Charge for job or add extra / tool?

Discussion in 'Landscape Architecture and Design' started by meets1, Jun 8, 2004.

  1. meets1

    meets1 LawnSite Gold Member
    Posts: 3,756

    I ran into a big commercial landscaper. Saws, tile saws, mini exc., skids, everything.

    I said nice equipment etc and he told me something that stuck. He said for every piece of equipment or tool that is on the job for that day gets charged out accordingly.

    Do you guys do this?
     
  2. DowntoEarthLLC

    DowntoEarthLLC LawnSite Member
    from VA
    Posts: 121

    yup.

    they cost you money to buy them don't they?
    they cost you money to operate/maintain them don't they?
     
  3. AGLA

    AGLA LawnSite Bronze Member
    Posts: 1,740

    So if you buy a new limo my mowing bill goes up?

    What he probably does is to keep very good records of expenses and all the billable man hours he puts out a year. He adds up all the expenses from the year and divides by the billable man hours. That is the rate he bills for a man hour with a percentage for profit added on. As long as he can get that rate and continue having sales he is, in fact, billing for all of the equipment all of the time.

    If he is charging for what happens to be on the truck on a given job, I'd follow him around and beat him in the free market by selling at a better price. ... if you can match his level of service.

    Having well equiped people all over town all of the time means a quick response to anything. Fewer people need that level of service, but those that do won't get it from a smaller company that has limited man power and equipment (most of us). A small job can tie a small company up for several days. Or a three guys on an unscheduled half day job can blow the mowing schedule for the week.

    Lots of small companies try to do too many services thinking it will bring in more jobs and more money. I have watched an aweful lot of 'scapers that have three or four guys do this. They spend lots on tools and equipment to do more and more. In the end, the still only bill out the same four guys every week, but have triple the overhead and scheduling nightmares.

    Form follows function. Too many guys think that "if I only had this, I'd be able to do that and make more money". It is much smarter to buy equipment to get the work done that you already have than to buy equipment and hope to get it busy.

    Just my opinions and observations... maybe not correct.
     
  4. meets1

    meets1 LawnSite Gold Member
    Posts: 3,756

    AGLA: I see that here as well. There is one landscape company that leased everything. 2 Boomers with loaders, forks, seeders, etc. 2 New Holland Skid, every year they got a different one, they alwasy leased 2 dogde trucks every year, there edger was new every year. Although they did keep there saws and tampers but that is it. Everything was leased - 6 guys working and nothing ever got done.

    Today they split the company up. One worker bought out the lC division, and the other focuse on the greenhouse only. The Landscape dude has himself and one other guy working. HE Bought one of the trucks, kept the skid this year but did get another boomer.
     
  5. D Felix

    D Felix LawnSite Bronze Member
    Posts: 1,898

    We try to charge for our larger equipment on larger jobs. We write in the cost of the tractor, tiller and sod cutter. I don't think the edger is factored in very often.

    What that does is help to cover overhead costs, as well as give us the option to obtain a simliar piece of rental equipment should something happen to ours. We don't write in the blower, chainsaw, shears or anything like that.


    Dan
     

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