2012=Year of the Lowball

Discussion in 'Lawn Mowing' started by Mahoney3223, Mar 24, 2012.

  1. Mahoney3223

    Mahoney3223 LawnSite Senior Member
    from midwest
    Posts: 995

    I stand corrected I thought 2010 was awful. Some of you might remember the thread I started that year that was shut down after 30k views and all sorts of hot issues. Well it must be something about years with gas at 4.00 in the Spring that makes companies bid work for wages instead of profit. Latest example, 40 acre mfg plant. with adjoining building r&d plant goes for ..........................................................................................................................................$500 (with a half mile creek that needs trimmed weekly on both sides. Let the debates begin. I personally think this company is hilarious. What are you guys seeing in your markets? Here, I have abandoned any hope of landing and big complexes as the giant LCO's have them so dirt cheap it's not worth it. I entered a different market and business is good here. Intelligent discussion encouraged.
     
  2. Snyder's Lawn Inc

    Snyder's Lawn Inc LawnSite Platinum Member
    Posts: 4,541

    Its not realy lowballing its keeping Employes working
    Its like buying a new truck I go to city and I can buy from big dealer and get one cheaper then buying one from a small dealer
    Big dealer looks at the numbers per month vs small dealer looks at the number per day

    I do a 60 acre school and I can drop 7 mowers and pull out in few hrs compare to others that only has 2 mowers and they are there all day or 2 days

    Some LCO makes there money on the extra work the mowing is a way to get a foot in the door

    Some say Im a lowballer and sometimes I am on mowing I see alot extra work I'll low ball to get in the door

    80% of LCO here only do mowing

    I'm a full service Company
     
  3. weeze

    weeze LawnSite Fanatic
    Posts: 8,157

    40acres for $500? 1/2 mile of trimming a creek?

    when i worked for another company we did a job for a plant that was about 10 acres. we made $1000 a cut on it. this was back in 1998.
     
  4. themadcutter

    themadcutter LawnSite Senior Member
    from florida
    Posts: 914

    I never get involved in anything that large so this is a little out of my field. I stick with residential and small commercial.

    I thought low balling was bad in that area. the price you just mentioned seems impossible to make money at.

    At first glance.

    If you have the right equipment and figure a total of 12 man/machine hours per cut, wether it was one guy spending a long day with 1 72" mower and a 40cc trimmer or a group of men
    the gross would be $41 per hour.

    At 10 hours it would be $50 (have to be owner operator for this time) and you would still be running equipment to make about 60% of some ac techs billing

    Not much money, and I wouldn't do it unless I was loosing my house, but you would at least meet payroll for a while. Off course if you kept it up for more than 2 years you would just be destroying equipment and wouldn't have the money to replace it.

    so if one owner had 50 of these accounts and only expected 2% and nothing went wrong he could get $500 a year. and he would be lucky to get that after all the expenses

    I don't think thats how mitt romney got rich. It might have worked for scrooge mc duck
     
  5. shovelracer

    shovelracer LawnSite Silver Member
    Posts: 2,009

    There has been an unusually large number of startups this year, but I think the warm weather has helped bring them out early. The part that frustrates me is that we are bound to all sorts of rules and regulations by our licensing boards and such. Meanwhile these guys have no problem littering the area with flyers. We had one guy put up so many plow ad signs on stop signs and poles that it sparked a front page newspaper article. We are talking 100's of signs in a few square miles.

    In the real world my customers are not concerned with these types, but there is always a handful that all of a sudden think you are overpriced because someone is willing to work below cost. I am more than happy to let them go. The part that I get upset about is when we get calls from people expecting us to drive over just so they can check that the new guy is giving them a good price. I've been asked to leave more properties in the last two years than all others combined. Much like the class system in our country the difference between start up and established companies keeps getting further apart.
     
  6. airsoft1779

    airsoft1779 LawnSite Member
    Posts: 152

    Just wait till the heat arrives in july or so and a majority of them will be gone.. happens every season.
     
  7. KrayzKajun

    KrayzKajun LawnSite Fanatic
    Posts: 10,742

    Bingo!!! Most here aren't even starting up becuz we have been in the 80s the past week. I've noticed here people are finally willing to pay a premium price for good service
    Posted via Mobile Device
     
  8. Snyder's Lawn Inc

    Snyder's Lawn Inc LawnSite Platinum Member
    Posts: 4,541

    Back in the 80s and 90s made good money to but I had slower mowers and didnt have 72'' just 50-60'' ones
    Then there was maybe 2-3 LCO here Now in my area there is 19 that I know off
    plus in my area there isa company that is a non profit company they bid pennies on the dollar Federal funded they work the mental handicap

    People pay taxes pays them to mow
     
  9. McG_Landscaping

    McG_Landscaping LawnSite Fanatic
    Posts: 15,737

    that sucks about how badly that was lowballed but its all part of the business. deal with it. in our area there is a ton of work and there has to be 100+ companies and stuff does get low balled, but there is still good paying work. just this past week i picked up 5 yards. and people say theres no work out there
     
  10. WHIPPLE5.7

    WHIPPLE5.7 LawnSite Senior Member
    Posts: 958

    Back when I first got on Lawnsite all the supposed pro's said any LCO has to make $50 hourly minimum. I tried to live by that for a few years and then realized not everyone can be the same. I'm solo with a 36 WB and a 21", no work comp since my state contractor exemption covers it, nothing borrowed from the bank, no huge diesel truck pulling a 26 enclosed full of Walker mowers. Just to come out and say $50 hourly is what any LCO needs to make is BS. We all have differant expenses and operating cost. Here is the way I look at it. If you are covering your cost and making something for yourself too might as well do it. My business suffered greatly from the start because I believed the nonsense on the website and failed to get many jobs because I tried to play the $50 an hour game. Considering everything I own is paid for I could make $38-40 hourly and come out nicely. Don't get me wrong there are total dumbass lowballers out there. I'm seeing guys offering $50 any size yard for powerraking, thats just ******ed. Most yards around here are 2,500,-4,000 sq. ft. so I mow them for $25 or so. Alittle bigger the goes to $30 or $35. Back when I first got one here in 2007 it seemed like everyone was saying don't even drop your gate for less than $40. Why, a 2,500 sq. ft. takes me like 15 minutes to mow, trim, and blow. Seems worth $25 to me.
     

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