pricing new lawn accounts

Discussion in 'Business Operations' started by BradLewisLawnCare, Mar 14, 2012.

  1. BradLewisLawnCare

    BradLewisLawnCare LawnSite Senior Member
    Messages: 279

    Saw a thread or two already about this. Just priced out a 30000 sq ft property that is 3 duplexes and a house across the street. fairly except 500 ft are in the gated part of the house. I usually use an algorithm to price the properties. I can not decide which one is best after doing regression analysis last year. I had 36 properties that I priced based on "feel". I measured them and came up with a formula. i have a cemetery that is a ***** included. with the cemetery included i have the formula 12.5 +.0035x, without it it is 25.85 + .0012x where x is square footage. Today I used 18.5 + .0022x when bidding the 30000. so 30000 * .022 + 18.5 is like $85. So $85 for roughly 3/4 acre.

    What do you all think?
  2. LawnSite Member
    Messages: 169

    Sounds confusing... :laugh:

    I've got all my cost per hour and than I just go by how long I think it will take.

    Works fine for me but sounds like you got something cooler going on there!
  3. BradLewisLawnCare

    BradLewisLawnCare LawnSite Senior Member
    Messages: 279

    lol. i might be opening a can of worms for the world to steal. I am establishing a way for idiots to price mowing. you can go on ilawn and get sq footage of any property. then basically charge up for gates and trimming. So that way when i have requests for new accounts i can have idiots give solid numbers. I hope someone else has tried to establish criteria...... :)
  4. buxflyr

    buxflyr LawnSite Member
    from Ohio
    Messages: 7

    Just as a reply to the ilawn suggestion... A lot of counties have the ability to do a property search online through the auditor's website. Its free, and there is usually a measuring tool on there as well.

    Same exact thing as ilawn, and its FREE!!!
  5. Mahoney3223

    Mahoney3223 LawnSite Senior Member
    from midwest
    Messages: 995

    85 for a 3/4 acre? that's super high around here.
  6. grass-scapes

    grass-scapes LawnSite Bronze Member
    Messages: 1,552

    It depends on how that 3/4 of an acre is laid out. Sure its high, if its just a field that you can cut with a mid mount at 11 mph.

    But its not high if you have a bunch of stuff to trim around, curblines and sidewalks to edge, hills, gates, fence, PEOPLE AROUND...etc.

    You should NEVER price by size. I get calls all the time from people wanting quotes. I tell them that I have to look at it before I can give them a price so I can measure it. The usual reply is..."well, its half an acre". I tell them I can not and WILL not give a price over the phone.

    Example: Got a call yesterday for someone wanting weed control. He said his lawn was 7000 square feet, he thought. I said I would come by and measure and get a price to him. What do you think his lawn size was? It was 24000 square feet of actual turf. now, what if I had priced that based on what he gave me. I would have had to give him a revised price, he would have not taken it, and PROBABLY would have told the next person he called that the last guy quoted XXX (based on his 7000 square foot estimate)

    The algorithm method is cool, I may stick that in my spreadsheet to give me a cost based on pure numbers.
  7. BradLewisLawnCare

    BradLewisLawnCare LawnSite Senior Member
    Messages: 279

    well in my analysis I used 36 different properties measurements. they all have different intricate things. they all assume a typical residential layout and a couple trees and such. some have gates some don't. You know when you do get the measurement that it is priced close to a typical property, if it s a typical property. If there are labyrinths to get to the grass then it changes. I had a price for roughly 5000 sq feet the other day that was on a main road with no street parking and to access back yard there was an access road that you could barely back a trailer up if you were good. the thing had to be pushed mowed. I adjusted by rate based on the road and push mowing.

    Now another way I thought to do the analysis is take last years data from cutting and pair it with how long it took to mow each of my 36 measured properties. then see how much turf my guys can cut and how long it takes. That would be interesting because your variable costs are derived by how much time you spent servicing a property. My residential rate is roughly an acre an hour. that is a 2 man crew mower and weed wacking and blowing in typical conditions.

    If 2 man hours @ $15 = $30 plus gas insurance depreciation and my pocket change i think $85 can work. a mowing crew for equipment can be from $10,000-$20,000 plus. if you expect the equipment to last for say 4 years then you can expect fixed costs of $2500 - $5000 a year plus overhead. you should get a return for investing. lets say 10% then your costs per yr is $3154 - $6309 (pmt finance calculation). So you need to bill to break even

    x = hours
    y = overhead and variable costs that are different to each company
    z = sales per hour

    (z-$30)X - Y = $6309 + your profit.

    call my numbers

    x=1080 (27 weeks *40 hours)
    y =30%*Z =$25.50 an hour

    Then my profit is =(85-30)*1080 - 27540 - 6309 = 59400 - 33849 = 25551 for having my two guys mow lawns! If I am hypothetically doing it myself then i make $41751 and if we do anything more than i obviously make more. and since we are all hypothetical here we could decrease our price for an acre to $62 just to break even by having people mow lawns for me. so i guess my markup would be 37%? just playing with numbers here.

    The model does not take into consideration how far the house is from the shop, but if it did it would overprice far jobs and then you would never grow from a certain area. it assumes you marginally can go anywhere if it is added to a list and scheduled right.
  8. BradLewisLawnCare

    BradLewisLawnCare LawnSite Senior Member
    Messages: 279

    oops.. $85 was for 3/4 acre that means my full acre rate was $106.50 and my profit for having one crew is $48771 and if i was on the crew i'd make $64,971. Not bad if done right.
  9. jnearor

    jnearor LawnSite Member
    Messages: 3

    I'm looking at a job right now that could be around 100k sq/ft can you explain that formula to me and maybe I can try it on future jobs thanks
  10. BradLewisLawnCare

    BradLewisLawnCare LawnSite Senior Member
    Messages: 279

    Basically the $18.50 is a show up fee. To cover gas and man hours to pay for travel and overhead. Then you have to take square footage times by an arbitrary number that matches your production rates. Say .0022 in this example. So 18.5 * 100000*.0022 would be $238.50. Now you can adjust to how hard it is. And be careful as this formula is for my biz an my numbers. You're area and target market may be different. I want to attract higher end or more picky clientele not foreclosures. See I charge minimum $25 on houses 0-3k sq ft. Thy is why I want to use a show up fee and a minimum. Your ara might have lower wages gas prices and insurance costs.
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