What is the right price to charge customers for services provided?

Discussion in 'Lawn Mowing' started by dcplace2004, Mar 14, 2006.

  1. dcplace2004

    dcplace2004 LawnSite Senior Member
    Posts: 423

    This information is for the uneducated or just plain stupid "business" people in the lawn care/landscaping industry...I am saying this because one of the accounts (of several others) that I acquired from a lowballer last Spring just went out of business...This information is from a business manual:

    "The Right Price is the highest price that your customer agrees is justified by the value AND that gives you a fair profit."

    Cost of Goods Sold (COGS) "All costs directly linked to the production or sale of a product or service."

    With this in mind, this idiot business was charging 25 dollars for lawns that are at least 40 to 50 dollars a week...by charging 25 dollars, you set the current market value lower and misinform and mislead customers with these low charges. You do no legitimate lawn care business any favor (including your business) by lowballing...Sell your quality of work and not the price and you will do well...I will continue consuming lowballers, one at a time, until most of them are gone...that is my goal, and my website I am constructing will address this and inform customers that we do have considerable COGS and many other factors affecting the prices we charge, customer knowledge being one of the factors...if there are any misspellings here, I apologize...peace...
     
  2. 2menandamower

    2menandamower LawnSite Member
    Posts: 247

    Well put. I agree with the lowballer cut outs. I hope that they all fall to the wayside (although we all know that as soon as the ones that are there now are gone more will come along with there 21" murray mower and charge 15 bucks to cut a 35 dollar yard and then in about 3-4 months when it gets hot will fold up and the customers will be calling begging to take them back. It just pisses me off.

    Scott
     
  3. wissel_landscaping

    wissel_landscaping LawnSite Senior Member
    from ohio
    Posts: 262

    I gave a guy a price $30 a cut small postage stamp yard he said the guy who did it last year was charging $15 i laughed and told him to call the other guy back,he called me on saturday and said he couldnt get ahold of the other guy and could i do it for $20 i told him sorry i'm booked for the year. theres noway i will lower my price i'm not working for the fun of it if they dont like the price call someone else.
     
  4. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    So I guess you have changed your mind from when you posted this response below 8 months ago in the thread "How Can This Guy be Making any Money? " and now you do think you should pay attention to other LCO's????

    So, good for you too for leaving the darkside...... :laugh:



    "
     
  5. grass disaster

    grass disaster LawnSite Silver Member
    Posts: 2,582

    nice catch mmlawn

    hey dc2004 do you need a band-aid for your a$$hole
     
  6. dcplace2004

    dcplace2004 LawnSite Senior Member
    Posts: 423

    I done patched it up...when you are new to all of this I suppose one can be misinformed about certain things or just plain ignorant...Now, to keep things in perspective, if that guy mowing that field on that walkbehind was charging the right amount then perhaps the "what you do to grease on a pan to clean it" thing might not be an issue, as I still have my used toro personal pace I paid 200 bucks for...it has not broke, and when it does I will buy a honda or toro proline...it is underpowered for commercial use and I know that...all my other stuff is new Stihl commercial stuff...however, I charge the same of above what others are charging...I just bought a trailer and it is a 4x8...it holds 990 lbs and it foldable to put in my garage in the winter...I will board it up with plywood with clamps and bolts I can remove later...I need it to put my mower, trashcans, tarps, and such in it as the mower in the truck thing got old without a ramp...I will have a trap on the truck for the trimmers...we all have to start somewhere and although I was offered a loan I decided to start small and pay as I can afford it...I am learning and will only get smarter as time goes on...peace...
     
  7. edward hedrick

    edward hedrick LawnSite Senior Member
    Posts: 871

    Check how much it cost to get Truck repaired. My repair shop gets $65/hr

    I find this is quite accurate. Try to time each job. get more jobs

    at one stop.You get paid to mow not travel.
     
  8. cantoo

    cantoo LawnSite Silver Member
    Posts: 2,910

    How much overhead do you have now? Keep in mind it will only get to be more as you grow. Better quality equipment also costs more, sometimes that piece of crap cheap thing at wall mart or wherever is all you need if it's only used once in awhile.
    Your also going to be pretty busy once you consume all or most of the lowballers considering they are all over the whole world or were you just talking about the ones on your street. There is no way you or anyone else is going to get rid of low ballers. Even your loyal customers will be tempted when someone offers a just as good job for $5 less. We didn't invent this game.
     
  9. SWD

    SWD LawnSite Senior Member
    Posts: 989

    I pay absolutely no attention whatsoever to other service providers in the area.
    The amounts I charge and receive are enough to sustain my growth from a one man operation almost six years ago to the seven employees, full time, throughout the entire year I have now.
    I do not entertain nor do I suffer attempts to negotiate prices for services provided.
    If the customer wants to pay less, than the scope of the work is adjusted accordingly.
    As it stands right now, I have no exterior advertising in place other than a Chamber of Commerce membership and a simple ad in the yellow pages.
    I am backed up for at least 10 weeks and falling farther behind.
     
  10. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    Good luck with that. The problem with LBs is they are here today and gone tomorrow so even if you do somehow manage to consume one there will be another one tomorrow to take his place. Even if you don't consume any they will still disappear and be replaced because they're like roaches.

    You also need to remember that, in most markets, LBs have their place. I don't work against them, I work with them. In my small market I know who most of them are and have spoken with them. If I get a call for a job I don't want I pass it along to one of the LBs in my area and I tell them what I would have charged if I had wanted it. I'll usually see them at some time down the road and ask them how they made out and they usually do pretty good.
     

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