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Setting up a price list.

Discussion in 'Starting a Lawn Care Business' started by TazLandscapes, Jun 3, 2007.

  1. TazLandscapes

    TazLandscapes LawnSite Member
    Messages: 157

    I familys been in the landscaping business for over ten years now. And this year my dad is letting me run the show.He handles the pricing,customers etc.
    I handle the mowing part of it.Well he asked me to come up with a price list so we can have it with us at all times.I need some help how i should price/charge people.What i have so far.

    1/4 acre and less-$25
    1/4 Acre-$35
    1/2 acre-$70
    3/4 acre-$105
    1 acre-$140

    Are my prices for lawn mowing wrong or is it right.?? :confused:

    I need help with pricing out-
    1.Power rakeing/dethatching
    2.Tree and bush plantings
    3.Flower and small shrubery planting
    4.brushcutting both by hand and walk behind billy goat
    5.Lawn edging

    any help is appreciated

    Mike DiBiase
  2. Grits

    Grits LawnSite Silver Member
    from Florida
    Messages: 2,994

    I think your mowing prices start out too low and get a little too high.
  3. weeble67

    weeble67 LawnSite Senior Member
    Messages: 286

    I agree. I think you should start a little higher, then you'll need
    to adjust the larger lots to be a little lower than you have them
    set at.
  4. Runner

    Runner LawnSite Fanatic
    Messages: 13,497

    Why does he feel that you have to have a set price schedule anyway? It is not like you are a retail business. If he thinks it is going to "simplify" things, forget it. What about a prop that has more slopes? More obstacles? 300 linear ft. of fenceline? More beds mow around? Yards that have ditches to work, rather than those that don't? Gated backyards? Tight areas that may need to be bagged? Irrigated and/or heavy fertilized properties? Ones with several trees which amount to more picking up of sticks per visit? Access for parking, or ones you may have to park in the driveway or across the street? Ones that my be 7 miles away from the nearest job, as opposed to those that are 2 miles away?
    Anyway, do you see the variables? And these are only some of them. I can think of several better things to concentrate you energies on for growing your business, rather than try to work out some generic price list that is completely meaningless. Afterall, who's doing the estimates...you ARE looking at the props before you quote a price anyway,......aren't you?
  5. TazLandscapes

    TazLandscapes LawnSite Member
    Messages: 157

    After reading this and showing it to my dad he said to heck with it.
    He thought it would make our lives a little easier.He said it just be easier to just price jobs out when we get them.
    I have been getting a lot of edging jobs lately and was wondering if $2.00 a foot for lawn edging was right.And shuld i start charging customers for trimming their lawns.There is a guy up here that charges $10 to trim a yard. I also need to get some help geting a ballpark figure on how i should price out these jobs.

    1.Power rakeing/dethatching
    2.Tree and bush plantings
    3.Flower and small shrubery planting
    4.brushcutting both by hand and walk behind billy goat
    5.Lawn edging

    Mike DiBiase
  6. bohiaa

    bohiaa LawnSite Fanatic
    Messages: 5,220

    I never could see how you guys figure prices like this....

    I have a customer who has total 10 acers... fornt back and side yard.
    it's a every 10 days....
    there is NO way she could or would pay 1,400.00 X 3 = 4,200.00 a month.
  7. JJG84

    JJG84 LawnSite Member
    from OH-IO
    Messages: 97

    I usually throw out a reasonable price at first before the first cut, then after I cut it, depending on how long/hard it was to cut then I will give my final weekly/biweekly price. I am always sure to tell the customer that it could be more or less or the same, but that I will charge fair and accordingly.
  8. A&BLLC

    A&BLLC LawnSite Member
    Messages: 10

    Generally speaking there are two ways to set pricing. The first is cost plus desired profit. The second is based on what the market will allow. Most of us, whether we realize it or not, use a combination of the two. In the first case, you need to get a handle on your overhead costs--both fixed and variable. This will include things like gas, equipment maintenance, insurance, depreciation, monthly payments for equipment and trucks and labor etc.--to name a few. A lot of companies will toss all these costs into a "big bucket" and divide by the number of hours they estimate to bill for the year. For example, as a rule of thumb, there are 1,952 working hours in a year assuming you don't work weekends and you take off for the normal holidays and are only running a single crew. If your total estimated costs for the year equal $50,000, then ($50,000 / 1,952) = $25.61/hour of overhead. Now you need to figure in a profit margin. Say you want to earn 15%. Take your costs of ($25.61 / 0.85) = $30.13, or ((30.13 - 25.61) / 30.12)) = 0.1500 or 15%. This is your rate to charge on an hourly basis computed from the cost plus method.

    However, you will need to judge this rate against the market pricing in your area. I suggest having your friends call other LCOs to get bids on their homes. Then mow your friends house with whatever equipment you have. Does it take you an hour, two hours, or longer. Compare this to the estimates you received. Now, change your rate based on your cost plus analysis and your market findings.
    You have ultimately combined cost plus pricing with market based pricing.

    From here, you can begin to figure a price per 1,000 sq. ft. if you still desire. You know your price per hour and the amount of time it takes to mow a yard with the equipment you have. You also have an estimate of the market pricing in your area--just add in square feet, and you are finished.

    For example, let's assume you settle on a rate of $35 per hour and you want to find a rate per 1,000 sq. ft. If your friend's yard takes you two hours to mow and is 5,000 sq. ft, then you have a rate of $70 per 5,000 sq. ft. So, simply compute: (5,000 / 1,000) = 5. ($70 / 5) = $14, or $14 per 1,000 sq. ft. Check ($14 x 5) = $70. Make adjustments as needed for mowing variables such as slopes, types of grass, trees, edging, weed trimming, etc.
  9. Lohse's Lawn Service

    Lohse's Lawn Service LawnSite Member
    from US
    Messages: 213

    Well said. Setting up a price list is just asking for trouble. I'd hate to see you set these figures in stone, then have some old lady call you wanting to mow with these "variables" as mentioned above, all the while paying the price you set, which might not be fair to you. I have my own system of bidding, by breaking a job down into sections, and adding the sections up at the end for a rough total. It has worked for me at least. Good luck.
  10. kupham

    kupham LawnSite Member
    Messages: 5

    Developing a price list is very important to the development of your company but should be developed carefully and methodically. You have to know your production rates before you can put together a pricing book. How long will it take to mow a 1/2 acre, trim 100 feet of edging, blow down 1000 square feet of driveway etc. Unfortunately, when your doing it yourself and timing the jobs, your being as efficient as you can be. As your business grows you'll hand out jobs to laborers with hopes that they work as effeciently and effectively as you do and complete the job in the amount of time that you priced it. But by job costing and timing your tasks, you'll be developing bench marks for what's called accountability. Once this is in place you'll tell your crew "here's 45 man-hours of work for the week now go get it done at 45 hours...if you do it in less time than that, you may get a bonus...but remember, quality..not quantity". When you're faced with a challenging site to mow, add a difficulty percentage to it. It comes down to trial and error, but what's important is that you start to track the time it takes so you can then produce a bid that will cover your direct costs (labor, dumping fees etc.) your overhead costs (insurance, shop supplies, repairs etc.) and still yield you a decent profict. This business is about good planning. The succesful companies are those with a plan to recover their costs and make a profit. Learn to read an income statement, that will give you a better understanding of where your money goes. Keep close track of all your expenses, time (billable & unbillable) and soon you'll realize how many hours you need to produce in a month to recover costs and make a profit. It's all about time. We're not like accountants and lawyers who can work into the night and bill out hours if we had to make up for short falls. We are landscapers who are bound by the rise and fall of the sun. The weather isn't always our friend either so we have to plan on some days that we won't be able to recover our overhead. Take small steps, set goals and acheive them, but don't ignore the fact that this business will make you money, lots of money, if you plan, track, budget, and keep your nose to the grindstone. Also, learn to sell. Being a salesman comes naturally to some people, others have to work at it. Be honest, dependable, and return calls quickly all the time and people will come knocking down your door for your business. Try to screw someone for the quick buck and you'll never get anywhere. Let me know if I can be of more help.

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