Commercial & Residential Rates - SW MO & SE KS

Discussion in 'Network: Central' started by allseasonslawncare, May 9, 2003.

  1. allseasonslawncare

    allseasonslawncare LawnSite Member
    Posts: 20

    I recently sold my partnership in a commercial landscape business. I have decided to begin my own LCO. I have business experience and know some of the things i need to do to be successful. However, i am still a "newbee" to some lawn care apects. My goal is to get a couple of good commercial accounts next year. I know that i will need to begin late this year... early next year in seeking out these accounts. What i need to know is...

    What are good Commercial & Residential rates in this region(Mid-West) and what tends to affect them?


    Thanks in advance for any help you can provide!
     
  2. allseasonslawncare

    allseasonslawncare LawnSite Member
    Posts: 20

    Hmmm... Nobody else do lawncare in SW Missouri & SE Kansas??? Well then.... ANYBODY from ANYWHERE... please! Any words of wisdom would be appreciated!!!
     
  3. wriken

    wriken LawnSite Silver Member
    Posts: 2,154

    Its hard to say about the rates, without looking at the property. My res/comm prices are very close together.
     
  4. allseasonslawncare

    allseasonslawncare LawnSite Member
    Posts: 20

    Thanks for the reply wriken. I have been told anywhere from $30-$40/hr for commercial & residential by two different lawn care organizations. I am not trying to undercut them to steal their business... but i definitely need to be able to make up for the time on my equipment. I wanna make sure to keep my rates in a range that keeps this areas rates in a "good return" type situation so i know i need to keep them close to the same as others in this area. Do you think i should get the Yellow Pages out and call a few of my colleagues and explain my thoughts and see if they would be willing to talk $$$?? Or... should i split the difference of $30-$40 and go for it?!


    Anyone else have any thoughts??
     
  5. Randy J

    Randy J LawnSite Bronze Member
    Posts: 1,124

    Hey Todd, what I did was figure all my expenses, divide by the expected number of hours I'd be working, add a profit margin and that gave me a hourly rate. It won't do you any good to charge $35/hour, if you need $40/hour to break even. I think my hourly rate was around $40/hour to survive. It's not too hard to do, but does take some time.

    Randy
     
  6. allseasonslawncare

    allseasonslawncare LawnSite Member
    Posts: 20

    Thanks Randy! I'm fairly certain that with $35-$40/hr i'm in a range that will help me make what i need to break even. But, at what point do you consider it profit... and when does it make the break into overcharging... or in this small of a range... does it really even make much of a difference???? Thanks again for your input!!!
     
  7. Randy J

    Randy J LawnSite Bronze Member
    Posts: 1,124

    Todd, I did a lot of work on this. I was planning on buying an existing business in your general neck of the woods, and wanted to make sure I could survive. As it turns out, it doesn't look like I'll be doing that after all. I was developing my business plan to compete on service, not on price. Obviously you can't charge $80/hour when your competitors are charging $40/hour, but I think if you differentiate yourself enough, you could get by with charging $40 /hour, when your competitors are charging $35/hour. It's true price needs to be somewhat dependent on market, but I think there's some flexibility there. So figure up costs, divide by expected hours of work to get your hourly cost of doing business. Then figure what your time is worth, and that's your starting point. Then you can add a little bit if you plan on competing based on service, or take a little off if you plan on competing based on price. If you want to email me privately, I can give you some examples of how I figured my "minimum" hourly charge. Just remember plenty of businesses fail because they don't really know their cost of doing business.

    Randy
    rdj_1@charter.net
     
  8. Hi Todd I am a lco from Joplin.I didnt quite understand your post.
    Did you split from allseason landscaping in town or are you still with them?.Commercial rates are alot higher than you think.If you charge 30-40 a hr. You will find it hard to make money here.After paying insurance,gas,equipment cost. It will eat up your cost.You would have to have at least 40 accounts at the 30-40 $ rate to make it.And getting 40 accounts for a new business will be hard.I would shoot for higher pricing.This market here is overrun with lco's. There are at least 30 new lco's this year in town.Best of luck
     
  9. allseasonslawncare

    allseasonslawncare LawnSite Member
    Posts: 20

    Thanks for your reply johnhenry. I am not affiliated with All Seasons Landscaping. Yes, i did sell my part of a little landscaping business in this area... but it was located in the Nevada/Lamar area primarily. I hail from the Carthage area now.

    What are some suggestions you might have for our locale? I wanna make sure i get off to the best possible start that i can. I am definitely trying to focus on the "details of service" for my customers. I feel as if customers are more likely to be "long-time" customers if they are happy with the appearance of their lawn and their experience with you. I would GREATLY appreciate any advice you can provide. Thanks again for your reply!
     
  10. Todd welcome back to the area.This area is very short on first class lco's.First thing I would do is change your company.Way too many people will think you are with all season landscaping.They are one of the biggest here but dont have a good reputation.As far as I am concern there is only one good dealer and he is in grove ok.He will even bring a loaner and pick your's up if it breaks down.His mechanic is the best in the area.The other one's here dont trust .Less said to them is the better for your business.Yellow pages seems to work.The cities here dont allow flyers or door hangers.You will be so surprise how low some of these guys charge.You know where petro truckstop is a lco in town charges $ 25 per cut and I wouldn't charge less than $85 per cut so its a battle to keep prices high.Carthage is a pretty untap area so you might have some fast sucess there since there are more weekend warriors there mowing than lco's.Best of luck and if you need the name to my dealer let me know.He will really take care of you.You have my word on that.
     

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