Have any of you done this?

Discussion in 'Business Operations' started by newjerseylandscaping, Jan 1, 2011.

  1. newjerseylandscaping

    newjerseylandscaping LawnSite Bronze Member
    Posts: 1,175

    Im was just wondering if anyone has done this. ive spent the last few days figuring out the hourly rate for my buisness. my brother walks in and says why not get an estimate for our house and use that as a guide? i thought that would be kind of a Not so good move but have any of you done this? thanks.
     
  2. Patriot Services

    Patriot Services LawnSite Fanatic
    Posts: 12,532

    Would you appreciate somebody wasting your time? Besides 5 different company's are going to give 5 different prices. You were right figuring what number YOU need. Sharpen your sales skills. The money is in full service not mowing dirt and weeds.
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  3. lukemelo216

    lukemelo216 LawnSite Bronze Member
    from ...
    Posts: 1,267

    agreed figure out your own hourly rate then go from there. IF you plan on working 20 hours per week and have 2k in bills per month then plan on charging 25/hour to break even. I like to know what profit im making and where all my money is going. But me I try not to worry about the competition and just do things myself. If my customers say well abc company is 5$ lower per cut. I just politly explain that I dont know what the other companies charge, and I dont wish too. I know what it costs me to run my business and what I need to make. That is also why I have a sliding price scale. I use a 20-60% profit markup. So if I am breaking even at 25/hour I will sell a customer anywhere from 30-40/hour. I just try to feel them out a little bit, and you can usuall tell if they are cheap or actually willing to pay for quality service.
     
  4. wbw

    wbw LawnSite Fanatic
    Posts: 5,424

    It is the height of stupidity to NOT shop your competition. You are in business to succeed. Aren't you?
     
  5. Patriot Services

    Patriot Services LawnSite Fanatic
    Posts: 12,532

    So your saying you need the competition to tell you what to charge?
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  6. I have all the newbie's call me every spring, it aint hard to figure out what they want, I don't play the game with them.
     
  7. lukemelo216

    lukemelo216 LawnSite Bronze Member
    from ...
    Posts: 1,267

    I generally know what my competition charges becasue Ive heard it enough, but Im not going out of my way to find out. I put the blinders on when it comes to them. I try not to sell on price but rather service. Thats why i have the tired scale. I charge what I need to charge to pay my bills and make a decent profit. Using the competitions price is price fixing which is against the law.

    Business is quite simple.......Know YOUR cost, add an acceptable markup, and provide a quality service.

    I know im probably guilty of it when i first started, but now that i have been in business a few years i just dont worry about their prices, or come on hear or plow site and ask what my number should be. I may ask for an opinion on it but if i do i give great detail on it such as what the hourly rate im charging and what the times are i believe the service will be completed in. I strongly suggest looking into ALMA. Great asset to help you grow your business. Tommy Ganz teaches you determine your hourly rate and just stick to it, thats what you need to make to financially succedd.

    However, if you have a common knowledge of the going prices in your area and just to make a simple 20% markup your still charging 15$ more then the competition i would recommend reevaluating your pricing and where you can cut some costs.
     
  8. newjerseylandscaping

    newjerseylandscaping LawnSite Bronze Member
    Posts: 1,175

    I figured, I dont plan on doing this belivee me, when my brother introduced the idea i thought he was nuts, now i know he is nuts. HAHA
     
  9. Darryl G

    Darryl G LawnSite Fanatic
    Posts: 8,033

    I get calls every spring myself...people wanting to know how much I would charge to mow their lawn but don't want to give me their name or address...I figure it's new guys wondering how much to charge.

    I have some friends in the business that I'll compare pricing with but I woulnd't go calling my competition and having them give me a quote.
     
  10. xclusive

    xclusive LawnSite Bronze Member
    Posts: 1,052

    As stated by other people I think you should figure out your on cost and base your price off of that but at the same time you should have any idea on what the going rate is in your area.
     

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