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Per Man Hour Rate?

fitph

LawnSite Member
You should not be charging by the hour at all. Or by knowing your numbers and trying for a set hourly rate. You charge by what the market will bear. You must adjust your business to this parameter. If you try and charge 60 per hour in a market that will not support that then you are too high and must come down. If you charge 60 in a market that more than supports that then you are leaving money on the table. You need to find what the market is in your area. That is usually done by trial and error. If you can afford it start with high prices and come down until you are winning the amount of bids you need to keep busy. We just raised our prices because I was winning 9 out of every 10 bids. That told me I was too low. I am about 100 an hour on site for mulching. I have a couple of services that top 200 an hour on site. I do use efficient equipment though. It makes a difference.
 

DLL LLC

LawnSite Member
Location
Pennsylvania
You should not be charging by the hour at all. Or by knowing your numbers and trying for a set hourly rate. You charge by what the market will bear. You must adjust your business to this parameter. If you try and charge 60 per hour in a market that will not support that then you are too high and must come down. If you charge 60 in a market that more than supports that then you are leaving money on the table. You need to find what the market is in your area. That is usually done by trial and error. If you can afford it start with high prices and come down until you are winning the amount of bids you need to keep busy. We just raised our prices because I was winning 9 out of every 10 bids. That told me I was too low. I am about 100 an hour on site for mulching. I have a couple of services that top 200 an hour on site. I do use efficient equipment though. It makes a difference.
I do agree that you do need to do some research on your local market. However, not charging by the hour or knowing your numbers is business suicide, You absolutely need to know your numbers. You cant "adjust to your market" till you know your costs. If your business expenses is $50 an hour and your market high end is only $40 then you will be bankrupt in a year. You would have to cut expenses. If you didnt know your knumbers ahead of time to adjust then you just lost thousands. If you dont know your numbers ahead of time you will have no clue if your business can be profitable. And if you dont charge by the hour then IDK how to charge. The number one product any service industry sells is time. Learn your numbers, do your local market research. Then you will know what to charge and if your market can handle it. "Trial and error" is not a business plan, its playing a game of darts blindfolded.
 

fitph

LawnSite Member
I do agree that you do need to do some research on your local market. However, not charging by the hour or knowing your numbers is business suicide, You absolutely need to know your numbers. You cant "adjust to your market" till you know your costs. If your business expenses is $50 an hour and your market high end is only $40 then you will be bankrupt in a year. You would have to cut expenses. If you didnt know your knumbers ahead of time to adjust then you just lost thousands. If you dont know your numbers ahead of time you will have no clue if your business can be profitable. And if you dont charge by the hour then IDK how to charge. The number one product any service industry sells is time. Learn your numbers, do your local market research. Then you will know what to charge and if your market can handle it. "Trial and error" is not a business plan, its playing a game of darts blindfolded.
I never said you don't need to know your numbers but knowing your numbers has nothing to do with how you price a service. What the market will bear is the only parameter you should consider when pricing. Everything else should be adjusted to fit that parameter.
 

landscaper22

LawnSite Silver Member
Location
South Carolina
Am I the only one that has a difficult time selling the man hour rate to customers? It is easy for me to price mowing jobs by the job as I know about how long it will take> Customers usually end up paying $50/man hour or that is my goal. Really closer to $55 is my goal. But then all the extra work that is time consuming they tend to have a hard time swallowing the man hour rate when you tell them that's how you will bill for doing extra tasks that are more difficult to price by the job.

I personally think (and I have said this before) it often doesn't register what your man hour rate is because all the customer knows is they free up half a day on the weekend by not having to mow their own lawn, and they will gladly pay say.. $60 for that service. They really don't think that a two person crew with professional equipment can be in and out in 35 mins doing what may take them half a day. But then suddenly they want a price for hand pulling weeds or need a leaf cleanup or something else odd, and they freak out at the same rate they are already paying for mowing. Something like hand pulling weeds you really can't do much quicker than the customer can so I guess they freak out thinking they will pay $110 for 2 people to be there one hour on their hands and knees. I don't know what to tell them, other than do it themselves or get a kid in the neighborhood to do it for $10.
 

fitph

LawnSite Member
Am I the only one that has a difficult time selling the man hour rate to customers? It is easy for me to price mowing jobs by the job as I know about how long it will take> Customers usually end up paying $50/man hour or that is my goal. Really closer to $55 is my goal. But then all the extra work that is time consuming they tend to have a hard time swallowing the man hour rate when you tell them that's how you will bill for doing extra tasks that are more difficult to price by the job.

I personally think (and I have said this before) it often doesn't register what your man hour rate is because all the customer knows is they free up half a day on the weekend by not having to mow their own lawn, and they will gladly pay say.. $60 for that service. They really don't think that a two person crew with professional equipment can be in and out in 35 mins doing what may take them half a day. But then suddenly they want a price for hand pulling weeds or need a leaf cleanup or something else odd, and they freak out at the same rate they are already paying for mowing. Something like hand pulling weeds you really can't do much quicker than the customer can so I guess they freak out thinking they will pay $110 for 2 people to be there one hour on their hands and knees. I don't know what to tell them, other than do it themselves or get a kid in the neighborhood to do it for $10.
An uncommon service will not have a market price and the customer won't have an idea of what the job should cost. So I stand corrected, in this case you do need to know your numbers because you are essentially bidding it by how much you want to make an hour. Just don't tell the customer your hourly rate. For most jobs though, mowing, mulching, fert and squirt etc there will be a market price and most customers will have an idea what it is. Go over by too much and you won't get the job. Bid too low and you won't make any money but get tons of jobs.
 

One-Man Lawn

LawnSite Senior Member
Location
Midwest
Am I the only one that has a difficult time selling the man hour rate to customers? It is easy for me to price mowing jobs by the job as I know about how long it will take> Customers usually end up paying $50/man hour or that is my goal. Really closer to $55 is my goal. But then all the extra work that is time consuming they tend to have a hard time swallowing the man hour rate when you tell them that's how you will bill for doing extra tasks that are more difficult to price by the job.

I personally think (and I have said this before) it often doesn't register what your man hour rate is because all the customer knows is they free up half a day on the weekend by not having to mow their own lawn, and they will gladly pay say.. $60 for that service. They really don't think that a two person crew with professional equipment can be in and out in 35 mins doing what may take them half a day. But then suddenly they want a price for hand pulling weeds or need a leaf cleanup or something else odd, and they freak out at the same rate they are already paying for mowing. Something like hand pulling weeds you really can't do much quicker than the customer can so I guess they freak out thinking they will pay $110 for 2 people to be there one hour on their hands and knees. I don't know what to tell them, other than do it themselves or get a kid in the neighborhood to do it for $10.
I get what you're saying. Right now I'm a solo operator. The best thing to do is figure out how long it takes you to typically do that type of work, and give the customer a quote for the job before hand. I don't tell mine that pulling weeds is $50/hour. I size up the job and figure if it'll be a half day or whole day. So if I think it'll be four hours, I tell the customer the cost is $240 ($50/hour + 20% (for the unexpected things that take more time)).

This isn't perfect, but as you figure out more about how long it takes you to do what, you get more accurate. I've had jobs that took way longer than I thought they would, and I lost out on money but still stuck it out and got the job done. I've also had some that didn't take as long as I thought they would, so I made a bit more/hour than I quoted.
 

landscaper22

LawnSite Silver Member
Location
South Carolina
I get what you're saying. Right now I'm a solo operator. The best thing to do is figure out how long it takes you to typically do that type of work, and give the customer a quote for the job before hand. I don't tell mine that pulling weeds is $50/hour. I size up the job and figure if it'll be a half day or whole day. So if I think it'll be four hours, I tell the customer the cost is $240 ($50/hour + 20% (for the unexpected things that take more time)).

This isn't perfect, but as you figure out more about how long it takes you to do what, you get more accurate. I've had jobs that took way longer than I thought they would, and I lost out on money but still stuck it out and got the job done. I've also had some that didn't take as long as I thought they would, so I made a bit more/hour than I quoted.
Yeah that's the way to do it I guess, but I don't like to lose on a deal. I can figure most things by the job, but some work I just have no idea, especially big cleanups. I don't want to charge too much or too little. I really am not a fan of those types of jobs to begin with, unless it's a current customer wanting extra work. I have found when dealing with new customers that only want something extra done, it has a good chance of turning out bad. I have priced one time shrub trimming jobs, etc, and the entire time the customer is out there telling me to cut more from this one and on and on. The last time that happened I told myself that was the last time. I could either walk away from the job, or not take them on. A customer standing over me is one thing I can't stand. I have cut thousands of shrubs in my career, I don't need someone standing over me making it take twice as long as what it should. If it's by the man hour, I can't lose.
 


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