Don't be the low baller!

Discussion in 'Business Operations' started by Erik R, May 16, 2019.

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  1. Erik R

    Erik R LawnSite Member
    Messages: 40

    Low balling is the worst thing you can do to yourself, your business and the landscape industry PERIOD!!!

    If you're low balling you are only hurting yourself. The landscape industry is probably the lowest paid industry that there is compared to plumbing, electrical, HVAC, flooring, construction, etc: don't make it worse! This business has almost no barriers to entry which means anybody in a truck and a few pieces of equipment can call themselves a "landscaper". What will happen is you will end up losing money, rushing through jobs cutting corners and not retaining the customer and getting a referral. If you do retain the customer and get a referral you will end up being stuck in a rut not being profitable and gaining unprofitable business.

    If you don't know what to charge that's fine, start at whatever price you start at but increase your prices by 10-15% on the next project and so on. I like to operate at a 60% gross margin. For example, you install a new sprinkler valve and it takes you one hour and $35 worth of material. I charge for my labor hour ($40) and the materials ($30). That gives you a total cost of $70. Take 70 and divide it by .4 (70/.4=175). So if my cost is 70 I will charge $175 for replacing the valve. Find numbers that work for you and if they keep working increase the price next time and find what people are willing to pay but stay firm! If you are getting all the jobs you are bidding you are probably not charging enough.

    This will help you and help the industry as a whole. Don't be in competition to be the cheapest guy in town you'll end up working more and making less.
     
    Ma&Pa likes this.
  2. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Messages: 16,099

    So why would you charge $40 an hour and then add 60%
    That’s not how margins work
    Why not simply charge the $85-90 an hour most irrigation companies charge
    Add 20% to materials ($36)
    And replace the sprinkler valve
    In the time it actually takes to drive there do the work and pack up and clean up
    So 1.5 hours at 90 $136 plus 36 in material
    $176.00
    Instead of some weird quotient you decided to multiply by for some unknown reason.

    Of course that’s a lot of money

    If you just installed jar top valves and manifolds with unions you can repair/replace most valves for about $65 including your time
    - make bank charging $95.00 and somehow l
    That’s a low baller because everyone should replace valves like a Neanderthal with a weird algorithm?
     
    Andrew H, Ma&Pa, Tara Ann and 2 others like this.
  3. OP
    OP
    Erik R

    Erik R LawnSite Member
    Messages: 40

    don't like it don't use it. Simple arithmetic, not an algorithm.
     
    Ma&Pa likes this.
  4. dieselss

    dieselss LawnSite Silver Member
    from NWI....
    Messages: 2,490

    Where'd the.4 come from?
     
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  5. Mark Oomkes

    Mark Oomkes LawnSite Fanatic
    Messages: 18,752

    Wow...who knew all this stuff.

    $40\hour for irrigation work IS lowballing.

    Raise prices 10-15% on every "next" project?

    What about job costing the first project to determine if one made money in the first place?

    Just raising your prices because is as stupid as "lowballing". Eventually you price yourself right out of work.

    For those "lowballers", how do you know they aren't making money at the prices they are charging? Just because you can't, doesn't mean they aren't. Don't get me wrong, I hate Walmart, but they really are the epitome of lowballing and in all reality, capitalism. Are you saying their model doesn't work?

    There will always be a market for low priced contractors. Just like there is always a market for Natty Light\Bud Light\Coors Light. There's also a market for craft beer as well.
     
    Tara Ann, Cam15 and sjessen like this.
  6. ShowCaseLawnCare

    ShowCaseLawnCare LawnSite Senior Member
    Messages: 411

    The same thread over and over again .
     
  7. Mark Oomkes

    Mark Oomkes LawnSite Fanatic
    Messages: 18,752

    But this time it's a new guy (again).

    Nice to see he has all the answers.
     
    GreenscapeCT, Cam15 and Jeff@diyokc like this.
  8. rippinryno

    rippinryno LawnSite Bronze Member
    Messages: 1,694

    saw 4 kids with 2 mowers and 1 trimmer pushing them down the road going door to door in a neighborhood yesterday. I thought it was the best thing since sliced bread.

    Rarely do you see kids out trying to make a buck these days, go get em, you're not taking any of my people I can garuntee you that. I encourage a little hard work, especially to see these kids doing it on their own. Work ethic is dead in these younger generations. Go get em kids!
     
  9. JMK26

    JMK26 LawnSite Fanatic
    Male, from Missouri
    Messages: 11,289

    That's a lowball hourly rate for irrigation. At least by half compared to the few guys I know.

    With so many lowballing threads it was only a matter of time before a lowballer makes a thread about how not to lowball.

    Heck I only mow and i'm getting almost double $40 per hour and more than double on certain days.
     
    JLSLLC, Ma&Pa, Cam15 and 1 other person like this.
  10. Jasburrito

    Jasburrito LawnSite Member
    Messages: 165

    Last edited: May 16, 2019
    Ma&Pa and Erik R like this.
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