Pricing every cent!

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.

 

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.

 

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?

 

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

 

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

 

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.

 

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.

 

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.

 

Very nice breakdown

 

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?