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Dont Be Afraid to Charge!!!!!

Discussion in 'Business Operations' started by living Green Property, Feb 6, 2012.

  1. living Green Property

    living Green Property LawnSite Member
    from PA Erie
    Messages: 68

    Hello Everyone I am new to this site this is my first thread. I have been reading this site for years and I keep seeing a question repeated. “How much should I charge?” this is dependent on what your expenses are and how much you want to make. I never understood how people could come up with an hourly rate without knowing what it cost them to do business. Word of advice to all you new guys remember this, you are much more likely to go out of business because you are too cheap than due to the fact that you are overpriced.
    I have worked in this industry for a long time and I once was at the same point a lot of you are. I started from scratch and now I live a very comfortable life style due to the lawn care business. So you can do it to, don’t get depressed! I wish I have a dollar for ever start up I say fail because they were to cheap. You just have to remember find out your cost and stick with the price that makes you money. It’s ok if you only get 1/3 of your bids. If you show up at a home and say I work for $15 an hour, how do you know the customer was not willing to pay the $50 and hour? That’s how you shot yourself in the foot. Next thing you know you will be really busy with jobs that aren’t making you money. 1 job that makes money is better than 20 that don’t make a dime. Just remember stick to your guns and keep your price up, work hard, save money and you will get there!
  2. K&L Landscaping

    K&L Landscaping LawnSite Senior Member
    Messages: 657

    Pretty good advice but the start up guys will still need to generate some cash flow.

    You can't sling a dead cat in the spring around here without hitting a new landscape trailer. It's really unbelievable how watered down this market is. I remember when you could get a lawn for $70 a cut and now you would be lucky to get that same lawn for $35. That's why I pretty much got out of residential and got into large acreage commercial properties. I will let all these newbies fight for the $30 lawns, I don't want 'em anyway.
  3. jvanvliet

    jvanvliet LawnSite Gold Member
    Messages: 3,944

    Start ups need to know their costs broken down by the hour (all of us really), that way they can bid based on time and real cost. Never bid below your cost. You can generate $1,000.00 in cash flow but if your overhead is $1,100.00 you'll be out of business real fast.

    Like the OP, it's taken me a long time to where I can be very comfortable; I set reasonable income expectations for myself (that increased as the customer base increased) and never knowingly bid below cost.

    BTW, your salary is part of that cost, don't set it at what you think you are worth, set it at what the market will bear and you don't have to apply for food stamps,

    Whatever you do, don't quit before the miracle!
  4. living Green Property

    living Green Property LawnSite Member
    from PA Erie
    Messages: 68

    Yeah I remember the golden days. I have also moved into the larger properties. I have moved in to the fertilizing and new installs it takes education and all the armature lawn monkeys can’t get into it. The small residential has just died. In 2008 I lost 24% of my residential customers just because they were losing their houses and had to move. I still stick with my prices I sign customers but not like 2007.lol
  5. smallstripesnc

    smallstripesnc LawnSite Senior Member
    Messages: 717

    I was recently approached by another lawn site member and he pretty much told me I was way too cheap! I am new to the business and I actually place my estimate on my flier. So when the client reads my flier they either throw it away or call me.

    I'll be honest I was only charging $20 as a starting price. Now I bumped it up to $25 and I may even go higher if gas prices continue to rise!

    I have a family to support and need to make money. This is my shot to make it.

    My issue is that I have about 5 weekly clients currently and one bi-weekly. I have decided to not offer bi-weekly services because many people will just shut the door in my face when I tell them it'll cost more and its hard to get someone to understand during our active growing season that the grass will be growing! And if I cut it every other week I'll have to go over it twice or bag it and I'm not doing that for the same price as a weekly client.

    Another issue I'm facing is marketing. SEO is very expensive and a lot of neighborhoods say "no soliciting" and I'm almost afraid to pass out fliers.

    I also advertise on craigslist but it seems everyone is looking for the guy who will cut their 1/2 for $20 and a lot of lawn care businesses post their dirt cheap price and then no one will pay me $25+ for a lawn when they get can get the other got for $20.

    Any advice? I have a ton of fliers to pass out and my goal is 30 weekly properties.

    Sorry to hijack this thread.
  6. living Green Property

    living Green Property LawnSite Member
    from PA Erie
    Messages: 68

    To be honest don’t do door hanger they will work but for all the time and money you put into it the return isn’t there. We used to put 30,000 out a year last year was the first year we stopped doing it. Every one and there brother who wants to get into this business tries that. You will be lucky if you get .5% return calls. Even tru green decided the door hangers are no longer effective. We have excellent luck with pens. Bic has specials for 500 for $50 we leave them every ware. And we go after new home sales every time we see a house settle to a new owner we have an envelope with our info and our pricing and a pen and magnet. Pulses we offer then incentives like $28.99 for their first lawn treatment. And professional signs are good we put them in the yard after ever landscape project we do. And to be hones the lawn mowing thing is blown out right now. I have been in this a long time and I have seen more startups in the past 3 years than the previous 10. I just could never make money at $25 per lawn. Our cheapest stop is $32 and $45 for a ¼ acre lot with the house. Focus on mulching and fertilizing and the mowing customers will follow. Mowing residential is not nearly as profitable as it used to be.
  7. living Green Property

    living Green Property LawnSite Member
    from PA Erie
    Messages: 68

    There’s a Reason guys are charging $50 a lawn its because that’s what it the price has to be to be profitable. If I could mow it for $20 and be profitable I would. Before I mow for free I’ll go home and sit on the couch and watch tv. I see it every year guys start up and say man I can do it cheaper and cut every one out. And it never works out.!!
  8. smallstripesnc

    smallstripesnc LawnSite Senior Member
    Messages: 717

    It does seem that the lawn mowing side of lawn care is really blown out. I can't go anywhere without seeing a guy pulling a lawn mower.

    The few clients I have now all keep telling me how great of a job I do compared to the other guys they have hired in the past. It seems word of mouth will be the BEST way to get my business out there.

    One client I have specifically told me he has millions of fliers from lawn care guys and its just crazy how many people start lawn businesses.

    Its a cheap business to start because all you need is something to haul the equipment, a mower, line trimmer, and a blower. Then get legal and start mowing grass.

    Its that simple but really its not. Marketing is very hard and extremely competitive! I really enjoy lawn care and its a shame people often start up a lawn business because its an "easy" business to start without a lot of over head.
  9. living Green Property

    living Green Property LawnSite Member
    from PA Erie
    Messages: 68

    trust me you are on t eh side you are now in 3 years when your more established you will be on the other side. All its going to take is a dry season and it will wash half of them away. Don’t get me wrong there is a market for guys to do 20 lawn mowing. But it’s a market that does not have any money. trust me I know a ton of people that just get cheap guys to do there lawn work then when that guy goes out of business or if someone comes in cheaper he goes with a new guy. You need to diversify don’t just concentrate on one thing. I pry have 50 to 60 fertilizing customers who I mulch for and I fertilize for but we don’t mow for just because I can’t compete with the cheap guys. To be honest that’s fine the cheap guys are just fighting for the lawn mowing but they all forget about mulching and pruning and the fertilizing. The funny thing is last year I was talking to one of this customers and I said hey when are you going to let us mow. And he said well the guy doing it now is only charging me $25. He laughed and said he must be nuts I have no clue how he is doing it that cheap well in a year or two when he quits ill let you do it. See so that guy is willing to pay my $45 a mowing price if that guy would have said $40 he would have pry still got that contract. I biggest thing is you have to figure out what it costs you an hour to do business then figure out how much you want to make then charge that much. Look around at the guys with $50,000 rigs they sure as hell aren’t charging $25 bucks so there is a market!
  10. wbw

    wbw LawnSite Fanatic
    Messages: 5,994

    I hate to break it to you but this is why everyone starts in this business.

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