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Perhaps a Math Tutor Would Help?

Discussion in 'Lawn Mowing' started by MOturkey, Jun 10, 2007.

  1. MOturkey

    MOturkey LawnSite Silver Member
    Messages: 2,782

    I really wonder how people arrive at what to charge. Some costs associated with mowing are a little difficult to ascertain, such as depreciation, while others, like fuel, are evident, but I would think anyone would at least be able to estimate costs, and bid accordingly.

    Case in point: There is a guy we'll call "Joe" who lives near here. I've only met him once, at the gas pump last year. Seemed like a nice guy, about my age (I'm 56), perhaps a bit older. Has a decent mower, a Snapper, I think, and a nearly new pickup (my tow vehicle is 11 years old).

    Anyway, the fellow that did my mowing for a week while I was in Alabama hunting this spring told me that he and his friend mowed the local school once for the LCO that has the contract, because he got so far behind with all the wet weather we were having. It took him and his buddy 3 1/2 hours to mow and trim, and these guys are a lot younger than I, and in good shape. The LCO has the contract for around $330 as best as I remember, which includes mulching as needed, and spraying herbicide periodically.

    Anyhow, he was telling me that good old Joe submitted a bid of $100, just for the mowing. So, $100 divided by 6 is what, about $17 an hour. The school board, however, stayed with the previous LCO.

    Well, the other day I was talking to a salesman for a local soft drink bottling company. He was asking me about my mowing business, and mentioned that he and his kids used to mow the bottling plant property, and charged $60 to do so. He said he didn't think he was too high, and in fact thought they were getting a pretty good deal. Last year, they decided they didn't want to mess with it anymore, so he told his boss to find someone else. His boss was upset because it was already mowing season, and the salesman told him they would keep mowing until they found someone else.

    Well, he said two days later, the boss was tickled to death they were quitting, because they found a guy to do it for $25! And, you guessed it, it was good old Joe's Mowing!

    We talked some more, and he said he knows some of the family, and he thinks Joe has a pension coming in. Well, I hope to be able to draw my pension and mow one day also, but if I'm going to do charity work, I'll volunteer at the local hospital or something. Why would anyone invest the time and money in a mowing business, and charge what obviously barely covers costs? I mean, did a lot of these guys miss 6th grade math class?
  2. bigbone

    bigbone LawnSite Member
    Messages: 101

    If he doesn't need the money to live on and is just doing it to stay busy, then he could charge just enough to make a few bucks per mow. Meanwhile, we have to charge enough to pay bills, buy food, buy your kids junk they don't need, etc.
  3. Richard Martin

    Richard Martin LawnSite Fanatic
    Messages: 14,699

    You can't really worry about people like that. There will be all kinds of segments of customers including those that aren't willing or able to pay for quality work. Let Joe Mow have those people. Both sides will ultimately be happy and that's all that really matters. You should just concentrate on the segment that you target and carry on with it.
  4. dhardin53

    dhardin53 LawnSite Senior Member
    Messages: 710

    Moturkey, your point is well taken and i feel your pain. For me I look at it like a business with a true business approach. (I don't meant to slam anyone here) but around my part of the country there are many guys in the mowing business that could not run a business with a 40 or 50% profit margin. Like most other retail business. But with LCO where if you have paid for equipment and don't bother with proper insurance coverage you could be paying out only 10% or less in expenses to be called "in the LCO business". With this kind of profit to expenses you don't really need a business degree to get started, i guess. But my favorite complaint is the guy that pockets the income and dose not pay taxes on there income. It simple Joe mow charge $25 and only spend 3 in gas to do it, "how hard can it be to make money". But the sad part is this guy took work away from a guy paying taxes, with proper insurance charging $40.

    And the people we do business with have to wonder whats gong on. But the truth is most commercial consumers of LOC service's are getting the biggest reward. They do not have to pay any taxes or benefits for the services they receive and get it done for a lowed price from theses Joe Mows. The guys that don't see the day when they have not payed in any money to there retirement system period. I'm sorry to bring what I call the forgotten 15% (IRS) issue up here again.

    The standard line here is "they will be out of business soon" is valid but thats not for all. Many will survive and want to, or be forced to retire and find they have nothing.

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