Ohio profit margin (Mowing only)

Discussion in 'Network: Central' started by KERRTURF, May 26, 2006.

  1. KERRTURF

    KERRTURF LawnSite Member
    Posts: 129

    There have been quite a few post lately about pricing. Of course the reasonable response is to know your cost of doing business, and add your hourly rate to get a price, but what about profit margins?
    I have already done a search for the answer, but can't seem to find detailed information, so I thought I would put it out there for the other LCO's in Ohio.
    Once I have figured out all overhead cost, maintenance cost (estimate), replacement cost of eqipment, and labor cost what is an acceptable profit margin that should go back into the business?
    I have been able to keep overhead cost extremely low, and I am around a 20% profit margin for the business. Is this about average for the Ohio area?
     
  2. Drew Gemma

    Drew Gemma LawnSite Bronze Member
    Posts: 1,510

    nothing less than 20% in any business is the goal! On mowing some days it is at 50% mostly becasue of low travel others it is 20%. Sidework I take nothing less than 30% or I just skip it. The last 2 years sidework has been crazy and profitable I want to level off my mowing and start pushing extras. Just don't do anyhting for less than 20%
     
  3. KERRTURF

    KERRTURF LawnSite Member
    Posts: 129

    Thanks for the input Drew Just so I am sure we are talking about the same thing, let me run this by you.
    If you have a property to mow, and it takes you 1 hour with a ZTR that you figure is costed at $10 per hour, 15 minutes with a trim mower that you figure is costed at $2 per hour, 30 minutes with a line trimmer that is costed at $1.50 per hour and 15 minutes with a blower that is costed at $2 per hour you would have a total of $11.75 in cost. Add in $20 per hour labor, $1 for insurance, and the total is $52.75. If you build in a 20% profit margin, the total bill top the customer should be $63.30 plus tax.
    Of course, these numbers are fictitious, but I see a lot of guys mowing for less than I can if I keep my 20% profit margin after labor cost. It seems that there are a lot of people who forget that they run a business, and that the business needs to grow.
    I have decided this year that I am going to be firm in my pricing structure, I can go broke at home doing nothing.
    Thanks again for your help, anybody else have a different profit margin?
     
  4. Jerry Andersen

    Jerry Andersen LawnSite Member
    Posts: 62

    your also talking about 2 hrs of work plus drive time $120 to 160 may not be to much either
     
  5. Drew Gemma

    Drew Gemma LawnSite Bronze Member
    Posts: 1,510

    well drive time sucks but until you get the route down you have to bite the bullet alittle on driving. Now that we are around 70 cuts aweek plus double cuts windshield time is getting less sometimes I miss it.
     
  6. BUCKEYE MOWING

    BUCKEYE MOWING LawnSite Bronze Member
    Posts: 1,169

    Columbus has a lot of cheap people......we have alot of affluent neighborhoods and people only want to pay $25-$30 for 10-20k+ yards.....and god knows they all have small gated yards and huge back yards....esp. in these new subdivisions....
     

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