How To Price Lawn Mowing Accounts

Discussion in 'Business Operations' started by KS_Grasscutter, Feb 13, 2012.

  1. KS_Grasscutter

    KS_Grasscutter LawnSite Gold Member
    Posts: 3,331

    As time goes by, I seem to notice more and more posts asking "How much should I charge to mow grass?" So as I was sitting there eating dinner tonight, the idea for this post popped into my head. This post is not intended to take all the work out of it for you, but may help others (as well as myself) to figure out how much to charge.

    First of all, there are so many variables it will take some tweaking. Full or part time. Other services offered. Region (cost of living, season length, etc). Work from home or have a shop. Etc.

    In order to be successful, you need to cover your expenses as well as your tax obligations and have enough left over for your desired profit (this could range from a part time gig earning $100 a week to pay for your beer and skoal, to a desired profit of $100k or more).

    The numbers I will use in this post are gonna be roughly estimated, some based on my numbers, some I may just make up.

    Ok. Here is the scenario. In your market, the typical lawn is 8,000 square feet. You are a lawn mowing contractor only to streamline expenses. You want to know how much money you need to make a profit. You are a full time solo operator, who works from home. Your wife has a job so insurance is provided. Your target number of accounts is 60.

    Your expenses: (cost per year)
    -fuel ($2,000)
    -liability insurance ($600)
    -advertising (door hangers, bus cards)($300)
    -logoed t-shirts ($150)
    -truck lettering ($100)
    -equipment ($2,300)
    -trucks ($1,000)
    -trailers ($250)
    -paper, envelopes, stamps ($250)
    -shop supplies ($500)
    -tools ($500)
    -vehicle insurance ($750)
    -business cell phone ($1200)
    -vehicle and equipment upkeep ($2,000)
    -vehicle registrations and personal property tax ($500)

    You need a $8500 truck with $500 of lettering, that will last 5 years and you can resell for $3500. Your trailer will cost $2500 and last 10 years. You need a 52" zero turn ($8,000/keep 4 years/sell for $3000) and a 32" walk behind ($4,000/keep 10 years/sell for $1,000), as well as $750 per year of smaller equipment.

    Based on all of this, your total expenses are $12,400. Of course this will go up significantly if you have more equipment. You have 60 lawns that get cut 34 times, for 2,040 cuts per year. Therefore your expenses are $6.08 per lawn.

    Now, you cut 2 of those lawns per hour, 12 in a day, getting the 60 done in 5 days. Figuring in maintenance and admin time, you work roughly 45 hours per week, or 1,530 hours in the 34 week season. As the owner, if you want to make (net) $30 an hour before taxes, you need to gross $45,900+ the $12,400, which is $58,300.

    To translate that into a per cut price, divide the $58,300 by 2040. That is $28.58.

    So in conclusion, that 8000 square foot lawn needs to be billed at a rate of at least $28.58. Tell the customer $32, they'll counter with $25, you agree on $29 or $30. Or they agree to $32 and you make a little extra profit.

    Now, like I said, there are a lot of variables this doesn't cover. Insert your situation and numbers, and I would imagine you will get pretty close. Hopefully this will help some folks, and maybe eliminate some of the "How much do you charge" questions. Also, I didn't go back and redo any of the math, so if something is off, try to go easy on me lol.
     
  2. Jimslawncareservice

    Jimslawncareservice LawnSite Platinum Member
    from mn
    Posts: 4,133

    Subscribed
    Posted via Mobile Device
     
  3. KS_Grasscutter

    KS_Grasscutter LawnSite Gold Member
    Posts: 3,331

    Well, I will bump this up, once, in hopes that it might help SOMEONE. I put a little time and thought into this post, it's kinda disappointing to see it get almost completely ignored in favor of the typical "nice stripes, dude" posts.

    Im sure more people would have seen it on the commercial mowing forum, which i'm almost positive is where I put it and it got moved here. Yet the "how much do I charge for this" posts, that this was meant to help answer, will remain there. Go figure.
     
  4. Landrus2

    Landrus2 LawnSite Platinum Member
    Posts: 4,811

    You tell them don't know if they going to listen :laugh:
     
  5. Jimslawncareservice

    Jimslawncareservice LawnSite Platinum Member
    from mn
    Posts: 4,133

    A post like this should be made into a sticky. Ks is your name Aaron?
    Posted via Mobile Device
     
  6. KS_Grasscutter

    KS_Grasscutter LawnSite Gold Member
    Posts: 3,331

    Close, it's Eric.
     
  7. Jimslawncareservice

    Jimslawncareservice LawnSite Platinum Member
    from mn
    Posts: 4,133

    Oh ok, there was a guy who sold a bunch of stuff on Craigslist and eBay from there.
    Posted via Mobile Device
     
  8. lawnkingforever

    lawnkingforever LawnSite Bronze Member
    Posts: 1,280

    I agree. This was a good thread with valuable info for the "newbies". Nice of you to take time to post it. I guess people are more concerned with one of the many threads on when to put out flyers and when to start mowing, even though it is still the middle of winter in some parts of the country. If you would of started another thread on the big mystery surrounding BOP you might have gotten a better response.
    Posted via Mobile Device
     
  9. drenchedlawn

    drenchedlawn LawnSite Member
    Posts: 145

    I too really appreciate this thread. Thanks, nicely done.
     
  10. rkeguy

    rkeguy LawnSite Member
    Posts: 130

    Excellent and very helpful. I agree and hope an administrator will make this a sticky. Very well laid out and explained in great detail.
     

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