How much do you charge for a gate?

Discussion in 'Starting a Lawn Care Business' started by jake78, Dec 5, 2013.

  1. A. W. Landscapers  Inc.

    A. W. Landscapers Inc. LawnSite Bronze Member
    Posts: 1,287

    Again, you missed the point.

    The guy bidding the property has an hourly rate of $60 so for him and him alone those are his prices for 1 hour of service and a 1/2 hour of service.

    This guy can only bid the property at "$60 x 1 hour with a 21" mower = $60 (this is the only equation that matters)"

    The other formula can't be used because you can't use your 60" mower on that property.

    Now, if we have a different property where the 60" could be used, it is a $30 job if it take a 1/2 hour to service. This property never was a $60 job...$60 x .5 hours with a 60" mower = $30 If you bid $60 on this property you wouldn't get the job because your price is twice as much as the market will bear for this type of property.

    There is no low balling, there is no profit being left on the table, the business owner is not a poor business owner and he is not a fool.

    The only fool is they guy who doesn't understand what the market will bear and the market will not bear the prices of the guy who is trying to charge $60 for a $30 property.

    I mow that property with a 60" and it takes me a 1/2 hour and I charge $30.

    You mow that property with a 21" and it takes you 1 hour and you charge $30.

    It is a $30 lawn and I am more efficient than you servicing this property.

    With the property that can only be serviced with a 21" mower, we are both equally efficient…Now we both have a decision to make…

    My normal hourly rate is $60

    Your normal hourly rate is $30

    We service different markets and occasionally our markets cross over into one another as is the case where the client with the 30" gate calls both of us to bid the property. In this particular case, I am operating outside of my market (larger properties more suited for 60" mowers). This is your market (smaller properties that can be serviced with 21" mowers).

    If I bid that property I can try to service this property at my hourly rate of $60 but I won't get the job because your market will only bear $30 per hour. My decision is to either pass on the job, price it at my regular hourly rate, or price it at the hourly rate for that market, or price it somewhere in between the two rates. As a smart business owner whose business requires an hourly rate of $60, I bid $60 and don't care if I get the job or not because I don't want to work in your market but I will if the client is willing to pay my higher hourly rate. The property doesn't all of a sudden become a $60 property because I happened to show up to bid.

    Your decision is to either bid normally at $30 an hour or try to bid more per hour and risk not getting the job. You bid $30 and get the job because that is what the market will bear.

    If we both bid $60, there is a good chance that neither one of us will get the job because the third guy bidding knows his market well and knows this is a $30 lawn but because the client told him that the two other companies wanted $60 this third guy decides to bid $45 and makes $15 more than he would have had you not chosen to price yourself out of the market and give the client the false impression that she has a $60 lawn and is lucky to find a nice guy to cut it for only $45. You didn't get this job but you are helping to raise prices in your market by pricing yourself out of that market.
     
    Last edited: Dec 7, 2013
  2. 205mx

    205mx LawnSite Silver Member
    Posts: 2,339

    More like 1 hr with a 21 and 3 minutes with a 60
    Posted via Mobile Device
     
  3. A. W. Landscapers  Inc.

    A. W. Landscapers Inc. LawnSite Bronze Member
    Posts: 1,287

    Just using the numbers as examples…they're not accurate…makes it easy to read.
     
  4. 205mx

    205mx LawnSite Silver Member
    Posts: 2,339

    You know I'm playin man
    Posted via Mobile Device
     
  5. A. W. Landscapers  Inc.

    A. W. Landscapers Inc. LawnSite Bronze Member
    Posts: 1,287

    I know…just seemed like a good opportunity to clarify just in case someone new didn't realize the numbers were fictitious.
     
  6. LawnForceOne

    LawnForceOne LawnSite Member
    Posts: 82

    Originally Posted by 32vld:
    A $60 lawn is a $60 lawn.

    If most people do that lawn with a 48" you can not charge more because it took you longer because you only have a 20".

    Well you can ask for $120 but the customer will hire the guy with the 48" for $60.

    Also the guy with the 60" is a fool to charge $30 because he can do the lawn in half the time.


    Exactly^^^
    I agree with 32vid. In my experience you cant price mowing off an hourly rate. Do you charge more for a mow if it takes a little longer due to wet conditions or some other hang up? I dont. There is a market price for each yard out there. No matter how fast or slow you get it done you can get $xxx from it. I have a couple of properties that I drop the trailer gate and im done and driving away in 5-6 minutes and i charge $35 (my minimum) So at AW's $60 an hour rate i should only charge $5-6??? I dont think so.

    The reason why we spend thousands of dollars on equipment is for this very reason. If i can mow the $60 yard in a half hour because i have spent years becoming skilled and efficient at my craft and purchasing equipment why would i only charge $30? If the market says its a $60 yard, you better believe im charging $60. This is the reason I work for myself. You can give 150% at a regular job (hourly or salaried) and you get the same amount of $. Operating a business i have a set amount of work to complete in a day (obviously its not always exactly the same but for illustrative purposes) Lets say for example the market value of this work is $1000. If I decide to work really extra hard because I have plans that evening or i just want to get done early im not going to give the customer a discount because it takes me less time. Im not going to charge them more either if I'm tired or sick and it takes me longer.

    I guess what im trying to say is know the market value (ie get the most out of every job you can without ripping people off) and become as efficient as possible to get that money with the least amount of time and effort possible.
    Posted via Mobile Device
     
  7. A. W. Landscapers  Inc.

    A. W. Landscapers Inc. LawnSite Bronze Member
    Posts: 1,287

    You either didn't read the entire thread or missed several key points…pay particular attention to post #23 where I stated: "Just using the numbers as examples…they're not accurate…makes it easy to read." Now try going back and reading the entire thread while keeping in mind that the prices and times are not real…they are just fictitious numbers plugged in so we don't have a bunch of letters like "X", "Y", "R", "T", etc. representing values.

    You do have an hourly rate…probably multiple hourly rates…you even told us one of your hourly rates…"5-6 minutes and i charge $35"...5 minutes of work for $35 is an hourly rate of $420…For that property you are charging an hourly rate of $420 or $7 per minute…you are there 5 minutes and the price is $35. For that type of property the market will bear an hourly rate of $420 when service is provided in 5 minutes. If a guy comes along and wants to take 10 minutes to mow, the market will not bear the same $420 an hour…this guy's market is people who want their lawn mowed in 10 minute at a rate of $210 an hour which also works out to be $35.

    So, as you've stated, you have a property that takes you 5 minutes to service and you charge $35. A neighbor on that street has the exact same size property but this neighbor has a fence with a small gate and the fastest you or anyone else can possibly service this property is 35 minutes (remember that the time is just a fictitious number used for example). How much do you charge? (remember that this new property will take you 7 times longer to service than that 5 minute property you are servicing for $35) (Also remember that this is an entirely different property than the lawn you are mowing for $35) Do you charge this new client $35 because a $35 lawn is a $35 lawn or does this lawn get an entirely different price because this lawn is not and never was a $35 lawn?
     
  8. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    Your reading comprehension is off. I never said I charge any of those amounts.
     
  9. A. W. Landscapers  Inc.

    A. W. Landscapers Inc. LawnSite Bronze Member
    Posts: 1,287

    Your reading comprehension is off. I didn't quote you. I quoted "LawnForceOne". "LawnForceOne" quoted you.
     
    Last edited: Dec 11, 2013
  10. LewisLawn

    LewisLawn LawnSite Senior Member
    Posts: 482

    cost of mowing with a gate is directly related to how much time is added to cutting the grass assuming that the increased time would be equal for anyone mowing it because the time increase in time spent mowing would be relatively close tot he same....remember the property cant be serviced by anything other than a 21" mower we are not comparing 36" WB to 62" ztr. but the again a 21" mower has a cost of operating much different that a 62" ZTR
     

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