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Am I pricing to low?

Discussion in 'Business Operations' started by nick2765, Jul 10, 2012.

  1. nick2765

    nick2765 LawnSite Member
    Posts: 84

    Whats your guys opinion on this. I got 3 customers side by side and each property is about the same size and I charge them $20 a cut. I work fast enough where I can still keep the quality aspect of it and can do it in about 1:45-2:00 hours. Thats a mow trim and blow. Is $30 an hour to low? I feel like I should have quoted them $25 each. Just some back ground about myself I am a solo-op and use a 36" walk behind scag. And the over head for the business is the truck and trailer insurance and mower payments and gas. Let me know what you guys think. Thanks.
     
  2. Dave does lawns

    Dave does lawns LawnSite Senior Member
    Posts: 260

    If thats all you have for overhead then no, making $30/ hour beats working at McD's. Funny how most people on this site, (including me) have an overhead as high as what your making per hour.
     
  3. subscribe, this will be good.
     
  4. easy-lift guy

    easy-lift guy LawnSite Gold Member
    Posts: 3,376

    You mentioned your expenses. Out of $30.00 an hour do you have any money for repairs or replacement of equipment?. Do you have any business insurance covering you or your
    customers?. Since you only have Three accounts I do not believe you are even close to
    charging enough to earn a profit much less cover your fixed cost. Even at $50.00 an hour you may be clearing $8.00 to 10.00 per hour max after all expenses.
    easy-lift guy
     
  5. GMLC

    GMLC LawnSite Platinum Member
    Posts: 4,353

    Very well said. I agree 100%.
    Posted via Mobile Device
     
  6. fitzbrotherslawncare

    fitzbrotherslawncare LawnSite Member
    from DE
    Posts: 12

    at 50 an hour if you clear 10 an hour after all expenses as a solo op, where does the other 40 an hour go? lol
     
  7. zak406

    zak406 LawnSite Bronze Member
    Posts: 1,519

    I think your too low, however your area and my area are different. Im a solo operator and cut 1 day a week with a helper. I landscape the other 5-6 days a week. However I do cut ten lawns (all on fridays) and after my expenses, taxes, and helper are paid I make about 40 an hour. 42 or 3 to be exact. That money pays off my few bills, the landscaping is were I make most of my money at. I think 30 is to low, by the time you pay off fuel, insurance, taxes and any other expenses you cant be making much more than 10 bucks an hour. At that point your better off working for someone else (take no offense) but for 10 bucks an hour its not worth the headache.. Of course someone would probably also say that about working for 40 an hour after expenses.

    Were I live I hold back 36 percent for taxes alone. 20 for federal, 10 for state, and 6 for sales tax (percentages) so if I made 30 dollars an hour before expenses I would already have to deduct 10.80 of that before I even thought about getting to fuel, insurance, ex. ex. In one day of mowing I go through about 3/4 of a tank of fuel in the mowers and the handhelds and 20-30 dollars in my truck.... If your working an 8 hour day (assuming) and you go through 40 dollars of fuel a day, thats 5 dollars and hour that goes to fuel. So now your down to 30-10.80(TAXES)-5(fuel) your down to 14.20 and we still havent got to insurance, vehicle replacment, mower replacment, ex. ex. ex.....
     
    Last edited: Jul 10, 2012
  8. GMLC

    GMLC LawnSite Platinum Member
    Posts: 4,353

    Liability insurance, ss, medicare, income taxes, retirement, health insurance, vehicle insurance, advertising, gas, equipment etc. The list goes on. Most people have no clue on actuall overhead.
    Posted via Mobile Device
     
  9. easy-lift guy

    easy-lift guy LawnSite Gold Member
    Posts: 3,376

    The balance go towards fixed and variable cost. Look up either one and you may figure out your working for just over minimum wage.
    easy-lift guy
     
  10. zak406

    zak406 LawnSite Bronze Member
    Posts: 1,519

    Easy,

    Taxes,insurance, vehicle replacment, mower replacment, equipment replacment, funds for tires and other things, retirment funds, sales tax, fuel, repair funds. His example was a little exagerated (unless you have an ungodly amount of overhead) but his point is well taken. Alot of guys think (newbs, fly by nighters, unemployeed people, people who work for beer money) o **** im making 40 dollars an hour, but they dont calculate any expenses into it. This is were I make my money because when they finally go broke or cant pay to replace a mower or do a job thats when I swoop in :walking:
     

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