Are we suffering because of innovation?

Discussion in 'General Industry Discussions' started by JCPM, Dec 5, 2011.

  1. JCPM

    JCPM LawnSite Member
    Posts: 222

    We all know the state of this industry. Overhead costs have skyrocketed over the past ten years, however, hourly rates have only risen slightly.
    My question is this; given what I just said above, are we paying the price for the technologically advance equipment on the market?

    Last season I had my trailer broken into and I had all of my backpack blowers and trimmers stolen. All br600's and wide range of very expensive Stihl trimmers and chain saws. My insurance company only offered to give me $1,600 for the $4,000 worth of equipment stolen. I didn't feel like making up the difference do I went cheap and bought some basic Echo equipment from Home Depot. Overall, I haven't been real impressed with them over the course of this season. However, this leaf season made me notice something.

    This cheap, basic equipment actually made me more money.

    All of my leaf cleanups are done by the hour. And while it didn't take me twice as long to complete jobs with the Echo equipment. Each job took between a half hour to an hour and a half longer resulting in a little bit extra to bill out at the end of each day. The customer doesn't know the difference. They see us working at full speed the whole time we're there and have no problem paying for the as long as the job is done well.

    So again, I ask the question; are we suffering because of innovation? Do we actually charge more per hour when we have bigger, stronger, faster equipment? Or are we just more competitively priced and saving the customer money?

    Even when I used to give a new customer a fixed price on a cleanup, I would never raise my price because of how much faster and more efficient my Stihl 600 is compared to my original 420.

    I'm really interested in what you all think about this.
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  2. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,140

    It doesn't make one bit of difference whether I use a 600 or a 420 or a 610 or 620 blower the job gets done in almost the same amount of time. But I don't use big blowers when getting RID of leaves.
     
  3. Ticolawnllc

    Ticolawnllc LawnSite Senior Member
    from Wall NJ
    Posts: 411

    What I do when faced with a new buy is pocket the winings. If I get a truck loader, I don't charge for the loader time but what it would have cost the costomer by hand. Its my equipentment to save me money. The hard part is pricing when every guy out there gives away the winings. By me the towns pick up leave so I don't have a need for alot of stuf.

    As for no name brand equipent, I worry about not being able to get parts.

    I had a Redmax ebz 8001 and it lated less than the ebz 7001. Why? The 7001 weighed less so if it fell it was more likly to brake. Also the 7001 is lighter to its not as big a pain carring it around all day. I save $100 up front and last an exra 2 years and its easyer to get into gardens.

    I like small. It costs less and lasts just as long. I also need less truck. An F150 is a lot less than an F250. And way less than An F350. Do the math. Right now I'm suffering form the housing boom. Lots of people got big yard and I got big mowers. :hammerhead:

    Big is no good. As time gos by lots get smaller. Farms tourn into development with 10k lawns.

    Three guys one hides. Two guy if one hids the work can't get done. Who need a forman when you have a quota.
     
  4. DuallyVette

    DuallyVette LawnSite Gold Member
    Posts: 3,063

    What is your hourly rate ? I like to get through as quickly and as efficiently as possible. We use 8050 & 8500 RedMax blowers and a 16hp self propelled BillyGoat blower. They're Big time savers. Anything smaller is a waste of time. I personally don't want to hang out in someone's back yard and milk the clock. Most of my customers aren't home, so they don't know how long we are there anyway.
     
  5. JCPM

    JCPM LawnSite Member
    Posts: 222

    Giving away the winnings is what I am talking about. It seems like that has become the norm. If you want to compete these days you are getting better equipment so you can price the job lower and can get the job done quicker.

    And I'm not just talking about leaves but that was what made me start thinking about this topic. The same goes for plowing too. I was making more doing parking lots with a 7'6" straight blade when I first started 11 years ago. Now most of us have 9' v plows and we are pricing accounts based on how quick we can get it done rather than how much they really should cost.

    It's just competition I guess. McDonald's is still making money even though a thousand burger joints opened up and selling cheaper than them. I just haven't figured it out.
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  6. zak406

    zak406 LawnSite Bronze Member
    Posts: 1,519

    Good question, in my opinion yes. Hear me out here, you cant get a standard work truck for under 33000. 25 yeas ago you can get a new truck for 10000. LIke you said the price of stuff goes up but income doesnt!
     
  7. Ticolawnllc

    Ticolawnllc LawnSite Senior Member
    from Wall NJ
    Posts: 411

    I've been traind to use cost based pricing. The reason is that market pricing is even worst. A lot of guys get in when they are unemployed and for them any work is a win. But in doing that it drives the price of cutting down and the cutting is base for the companys. They later get work agin but they leave that low price tast in the costomers mouth. the next year the cosomers looks for that low pric agin.

    I see home owners load up thier pick ups with lawn tractors and sart to eat away at my rout. Thankfully I've lost all my low baller cilents. Most every on i have woulden't traid me for the world.

    Thats why I think states should have lawn mowing biz licences. To protect the pros form low ballers. This type of biz is a big investment and we should be treated as pros.

    I know what i'm doing. I have inc. I get training yearly for lawn care. Whats $100 a year for somthing at shows that the state vets us. I think it would go along way.
     
  8. GMLC

    GMLC LawnSite Platinum Member
    Posts: 4,353

    The point of better equipment is to get done faster so you can move on to the next job. I may give a small break to the client but I know what most clean ups are worth and it's up to me to be the most efficient that I can. Which means having high quality equipment that gets the job done fast. It's also easier on the body!
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  9. Patriot Services

    Patriot Services LawnSite Fanatic
    Posts: 12,680

    As I've stated many times here I will not work/charge by the hour. Dosent matter if its a mowing or a complete renovation/install. People do too much math in their heads when you offer a per hour rate. Better equipment means more production per man hour.
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  10. JCPM

    JCPM LawnSite Member
    Posts: 222

    I usually don't do anything by the hour either except for cleanups. I give new customers an estimated price which is usually in the ballpark and long standing customers we just show up and do the work. There can be so many variables with cleanups by the time you actually get there to do them.

    My point was that all of this new equipment has trained us to get stuff done quickly but I don't think we've put enough stock into what we're actually making at the end of the day.

    Six years ago I bought my first brand new truck. It was an f350 dump truck with a diesel and four wheel drive. I paid $39,500. I recently decided not to buy a new truck this year and look for a used one instead because for the same vehicle the dealerships around here want about $45,000. My hourly rate has been $45 per man/hr since I bought that original truck. I wouldn't dream of raising prices now.
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