What to charge

Discussion in 'Starting a Lawn Care Business' started by newmower21, Sep 29, 2005.

  1. newmower21

    newmower21 LawnSite Member
    Posts: 2

    In the spring I am going to be starting up a mowing and landscape business. My problem is I don’t really know what to charge for the mowing. I live in the western part of NY. Home prices go for 200,000 – 300,000 and most have ¼ to ½ an acre of lawn.

    What should I charge for this size yard with average trimming and blowing?

    How do you guys determine your prices?

    Thanks in advance!
     
  2. Jcs Lawn and Landscape

    Jcs Lawn and Landscape LawnSite Member
    Posts: 117

    1 dollar per minute never fails until you get better at pricing
     
  3. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    For me, a dollar per minute is tough even with 4 years experience and all the tricks and equipment and stuff... Price things at a dollar/minute when new, and I think you'll find yourself somewhat short of work... I could be wrong, but it used to take me twice as long 4 years ago, so half the secret of $60/hour is being able to do twice the work in the same hour that used to cost $30...

    Then there's fair pricing. You want to price the yard for what it's worth, like around here an acre goes for 55 dollars, that's the price for an acre lot whether it takes 10 minutes or 2 weeks, it's still 55 dollars.

    Now that's in Virginia and realize things in NY are a bit higher, so maybe acre lots in NY go for 60-75? The price drops in a strange way, 1/2 acre is NOT 1/2 the price of 1 acre.
    Let me see: (VA prices)
    1/4 acre $30
    1/3 acre $30-35
    1/2 acre $35
    2/3 acre $40
    3/4 acre $45
    One acre $55

    So, add 15 percent for NY? If it's more you can adjust later, here's my guide:
    1/4 acre 35
    1/3 acre 40
    1/2 acre 45
    2/3 acre 50
    3/4 acre 55
    One acre 60?

    Keep in mind over time as you gain experience, you'll likely want to price flat square lots a bit lower than the hillclimber extravaganza in the woods, but I think if you use the above prices as a guide, that should help get you started.
     
  4. newmower21

    newmower21 LawnSite Member
    Posts: 2

    Thanks SO much! Your pricing and explanation have helped me out a lot. Your pricing seems about equal to what others are charging. I was a bit hesitant at first but I asked a few neighbors today what they are paying for lawn care and it’s relatively what you have outlined. Thanks again.
     
  5. Runner

    Runner LawnSite Fanatic
    Posts: 13,494

    You can't go by the "dollar a minute". That is so far out in left field that you'll be lost for a whole season. In the first place, there is no logic or rationale for the "dollar a minute" thing. I've heard this for years and years and know exactly what it's done to many people. There are too many posts on here dealing with this topic to fall in for that stuff.I wish I could help you on direct pricing, but where I'm at, pricing is just SO different. There are areas down there that have prices that we can't even touch because no one around here would pay them. On the other hand, there are other areas that are way cheaper than us, as well. Hopefully, some near you can chime in and help.
     
  6. mad_wrestler

    mad_wrestler LawnSite Senior Member
    Posts: 339

    I would have to agree. A lot of people here gave me the same advice on the $1 a minute thing. However I have found that as prices vary from state to state. After you mow a few you will start to understand what your time is worth. But most importantly, you have to understand what it costs you to operate and then price accordingly. I was told that and it took awhile before I understood what it meant. For instance. If your mower cost $7200 and the life expectancy of the mower is 7 years then your cost of operation for the mower is approximately $8.40/hr
    360(days) x 24 (hrs in a day)= 8640(hrs in a year)
    8640(hours in a year) x 7yrs (life expectancy)= 60480 hrs of life
    60480(hrs of life)/7200 cost of piece of equipment)=8.40(cost of operation/hr)

    You can do this with all of your equipment. You will just have to ask your manufacture what the AVERAGE life expectancy of the particular piece of equipment is. After that then you will know what it costs to operate your equipment per hour. That is where the by the hour stuff stops. It doesn't apply to the people doing the work. Then you must find what the market will bear. Start high. We don't drop our gate for less than $35. But we do some 1/2 acre lawns for $85. You will figure it out. In the beginning we under bid some, but the ones that don't want to pay for it are a PITA ( Pain in the ARSS). And you just weed those out at the end of the season. This was our first summer and we ended up with plenty of clients. You will do fine. There is a wealth of information on this site. We are here to help.
     
  7. BH Mowing

    BH Mowing LawnSite Member
    from SD
    Posts: 4

    Sorry, I just had to post my $.02 mower cost breakdown.
    Say you work a 40 hour week. I know, I know, 80+ peak season. But just for this think 40 hours total. Would 20 hours of actual mowing be fair? Also just for grins say your mower runs on your good looks and never breaks down and never even needs any maintenance. Yes, you are mowing in wonderland Alice. OK, sort of back to the point, let's say a 26 week mowing season (I live up north, bear with me). Anyway, 20 hours X 26 weeks = 520 hours X 7 years = 3640 hours. mower cost $7200 / 3640 hours = $1.98 per hour price of your mower. Does that sound about right? Or you can try to convince the tax man that the very first lawn you mowed resulted in a $7165 loss and every lawn after that costs you nothing.
    Just my thoughts,
    Thanks
    JG
     
  8. mad_wrestler

    mad_wrestler LawnSite Senior Member
    Posts: 339

    No not at all. You missed it by a mile JG. You gotta get your average life expectancy over every hour. Whether you know it or not, your equipment is on the clock 24/7. So use the #'s accordingly.
     
  9. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    Not sure why expense is over every hour as a mower will not cost you anything when it is off (or very little)
    Handheld I give 1 year of service so that is OK for every hour but the bigger equipment is cost out by use.

    Newmower--What we are talking about here is knowing your COSTS!!!!

    There are some things that you will learn with time but you need to know costs. Ask around about life of tools and cost to run.
    Ask about
    ---insurance
    ---gas
    ---taxes
    ---office expense,paper, banking, accounting, computers
    ---trucks and all their upkeep
    ---trailers
    ---tags on trucks/trailers
    ---storage
    ---tires
    ---repairs
    ---depreciation
    ---labor time to make repairs and maintenance
    ---drive time
    ---shop tools
    ---oil & grease
    ---dump fees??
    ---advertising
    ---attorney
    ---dues
    ---interest expense (if you finance)
    ---utilities
    ---salaries or commission to sales staff (I bet you will say that you will do all your own selling, but what your really saying is you will work for nothing, ALWAYS PAY YOURSELF FOR YOUR TIME!!!

    Many will say that they don't have to worry about all this because every thing is paid for. The only person that your fooling is yourself.
    Everything you use for the business and all the time you put into the business has to be payed for by the business or you are losing money.
    Add all this up and divide by the number of hours that you will work for the year and now you have a per hour COST.
    Add your pay per hour
    Add your profit that you want to make. And this is the only reason for owning a business!
    Now you know what your hourly rate is. Just learn how long it takes to do each task and plug in you number.
    That is how much you charge.
    A lot of guys on this site will laugh at this and say that it is not necessary but if you want to grow and make a real living start right and do this and it will pay you back forever.
    Or just say $30.00 per yard and be happy making $25,000 - $35,000 working you but off 80 hours a week in the HOT sun wondering what you can do next year.
     
  10. LB1234

    LB1234 LawnSite Gold Member
    Posts: 3,210

    Sorry, but this whole $1/minute thing will not help the orginal poster.


    What you really need to be asking (and determining for YOURSELF) is how to derive what to charge. Everyones price/s will be different. However, for the most part the approach should/would be the same. It is a basic formula (well, sort of). First and foremost you need to determine what ALL of your expenses will be. From telephone bills to truck maintenance from internet fees to payroll. This is where you need to start. If you determine what your expenses will be then you can determine what to charge by added in your desire profit (but don't forget uncle sam).

    the best advice I can give is to go purchase a few books on writing a business plan, operating a business, etc. When you have specific questions post them here.
     

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