Price to the market

Discussion in 'Starting a Lawn Care Business' started by fitph, Apr 20, 2017.

  1. fitph

    fitph LawnSite Member
    Messages: 72

    I have been reading on here and see all these posts where people say know your numbers and then decide how much you want to make and price accordingly. That is just plain BS. You price to the market. Then you make your numbers fit the market. If there isn't enough profit after you run the numbers then either don't get into the industry or find a way to become more efficient. There are three tiers to the market. High end, middle and low end. Stay away from low end unless that is all that is available. High end usually requires skill and knowledge the new guys don't have. So concentrate on the middle and go for the highest pricing the market will bear.

    Customers do not care what your numbers are. They only care that they get the best deal they can get for the quality they are looking for. This varies but it has nothing to do with your numbers or how much money you want to make. By telling the new guys to do it this way you are creating low ballers. They don't have the overhead that the established companies have and they can price below the market which drives down the overall pricing in a given area. So what if it took you years to learn the market. The new guys are gonna lowball because they don't know what the going rates are in the market and while they are learning everyone else loses as the market drops.

    So new guys, learn what your market area will bear and price at the highest you can get. This keeps profits up for everyone doing a professional job. You will make more than the big guys per hour if you do it right.

    Vent over............
     
    PDLlandscaping likes this.
  2. wheatus

    wheatus LawnSite Senior Member
    Messages: 926

    You are overestimating the level of sophistication of 98% of companies in this industry.
     
  3. stringfellohawk

    stringfellohawk LawnSite Senior Member
    Messages: 582

    New guys are going to low ball regardless.
    By telling new guys to know their numbers does not create low ballers. They'll still have to charge higher if they want to get ahead because they get less hours. They still have to grow into their overhead.
     
    h&m GARDENS and DIYOKC like this.
  4. TXPL

    TXPL LawnSite Member
    Messages: 233

    People are always going to lowball in the name of creating more work for themselves because in their eyes they're "making more money".
     
    Mdirrigation and 13Razorbackfan like this.
  5. whammer33024

    whammer33024 LawnSite Member
    Messages: 120

    to quote john d rockefeller, "competition is sin." listen bud, i don't give a damn what you, him or her charge to do a yard. i know what i need to make and i know what i want to make and i will charge my price. i've been called a lowballer, i've also been called expensive. but i'm quick, efficient, and do quality work and shoot for 60 an hour. if it takes me 2 hours and you 3 hours, you would call me a lowballer for bidding 120 because you bid 180.

    i'm not out to make everyone else money, i'm out to make ME money
     
  6. TXPL

    TXPL LawnSite Member
    Messages: 233

    So if you could reasonably still bid 180 on the property and get that approved, why wouldn't you?
     
  7. whammer33024

    whammer33024 LawnSite Member
    Messages: 120

    how do i know i would get approved at 180? i don't. this is why you don't guess what other people are going to charge and need to know YOUR numbers
     
  8. TXPL

    TXPL LawnSite Member
    Messages: 233

    Nevermind.
     
  9. fitph

    fitph LawnSite Member
    Messages: 72

    That makes you a lowballer. You don't need to worry about what someone else is going to charge, worry about how much the customer is willing to pay. If you know the market then you would know you could get the higher amount. Your customer just screwed you over with your blessing. This is a business not a hobby. It is all about profit. The goal is to maximize the profit and if you aren't doing that you might as well work for someone who is.

    If I can make an additional 60 on the same job then i would be a fool not too. So what if my numbers say i am making a profit. By charging what the market will bear you are making 50% more profit on that scenario. Who is their right mind would work for 50% less and think that is good.
     
    PDLlandscaping likes this.
  10. stringfellohawk

    stringfellohawk LawnSite Senior Member
    Messages: 582

    Yeah, I mean, I put on my mind reading cap every time I get to a job.
    [​IMG]

    This is why you bracket and offer two different prices for two different scopes of work. You can go to two different houses in the same neighborhood to two neighbors who make similar income and gave them be willing to pay two different prices. One high and one low.
     

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