projecting monthly goals

Discussion in 'Lawn Mowing' started by Eric Green, Feb 6, 2001.

  1. Eric Green

    Eric Green LawnSite Member
    Posts: 40

    I have a ? about the machine/man hr. thing. I'm trying to project monthly goals or figure profitabilty for the upcoming months. How do you guys figure out how much to charge for the machine(s) and labor if lawns are between $20 and $30 a stop???



    Eric
     
  2. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    What size decks are you running and what are the avg sizes of these properties 6-10/m.sf. are they larger?? smaller??

    Need a little bit more info to help you out.
    Kris
     
  3. Eric Green

    Eric Green LawnSite Member
    Posts: 40

    That's the thing, I'm buying new equipment I plan on a 48" deck and a 32". most are about 4000 s/f some maybe larger.
    Last year I ran 2 32" decks due to alot of the gates around here.This year I want to know my profitability so I don't underbid myself.sorry for rambling!!!

    Eric
     
  4. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    One operator can cut approximately 25 lawns (8m/sf avg) a day by just mow trim blow if they are realitively close together say within a 5 minute drive. Its a hussle but it can be done.

    If you have just basic 4m/sf lawns without many obstacles I would plan on around 16 minutes per account.

    As far as adjusting your price I would figure your overhead then replacement costs for equipment, then operating expenses and lastly add on a percentage of profit say 35% or so.

    Hope this helps.
    Kris
     
  5. Eric Green

    Eric Green LawnSite Member
    Posts: 40

    When you say replacement costs do you mean estimated for each piece of equipment or do you mean a minimum budget for repairs? Also do you include employees in overhead costs? Can anyone give an example of the things they would include in their overhead,if the office is at home?? If I go into full time, I would include utilities and personals in as well right?

    Eric

    [Edited by Eric Green on 02-06-2001 at 02:17 PM]
     
  6. VLM

    VLM LawnSite Member
    Posts: 189

    It seems to me that you should just use a flat fee based on the neighborhood and what your competition is charging. Adjust for obstacles, hills and so on. I dont take a job for less than $35 now and I'm cheap. Different areas have different going rates and N VA is a pretty expensive market so I'm sure your area is different, but just make sure you're not undercharging. I did that for many years until I started talking to my competion. As for the profitability measure, I just tackle it working backwards, ie.. my income is a, my expenses are b, a minus b is c=profit. If I'm not making enough profit I raise the price. If I only used the profitability test to set prices I would underprice many juicy accounts that are in neighborhoods that command higher prices.
     
  7. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    I figure that a mower should last 4-5 seasons before any major repairs need to be done and that hand held equipment should last approximately 3 seasons. I take the number of months we operate the different pieces of equipment in. I add 30% to what I buy them for and then divide that number by the total number of months I hope the equipment will stay operational for.

    Say that you buy a machine for $4000. I would estimate the replacement value at $5200. I would then divide this figure by 32 months(4 seasons @8 months each)and end up with 162.50. Now I divide the 162.50 by 4 weeks (per month) and my replacement cost becomes right around $41 a week. If you are serviceing around 20 lawns you know that you must deduct $2 per cut to replace this machine down the road.

    Hope this helps.
    Kris
     
  8. Eric Green

    Eric Green LawnSite Member
    Posts: 40

    Thanks guys for the insight! So if I buy used a used w/b then I should't anything older than 2 years right?

    Eric
     
  9. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    Thats not necesarily the case. I bought a used machine from a guy for $600 once for one of my parents neighbors to use on his large yard so that he could get the exercise.

    When you are looking into purchasing a piece of used equipment you need to think of how the unit was operated. Were the conditions always hilly or did they use it to cut around ponds?? Was it for an industrial account where roadside debris kicks the crap out of equipment?? How well did they maintain the piece of equipment?? Regardless of what he says, look at the other equipment he has in his shop. If his other mowers look like hell and this piece is spotless - well theres a story there.

    Talk to your local dealer or the dealer he deals with for service. They can often let you know how he "truely" treats his euipment or his employee's for that matter. So just do a little bit of research and you should be able to make a worthwhile purchase.

    Kris
     
  10. awm

    awm LawnSite Gold Member
    Posts: 3,354

    You younguns shore know how give an older fella
    a reality check.16 min a yd
    and all day at that
     

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