If you were starting a new business today, what would your pricing be?

Discussion in 'Business Operations' started by sedge, Jan 25, 2011.

  1. sedge

    sedge LawnSite Fanatic
    Posts: 32,643

    Here is the situation. My son who was in college decided that he didn't like engineers school and he wants to get back into lawn care. I have tried to talk him out of it, but he really likes to do it, so i am helping him get started.

    We have no debt on our place and he lives with us. Just bought a new enclosed trailer, truck and equipment.

    We live 15 minutes from one of the higher income area's in the state and the economy has been pretty good here.

    I started a lawn care service back in 2005, we started in the spring with zero customers and ended the year with just under 400. We were priced at $25 per 10k lot (which is about 5k in grass) for mowing, edging, line trimming and blowing for weekly service. 3 man crews were doing about 1k in revenue per day and the average price per lot was about $34 bucks.

    I know what it costs to run this business and can even make money at $20, but surely do not want to mow for that, nor will we, but we want to be able to pick up work at a decent clip.

    What would you guys price yourself at in the current market, if this was your first year with no debt and all new equipment?

    Thanx
     
  2. 4 seasons lawn&land

    4 seasons lawn&land LawnSite Gold Member
    from NY
    Posts: 3,587

    cost of op plus profit to make it worth it
     
  3. purdue37

    purdue37 LawnSite Member
    Posts: 5

    A. Income generated through this line of work is great, but giving up an education to pursue this is short lived.

    B. Assuming that you can pull 1k per day per crew is fairly ambitious and will not scale to the point in which you can work a computer as opposed to a lawn mower.

    C. I have an MBA and a B.S. from a reputable school and only after months of work did I decide that I could make this industry make money for me.

    D. I run 65 five guys in mainly two man crews, as you pick up zero marginal value on the third guy, a couple of enhancement crews, three chemical applicators, and never in my wildest dreams would I let my son venture from education into manual labor.

    E. Education provides you with the ability to be a business owner and not a 'cutter'

    F. Unless community college was the option given up.
     
  4. JDUtah

    JDUtah LawnSite Silver Member
    from UT
    Posts: 2,636

    35 to 45 per mow for 5,000 sqft of turf. 25 is much to low if you ask me. 333 per guy per day is kinda low too IMO.

    But, you are saying you were mowing 80 lawns a day? (400 weekly accounts) with just a three man crew? If you were really cranking out those numbers then heck, 25 might not be bad after all. (including drive time, your numbers say you spent 6 to 9 minutes per lawn) Also note... 400 accounts, or 80 per day multiplied by 25 per mow is 2k income per day, not 1 k
     
  5. sedge

    sedge LawnSite Fanatic
    Posts: 32,643

    One can lead a horse to water, but you cannot make them drink....

    i did tie it in that he has to attend night business classes and we will also be doing fert in squirt. Mowing is how we will get in the door and keep us busy until we are busy enough with fert n squirt.

    No, had more then one crew. Me and my one son could do nearly 1k a day ourselves, but it took 3 guys to do what we could do in 10 hours. They would maybe get a bot more done, but not much.

    $35 to $45 in this economy would get us about zero lawns. maybe once we are up and running and they see our quality, but not for a new guy.

    I am thinking between $27.50 and $30 to start until we are about half to 75%full, then add $5 to what ever we were charging.
     
  6. Barefoot James

    Barefoot James LawnSite Senior Member
    Posts: 984

    So what happened to those 400 accts? Why did you get out if it was so good and you seem to already know what you need.
     
  7. sedge

    sedge LawnSite Fanatic
    Posts: 32,643

    You ever work with an over bearing brother? We had just under 600 accounts when I left in 2008. Left with nothing, and he had 75 left in spring of 2009......:laugh:

    We disagreed on how to run it, so I let him run it.
     
  8. StihlBR600

    StihlBR600 LawnSite Senior Member
    Posts: 705

    Ok so how the hell do you get 400 accounts in one season? I would love you know your secret besides buying all of them
     
  9. punt66

    punt66 LawnSite Fanatic
    Posts: 8,538

    Obviously its because he is too cheap. I know markets are different but i will not drop my gate for less then $37 now.
     
  10. sedge

    sedge LawnSite Fanatic
    Posts: 32,643

    Didn't buy any. I said we were starting our prices at $25 back in 2005. Door hangers with price on door hanger.

    What was your price in 2005?

    I think that is your bagged price, right? We would bag some as well in 2005, price was $35. $10 extra to bag.

    if you were starting today, with the economy being tight, what would you charge? You have no word of mouth or customer service to fall back on, your brand new to the market, please remember that when replying.
     

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