How the differ in regional prices came to be...

Discussion in 'Lawn Mowing' started by mcwlandscaping, Dec 28, 2005.

  1. mcwlandscaping

    mcwlandscaping LawnSite Gold Member
    Posts: 3,164

    It is amazing how one place $60 per man hour is a reasonable price and another, you could get $45 per man hour maximum. Why is this, that just as an example, how do all the variations in prices throughout different regions come to be??
  2. ToroLandscaper

    ToroLandscaper LawnSite Bronze Member
    Posts: 1,177

    This is the same reason bottled water in Hawaii is $7.00 and here in TN it you can get it for $.90..and alot of it has to do with the depand.
  3. mtdman

    mtdman LawnSite Gold Member
    Posts: 3,137

    A lot of it has to do with standard of living. Where I live in michigan the sol is pretty high due to a so many of the jobs around here requiring higher education. The more you know the more you get paid. Where I grew up in Michigan, the area has gone from manufacturing to retail and service based economy, and has a much lower standard of living. My sister lives in a house that would fetch $250,000 around here and is only worth $30,000 at best up there. I can get more for my service here than people could up there. Because people have more disposable income and are willing to pay more. They also work more and don't necessarily want to do this kind of work in their free time.
  4. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Posts: 11,062

    I think it is to do with green industry progression within an area....
    Or should I say average progression and average consumer wages.

    I don't buy into the supply and demand jargon.

    People who can afford to will pay whatever is somewhere in the neighborhood of average for products or services... or they will choose to do without. Doing a little comparison shopping is how we all decide what is a good price for something and if we are willing to pay it.

    So if gas is atleast $2.50 a gallon at every station in your area, you'll either pay $2.50 or do without. If every 60" ZTR on the market costs atleast 8K that's what you'll pay or do without.

    By the same token, if the majority of guys in your area are shooting for $45 an hour for lawn work, consumers will expect to pay whatever rate for their size lawn that fits the ratio... or however you want to say it.

    So if the average quote is $45 and yours is $60 it is going to be much harder if not impossible to get a supply of enough work to meet your financial demands... and that's where it comes into play.

    I've fought this satistic for a long time and it gets harder and harder every year. Reason being is that there has been no progression in this area and there has no support for a host of sucessful companies. By no progress I mean that guys are getting the same or less than I was getting 15 years ago for the same lawns.

    I can almost guarantee that if I were to take a residential poll, the average expectations for what they would expect to pay for lawn mowing would fall in the distinct range of $20 to $40 per cut on average, regardless of the lawn size.... As someone else here puts it, that is the average "threshold of pain" for most people willing to pay for mowing.

    Sadly, most of those who would expect to pay more just do it themselves.

    So what the average consumer expects to pay has stayed the same or decreased over the last 15 years based on what most charge, while what I charge has continued to increase. It finally reached the point in recent years that I just started decline requests for competition bids. My sucess rates for being the lowest bid or the acceptable middle of the road bid they were looking for fell to 0%... waste of time and paper.
  5. 6'7 330

    6'7 330 LawnSite Bronze Member
    Posts: 1,823

    They can be many variables to this question. In the Chicago land area; there can be huge variations on how much you can demand for your services, from one area to another. There can be differences in the rate you can command for services in an area, within an area lol. The economics of an area will dictate the price you can demand for services.

    Around here it boils down to we target the villages and areas that have potential clients, who earn a large deposable income. These areas allow us to make our target rates.
  6. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    I believe 2 main factors influence pricing.

    1: As MTD said it is the general economic condition of an area as a whole that can affect pricing. Time and time gain there are members that complain that they just can't make in their town because they can't get the pricing up to a liveable level. In every case a smple check of or reveals that their local economy is running below the national average.

    2: Competition. If you're driving down the road looking to pass out flyers or whatever in an attempt to gain new customs and you see a ritzy neighborhood that has 10 million landscapers running all over the place you should know better than to even pass out a single flyer. Unless all of those guys are working for the same contractor there will be low pricing in an attempt to get all of those dollars that the ritzy neighborhood has to offer.

    You can make it in both enviroments but it takes a lucky break sometimes. You ever hear of the saying "Birds of a feather fly together"? It applies to customers too. Basically if you can convince one single customer that your service is worth more than the average Joe Mow then you may have it made. At this point word of mouth kicks in and that enlightened customer tells his/her buddies about the guy that charges a little more but is worth it. Since birds of a feather fly together it can be assumed that the enightened one's buddies will also be of a similar means and will also be able to afford your services. The only problem with this is it may take years to get where you're going but the alternative is to give your services away and never make a living wage.
  7. jeffex

    jeffex LawnSite Bronze Member
    Posts: 1,933

    I agree with RM 100% the only factor I would add to Economics and competition would be age of population. This would apply to residential customers where as their age increases and health declines they willingly , or from a doctors orders, stop mowing their own lawn. Young professionals or people with allergies still have their lawns cut but older people such as widows or ladies whose husband is in ill health have NO choice but to pay a service. Baby boomers are retiring in record numbers and should increase the mowing customer pool.
  8. 6'7 330

    6'7 330 LawnSite Bronze Member
    Posts: 1,823

    You can pitch a fancy sales pitch all you want, but if your economics in a particular area are bad,the rate of return in that area will correspond.We target the account the mow-joe can't take care of, cients who have demanding full service requirements.The only reason we mow,is because to get these type of account's you have mow the grass.We leave the mow-joe's to cut one another's throats, over the mow-joe blow and go market.
  9. jeffex

    jeffex LawnSite Bronze Member
    Posts: 1,933

    I know of a guy in my area that targets the lawns no one wants . Crappy yards , hills , row houses , gates etc. he charges outrageous prices because the people can't get anyone to mow their yards. He has alot of 10 day and 2 wk cuts but he gets $30 and $35 for 1000 sq ft. lawns. He only uses 21" cheap mowers and homeowner $69 weed eaters. He scavenges parts to keep for the next mower,weedeater, and blower. and throws the worn out ones away. His overhead is low. He has 2 brand new trucks and he has his mexican nephews ,cousins , and friends working with him. He is a drywall contractor full time and has 100 + lawns. He bought a walkbehind yrs ago but hated it . Its still in his shed.
  10. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Knowing your true costs will determine what you need to obtain for an hourly rate. Unfortunately, the majority of LCO's don't have a friggin clue and that is why they are mow-joes.

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