How do I price my services?

Discussion in 'Starting a Lawn Care Business' started by Giant Menehune, Jul 30, 2005.

  1. Giant Menehune

    Giant Menehune LawnSite Member
    Posts: 18

    Hi There, :waving:
    I've been doing yard services for family and for side cash for awhile, but I'm now trying to make an actual business out of it. Here's my question... :help:
    Is there any kind of "formula" that any of you use to price your services quickly and accurately, so I can at least try to act like I know what I'm doing out there? :p Any ideas, help, or suggestions would be very much appreciated. :angel:
    Thanks Guys,
    Skip :cool2:
     
  2. sooner74

    sooner74 LawnSite Member
    from UT
    Posts: 76

    Experience bidding jobs is my formula. I have underbid and worked for what seemed like nothing and then I worked for $75 an hour. The ones you underbid, just learn from it. I have seen people on here tell others that if you receive all the jobs you bid on, you are too low. If you don't get any jobs you bid on, you are too high. Should land about 50%. Others will tell you to aim for $1 a minute. Hope that helps.
     
  3. Giant Menehune

    Giant Menehune LawnSite Member
    Posts: 18

    ...what I mean by formula is, do I charge by the square foot, or the hour? Or something like that? Or do I just walk through and try to see in my head what it will take to shape the yard up, and just be honest and quote 'em what I feel it will take for ME to do it?
    I guess there isn't any substitute for experience right? I just need to get out there and get my blades movin', be fair not only to the customer, but myself too. After I quote 'em it's their call eh? They can "take it or leave it" as the phrase goes...and just see how it works out.(sounds easy right?)
    Thanks sooner 74,
     
  4. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    there is a guideline by the square foot.." differs for area"

    You can go to your local Appraisal web site and it will give you the total square foot.

    However it will not give you things like flower beds. curbs that have to be line trimmed around....

    if you keep in mind while bidding, how long will this take me?
    is it located around other jobs I have ?
    driving time,

    I have a customer that always wants to talk when I show up. she's a widow woman and has no family. " I may be the only person she has in this world"
    every time I go there she will talk to me for about 15 to 30 minutes. and most of the time she has something else for me to do...
    once she paid me 35.00 to change a light bulb. " it was a high entry"

    I eat crow sometimes on this job. but others I make out like a bandit. I keep my time written down and it levels off......

    there are just so many factors, some yards are hard to cut. some are easy.
    going stirckly by square footage may not allways be the best way to bid...

    hope this helps..
     
  5. Wells

    Wells LawnSite Member
    from SLC UT
    Posts: 0

    Basic formula:

    Square Footage times .005 cents.
    Example: 5000 sq ft x .005 = $25.00

    For larger properties I use .004 cents

    The formula doesn't work for every property, as it doesn't take into account such things as hills, obstacles, major trimming, etc, but it will give you a number to start with.
     
  6. a1 lawncare

    a1 lawncare LawnSite Member
    Posts: 153

    i generally charge 1$/1000sqft

    1 acre = 45$ (roughly)

    now you can break it down any way you want, remember to add/subtract for different amounts of trimming, add for obstacles and hills.

    i also use a difficulty factor

    easy = price X 1
    moderate= price X 1.25
    extreme = price X 1.5+

    shoot for a dollar a minute, some you'll do better at than others, i got a development i landed with 5 properties together, i get 25$ apiece weekly and i can do all 5 in less than 1.5hrs.

    125$ / 1.5 hrs. is 80 something an hour, you will get better at it, and remember you will not want every job, bid accordingly
     
  7. Tn Lawn Man

    Tn Lawn Man LawnSite Senior Member
    Posts: 479

    Does that mean that for a 15k sq ft yard you only get paid $15.

    Surely, you made a mistake.
     
  8. a1 lawncare

    a1 lawncare LawnSite Member
    Posts: 153

    i haven't cut a a property that cheap since sometime in the 70's :rolleyes:, i do have a 35$ minimum, but thats not set in concrete, as you could tell in my example of the 5 properties together, i'm cutting them for 25$ a piece once a week. they measure 105' X 150'ish, w/ 1200-1300 sqft. homes, the drives are 35 feet and about 15' of walkway to the front door, these properties came up for me right at 14k sqft. they are all connected/ no drive time between, one of the b/yards is fenced :cry: , which does slow me a little, but i generally can do all 5 in an 1-1.25 hrs. the average propety around my area is 1/2 acre (@ 35 min.) and up, this is a new development and it is so easy i couldn't turn it down, actually wish i had more of them together, btw i do 8 more properties (all about the same size) in the same area @ 35 and one at 45 because of the topography of the property and the obstacles, hence my difficulty formula. and a couple of these i can run my mower down the road and just move my truck and trailer. 400+$ / 5-5.5 hours i'll take it.

    hope that clears that up a little
     
  9. SunSwept

    SunSwept LawnSite Member
    Posts: 93

    While all of these suggestions are on track, no one has really give you THE answer which is "charge what the market will bare and what will yield a profit for you".

    $1 per minute is a general rule that is being passed around a lot. If, however, you have gone out and spent $30,000 for a new truck, $11,000 for a brand new John Deere and another $3000 for a trailer AND you financed it all, well then, $1 per minute just might not be enough.

    A simple formula: Revenue - Costs = Profit.

    Another simple rule: If your costs are 50%, to increase profit by $10 you will have to earn $20 OR you can reduce costs by just $10. In otherwords, it is allways easier and more efficient to reduce cost than to increase revenue.

    I have tried to come up with some idea of what my costs are per square foot and it has been too much trouble. The square foot is too small and the deviations can be great. I now just go by the 1/2 acre or "average cut" which was all of my costs for the month (including equipment payments and insurance and travel etc) divided by the number of cuts.

    As you do more cuts then your costs per cut is less but you get a pretty good ballpark figure. Minus labor, you should be looking at about $5 or less for every cut that you do. Add labor and benefits and you can easily get $20-$25 per cut in expense. (Don't forget to count YOUR OWN time in the labor costs.)

    Depending upon what I think that I can get away with (what the market will bare) I then double of even triple what it costs me to cut and that is price that I quote them. Always go high. You can always go down if you want but you an't go up unless they tell you something like their lot also includes 400 pounds of dog doo each week.

    The $1 per minute routine assumes that your your expenses per yard, including labor, are from $20 to $30. That might very well be accurate but, to me, it sounds just a little high. Just a little.

    Last, some who can find ways to reduce costs then pass the savings along to customers. There are those people here on this board who will consider you a "SCRUB" (not a good comment) for doing work cheaply. I wonder of the would call Sam Walton (WalMart founder) a scrub for using the very same principle.
     

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