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Old 08-04-2013, 04:04 PM
Valley View Lawns Valley View Lawns is offline
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Join Date: Mar 2013
Location: Helena, Montana
Posts: 1
When to price hourly and when to price per item?

Fairly new company here in lawn and landscape maintenance.

My question is, how do you determine when to piece rate your work and when to charge hourly? I do sprinkler repair work, replace heads, add heads, move heads, trim shrubs/bushes, mow lawns, snow removal, etc. Mostly maintenance work. I can R&R 6-8 sprinkler heads in an hour, maybe more, but that includes removal, sometimes digging them out, install, and aim. If I am charging hourly I think the work is too cheap, if I charge per head, as an example, then I can make better money and still be cheaper than the big sprinkler companies in my area. Some of our commercial accounts are just parts and labor at our hourly rate and some of that work is not specifically spelled out in the contracts. I would like to have a set rate for each thing we do, covering our P/E needs.
Chevy 2500 4x4, Meyer 7.5' Plow W/Wings
7x14 Landscape Trailer
ExMark Navigator 48"
Toro Walk Behinds
Echo Trimmers
Husqvarna Blower
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Old 08-04-2013, 04:38 PM
Stillwater Stillwater is offline
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Join Date: Mar 2006
Location: The United States
Posts: 4,633
It cost you x dollars an hr. To cover your insurance fuel mortgage, food clothing parts equipment cable cell electric and heat income tax property tax water bill medical hair cuts water accountant equipment and everything not mentioned above. And their is a lot not mentioned above. It is up to you to determine what that x figure is. Your hr. Rate must exceed your expenses or your doors will close. If you know your production numbers and the x number it is easy to set rates, if you can do 6 heads an hr. And you think if you charged by the job you would make more then it is clear your per hr. Rate is way to low. Your per job rate is based on a per. Hr rate that exceeds expences. You must exceed your expences. Normally work performed beyond the scope of a written agreement is billed hourly
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Old 08-04-2013, 06:04 PM
CL&T CL&T is offline
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Join Date: May 2011
Location: New York
Posts: 493
You charge "per item", actually time and material, when it would be difficult to determine beforehand what the cost is going to be. That is usually because there are unknowns that may make you take more time or require unknown materials that you can't see until you get into working on whatever it is. A good example of that is sprinkler work. I would charge an hourly rate plus any materials used. You should have a minimum service call charge for up to and including the first hour. So if you are there for five minutes to reset the controller they pay for the hour. Around here that's usually $75.00. If you are there for more than an hour and any additional hours you charge a prorated amount like $50.00 rounded to the nearest 15 minutes. So for example if you are there for an hour and 14 minutes they wouldn't pay anything extra. An hour and 15 minutes it's another $50 bucks. Of course additional workers= more money.

Time and material should also apply to planting, trimming, anything you can't nail down exactly how long it will take or what you will need. A time and material contract will just state your hourly rates (kinda like I wrote above) and then say "plus materials". You can give a verbal estimate on what you think is needed and how long but NEVER put it in writing. Note that an estimate is just that- your guess as to what is needed which can go either of two ways, right or wrong. If you are right everybody is happy. If you are wrong you shouldn't be the one to lose money. If your customer won't agree to these terms YOU DON'T NEED THEM because you will more than likely lose money.

Now, items like cutting the lawn, edging, etc. are pretty straight forward so you can usually be comfortable with giving a fixed price per visit.
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