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let's take two companies. company #1 was not WISE enough to control his costs. i mean, it's only grass cutting, the tools should fit the job. but company #1 with his $12,000 lawn mowers and $60 grand in gas guzzling truck and enclosed trailer etc, 9 million dollar liability policy etc, is operating at about 20% profit. company #2 is WISE ENOUGH to buy the right tools for the job. he carries only what he needs as far as ins, permits, etc. company #2 is operating at about a 75% profit. ok then, let's minimize the price/profit to that of a single grasscut. comapny #1 charges $40 per cut on mrs jones house. at $40 he's lucky to squeeze out a $10 profit. but company #2 only charges $30 per cut at mrs jones house. yet at 25% less in price, he's profitting $22.50 on this service. that's more than DOUBLE what company #1 profits. who's the "lowballer?
 

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I think it would be hard to get your expenses down to just 25%. The price of fuel and taxes will be at least that much if not more, then you add insurance and the other stuff. I can't see that happening. I could see 35-40% while squeezing tight but 25% just won't happen.
 

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in other words company #2, "carrying what he needs", I don't need contractors or workman's comp insurance, I can spend less money on a Lowes quality mower. Therefore, I can make more profit on that $30.00 job that I took from a company that has "real" expenses.
 

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Low-ballers, have been defined on this forum many many times. Again, a low-baller is one who will perform a job at a loss, ar at best break even just to steal someone's customer. Don't matter what they drive, mow with, or how many "toys" they have in their arsonal. What ticks most people off is that most true low-ballers are not legit and are not in business long.

On the other hand, there are a lot of LCO's that try to justify their high prices so they can afford to buy the expensive trucks and equipment and get mad at the guys who can perform the job cheaper because they are not trying to be fancy, just legit.
 

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Neither is a low-baller, you stated that they both have the equipment, Ins., etc. need to run legit, and are both making profit from their work. One of them just has a higher profit margin and lower price.
 

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But if the market is demanding X price structure with in 5% - why low ball your bid to the point of being laughed at?

If contractor A and B are charging $50 and $55 / hour - you choose who you want b/c friend, word of mouth, seen his workmanship elsewhere - its $5 / hour difference.

Now your charging $40/ cut and I come in and charge $22.50 / cut - I am lowballing to get a customer who will probably drop me in a year or two due to ok work, and calls you and your now at $45/cut - then the name calling really begins.
 

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Low-ballers, have been defined on this forum many many times. Again, a low-baller is one who will perform a job at a loss, ar at best break even just to steal someone's customer. Don't matter what they drive, mow with, or how many "toys" they have in their arsonal. What ticks most people off is that most true low-ballers are not legit and are not in business long.

On the other hand, there are a lot of LCO's that try to justify their high prices so they can afford to buy the expensive trucks and equipment and get mad at the guys who can perform the job cheaper because they are not trying to be fancy, just legit.
Very well said!
 

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let's take two companies. company #1 was not WISE enough to control his costs. i mean, it's only grass cutting, the tools should fit the job. but company #1 with his $12,000 lawn mowers and $60 grand in gas guzzling truck and enclosed trailer etc, 9 million dollar liability policy etc, is operating at about 20% profit. company #2 is WISE ENOUGH to buy the right tools for the job. he carries only what he needs as far as ins, permits, etc. company #2 is operating at about a 75% profit. ok then, let's minimize the price/profit to that of a single grasscut. comapny #1 charges $40 per cut on mrs jones house. at $40 he's lucky to squeeze out a $10 profit. but company #2 only charges $30 per cut at mrs jones house. yet at 25% less in price, he's profitting $22.50 on this service. that's more than DOUBLE what company #1 profits. who's the "lowballer?
#2 is because the fact that his company is devaluing the service. If the customer feels $40 is a fair price to pay then that company is leaving $10 on the table for each service. Don't value your service by price provide a "real" value to your customer and charge accordingly.
 

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Why wouldn't you give the customer the best "value" if you are getting the profit margin that your company wants? If you look at the scenario posted #2 is making more money than #1 and assuming the quality is the same then the second guy is giving just passing along his good business sense in terms of a lower price to the customer not devaluing the service.


If you were a customer with a 2 acre lot looking for a maint. company, you get bids from 2 different places, 1 uses a 36" WB and the other uses a 60" Ztr, both charge $60 per hour. The end result will be the same. Which company is giving you the better "value"? What if the company using the WB is only charging $50 per hour? and the one with the Z's is charging $70? The cost for company #1 comes out to $75 and company 2 is $85? In the end he does the same quality work, makes more profit, and charges less. Is company #1 devaluing his service?
 

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let's take two companies. company #1 was not WISE enough to control his costs. i mean, it's only grass cutting, the tools should fit the job. but company #1 with his $12,000 lawn mowers and $60 grand in gas guzzling truck and enclosed trailer etc, 9 million dollar liability policy etc, is operating at about 20% profit. company #2 is WISE ENOUGH to buy the right tools for the job. he carries only what he needs as far as ins, permits, etc. company #2 is operating at about a 75% profit. ok then, let's minimize the price/profit to that of a single grasscut. comapny #1 charges $40 per cut on mrs jones house. at $40 he's lucky to squeeze out a $10 profit. but company #2 only charges $30 per cut at mrs jones house. yet at 25% less in price, he's profitting $22.50 on this service. that's more than DOUBLE what company #1 profits. who's the "lowballer?
1) I have never seen a lawn care operator with a $60,000 truck.

2) Company #2 clearly does'nt know it's expenses. There's no way you're cutting someone's lawn for $7.50 !

3) A lowballer is a person that does business without a license, paying insurance, sales tax, state charges ... etc. And can therefore bid lower to get the job. The lowballer in your story would be company #3 that bids $20.
 

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I charge approx. $45-50/hr for my labor jobs and end up getting $50-100/hr for mowing jobs.My son works with me.All I have is a $500k liability policy should a rock come flying out of a mower.Any tree work I take on is only the stuff that is not going to hit power lines or hanging over a house.My agent said I would be paying alot more for tree work.I only have a $72/month ad charge in the local paper and I do manage to get work every month from it.I mainly do this work to pay for all the new equipment I bought to use on my own property.So I do not realy take hardly any wage out of money I make.I have not gotten a few bids so I know I am not a lowballer.But I do not care if someone lowballs me.I have my price which I feel is fair and according to what I need to make to keep my payments up.I do not take vehicle ins into effect because I would have my truck anyways.This works for me.If I wanted to make real money I would use my electrician skills more instead of at my other job.I am only a grass cutter like most guys here plain and simple.The ones that complain about lowballers should have another skill that they can fall back on.Most trades make decent money and lowballers in the trades generally do not last or usually even startup a business.
 
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