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Price to the market

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

  1. stringfellohawk

    stringfellohawk LawnSite Senior Member
    Messages: 603

    No man, I hate money.
     
    Mdirrigation and h&m GARDENS like this.
  2. h&m GARDENS

    h&m GARDENS LawnSite Member
    Female, from Newport, ri
    Messages: 154

    Quoting a customer of mine: "I got an estimate from Y but that seemed high to me, so I went with X. I wasn't happy with his work though, so I am going back to Y now." (in reference to her landscaper)
    That's all I can add to the conversation! ;-)
     
  3. fitph

    fitph LawnSite Member
    Messages: 73


    Me too, money doesn't buy happiness, but it did buy me a boat
     
    AeroEngi and ltdlawn like this.
  4. ZombieCutter

    ZombieCutter LawnSite Gold Member
    Messages: 3,082

    Money doesn't buy happiness, but it does allow you to rent it.
     
    Mdirrigation likes this.
  5. Darryl G

    Darryl G Inactive
    Messages: 9,500

    Sounds great but it's not like I'm giving dozens of bids. I have a stable client base. I've given one bid this year to a former customer from a decade ago. I got it. Tells me nothing. I get most of my bids but it's because either they know me or they were referred to me and I'm the only one they called. Again, tells me nothing.

    So great theory with no way to apply it for some of us.
     
    hort101 likes this.
  6. whammer33024

    whammer33024 LawnSite Senior Member
    Messages: 286

    so your advice to a new guy is to guess the market price? and i'm the one that doesn't understand business?

    would you go to a bank with a business plan and when they ask what your costs are, you're going to respond with "it doesn't matter because i'm going to charge market price." what is market price? "well, i'm not sure but i'm going to guess for a while until i figure it out."

    know your costs per sq ft of mowing and trimming. decide what you want to make as a profit. now you have an exact formula for what you're going to charge. now the ever changing market doesn't dictate whether your prices go up or down
     
    h&m GARDENS and stringfellohawk like this.
  7. stringfellohawk

    stringfellohawk LawnSite Senior Member
    Messages: 603

    I offer a service. My prices are set (based off of profit margins and overhead), granted, the customer doesn't know what they are by the hour, but I'm not going to play Jedi mind tricks to figure out how much I can gouge them for. If they don't like either of the two price ranges I offer, then we both move on.

    Main reasons why new guys low ball in no particular order:
    Necessary income - keeping lights on
    Brand recognition
    Hope for follow on work/foot in the door
    Thinking profit markup is profit margin
    Not knowing what they need to charge
    Lack of confidence
    Customer negotiates lower price


    I may have missed a few, but those are the big ones.

    If you're not documenting and analysing your numbers like the Third Reich, you're bound for mediocrity.
     
  8. Darryl G

    Darryl G Inactive
    Messages: 9,500

    I just texted one of my customers to let him know I did his spring cleanup and to ask to meet some time soon to discuss finishing up some work from last year that couldn't be done due to frozen ground. His reply was "just do what you think needs to be done when you can." Price wasn't even discussed and won't be. I'm just going to do it and I'm going to bill him fairly and he's going to pay me without even commenting on my price. I'll never know what anybody else would charge to do it and neither will he. So what's the market value for the work I'll be doing? I guess it's whatever I charge him for it...
     
    hort101 likes this.
  9. fitph

    fitph LawnSite Member
    Messages: 73


    No my advise is not to guess, I am sure everyone starting a lawn business has an idea what most pay for a service. If not then get a bunch of estimates for your own lawn. But if you really have no idea then why are you even attempting to get into the biz in the first place?

    I never said don't know your numbers. I said it doesn't matter to the market what your numbers are. You need to know your numbers to know if you are going to be able to make a profit.

    No bank is going to give a loan to anyone who doesn't already know what the market is. That is part of a comprehensive business plan. And for the start up guy no bank is going to give them a loan anyway, no matter how pretty their numbers are. It is just too risky for the bank to lend money to a start lawn company.
     
  10. fitph

    fitph LawnSite Member
    Messages: 73

    This post is referring mostly to mowing. Not spring cleanups. That is a labor job and there is a market value to that also. If you are above it and this customer is willing to pay it then more power to you. If you are low then he is getting a discount at your expense.
     

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