Pricing every cent!

Discussion in 'Business Operations' started by lawnguy1219, Feb 1, 2019.

  1. lawnguy1219

    lawnguy1219 LawnSite Member
    Messages: 28

    Hi everyone, I know this questions must have been asked a million times and I tried the search bar to no avail. How do you price your services down to the very cent, truck, fuel (for truck and equipment), labor costs for you and your men, travel time, string, anything that might be an unforeseen expense etc. Also, what margins should I be shooting for in the lawn maintenance/ landscape industry. I don’t want to be the low baller but also want to earn business and provide a great service for my customers. Thanks for any responses.
     
  2. Mitty87

    Mitty87 LawnSite Silver Member
    Messages: 2,397

    Obviously some things have to be estimated until you have the numbers, some things like truck repairs or surprise costs vary so nobody can price to the cent. I just aim higher so it doesn't matter if I don't have all of my costs exact yet, I just know there should be a surplus.
     
    lawnguy1219 likes this.
  3. OP
    OP
    lawnguy1219

    lawnguy1219 LawnSite Member
    Messages: 28

    So what about pricing maintenance jobs? Are the just a simple price for similar homes? Or do you price every job different? I would thing each job is different because of extra leaves etc. but have you ever had neighbors talk and someone feel ripped off? I feel like it’s an easy explanation to the customer if their job require more work. My main concern is what are the margins that I should expect?
     
  4. Mitty87

    Mitty87 LawnSite Silver Member
    Messages: 2,397

    I don't do a lot of maintenance. I have maybe 8 clients we do maintenance work for but that is hourly because I would rather not have to do a sub par job because they only want to pay a certain price per month. I do installs and Cleanups/pruning, irrigation
     
    hort101 and lawnguy1219 like this.
  5. Matthews Lawn Care

    Matthews Lawn Care LawnSite Silver Member
    Messages: 2,624

    Total expenses / Total billable hours for your area = hourly expense for maintenance.

    For landscaping I do it per project.

    Total project labor cost + project material costs + material markup + delivery costs = project quote
     
    lawnguy1219 likes this.
  6. weeze

    weeze LawnSite Fanatic
    Messages: 16,811

    no need to be exact. charge as much as your area will allow. that's how you do it. around here it's $50-$60 per hr.
     
    lawnguy1219, AlohaMowing and iand like this.
  7. OP
    OP
    lawnguy1219

    lawnguy1219 LawnSite Member
    Messages: 28

    Thanks guys. I appreciate it. It’s hard breaking into the industry in a new place. I don’t have friends or family that I can ask around here to get an idea of what people charge for certain installs or even maintenance and I live in an apartment so I can’t call different companies Iut to get an estimate. But so far it’s going pretty good with little advertisement.
     
  8. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Messages: 16,105

    Ok

    These is a cheese ball way to do it
    But ...
    if you’ve got a lawn
    Call three to five companies and ask them to give you an estimate for servicing yours

    This will give you an idea of what the going rate is
    Add up all the prices you are given
    Divide them by the number of bids you got.

    Let’s say that number is $40
    Be careful of this number because the likelihood at least half the prices you were given were taken out of thin air.

    But now you have a theoretical target

    Now
    You need to reverse engineer that number
    How do you get to that number (or near it)

    First
    Mow your own lawn and time yourself
    How long did it take?

    Let’s say it took 30 minutes
    Then trim and blow it
    10 more minutes?
    Add 5 minutes to load up on your imaginary rig and 10 minutes to travel to the next imaginary job
    That’s 55 total minutes into a $40 job

    That translates into $43/hr

    If you have 40 hours in a week to work and you have a 30 season
    That’s 1200 hours

    $43 Times 1200 is $51600

    Now
    How much does everything cost?
    A year of insurance
    Loan payments on vehicle and equipment
    Fuel
    Etc
    Everything gets a price and it gets subtracted from $51600.
    Even if you have to make up a price for that category because you don’t know what it is going to be.
    Marketing/advertising? I don’t know
    Pick a number $1000

    You get the idea

    When you’re done subtracting your costs
    Divide that number by 1200 hours.

    If that number is less than what you want to make an hour, you need to add the difference between what you want to make and the number you came up with
    (Example let’s say you ended up with $10 but you really want to make $20, then you need to add $10 to $43 and you’ve got $53)

    THEN add 12 percent to that final number and round to the nearest whole dollar.

    There
    That’s your rate for the first couple of years.
    Until you collect data on time/production and actual costs.
    That’s as close as you’re going to get.
     
  9. FitzRightMowingService

    FitzRightMowingService LawnSite Member
    Messages: 224

    Very nice breakdown
     
  10. OP
    OP
    lawnguy1219

    lawnguy1219 LawnSite Member
    Messages: 28

    Thank you. This was very helpful. Although like I said, I don’t own a home so I don’t have a lawn lol but nonetheless this was extremely helpful for me. I really do appreciate you taking the time to explain all that. How long have you been in business?
     
    Doc8406 likes this.

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