Am I charging too little???

Discussion in 'Starting a Lawn Care Business' started by nickm, May 5, 2003.

  1. Green in Idaho

    Green in Idaho LawnSite Senior Member
    from Idaho
    Posts: 833

    Well on second thought Nickm since you have no costs, and your actions leach off the other businesses, and you got plenty of money coming in from your other businesses I say

    just do it all for free!
    \

    What the heck... what's a couple bucks to YOU?
     
  2. nickm

    nickm LawnSite Member
    Posts: 13

    It's not about the money, I have full insurance from state farm. I have 8 f-150's, 8 12ft. trailers, 8 lesco 54in. z turners, 8 32in. walk behinds, 12 self propelled honda's, 12 stihl edgers, 12 stihl trimmers, 12 stihl blowers, 4 billygoats, and 12 gas powered hedge/tree trimmers. I don't mooch of any company, All of the businesses are tied into one, but the realty co. makes the most money by far, which takes care of the lawn co.'s expenses.
     
  3. Mueller Landscape Inc

    Mueller Landscape Inc LawnSite Senior Member
    Posts: 489

    Come on Nick. You have all that equipment and you're asking if you are charging enough??? Either you are playing games or you come from a wealthy family and have money to dabble with. Something doesn't add up. :)
     
  4. gogetter

    gogetter Banned
    Posts: 3,256

    Now he's just getting silly.
    Thanks for wasting our time!
     
  5. LawnLad

    LawnLad LawnSite Senior Member
    Posts: 738

    Nickm - I'm surprised you say you don't have any overhead. What you really mean to say is that you are not attributing any overhead to the landscaping business since the realty company is covering it.

    You do have overhead expenses, you're just not tracking them. THerefore you're Realty company is showing higher costs than it has in reality and your lawn mowing business looks like a gem. I would apportion part of the telephone, insurance, equipment costs, etc. to the lawn mowing business from the reality company. Your mowing business is a separate SBU (strategic business unit) that is a fully operating and fuctioning business. It should carry it's own weight.

    Once you plug the numbers in for the equipment you're running you will see that you are most likely charging too little.

    One more question - how does the realty company do job costing to see if it's more cost effective to do the maintenance work in house versus hiring an outside vendor to do the work? I think if this evaluation were made you'd already have the operating numbers for your 8 trucks and trailers and cadre of equipment.
     
  6. WildMowMan

    WildMowMan LawnSite Member
    Posts: 50

    One question for nickm......with all of the equipment and accounts that you have, how can you not factor in laborer payroll into your overhead? I'm sure you must pay somebody or bodies to cover your 200+ accounts.....a man/hour ratio must be factored into your overall pricing. I'm not trying to be snide, but I don't see how $15/account (even $20) could possibly cover all expenses..especially on acre+ lawns....In the mid-late spring your lawns will be unbearably tall. Time spent maintaining these properties are going to increase if not double until the summer burn-out..especially if you have fertilization contracts. Your laborers are getting paid by the hour ( i assume) not by the account. More time equals greater payroll plus OT in some cases (in your case, I don't know). Plus greater time spent on each property means you are going to be playing alot of catch-up in the upcoming month or so. In my neck of the woods..most contractors would even charge a double cut during thee months. Also what about workmans compensation for your labor (just in case).....just some food for thought....factor in everything, nickm, don't sell yourself too short...you may get all the contracts in the world by undercutting the competition but remember..in the long run your staff will want to get paid regardless of what your profit is. There is no such animal as "pure profit"!
     
  7. gogetter

    gogetter Banned
    Posts: 3,256

    Me thinks we're being trolled.
     
  8. Frosty_03

    Frosty_03 LawnSite Senior Member
    Posts: 333

    With all that equipment you must have 8 crews, what do you pay you're crews. I have seen lawn services like yours cut yards for 15-20 dollars and they do a fast job but they lack quality. I watched one just the other day come in and in 15 minutes, they had done a 25,000sqft yard, they had two crews and and by the time I finished my yard the knocked out three, but the quality was lacking, as a matter of fact one of the owners came up to me and asked what I would charge to do his lawn cause he was upset at the appearance of his yard, it looked like SH** he said. It was the 25,000 sqft yard I told him off the top of my head 80 bucks. You know what his next question was??? Would it look like the one I was doing and I told him but of course. He told me latter that he was only paying 23.50 you know what I told him???? He got his money's worth. So to answer your question your are charging way too low for you mowing unless it's like what I have express in this post. I like big high dollar LCO they bring me more business than they know. Good Luck and God Speed in all your endevors.:cool:
     
  9. nickm

    nickm LawnSite Member
    Posts: 13

    Well, I gotta thank you guys. I really don't have 8 crews, I only have 3. I am really in need of help and I just wanted to see if you guys really knew something about this biz, or if you thought you knew something. I believe you guys do know what your talking about. I really am losing money and I need help trying to figure out how to change it. I raised my price from $15 to $20 and a few of my customers have accused my of the bait and switch. I never made them sign any contracts and they are not locked into my services. The co. does manage 240 homes but we only do 129 of their lawns and the rest are just pools. I am now charging 20 for a cut and 10 for the pools. All of our equipment is paid in full. We pay our guys 9.75 an hr., and gas last for 3 days. We make some money, but not as much as we should. I want to bid on some commercial jobs but I have no idea what to start at. Everyone and anyone here has a lawn co. and I want to be able to land these new account and make some money and at the same time, under bidding my competition. Again, I'm sorry for the lie, but I needed to make sure you guys weren't playing. Thanks
     
  10. Let it Grow

    Let it Grow LawnSite Senior Member
    Posts: 476

    If you want honest answers then ask honest questions. You're never going to find out what you need to know by beating around the bush and telling lies. The people on this site want to help, and there are a whole lot of smart people here. Just be level with us!
     

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