OK, Here's What I Plan to Charge

Discussion in 'Lawn Mowing' started by coyotekid, May 14, 2005.

  1. coyotekid

    coyotekid LawnSite Member
    Messages: 111

    I'm in a rural area, so keep in mind that I don't have loads of competition to compare my prices to. Also, I often get my rates compared to 7th graders trying to make a few bucks on the side...

    With that said, here's how I plan to bid jobs:

    I figure that it's going to cost me approx. $12 per hour to operate my Grasshopper 928D based on the lease, maintenance, and diesel.

    By the time I figure in my mileage to job sites (my closest is 10 miles so far because that's the way it is out here in the boonies!), my operating expenses, and my wage (I would like to be making somewhere around $13 per hour), I figure that I'll need to bill right at $25 per hour for my big mower.


    I know most recommend not billing "by the hour" but how else can I figure out what I need to charge in order to make it worth my time?! Determining "what the market will bear" is way harder in a rural area.
  2. Precision

    Precision LawnSite Silver Member
    Messages: 2,995

    Unless your last job was $6.50 per hour you are aiming way too low for a net of $13 per hour. $13 net (before taxes) self employment tax is 30%. Now you are down to $9.10 per hour.

    To figure out what you need to charge, mow a yard of a known size and see how long it takes. Example. 4 Acres took 1 hour including mowing, trimming and everything. Plus 20 minutes drive time. So with your proposed prices that would be $33 per cut. Or $8.25 per acre per cut. Now you need to bid on an account that is similar terrain but 10 acres. You know to charge $82.50 per cut.

    Hopefully this example will help you to see why you need to charge more, as well as to help you see how to price in a way other than hourly.
  3. geogunn

    geogunn LawnSite Gold Member
    from TN
    Messages: 3,010

    precision...dude--are you serious or are you jerking the guy's chain?

    GEO :dizzy:
  4. J Hisch

    J Hisch LawnSite Senior Member
    Messages: 952

    Also, eventually you need to make money for capital re-investment. Remember office expenses, time you need to bill, postage etc. But You know best how to run your business. A bare minimum for me with something by it's self. I try to make on average 50 plus per man. When customers are grouped together we can averge much higher margins.
  5. hoosiermommy52

    hoosiermommy52 LawnSite Member
    Messages: 2

    Coyote, I think you should figure how many hours would it take the customer to mow it him/herself with a regular mower. (either riding or push depending on the size of the yard) You are saving the customer that many hours of labor. You just happen to have better and faster equipment to make it more efficient. just mho
  6. Tider6972

    Tider6972 LawnSite Senior Member
    from Alabama
    Messages: 649

    coyotekid, you are pricing WAY too low. You will fail at this pricing, and that is a fact.

    This kind of 'thinking' , along with more and more people cutting, is killing this industry!

    coyote, please do yourself and the mowing industry a big favor, and think $1 a minute *at least*...that's right, $60 an hour - minimum! You'll know why in time.

    If you are convinced that you can't get these prices, find another line of work ans you'll save yourself a LOT of *money* as well as heartache!
  7. A+ Lawncare

    A+ Lawncare LawnSite Senior Member
    Messages: 503

    even the 7th grader knows to charge more than this.... stop smokin the grass & start cuttin it :rolleyes:

    a 61'' ztr will cut 3-4 acres an hr, so since u said you operating cost is $12, your gonna "clear" $13 an hr, $13/ 3acres= $4.3 an acre thats $2.16 for an half acre.... the 7th graders down the road are at least charging $30 to cut an acre w/the murray 21''

    do u just have the mower in this buisness or do you have an trailer, a p/u ( or the honda ricer, haha :rolleyes: )& weedeater & push mower & edger & the list gone on & on :waving: there's more variables in operating then just ur pop's ztr ur leasing & upkeep of that mower....

    there's a 30% tax like some1 already mentioned so if you clear $25 thats actually $17.5 your making.... u have to at least charge $1 per min, some will even argue about that... some LCO charge $1.50

    u won't make much on big jobs by charge the min rule though....
  8. Precision

    Precision LawnSite Silver Member
    Messages: 2,995

    I am very serious. I am trying to extrapolate out exactly why he can't run at these prices. I was hoping that my example would make it plainly obvious why his pricing scheme DOESN'T work.

    My hope was that by seeing that his idea would have him pricing $82.50 for 10 acres. Obviously (I hope) a bad idea.
  9. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Messages: 11,087


    Even if you are cutting larger jobs, you are still gonna have to atleast double your rates to make anything to speak of. The "dollar a minute theory" is an even better figure, especially considering your mileage.

    What you are going to end up finding out in time is that your direct on the job expenses are going to run dang close to your current rate you are considering. This might be hard to see in the beginning because you are crunching the numbers, ect. But what will happen in this situation is that everything will look OK at first and you'll feel OK taking your $13 hr wage out of the company cash flow. But you'll soon decide this job is too much punishment for $13 hr. Plus one day you'll wake up and realize your business couldn't really afford to pay your $13 hr payroll.

    That $13 hr you pocket out of your company cash flow will be needed despirately at a later date to re-invest in the business to keep it afloat.

    Then income taxes come due and you realize you make way less, work way harder, and have a lot more headaches than you would have if you were just an employee somewhere. Not good!
  10. Todd's lawncare

    Todd's lawncare LawnSite Senior Member
    from P.A
    Messages: 548

    Can you say a a a a a a a a a a a a a a a a a a a a not an an an an an an

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