Ever think our equipment is too efficient for our own good?

Discussion in 'Lawn Mowing' started by roscioli, Nov 12, 2005.

  1. roscioli

    roscioli LawnSite Senior Member
    Posts: 749

    (now, I am saying "our" as if I am still in the business, but its still in my blood, so get over it). I was just reading another thread about how someone has to raise their hourly leaf cleanup prices because they bought new, more powerful, more efficient blowers, and this came to mind.
    Is our equipment so efficient that it is detrimental? 72" Mowers? 10 HP Blowers? Its all so fast that we cant get the hourly labor rates, so we have to switch to job rates? When I started (yes, with my fathers 21") I would take 2 hours to mow a lawn for $45. When I bought my riding tractor, then 36" WB, then finally the Lazer Z, it was down to 20 minutes for $45.
    Just something to think about...
     
  2. TClawn

    TClawn LawnSite Silver Member
    Posts: 2,036

    no matter what, if you charge by the hour, that is all you will make, maximum. so if you bid "$40 and hour" that is the maximum you can make, but if you say "$200 for the job" you have the potential to make $100 an hour if it only takes you two hours, even though you bid it at $40 an hour.

    another thing to consider, is bidding the homeowners time, in other words, it may take you 20 minutes, but the home owner may be out there with his 21" for 2 hours. you see what I mean?
     
  3. roscioli

    roscioli LawnSite Senior Member
    Posts: 749

    Exactly... I always used to try to explain that to customers.. but it never really worked well..
     
  4. Squizzy246B

    Squizzy246B LawnSite Senior Member
    Posts: 837

    I figure if your machines are more efficient then you can do more jobs in oneday, but rarely can you charge more per hour.
     
  5. Cooper725

    Cooper725 LawnSite Member
    Posts: 107

    When I estimate a job I always say "Ill do the lawn for x amount of dollars" I never give an hourly rate. So they really dont know how long it will take me, just that the job is being done for said amount of $. I Have a commercial property that at the beginnig of the summer took me 3 hrs for the mowing and trimming. So I was getting $90.00 per visit. Now with the equipment I have now it takes me 30 mins. The owner knows it, Doesnt have a problem with it, as long as the job is done and I still recieve the same amount as if it took me 3 hours. At first I used to tell them $30.00 an hour. Found that some people were WOW thats a lot. Realised through trial and error that telling them that the job costs x amount seems to sound better to them.
     
  6. gramps

    gramps LawnSite Member
    Posts: 241

    Then you take a nap or go on to the next one. Since your now cutting in one sixth the time lower the price to $7.50.:p
     
  7. Cooper725

    Cooper725 LawnSite Member
    Posts: 107

    lmao too funny, you a professional napper gramps lol.
     
  8. south jerz

    south jerz LawnSite Member
    Posts: 87

    You have to strike a balance between making more profit per hour now, and making more profit per hour later by growing your business and getting more work.

    Reputation plays a part in this, particularly in landscaping. You can grow your business through reputation by getting the dirty-work done faster with the most efficient equipment and having more time to focus on the details of the job, while staying under the number of labor hours you bid. Your profit is less than it would be had you stopped at an average result for the job, but the above-average result will get you more work and justify a rise in pricing.

    I believe maintenance is very different however. The far-and-away best method to getting new customers in the maintenance sector seems to be lower prices, as there is less discrepancy in quality-of-work across all the sector's companies.

    As someone said, efficiency, rather than "cause" a rise in job prices, allows you to do more jobs per hour. When you can do more jobs per hour, you can lower your prices somewhat and still maintain an equally high profit. Even if profit suffers for a while, the increase in customers your business will get as a result of this price-cutting will give you more profit in the long run.

    Efficiency can be good for everyone, but benefits the large company and their consumers the most. If small companies (who want to remain small) don't use efficiency to improve their quality-of-work (in order to maintain prices that have been cut industry-wide by efficiency), then they should be set to fail.

    Only these small companies with no intentions of getting any bigger should be in favor of standardized pricing, and since they can't get it in this industry they must resort to improving their reputation as the only means of sustaining a client base that would otherwise reject their higher prices. Everyone else, if they want to succeed, should be undercutting the hell out of each other in competition for the customer. People are in business to make money, so everyone will stop price-cutting when profit is no longer possible. Efficiency allows growing businesses to drop even lower and grab a larger share of the market.

    So, efficiency can be good for both small static companies and growing companies in most industries. However, because price is the customer's key issue in the lawn maintenance industry, small companies that are counting on reputation (to keep high prices) are fighting a losing battle as the efficiency of the industry's machines improves (and leading companies drop their prices).
     
  9. yrdandgardenhandyman

    yrdandgardenhandyman LawnSite Senior Member
    from midwest
    Posts: 953


    A lot of my customers comment on how fast we are, be it mowing or trimming bushes. They always say how it would have taken them 4 hours to do what we do in an hour so, for sure, bid the customers time.
     

Share This Page