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Am I lowballing?

Discussion in 'Business Operations' started by BetterLawns&Gardens, Apr 22, 2013.

  1. 205mx

    205mx LawnSite Silver Member
    Posts: 2,339

    That's the worst. There's a guy here with two crews. He is a low baller. He even works a second job. Has over 180 accounts. I met him. Business makes him an extra 20,000 a year. So he's cool. Has a job for 40k and benefits. 60k and benefits. I get it, but damn dude. I'm at 65 he's at 50. All over.
     
  2. Raymond S.

    Raymond S. LawnSite Senior Member
    Posts: 977

    I fert a group of 19 houses. Total sq ft is like 6 acres, maybe a little less. Streets, drives, trees, curbs, etc. Completely surrounded by a curb and another street. Basically the 19houses are condos and they make up their own block. I get $670 per app. They asked me to quote the mowing. It wasn't on our route so I told them I couldn't but out of curiosity what were they paying. $120/cut!!!!!! Absolutely insane! The outfit that does it plows a lot for $19 that I bid at $85. It baffles me to this day.
    Posted via Mobile Device
     
  3. Nate'sLawnCare

    Nate'sLawnCare LawnSite Bronze Member
    Posts: 1,001

    Even if you do a calculation by square footage, acre, whatever, you still have to maintain a minimum price just to cover driving time, fuel, insurance, etc. Even if the actual mow only takes 15 minutes, think about your total time invested in that one job. It may surprise you.
     
  4. herler

    herler LawnSite Fanatic
    Posts: 5,145

    Yes, you are lowballing because
    a) You had to ask.
    b) You offered up a lengthy explanation.

    That having been said you won't get many customers charging what someone who has been in business 10 to 20 years is charging either, the question I have is why would you even charge less than $30, hell you could have quoted $30, made out, and still been way below the competition.

    So there you have it, your whole kit and kaboodle in a nutshell.
    You owe me $50

    Not really.
    k.bai
     
  5. TuffTurfLawnCare

    TuffTurfLawnCare LawnSite Senior Member
    Posts: 670

    The way I see it, you are mowing and running a business for $10/hr. What happens when you need a new mower or trimmer? Who is gonna pay for that truck that you want add on next year? As it is, the company is unable to sustain itself as you aren't making any profit at all and have no money for capital purchases, let alone expenses. You seem to have been concerned about paying yourself $10/hr instead of making a profit for the company. If you want to make $10/hr go to McDonald's. Also, just because you pay an employee $8.50/hr, doesn't mean you bill that. Employees are only there to make you money. If they don't make you money then you either have crappy employees or not enough work.

    I am a solo part timer, If a yard takes me 45 minutes to cut, I charge $45. Its hard to hit that as you have to estimate how long it will take you to do it without doing it. That is one of those things that's comes with experience.

    As for your current customer, I would cut them loose. Your loosing money everytime you cut it. Honestly, and I mean no harm by this, you should look into some business management book and/or classes. Anyone can mow a lawn, the hard part is running a business.
     
  6. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Posts: 2,715

    If 6 companies are within $10 of each other and you are 50% cheaper than them there is a problem with your estimating abilities. Come up with a cost per hour for various services and an appropriate MH rate. Example would be I would bill an employee out @ $30 PMH, just the employee and a hand tool. The rates go up from there depending on which trucks/equipment are being used, then figure the MH's required to do the job. Read a few threads on estimating/quoting jobs.........
     
  7. Smallaxe

    Smallaxe LawnSite Fanatic
    Posts: 10,081

    Machines run at 10-20 dollars per hour... trucks/cars run at 50 cents/mi and the minimum that any operator should get is $20/hr... after experience and knowledge set in ,,, operators could be worth $50/hr...
    That is your BASELINE in the midwest... whatever you actually pay your employee is irrelevant... just remember the additional cost of having an employee...

    The additional costs are no longer Just taxes and insurance or UC benefits, but now there is Obamacare and no one even has those details put together yet...

    I agree with the guy that said "Stay Solo"... :)
     
  8. ryanc

    ryanc LawnSite Member
    Posts: 45

    I usually go a dollar per minute.
     
  9. JCLawn and more

    JCLawn and more LawnSite Fanatic
    from MI
    Posts: 5,204

    I kinda figured that my break even point is about $25i$30 a hour if you include everything including replacing equipment. So i need to make $40 to $60 a hour
    Posted via Mobile Device
     
  10. OmegaRed

    OmegaRed LawnSite Member
    from NE OHIO
    Posts: 191

    That's generally an easy way to quote a small lawn. If I haven't mowed somewhere before and they want a ballpark, it's a dollar a minute. That way you are covering fuels for blower, mower, trimmer, truck, profit margin is in there and it equals for me about $20 an hr pay for most jobs.
     

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