Telling a customer your man hour rate

Discussion in 'General Industry Discussions' started by greenproadam, Oct 29, 2009.

  1. VO Landscape Design

    VO Landscape Design LawnSite Senior Member
    Male, from Mt. Pleasant Ia.
    Messages: 365

    Say you have a customer "Bob". You tell him you charge $30 hour to do a Leaf clean up. He tells "123 Landscaping" you charge $30 so they say they will do it for $25. I will never tell a client my hourly charge. I estimate how long the job will take and give a flat price. The minute you tell someone your "rate" other company's can under bid you. My teacher in school mentioned that in class, he knows what some company's charge and can then bid accordingly.
    my 2 cents
  2. Branch manager

    Branch manager LawnSite Member
    Messages: 56

    I have used hourly rate for 12 years with great success. It is much fairer to all parties involved. If a job runs longer than I expected, I don't take it in the shorts. As for comparison shopping, another company can just as easily say " We'll do it for X dollars less than that guy". My clientele is established. I've worked for most these people year after year, and they have come to trust me. I like to know exactly how much I've made at the end of the day.Obviously,as some have mentioned, it eliminates ability to gouge, which isn't my goal. I've never lost sleep because of overcharging; I want these people to call me when they need something. I do give estimate of time I think it will take,plus any materials, and a few want a 'cap' on the cost. Just my method; it works for me, and I work for myself. I can charge a reasonable, competative rate, and earn a decent living.
  3. vharman4

    vharman4 LawnSite Member
    Messages: 51

    how do you estimate the price for clean-ups? what happens when you get into it and it turns out to be a lot more work than you expected?
  4. Branch manager

    Branch manager LawnSite Member
    Messages: 56

    That would be my point, exactly. I work at a comfortable pace, have 23 years experience, half with a large Nursery. If I finish earlier than expected, good for the client. If it takes longer, and it usually does as I spot other things, GOOD FOR ME. And yes, I've raised the rate through the years to remain competative. I don't spend a nickel on advertising. My rep and word of mouth keep me as busy as I wish to be. Again,it works for me.:dancing:
  5. Stillwater

    Stillwater LawnSite Platinum Member
    Messages: 4,888

    over time with work history behind you it becomes 2nd, nature.
    So what happens when it turns out to be allot more work and you under bid? This happens, this is just 1 pit fall of bid pricing clean ups after you do this a few times you learn not to do this it's that simple, So over time with work history behind you you learn what it takes to get the job done and if you are bid pricing you will focus on getting the job done as fast as possible to get to the next one. If you are new in this industry with little work record it is more likely than not you will shoot yourself in the face by being unaware of the actual scope of the work involved.
  6. MarcSmith

    MarcSmith LawnSite Fanatic
    Messages: 7,157

    our customers are not stupid, they can figure out our hourly rates...

    My contracts for mowing had my hourly rates listed for extra's and T&M work, shrubs, ect...

    Invoices were detailed showing were all the money went that they were spending...
  7. jasonnau

    jasonnau LawnSite Senior Member
    Messages: 454

    It's hard for a customer to comprehend that we earn more per hour than a lot of them do. I've lost several jobs by telling them $45 per hour for this and that. I do better offering to do a job at a set price. An hourly rate takes on a different meaning. If the ac on your house needed repaired and the heating company said it will be $4800.00. You might not have a clue if it's going to be easy or hard. It just is what it is. If the company came in and said it's going to be $100.00 per hour. You'd probably have to think about it much more. Maybe even shop around for a better hourly rate. I always make more money bidding by a set price. The only time that I bid by the hour is if the job is hard for me to figure the hours out on. Leaf removal is usually one of these. If the leaves are wet, it will take longer, dry, easy, lots of shrubs, you never really know. I had a customer this year who wanted new landscape on a rental property they were going to live in instead of rent. I told them 2200.00. It was all good and well until they decided to buy shrubs themselves to save a little money. She then asked for my hourly rate to plant everything and do a bunch of transplanting. I told her $40 per man hour and she looked at me like I was crazy. Never heard from her again. Like the other guy said, you win most of em, every once in a while you have to live and learn a little. If you are unsure, bid it up a little so that you know you are still being paid half way decent in the worst case scenario. Most people could do what I do if they wanted to, it would just take them a lot longer to do it. When I give them an hourly rate, they compare it to what it would take them to do the job. What would take someone an entire weekend to do in leaves, we can usually do in a couple of hours. Homeowners usually don't get this at first. If you have an established customer base that sees what you can do, maybe hourly is just fine, but I wouldn't bid hourly for new customers if I could help it.
  8. Patriot Services

    Patriot Services LawnSite Fanatic
    Messages: 14,016

    Never have and never will give an hourly rate. Most people are ignorant and have no clue how much they themselves really cost their own employers. They only know the rate on the pay stub which is only a fraction of the true cost of an employee. In the middle of August here in Tampa I will probably spend 10 minutes every hour cooling down and hydrating. I would never stand for a client to tell me they are not paying me to stand around and drink Gatorade. Too many people think of us as employees not business owners.:usflag::usflag::usflag:
    ericg likes this.
  9. ACA L&L

    ACA L&L LawnSite Bronze Member
    Messages: 1,102

    After 13 years I have become very good at estimating how long a leaf clean up will take, we have good equipment and good employees. If I am short at the end of the job is not by much, if im under which we usually are than good for us. Either way we are making good money cleaning up leaves. After all they are just leaves. In 13 years Ive been way off maybe once or twice, i bid the job to make money. After you do one or two cleanups you should have a good idea how much time it takes to get it done right. Always bid high, not low, your already there giving the estimate and thats half the battle, if its fair they will acceept the bid and be happy that they dont have to keep meeting guys for estimates. Its all about knowing what it will take to do the job, and what it will actually cost you.
  10. ACA L&L

    ACA L&L LawnSite Bronze Member
    Messages: 1,102

    Oh yeah and never let the customer start talking you down with the other guy said he will do it for this and that, always have an answer for those kind of responses. My favorite is , " do u still have his number?" I used that on a landscape job where the guy was going back and forth about a 12x14 barn shed he wanted stuccoed and the roof had to match the house roof, (tiles) and a window, with electricity.......said he quoted him $1100 for it .........? i was like do u have his number cuz id like to have him come do my shed next. we got the job minus the shed, dont think he ever did get his shed, but the customer knows when they are trying to get one over on you just be aware....................

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