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Raising rates after 3 years Landscape Gardener

Discussion in 'Bidding, Estimating and Pricing' started by h&m GARDENS, Nov 24, 2019.

  1. KUMA01

    KUMA01 LawnSite Bronze Member
    Messages: 1,196

    I do the same exact thing you do fine gardening for estates ect. Except mine is on a larger scale. I’m dealing with property raging from 3 acres to 42 acres I’m dealing with thousands of annuals to redo every year thousands of perinials to deadhead, tons and tons of hedge clippings ect. And a little bit of grass clippings. Tons of weeds and soil from edging out beds ect. And tons of leaf debris and the dump trailer with built up sides is the absolute ticket. next year I’ll buy a 5500 dodge dump truck and run the dump trailer behind it. This is a power combo! I just carry several brute trashcans and put material directly in them and dump in the trailer when full. Ultimately it’s your company but a dump trailer is something most of us can’t live without.

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  2. hal

    hal LawnSite Gold Member
    from Georgia
    Messages: 3,406

    You would charge per job for dumping. If you only had one job that day it would be xx amount, if you had 10 jobs it would be xx per job. Think about the time and energy it takes to dump, travel, lifting into the truck, lifting out of the truck... all that entails that WORK you bill for.
     
  3. OP
    OP
    h&m GARDENS

    h&m GARDENS LawnSite Member
    Female, from Newport, ri
    Messages: 216

    KUMAO1 are you willing to share your labor rate?
     
  4. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Messages: 17,253

    So
    If the rate around town for landscaping is 40/hr
    and you are currently getting around that you don’t stand much of a chance suddenly doubling your cost.

    that’s asking for someone else to come take your work.

    IF you are sub contracting (1099) then that person has their own equipment, tools, truck and insurance.
    So you do not need to recover overhead from a 1099 sub contractor.
    Typically adding profit margin to a sub is 8-20% depending on circumstance (typically in contract or out of contract variances)

    so $35 plus 12 percent on average is $39.20
    You do not need to raise your rates to the customer
    The 1099 contractor shoulders ALL the operating costs.
    If they’re an employee then you can’t pay them 1099, and $35/hr is an outrageous hourly rate for a gardening employee.
    You do not need to charge an additional $25/hr or more over and above that subs rate in order to “afford” that sub.

    if your profit margin in larger than 12% if you do it with an employee or yourself than you do not need to the sub.
    If you cannot keep up with the work, that means you need the sub and you are making higher margin elsewhere everyday and this just adds to your bottom line until you can grow and no longer need the sub.

    however hiring a new sub/high dollar employee isn’t as simple a deciding wether you want to pay taxes or you want them to pay taxes, that decision isn’t up to you and there is a clearly defined set of parameters that determines if they are a sub or not.

    if they drive to the job in their own vehicle, use their own tools, do this kind of work for other people that aren’t you or your customers, have their own insurance and business license, make their own schedule and set their own prices (meaning the don’t work hourly or fill out time cards) then that is a 1099 sub contractor
    If they don’t meet that criteria
    You have an employee
     
    Jeff@diyokc, Mark Stark and KUMA01 like this.
  5. FitzRightMowingService

    FitzRightMowingService LawnSite Senior Member
    Messages: 370

    A $35 haul away fee would be good
     
  6. KUMA01

    KUMA01 LawnSite Bronze Member
    Messages: 1,196

    Yes me and my helper combined I’m at 115 a hour 15 a hour for him and 100 for me. So let’s take for example a typical new install. It takes a day to do. 10 hours I work that’s 1,150 another 1,200 for materials so now we are at 2,350 add my machine labor (mini skid, excavator) at 100 a hour. My typical billable day is in the 3,000. From June-September but my estates I go by hourly rate of 125 spring and fall. That’s for like hedges leaf cleanups. But annuals is the plant cost doubled same thing with most of my plantings so take for instance a 8ft Nellie r Stephens holly wholesale $162 round off to $200 delivery time ect. And now to plant it it’s $200 so it’s 400 total to plant. when doing bulk planting last week I installed 63 hollies that size I dropped it down to 100 a plant to put In the ground. I can go anywhere from $600 a day to 3000 but I average 1,500
     
  7. rclawn

    rclawn LawnSite Bronze Member
    Messages: 1,421

    Not to be rude, but this post basically summarizes why some landscapers are good at what they do, but still go out of business b/c they are terrible business people. You really are charging too little. Charging $50 an hour does not mean you are making $50 an hour.

    So many people that work for a company making $12 an hour go out and start their own... Now they think they are making $60 an hour! It just doesn’t work that way. All landscapers would be rich.

    The simplest way to calculate what you are actually making would be to add up all your expenses and convert it to a cost per hour. Anything with an hour meter is simple enough, but even on like your truck, maybe figure the replacement value, average fuel used per day and calculate that all in there. You need to factor in all your tools and anything you have bought for your business. Don’t forget taxes! In the end, $50 an hour will probably be reduced by 1/2 or 2/3... meaning that employee you are paying $35 an hour is making more than you! It looks like you have already realized it is foolish to charge less for the second employee, so that’s a start...

    I honesty think you would be better off working for someone else, especially if $35/hr is a reasonable wage for this sort of work in your area. From your posts, I can tell you know what you are doing in the garden and you seem to really enjoy it. Owning a business isn’t for everyone, there is a lot more involved than just being able to do the work.
     
    Jeff@diyokc, oqueoque and Mark Stark like this.
  8. Hayduke

    Hayduke LawnSite Senior Member
    from Oregon
    Messages: 299

    I think it is important to start thinking of it as what does your company charge per labor hour, not how much does it charge for you or for your employee. because eventually you may have another employee, and you'll be spending more time in the office running around doing administrative chores. i think its perfectly reasonable to adjust your company's hourly rate based on the type of work done, i.e $50/hr to spread mulch, $65.00 to install irrigation etc etc. if you'd like. These are not the rates I'm recommending, just an example...
     
  9. BigJlittleC

    BigJlittleC LawnSite Fanatic
    from Chicago
    Messages: 7,712

    I agree I have different rates for different tasks. I have labor broke down in two groups. Basic stuff like hand weeding and mulching. Then skilled like detailed pruning and trimming.
     
    hort101 likes this.
  10. Jeff@diyokc

    Jeff@diyokc LawnSite Member
    Messages: 216

     

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