overkill?

Discussion in 'Lawn Mowing' started by fga, Nov 19, 2003.

  1. fga

    fga LawnSite Silver Member
    Posts: 2,449

    How ya doing everyone?
    I’m new to these forums, just a couple of months. I’ve been in business for almost 6 years, worked for others the 6 years prior. Everyone has been great and professional. But I’ve viewed some thread and posts, that make me scratch my head. The view of some companies in this great field we work in is take what you can, when you can, from who you can. I’ve heard of disputes over other companies charging slightly less(ON PURPOSE OR NOT!!), big companies threatening the smaller ones, bricks through windows, etc.etc…
    Let me say that it is my opinion that when your running your business, you should have some goals……not limits, but goals. If you have realistic goals, you’ll live a happy life. If you’re a greedy S.O.B., this post is targeted at you.
    First, being undercut. If you’ve ever been undercut, it doesn’t mean it was done on purpose. I once gave an estimate for maintenance, that wound up $5.50 less per cut and the guy had some words. I didn’t know what was being charged previously, and I gave up asking the customer my first season. Not only does it look unprofessional, but they lie all the time…..”He used to charge me $16.00, can you atleast match that?” If you’ve been undercut (I have also), its usually not personal, and the guy has a different price scale that might be lower then yours or mine. If you give quality service, people will pay your price, and not even have the thought to get another quote. Also, you don’t know the guys situation, he may not know any better. Or, he may know more then me & you and he’s got a system that lets him live like a king. A lot of companies are making money hand over fist, I’ve seen your rigs and pics of your houses, they’re beautiful. When does making a living cross the line to becoming greedy, taking work from guys who might be struggling. How dare that guy with that $70,000 truck set up, who’s got accounts in 3 states get the nerve to keep pushing out ward. Like I said, it depends on your goals. I want to support my family, with a house and health, and be there to spend the time with my 9month old daughter, PERIOD! I’m lucky enough to have companies where I live who have hit there desired goals, and actually give me house they can’t get to. I’ve actually had people call me for estimates who were referred to me by some companies I don’t even know, til I thank them when I see them driving.
    Point is we work for ourselves, in the best field there can be, in the great outdoors, with loud cool equipment, and trucks with more then 4 wheels, and I’m content and happy at the end of the day. I’m not rich by any means, that’s not my goal. BUT I’m HAPPY! Some of these companies want more and more and more, so be it.
    This isn’t directed at anyone exactly, just venting some thoughts I’ve had.
     
  2. justmjc

    justmjc LawnSite Senior Member
    Posts: 261

    As far as undercutting goes, market strategy is the name of the game. Why do you think they can't sell a can of coke for $10.00? Target and Kmart, meijer and farmer jacks all sell it for about $1.00, but guess what. Walmarts is selling it for 55 cents. Guess that's why walmarts is the number 1 retailer.

    I only have one question. If people are so worried that undercutting is keeping prices lower than they would like, what were you expecting? $100 for a 10 min cut job? It's all about strategy and the one who does the best, makes out the best. The only limit to your income is you and your thought process.
     
  3. turfcare

    turfcare LawnSite Senior Member
    Posts: 276

    Good Post fga!
     
  4. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    What business does anyone have telling someone what they should charge, more or less? It is still a free country isnt it?
     
  5. fga

    fga LawnSite Silver Member
    Posts: 2,449

    justmjc,
    We need a walmart in NY!!!!!!
    Thanks for reading guys!!!!

    adam FGA
     
  6. Chris Wagner

    Chris Wagner LawnSite Senior Member
    Posts: 252

    With all due respect, Walmart charging for a product is completely different that what you charge as a SERVICE.

    Lawn care is a SERVICE... it is NOT tangible. There are great services and real crappy ones too.

    In business, there will always be a market for those people who appreciate quality work and will pay a premium for it.

    Yes, there are also those bargain shoppers too.

    However, it is unfair to compare a product (Coke) to a service. NOT ALL SERVICES ARE THE SAME. All 12oz cans of Coke are.
     
  7. justmjc

    justmjc LawnSite Senior Member
    Posts: 261

    (not intended to anyone in general. But this is the truth of the game)

    Ok, I was using it as an example. It's a good example how Walmarts has a stragety that the other in the same line of business can not match.

    I can guarantee my work as confident as many on this site can. Just because I bid $25 on a lawn that takes me 15 mins to service and you would have charged $40, guess what, I'm happy with the income. I just made $75-$100 hour with my time and I win the account. Meanwhile your still looking to win that $40 bid. If you figure a crew into the equation and the w/c, etc, I still make money. Much better than my former JOB.

    You may be bidding for the $40 accounts and landing 1 out of every 3,4, or 5 bids. In my situation, I could be landing 2 or 3 out of 5 increasing my customer base much quicker than yourself making, perhaps money of a slightly milder income, but moving on volume. I can certainly guarantee there are more in between $ customers than there are top $ customers.

    There is much more stragety to this
    business than just advertising and giving quotes. Anyone can do this, but you need to add something to sell your services, move on volume, and maintain a quality product the customers want.
    If you only seek top paying customers, you narrow your playing field and perhaps limit or slow your growth potential.

    What I'm speaking of is not intended
    towards working as a scrub, without insurance and pos equipment. More along the lines of a lig. business operating at a lower overhead and different marketing strategies.

    True story.....

    I have an uncle that has run a landscaping business for over 14 years making major $$$. Never could expect to keep any employees because the wage was $7 hour. Never had leaders making wages worth staying with the company.

    His favorite line to me was " I only keep the customers that pay top dollar". I can raise their rates a little each year even though he was already commanding top $. If they quit service, I can replace them. He had landscaping jobs and city jobs, and I asked him lately how's things. He said I'm down to 1 crew and losing all my accounts. I'm being underbid and the customers obviously like the quality enough not to come back.

    I asked him when he was making hundreds of thousands of dollars, did you have any real full time descent-high dollar employees? No

    I asked him, did you ever think that if you stuck with affordable rates for everyone and picked up in volume that you could easily recoup any losses from his premium $ customers? Not really

    Since he now only runs one crew, he wanted the most $ he could make which now still puts his business at a higher risk.

    Since he started he's went up, up, and up and now's he's on a downslide trying to reverse the trend.

    PS. If the $75-$100 /hour is not good enough for the average person, maybe they should go back to the cubical and make their $15-$30/hour wage.

    I agree there are people that want premium services and will pay for it. But dont count on landing hundreds of these anytime soon.

    Lower reasonable rate = less chance of an underbid and less reason for a customer to want to search for a better rate. (good quality assumed)

    Higher rate = more profit and higher chance for an undercut bid. More power to you if you find a loyal customer willing to shell out the $ (And I'm happy to come across this time to time when I make my calls for advertising) But the brutal truth is, a good majority will AT LEAST be willing to look at your quote and see how their current one adds up. Good luck with your bids. Unless that customer believes money is no object or your services are truely that much better than most, I'm going to take your account. And I provide a very good quality service just like many on this site do. This is a business not a job. If you can't provide quality service already, you wouldn't make it anyhow.

    Business is survival of the fittest, like it or not, and I'm not here to cater to your company, your family, or anyone else's business. My job is to bring home good $$$ for myself.

    I'm sure many can at least relate to this even though a majority may not like it.
     
  8. fga

    fga LawnSite Silver Member
    Posts: 2,449

    justmjc
    You hit it on the head, I guess I'm not crazy!!!! Still could use a Walmart though.
    FGA ADAM
     
  9. It'd be nice to keep those moral objectives and make a living at the same time.
    I think too many LCO get nervous about their bottom line and start acting greedy. It might generate some imediate relief, but has a devistating effect on their business.

    Dave
     
  10. NickN

    NickN LawnSite Bronze Member
    from Alabama
    Posts: 1,010

    It's called a free market and I'm learning more about it than I ever imagined I would.
    These guys with the big homes and new trucks are doing something right.They're making money,not just getting by.They've found a market for their services and are taking the appropriate measures to insure their business grows.
    You are working yourself and your equipment harder than they are.(The 3-4
    accounts you get compared to their 1)You're having to service your equipment more(more hours) and it's going to take a toll on you and your employees health.When you have a catastrophic equipment breakdown,you're out 4 mowings per hour.They're out 2 mowings per hour.
    Who's better off in the long run when you have to catch back up from missed services due to inclement weather or equipment problems?
    When the next guy comes by undercutting YOUR low price,where's that going to leave you?You could have made your money instead of just getting by.
    As always,just my measly .02 :)

    You see it as greed.I see it as smart business.Your uncle,on the other hand,evidentally didn't plan for the rainy day.If he did,he's be able to sit back while those undercutting him,run themselves out of business and his customers start calling again.If he,as you say he did,made big $$$'s for 14 years,he should have put at least 1/2 of that money aside for situations like this.
    It's like personal finance.You don't spend all of your earned income.You put some away for the bad times or at least for retirement.
     

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