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Discussion in 'Pesticide & Herbicide Application' started by Brown's LC & L, Mar 23, 2008.
The cost is $0 if you don't have one
With an acre lot you have driveway, house, beds, trees sometimes shed/detatched garage. How much of actually grass do you have? 30,000 sq. ft. or less? For a regular fertilizer app. you only have 45.00 in material, thats not bad, it will only take you 10 min. to do. On the pre-emergent app you only have a 50.00 net. I agree, small lawns is where the money is at.
I'm sorry, when I discuss sizes I am referring to the actual amount of turf not the size of the property. Around here we are performing fert apps for $125, or less, for one acre of turf.
I agree there is more money in smaller yards but we are not necesarily able to charge much more in those areas. In this area many companies are doing 10k properties for far less than $50/app.
About 25 years ago I worked for a company call Excellawn. Anyone remember them? They were charging 21.00 for 2000 sq. ft. 31.00 for 5000 sq ft and I think 50.00 for 10000 sq ft. They would tell us to go do 890.00 in work and don't come back until its done. They paid us 4.40/hr plus ot. There was a bonus of 10% over the 890.00. I would try to do 1100.00/day then go home. I left after a year.
We charge anywhere from min $4.00 to $6.50 per 1,000 square feet. that includes material and labor our cost on the materials is anywhere from $0.60 to as much as $2.49 for materials. The lesser amount is the liquid apps and the $2.49 is the 3rd app with the grub control per 1,000 sq feet
It doesn't matter that I charge $ 01.25 or $ 12.50 a thousand in Florida if you are in NY or any other state. What counts is running a business like a business.
COST PLUS PRICING is the only way to price your services correctly.
Cost Plus Estimating is just that, first you determine your cost and then add on a profit. It doesn't matter if you are selling Porn magazines or Bibles every business works the same. In the case of fertilization you would first develop a program of what products need to be applied. (Your County Extension Agent knows your area best and would be the best person to help you. Internet members have no idea what your area needs).
Once you know what products you plan to apply, find out your purchase price. Next add in your cost to either get them delivered or pick them up. Add in your time factor for acquiring those products as well as warehousing expense. Be sure to account for your overhead as a cost of doing business. These are things like Insurance, certification and licensing cost, telephone and advertising, equipment depreciation, and fuel costs Etc. How add in your hourly wage at 1.5 because of labor burden and then add in your profit margin percentage.
Now that you know your TRUE cost, compare it to your competitors price. If your Cost Plus price is lower than your competitor, market your price as the selling point. If your Cost Plus price is higher than your competitor, market yourself as a better service. Remember the Big Boys are real professional Businessmen who buy product for half your cost and have a better system already in place. But they also have higher overhead and advertisement costs.
Cost Plus is a win win method, even if you don't get the job, you don't lose money on that job from under bidding.
BTW If your COST PLUS PRICE is not competitive and you can't sell it, Look for another line of work.
I'm at 36 minimum, $12/k. I don't have any accounts over 4k of turf. Takes about 5 minutes to cover 3k for me. Obvoiusly longer for any spray apps with a backpack, but I do granular ferts. I also do 5 fert apps/year.
One thing that also has to be considered is where the competition is priced, I don't think I could just go cost plus in a vacuum. I'm pretty happy with a gross of $10/k before overhead and fuel... plus every account is within a mile, so travel time is near nothing, and gas doesn't kill me.
Because I am in growth mode, and still need to double my customer base, it's a bit difficult to bill out overhead amortized over my existing customer base. I price my overhead out based on how many customers I want as a goal. That means less net for now, but it's how I've set my pricing up.