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Time: What Is It Really Worth?

Discussion in 'Lawn Mowing' started by MOturkey, Oct 24, 2011.

  1. MOturkey

    MOturkey LawnSite Silver Member
    Posts: 2,741

    There is another active thread on here right now debating equipment choice for larger acreages and people always want to know exactly how quickly you can mow an acre with this mower vs that mower, but, in reality, how much is time itself really worth?

    I mow a pretty good sized shopping center. On a good day, I can mow it in about 90 minutes, and trim in 30 minutes or under. On a bad day, there is so much trash that picking it up takes almost as long as it does to trim. Every time it is trashy, I catch myself grumbling about how long it is taking, and how big a PITA it is, but the last time I mowed, I got to thinking about that, and realized that the paycheck is the same either way. The mowing itself doesn't take any longer, so I don't put any more hours on the machine, or burn any more gasoline. The extra time spent picking up the trash is basically just that, time. Sure, it is a little work, but the exercise is probably good for me, I just don't like doing it.

    I realize this principle doesn't apply to those with employees, then, the costs go on based on the time involved, but for solo operators, how much is your time actually worth? Debates rage on how much to charge per hour, and in many cases, the target rate and the actual rate are often different. But, does it really make any difference if, at the end of the day, you have turned what you consider to be a reasonable profit?

    If you stop and think about it, your time is only more valuable if you are so busy that you must turn down work because there simply aren't enough hours in the day. If, however, you are like me, and don't mow every day and still have enough time to stop at Sonic for a burger, then it actually isn't worth much, from a monetary standpoint. I think a lot of solo operators would be much happier if they concentrated more on the bottom line, and less on the time spent getting there.
     
  2. hackitdown

    hackitdown LawnSite Silver Member
    Posts: 2,486

    You make an excellent point. When the schedule is full, and you pass on profitable work because you are doing freebies for somebody, or you are washing a mower, or surfing LawnSite, there is a cost. They call it "opportunity cost".
     
  3. fastlane

    fastlane LawnSite Senior Member
    Posts: 347

    I understand your point. But sometimes I would rather do ''nothing'' with my time then spend it working for free.
     
  4. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    "I mow a pretty good sized shopping center. On a good day, I can mow it in about 90 minutes, and trim in 30 minutes or under. On a bad day, there is so much trash that picking it up takes almost as long as it does to trim. Every time it is trashy, I catch myself grumbling about how long it is taking, and how big a PITA it is, but the last time I mowed, I got to thinking about that, and realized that the paycheck is the same either way. The mowing itself doesn't take any longer, so I don't put any more hours on the machine, or burn any more gasoline. The extra time spent picking up the trash is basically just that, time. Sure, it is a little work, but the exercise is probably good for me, I just don't like doing it."

    You are confusing doing what you like with what you don't like. Mow vs liter. And that you are getting paid by the job not the hour.

    "I realize this principle doesn't apply to those with employees, then, the costs go on based on the time involved, but for solo operators, how much is your time actually worth? Debates rage on how much to charge per hour, and in many cases, the target rate and the actual rate are often different. But, does it really make any difference if, at the end of the day, you have turned what you consider to be a reasonable profit?"

    No you don't realize it's the same whether you or employees. Cost is cost. Thing is when you come up short you accept lower profits, employees expect the get their same wage.

    What you charge per hour is based on your costs and the range of local rates. If it costs you $100 to mow a lawn and regional pricing is $100 you made no profit and if regional price is $70 you lost $30. Now if your competitors cost is $80 and they get $100 they made $20. If your cost is $60 then you made $40 profit.

    So it's just not your costs alone determining profit and what to charge.


    "If you stop and think about it, your time is only more valuable if you are so busy that you must turn down work because there simply aren't enough hours in the day. If, however, you are like me, and don't mow every day and still have enough time to stop at Sonic for a burger, then it actually isn't worth much, from a monetary standpoint. I think a lot of solo operators would be much happier if they concentrated more on the bottom line, and less on the time spent getting there."

    Pricing is tricky. You charge to low people will think you must do low quality. You charge too high people will not being willing to pay.

    Thing is when at 100% capacity time to adjust rates up. Not go crazy but if you raise every one 5%.

    You were making $50,000 yr tell everyone next year +5% increase, you lose 5% of your costumers. 25 customers bring in $2000 each.

    You lose 1.25 customers, loss at old rate
    -1 customer = $48,000
    -2 customer = $46,000

    23 customers charged 5% more 2,100 ea = $48,300
    24 customers = $50,400

    So depending on actual numbers and how many customers you retain you can increase profits with less customers.

    Thing is even if you lost some you cleaned out the low profit ones, made room for higher profit ones.

    However what our time is worth and valued is not always the same thing. Because we have room for more accounts does not mean we need to lowball in desperation to get more business.
     
  5. cimkill

    cimkill LawnSite Senior Member
    Posts: 271

    I have been trying to figure this out since i started. I am still under 2 years in the buisness, and just realized after reading a thread on here that I was loosing money. I wasnt depreciating my machines nor figuring out true man hours. Since figuring it out I increased my rates on all new clients buy 70%. I am still getting new buisness but am getting much better returns. I went straight from never doing this to a 3 man sometimes 4 man crew. Its easier to loose money with employees than going solo for sure. No matter what you do I believe time is $$. Family time is priceless. Mind you where im located labour is cheap! It makes more sense for me to pay guys, and use my time in sales and marketing.
     
  6. gebby

    gebby LawnSite Senior Member
    Posts: 705

    I too do shopping area's. Yes the trash some weeks makes you sick. In those area's, I just bag it. Yes it is more work but still quicker than picking everything up. Yes I charge extra for it. Yes I bag it every week no matter what.

    Your question is, "WHAT IS TIME WORTH?" To me it is the time spent that it takes to get the job done whether I do it or if an employee does it. It is still time. Now I price evrything just like an employee will be doing it. Employees are not free so why would I be ?

    To many my time is worth nothing to nobody but me. But as I age and realize I have less and less time evryday, it becomes more valuable. To me my time is priceless but, to a customer it's right around 60.00 per hour and more if I am able to get.

    Your time spent just picking up trash is gone forever. Yes the pay is all the same I know but, it is also time lost that you could be doing other things. If you are happy with your situation that's all that matters because it's your time. What is your time worth to you?
     
  7. GMLC

    GMLC LawnSite Platinum Member
    Posts: 4,353

    Its better to work smarter not harder. I would never bid on a property to break even or loose money just to add an account. You have to bid at your acceptable profit margin for the equipment you own. Its up to the prospective client to choose who the right person is for the job. If you ever look at a bid sheet you will see bids crazy high and crazy low. Part of your bid has to be based on how much time your going to be at that property, if you dont, you are wasting time that could be used at another property that is profitable. There is only so much time in the day and it all needs to be profitable. On a side note you have to have the right equipment for the job or figuring profit vs time is going to be a nightmare. Another words if your equipment is to small for the job there isnt enough wiggle room to make a profit and have an acceptable bid.
     
    Last edited: Oct 24, 2011
  8. weeze

    weeze LawnSite Fanatic
    Posts: 7,795

    i will pick up a few pieces of trash but i'm not a garbage man so to speak...if it's a trashy place then i dont' even bother picking it up...i just cut it up with the mower and keep going...i'm not gonna spend 30min picking up trash unless they pay me extra for that job.
     
  9. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    Remember Guys:

    If your time is worth 60.00 Per hour, then by all means dont pick up trash. hire someone to do it for you, and you can pay him 10.00 per hour. this would increase your total profif.

    deligate all you can, this will increase you too. If you can. Read autobiagraphys. these people will inform you on how to become more powerfull in money.

    I sometimes see many post here about large areas/small areas.

    It's ALL your PROFET. JUST because it's larger doesn't mean you make more money.
    your base RATE SHOULD STAY THE SAME.

    You time will ONLY BE WORTH XXX.XX and YES it stops there.....

    take this challenge.
    Write down your down time..... KEEP TRACK OF IT.

    NOW track all your customers. and what your REALLY MAKING for a day then each day.
    then add them up for a week.
    and keep doing this.

    you will have a total. this will show you what your REALLY MAKING.
    and from this it will show you where you made mistakes in bidding.
    and from this you can adjust your prices accordelgly.......

    It's A SHOCKER to learn that the big appartment complex you have bene doing is really costing you money.....

    Best of luck to all.
     
  10. weeze

    weeze LawnSite Fanatic
    Posts: 7,795

    this is very true...i find i make more money the smaller the property is...for instance i have a yard that takes 30min and they pay me $40...another pays $50 but takes 1 hour....i'm making more money per hour on the smaller yard.
     

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