Clearing small trees and such?

Discussion in 'General Industry Discussions' started by Collin, Jan 23, 2006.

  1. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,835

    I quit worrying about the "going rate" years ago. Honestly, I could care less what other companies charge for their rates. They don't have the same reupation that we have in our area. So we can charge more then them anyway. They may not be excellent at marketing like I am, so they might have to lowball every bid out of sheer desperation whereas I don't care so much if I land any certain job or not. Because I know that because of my marketing tactics, I'm going to get another 10 calls that day. So I can afford to charge more and I can afford to lose more bids than they can. There are just too many other factors like this to list. So honestly, I don't care what the going rate is. The going rate could be $35 an hour and I'm still going to charge my $65 an hour because 1) That's what I need to make to make a profit and 2) I've positioned our company to be able to charge that price and get away with it.
     
  2. LB1234

    LB1234 LawnSite Gold Member
    Posts: 3,210

    Okay...I live in Jersey but my bid is for a job in pennsy. How do I call someone at my home to quote something for a job in jersey? Did I mention my yard doesn't have any trees? I don't have any friends or relatives in pennsy nor is my LOCAL mower shop located in pennsy?

    My point is, going rate is a bunch of horse crap, ESPECIALLY if you get just a couple (2-3) quotes. Average those out they mean nothing about the 'going rate'

    Example:

    You and I are trying to find the going rate on installing a retaining wall. You call companies A, B, and C while I call companies X, Y, and Z. You find out your going rate is $3k while I find out the going rate is $5k. Whose going rate is correct? Well, both...according to your definition. And if you are going to tell me that it would never be that far apart I'll give you another example...

    My parents got three quotes to get their driveway paved...7.5k, 9k and 10.5k. So is the going rate 9k? SO that means that the one for 7.5k is wrong cause it is over, what did you say, 10% of the 'going rate'. Well, that was three years ago the guy for 7.5k is still in business. I guess not much longer though according to your theory.


    And I'm sorry, the thing about the 'overhead of a real company'. Are you implying that companies with larger overheads are real while those of us with smaller, less overhead are fake even though we have our FEIN, registered with the state, are properly liscensed, carry proper insurance, etc?
     
  3. Precision

    Precision LawnSite Silver Member
    Posts: 2,995


    Get a grip.
    In no way did I even inferred that your company was not a real one. Simply that some people who are "in business" are not really companies. These people often skew the price down to lowball land.

    You, a tax paying, insurance carrying, overtime paying, worker's comp paying company will have much higher overhead than some bum who claims to be a legit business but carries none of these things.

    Two grass cutting companies. Both run Toro Proline 21 inch push mowers out of 1987 astrovans. One works for cash and pays none of the above. The other does the right thing and does all the above.

    Now which one has to charge more to make (take home) more?
    That is all I am saying.

    Now given that, why would you want to not at least charge the going rate. That is what people assume they are going to pay for a given project as the bottom (realistic) price. Of course, if you can sell yourself, your business, your reputation, your portfolio or whatever, then charge more.

    The great thing is we live in a democracy and our economy is capitalistic. So they have choices. If you are too expensive, they will find someone else who isn't, do without or do it themselves. As a business man, my job is to do the job as contracted (or better) and do it at the price agreed to. My job is not to cut deals, work for less or any other thing to make the clients life easier.

    As far as living in Jersey and working in PA. That is your choice. Network, ask people on here, or just do it however you want. The only person you are hurting by charging too little is yourself. Well and the industry as a whole, but there is no helping that.
     
  4. Precision

    Precision LawnSite Silver Member
    Posts: 2,995


    I agree.

    But what I was trying to say, is the people who are new or unsure of proper pricing should at least be aware of the going rate and start from that as a basis.

    If a cut is $25 weekly (going rate) charging $15 is just stupid. Be a lowballer at $24 or $23. Or work up your reputation (and ad budget) then start charging $27 working up to $30
     
  5. LB1234

    LB1234 LawnSite Gold Member
    Posts: 3,210

    Bottom line, I could care less about 'going rate'. If it works for you great, kudos to you. Sometimes cleints tell me I'm too high and I don't land the job, other times they tell me I was lower than the others so I landed the jobs. Then there are the clients (choose to believe it or not) that want to use us no matter what the cost (within reason of course) cause they saw our work, were reffered, owner/operated whatever.

    Instead of beating a horse that is already dead I will have to respectively agree to disagree with you. :waving:
     
  6. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    Check your insurance before doing tree work.

    As far as money--I will defend the highest price.
    I will not fight for or defend the lowest price:confused: .
    Just something that makes sence to me.
     
  7. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,835

    I see your point. And I guess if you are a new LCO and just totally clue-less using this method is better than nothing. But there are certainly better ways to figure out your price point.

    And I am still not convinced there really is a "going rate". In my area, a homeowner with an average sized lot can get estimates ranging anywhere from $80 per month to $220 per month. And they could get dozens of estimates all throughout that range. There are dozens who would do it for $80. Dozens would would do it for $100, dozens who would quote $130, and on up to even dozens who would charge over $200. In the metro area that I am a part of there are literally thousands and thousands of Mow-Joes, LCOs, and full Landscape contractors who would bid lawn mowing jobs. And their prices would vary like I described above. So what's the "going rate" in that scenario? I would argue that there isn't one. I'd argue that each company charges what they can and makes the best justification to the customer why they should hire that specific company. It comes down to more than just price.
     

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