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mowing price control

Discussion in 'Business Operations' started by trophytkr, Feb 11, 2002.

  1. trophytkr

    trophytkr LawnSite Member
    Messages: 73

    I have been reading steadily all the threads i can find on lawn pricing. Ok I'm a new guy and this is what I found out so far from both you guys and a local lawn care guy. I found out that in our area the going rate per hour for mowing is 47.50. I'm just starting out and certainly don't know all the ins and outs of lawn care. Speed that you work at must play a big role on the average hourly rate. Should i charge so much per 1000 feet mowed? And if i do how much do you think it should be based on the 47.50 rate? My equipment starting out are a 21 hp white garden tractor and a 21 hp white ztr tractor both with 46 in decks if that maters in the equation. Your guys input as alway is much appriciated! Thanks:blush:
  2. trophytkr

    trophytkr LawnSite Member
    Messages: 73

    I thing my minimal price for each stop should be $25.00 to cover going to address and loading and off loading equipment. So if i mow a mall yard say 2500 square feet the fee would be $25.00 even thou I mowed less than $25.00 worth of lawn. (hope that made sence) :blush:
  3. augs dad

    augs dad LawnSite Member
    Messages: 32

    I'm a new guy too....based on what I've learned from this forum and in talking with guys locally, is that $35 is about as low as I'll go for a single property. I just paid $15 for a 15 minute haircut. She has her salary, insurance and maintenance costs....and so do you. WISC and PA probably have a similar cost of living. I'm not in a metro area like Phila or Pittsburgh. Hope this helps.

    Gary in Central PA
  4. LawnLad

    LawnLad LawnSite Senior Member
    Messages: 738

    Any time you bid a job, you need to understand your costs. With the help of a spread sheet, you can make your life pretty easy and you'll gain a good idea as to what it will cost to operate your mowing crew and what you'll need to charge.

    I have outlined my conservative bidding method - this is not necessarily for everyone. But it might give you an idea or two. This is a compilation of Frank Ross and Charles Vander Kooi type pricing. So here goes another long winded post...

    Consider these costs:

    How many men
    How much is the average wage with labor burden
    How long will they work each day - payroll hours
    How many hours will be productive or billable?

    What equipment will be used
    Truck, trailer, mowers, line trimmers, back packs, etc.
    What does it cost to operate each piece of equipment each day?

    Overhead & Profit
    How much overhead do you carry
    Apply it to your list of costs
    Add in your profit for the crew for the day

    Sample Math for sake of example... use your own numbers:

    2 men x 9 hours x $15.00 (avg wage w/ burden) = $270.00

    Truck = $38.00 per day
    Trailer = $6.00 per day
    1 36" walk behind = $18.00 per day
    1 52" walk behind = $20.00 per day
    1 21" Push mower = $5.50 per day
    2 Back pack blowers = $4.00 per day
    2 line trimmers = $5.50 per day
    1 Powertrim Edger = $7.00 per day
    Total Equipment Cost for Day: $105.00

    Adding it up:

    Total Labor = $270.00
    Total Equipment = $105.00

    Sub Total = $375.00
    Over head recovery at 45% = $168.75

    Sub Total = $550.00 (always round up)
    Add Profit (reciprocal of 15%) $ 97.00 (Divide $550 by .85)

    Total cost per day to operate $650.00
    Assume billable 7 of 9 hours / 7 hours = $75.00 per hour

    Assuming the scenario outlined above, if you were to bid on a property that will take .5 hour crew time, you might bid $40.00 per week or visit.

    When figuring the equipment cost, you need the following information.
    Purchase Price/# of yrs in service = Annual cost
    Add, maintenance costs (repairs, parts, insurance), gas/oil
    This equals total cost per year to operate equipment
    Divide this number by the expected number of days you'll use the equipment. An aerator will not be used as many days as a back pack blower.

    The overhead mark up includes your Admininstrative expenses, indirect expenses, and maybe your equipment costs. If you're looking at this closely, you might realize that I double charge some of my expenses...

    Gas is both in equipment cost and in overhead
    Equipment costs are in my overhead as well as billed per day
    I'm sure there are others... but you get the idea.

    For the example, 45% represents the above costs. If you're a lean company you may be at 30% or 35%. Keep in mind, even if you work out of your home, you can assume for bidding purposes that you are paying rent, etc. in a commercial location. Everyone else has to pay it and they bid with that cost in mind, so you can make a few dollars here more than your competitors because you have lower over head. Don't give it away just because you don't have the expense. Some day you will, and you'll need the money in the bid to support your additionaly over head.

    I'd rather be conservative. Play with the numbers, add a third crew member, a different mower. Don't take my numbers as accurate, as they are not necessarily the numbers we use, and they reflect our costs of operation and our market. Everyone is going to be different.

    I hope this helps you to determine what to bid for a job. If you had a minimum stopping fee of $25.00 or $30.00 that might make sense, as you have at a very minimum, some over head expense in just keeping the paperwork on the account. You'll have to figure out where your threshold is for a minimum. But I think you're on the right track!

    PS - Use what the market is charging as a bench mark to see if you're in the right ball park. Maybe you have to tweak your cost basis a little and understand what is different. But don't accept someone else's numbers for what you should be charging. You'll hurt yourself very quickly if you do this.
  5. mlc4163

    mlc4163 LawnSite Member
    Messages: 40

    Great responce to a fairly common question or line of thought LawnLad.
    Thats the kind of meat and potatos information that will truly help small business men, and women. Keep fighting the good fight.
    Staight math and then it's worth your time and situation or it's not.
    $30 min Trophytkr. But must be a small plot with a simple and efficient layout.

    INTEGRITY LAWN LawnSite Member
    Messages: 20

    I love posts like this! Thanks guys!I do however have one question. I am a small business, and have a 36" walk behind scag mower with Kawasaki engine, and just one stihl edger/string trimmer combo unit. I can't figure out the cost per hour to use those machines, because I don't know the years. How can I figure out the years part of the formula? Manual didn't say, dealer says depends on person, which I understand, but how have you guys done it, and if you know anything about my machines, what would you say years should be?

    Thanks guys.
  7. LawnLad

    LawnLad LawnSite Senior Member
    Messages: 738


    How many days a week do you run your equipment? If you mow 2 days week (on the weekend) - not saying you do, but follow the example.

    The equipment in theory is going to last longer than what you'll price it at. A dealer might tell you that a Scag will last three years or four, or five. Once you get into older equipment you'll be fixing the little stuff all the time, so many guys will turn their equipment over every two to three years.

    You may not turn your equipment over, but assume that you do. Take the original purchase price for new equipment, divide it by four years. A $4,000 mower will cost you $1,000 a year to operate by this math. If after three years you sell it for $1500, that's your salvage value. The mower cost you $2500 to run over three years, or $833.00.

    If you're buy used equipment, figure it off new equipment pricing or if you use used equipment pricing, make sure you got enough for repairs built in.

    For a linetrimmer/edger, maybe a two year life span if used 5-6 days a week for the season. I like to turn over 2 cy equipment every year to two years depending on the type. Stihl back packs, we get three years.

    Last question... what does down time cost you when equipment goes down? This is why you price to change equipment out before the little stuff starts breaking. The $4.63 part will cost you $150.00 in down time and lost productivity.
  8. trophytkr

    trophytkr LawnSite Member
    Messages: 73

    :blob3: thanks alot for loads of great information! You guys are making starting up alot easier with the knowledge and insight that you are able to share with me. Thanks again!:D
  9. pugger

    pugger LawnSite Member
    Messages: 2

    It may seem like an underhanded way of doing business, but I have a tried and true way that has worked everytime. I have 18 years experiance in bidding jobs in a brutaly competitive market and it has never failed to call several jobbers over for estimates on a given lawn, your, yer folks, a neighbors...

    This will give you a reasonably good idea what to charge. This also allows you too meet your competition, although they don't know that yet. You'd be surprised how many people will pass themselves off as professionals yet don't have a clue.

    You will also be surprised at the differences in cost. Look at the bidders and the bid. Would you want these people on your property? Do you feel comfortable with them and their knowledge.

    Before everybody jumps all over my calling out the competition, they all do it too. I often have my wife or dad call a competitor and request a quote so I know if I'm in the running. I know (via caller I.D. and reverse number tracing) that they do it to me.

    We all know who is who and what we're all making. We also all know who is underbidding or not producing, and even giving the business a bad rap.

    Underbidding hurts everybody.

    the infamous school of hard knock has another name. Experiance.

    We all learn and grow or fall by the way side.

    Good luck in all your businesses (I own three) and remember thats its not allways what you charge but also who you are and who you appear too be. There's lots of work out there, go for it.
  10. wayne volz

    wayne volz LawnSite Member
    Messages: 49

    :) More important than what the competition is charging is what does it cost you? Take a look at your cost per hour of operation before deciding on what is right for your company. Too many times looking at what others are charging will only get you in trouble. I have found that more times than not, contractors don't know what they don't know. Good luck


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