loss leader...i was thinking....

Discussion in 'Lawn Mowing' started by bobbygedd, Jul 26, 2005.

  1. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    i've heard here that alot of guys consider cutting grass a "loss leader", and contract the grass customers at mediocre prices, so they can make money on the extras. so i'm trimming these bushes today, sweating my butt off, and i'm thinking, " bob, you are a genius." but other than that, i was thinking, " why the hell would anybody take a service like grasscutting, when you are there every freakin week, and use this as a loss leader, to get at the 1-2 times a season trimming, and a little mulch.?" if i HAD TO use anything as a "LOSS LEADER", i certainly wouldn't make it the service that required me there weekly, i would instead get as much as i could for the "base service" or the service that uses most of my time, and discount the bi annual services instead. input on these "loss leaders"?
     
  2. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Posts: 4,900

    Heres my view of it, 10 yds of mulch $700, bed clean up from $250 and up fert $250 and up, pruning and hauling $250 and up. Now your at $1450 x twice a yr = $2900 min.
    Its hard to make that kind of money for the hrs worked vrs. the hrs worked to mow weekly at $35-$50 a pop.
    Plus it allows me the option of dropping any pita customers and I still took the easy money in the spring before mowing even began. JMO
    The fert would be 5 apps.
     
  3. Lake Claire Lawn Ranger

    Lake Claire Lawn Ranger LawnSite Member
    Posts: 242

    I THOUGHT THE GENIUS WAS ABOUT TO FIGURE IT OUT!

    I guess not

    j/k Bobby
     
  4. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    mac i see what you mean but, grass cutting is usually 28 cuts per season. i can't see practically giving away 28 visits, to score on the extras. if you are cutting 28 times, and about breaking even on the mowing, this means that, ok, lets figure it like this: the $2900 you are getting for the extras, probably only drew a profit of say , even $2000. ok, you visited the property 28 times mowing, to only break even. then you visited the property twice for mulch, bed cleanup, pruning, 5 times for fert. this means you visited the property a total of about 33 times (two of the fert apps were done at the same visit as mulch). 33 visits, for a profit of approx $2,000 = a profit of about $60 per visit. i'd rather make my mowing visits more profitable
     
  5. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Posts: 4,900

    Can't argue with the fact that mowing need to be more profitable but so does everything :D I would never mow at a rate to break even, I do make a profit on it. But as a percentage I can make a larger profit on the "extras" Also mowing is not my main objective I'm geared more for the intalls so the mowing gets my foot in the door to upsell the other services that are more profitable for me. Plus as I said, And this is worth a lot to me, when a customer becomes a pita I can drop them knowing that my time estimating there job and putting up with all the BS that makes a customer a pita in the first place was not done for free. I already took the lions share of the profit. It works for me might not work for anyone else.
     
  6. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    I'm with Mac on this one big time bg.

    I'll "lose" 3, 4, even 500 bucks a year (or more) on mowing to get the premium services. Throw in fert, mulch, aerating, weeding, installs, pruning, snow plowing, and whatever else and then I don't even think about it. At 47% net profit currently, what is there to think about?

    Case in point, we did a 82 yard mulch job last month on a residential. Weeding the beds and disposal came to about 900 (big time mess), edging a little over 500 dollars, and we billed the customer at $75 a yard for the mulch installed (paid $16/yard for it and delivery was free)...$7500 job we did in 2 days basically with 4 of us. So labor and materials cost me about $2500...do the math. Guy in the beggining of last year asked me if I could mow his prop for 70 bucks instead of 80 I quoted him. I said no problemo.

    So I lost 3 bills over the course of the year mowing. BFD, cause I would have never got the 5 grand profit for the mulch hadn't I been his LCO in the first place.

    Loss leader you say? Nope, no-brainer I think.
     
  7. Precision

    Precision LawnSite Silver Member
    Posts: 2,995

    Holy Crap. 82 yards on one house. What kind of mansion with beds from hell was that.

    Did you do Buckingham palace?

    Rod I gotta give it to you on that one. Man that is one sweet account.
     
  8. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501


    That's nothing...last year we did one (residental) that was 300 yards. Now, that was big. Get this, it's a weekend house (the one that needed 300 yards)for a couple that lives in NYC during the week. The joint is 22K square feet with 9 fireplaces. 8 car detached garage. It goes on and on...
     
  9. 6'7 330

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

    We run our company in to separate divisions, landscape installation and design and landscape maintenance.

    We take a somewhat different approach and do not mow to up sell the extras. The only reason we do mowing at all is because it is part of a full service package and the extras are in it at top dollar rates. The only lesser package we offer is to large commercial accounts.
     
  10. Precision

    Precision LawnSite Silver Member
    Posts: 2,995

    That kind of house doesn't really exist here. But some day I am gonna build myself one. Especially the 8 car garage part. You can keep the 22k ft sq. Anything over 5k sq ft just means my woman might successfully hide from me. :D

    300 yards that is 3+ semi loads of mulch. I hope you used a blower truck.

    on the 82 yds how big is the actual turf area?
     

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