Would you mow for $17.66 / acre..... follow-up

Discussion in 'Lawn Mowing' started by LwnmwrMan22, Feb 15, 2006.

  1. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    Just thought I'd post the results of a school bid that I put in about 2-3 weeks ago, which prompted the original "Would you mow for $17.66 / acre" thread.

    The board approved the mowing bid and the fertilizing bids last night.

    Refreshing everyone's mind, this is for 3 schools, located on the same parcel of land, approximately 30-35 acres of turf.

    Some fencing around the highschool track / football field, not too many trees and fairly open.

    The bid for the mowing went to the guy that's been doing it for the last 3 years, for the same price as last year, $13,600. My bid was $22,500.

    The fertilizing, went to a different company than who's been doing it for the last 4 years. CL/TG has been doing it for 4 years, last year's bid was $8200 for 4 apps. This year a new company came in and is going to do the 4 apps for $7400. My bid was just over $15k for the apps.

    So, the school district is getting mowed, along with 4 apps (pre-m, sprayed 2 times, fertilized 3 times (after the pre-m)) for about $21k, $1500 LESS than my mowing bid alone.

    And people think that I'm cheap mowing at $20-25 / acre.
     
  2. Flex-Deck

    Flex-Deck LawnSite Silver Member
    Posts: 2,846

    Well - I guess we are both off the hook on LS as being considered Lowballers - I also go for 25 per acre on big jobs, - but we also have our mowers sitting in the garage in some instances of losing bids we want.
     
  3. Jpocket

    Jpocket LawnSite Silver Member
    Posts: 2,278

    I wouldn't consider myself a low baller, because my overhead is in order.
    I don't have an 05' or 06' F-550 Diesel, with 2 Liquid cooled Z's Running around. In that case you couldn't cut for $20 per acre.

    My total 3 work trucks cost me about $6500 together.
     
  4. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    I'm sorry but as a solo I would never consider those bids, not even close. Now if I had employees and it was a thing to keep everybody busy, then that would be a different story. Still, you never make big money with government / schools / churches / et.al., but it is enough to survive on and can save your tail in a dry year. Also, I suppose with employees it pads those gaping financial holes that would otherwise be left open, thou whether it fully patches them I wouldn't guarantee, no doubt it helps.

    Far as the machines sitting around, it gets to a point where I would lose money if I did not have them sitting... As for me, I prefer earning zip as compared to actually losing, that just frustrates me to no end. Because for the truck, I'd like to get a little something newer one day, I get tired of driving 20-year old p'ups... My oldest mower is 11, my second oldest 8... This stuff has to go because it will not last much longer, so I can not stand by a low bid when my equipment is at stake. One, maybe two more years and I have to have another new mower, by then my 1-year old will be 3-4 years old and before you know it, it starts all over again.
     
  5. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    Depends.

    I've got a 2005 Dodge 2500 Quad Cab Diesel 4x4, along with a 2003. I've got a 2003 24' V-Nose all aluminum enclosed trailer.

    I've got 2 60" mowers, both newer than 2002, along with a 45 hp Kubota 4x4 diesel tractor, along with a 16' dump trailer and a 26' flatbed trailer, all newer than 2001.

    I've got an 11' pull behind mower for the Kubota and a 2001 Toro 11' WAM.

    What I DON'T have, is any employees or any employee expenses.

    If I did, I'd never be able to afford 1/2 of this stuff.

    I'm not trying to brag, or show anyone up. My point is that your biggest per hour expense in this business is labor. Nothing else that you buy is going to cost you $10 / hour to use, and that's if you're paying someone $10 / hour cash money, without paying in taxes or any other employee related expense.

    If you're actually paying your true employee related expenses, then you're talking $15-20 / hour, on the cheap end for that labor.

    With the big mowers, and big trailers to get the mowers around, you can mow for $20 / acre, since you can cover 5 acres in an hour and still make $100 / hour.

    Again, this only works when you're in an area where you have large areas to mow as well.
     
  6. ALarsh

    ALarsh LawnSite Silver Member
    from Midwest
    Posts: 2,412

    Why have 2 60" mowers being solo?
     
  7. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    For when one breaks down / gets a flat, you just put it back on the trailer, keep mowing. Virtually no down time.

    Think about this.

    Say you work 50 hours / week, 24 weeks / year, this is how I set my contracts up.

    A $40k truck, if kept for 4 years, or 4800 hours costs approx. $8.50 / hour.

    A $12k mower, if kept for 3 years or approx 3600 hours, cost approx. $3.50 / hour.

    Same thing with trailers, etc.

    When you break equipment down per hour, it really doesn't cost that much.

    Basically to own the mowers, it's costing me $7 / hour to have 2 ZTR's sitting on the trailer for 1200 hours / year while I mow.

    It costs me approximately $17 / hour to have the 2 trucks.

    The WAM and tractor / mower is costing me about $17 / hour, including the trailers.

    My insurance is $5500 / year, so that's about $5 / hour.

    My fuel bill last year was about $10k, including fuel for snowplowing, so I'll drop it down to $8k, since I don't do near the driving for snowplowing as I do mowing grass all week, so that's about $7 / hour.

    Since everything is new and under warranty, there isn't alot of repairs, at least major ones, so if you figure another $5 / hour, or $6k for the year, that more than covers it.

    Now add all those up and you're at $58 / hour. Now I charge between $75 and $100 / hour, depending on the account and how long I've had them. My long time accounts I've got towards the bottom of the pay scale, the new ones all get bid at $100 / hour.

    That leaves me between $17 and $42 / hour that I get after all this, an average of about $30 / hour, or on a 50 hour week, about $1500 / week.

    Now, those numbers are if you're working at 50 hours / week. I usually put in between 60 and 80, sometimes up to 100 in the spring and there's alot of rain so I'm trying my darnedest to keep the clumps away.

    Even with the more hours, the fuel bill is the only variant. Most other truck / equipment costs are the same, since you're already owning them.

    Sure, I could work with some trucks that I picked up for $3-4k each, but I, and I stress I like new trucks. It's what I work for. It's my treat to me, the company pays for, and is a tax benefit.

    If you throw 2 guys in on the deal at $20 / hour, including MOST employee related costs, JUST the labor, not costs associated with extra running of equipment, now that eats into my $100 / hour, to the point where I'm losing money.

    Yes, I could get more done, but I don't want any more work, or employees.
     
  8. dwc

    dwc LawnSite Senior Member
    Posts: 628

    If you start watching what you ACTUALLY spend to drive an old clunker, its not much less if any than driving a new truck.
    Yeah, you may get by for 6 months without anything, then there comes the $2500 transmission. (or whatever the case) There is your $400 a month for a truck payment. That doesnt include all the extra maintenance, downtime for the truck, and any other repairs done. All that then you still have a old truck! It costs a LOT to drive a truck (or any vehicle).
    It just all depends on whether you want to spend it up front each month or at the mechanic shop every so often.
    I am solo, and I look at my truck like my mobile office all day. I like getting in to a nice, clean, professional looking truck all day. JMO.
     
  9. dwc

    dwc LawnSite Senior Member
    Posts: 628


    I bet not one piece of equipment has ever called in sick or just walked off the job either huh?! dancing

    I learned a long time ago, equipment is CHEAP if it will save hiring another employee.
     
  10. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    One last thing that I forgot to point out when I ran off those numbers.......

    After 4 years, that truck is still worth $15-20k, so your next truck is only going to cost $20-25k out of your pocket, or drops down to approximately $5 / hour.

    Same thing with a ZTR, it's still worth $5k, so your next mower costs you just under $2 / hour each.

    Your employee is still costing you at least $20 / hour, and more as the years go on with raises in pay, costs, etc.
     

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