Formulas to help you run your business

[The Professional]

I had no one to tell me this so I had to think about it and figure it out for myself. I do not know if it has been touched on in the forum, but I am doing so to try to help others trying to run this as a business. The more people that know how to price things means that everyone’s prices will be more similar (less lowballers) and help the quality of the industry. Feel free go and talk to and share/teach this with your local lowballers too.

There is really no difference between square foot price/linear foot price and per hour price.

Say you have 2 lawns. Both are 1000 square feet.
Lawn 1, is perfect like a golf course and
Lawn 2 is bumpy, rocks and trees, and on a 30 degree slope.

Now, both lawns have an area and both are going to take time to do, unless you are magic. So you can do so much area in so much time.

Lawn 1 will take less time than lawn 2.
Say lawn 1 takes 10 minutes and
Lawn 2 takes 15 minutes.

I use seconds instead of minutes.
Lawn 1: so you take 1000 square feet and divide by 600 seconds (10 min), and you get 1.666 square feet per second. This would be your formula for a perfect lawn.

Lawn 2: take 1000 square feet per second and divide by 900 (15 min), and you get 1.111 square feet per second. This would be your formula for a bad lawn.

Take 1.666 and 1.111, add together and divide by 2 and you get 1.388 square feet per second, the formula for your average lawn.

Now you have a square feet per second formula it takes to do a bad, average, and a perfect lawn. Do the same for trimming and edging and blowing, come up with a low, medium, and a high formula for each. Run formulas for a push mower and your zrt. They will be different. If you use a 48" regular riding mower and then use a 48" ztr mower, your prices will be a bit off.

If you don’t have these times, eye ball the first few accounts and if you get it, measure everything you do and the time it takes to do it. Buy a measuring wheel at home depot for 60 bucks. Take good and bad accounts to get varied times. Time if the grass is wet or dry, if you feel great or bad, whatever. I keep a journal on each account I do and the time it takes to do each part each week, I have them measured also.

Now when you go to do an estimate with these formulas you can look at the yard and walk the yard to see how bumpy it is and measure the slope or pitch. Then measure the size. Say 5000 square feet.
So take 5000 square feet and divide it by 1.666 square feet per second because this lawn is near perfect. You get 3001.2 seconds for mowing the whole area. Now take 3001.2 and divide by 60 minutes and you get 50.02 minutes that it will take to mow. Do the same thing for trimming, edging and blowing and then add them to the mowing time. You now have a total time it will take you to do the lawn. I always add a percent for unforeseen things, like adding gas to trimmers, edgers, blowers, mowers, line for trimmers, and things like that, or just for travel time if nothing goes wrong. Lets say 5% to the total balance.

Now take the total time to do everything, say 75 minutes and times it by your operating cost per minute.

((Say it takes you $2.50 cents per minute to pay yourself, pay office bills, gas, insurance, repair and upgrade mowers, repair and upgrade trucks, repair and upgrade other equipment, and to be able to buy new equipment like skid steers, bobcats, dump trucks, tractor and brush hog, and everything else. I estimate for upgrading trucks, mowers, trimmers, trailers and everything every 3 years. Sell the old or keep it if you want to.
Take the price of all equipment going to be upgraded and new equipment needed and divide by 3. This is how much you need to save per year to upgrade every 3 years; you could do it every 5 if you wanted. You could figure on $100,000 to $250,000 per year or for advertising alone if you wanted too! Easy to spend that on TV and radio, real quick!

Say you wanted to make 20k per year, it took you 20k to operate and advertise, and you needed 60k to upgrade your equipment every 3 years and to buy needed equipment along the way. So add your salary 20k, add operating costs, 20k, and 1/3 of 60k, 20k. You get a total of 60k per year needed to operate, for equipment, and for you to live on.
Divide 60k by number of months mowing. This is price per month
Divide new number by 4 weeks in a month. This is price per week
Divide new number by working days in a week. This is price per day
Divide new number by hours working in a day. This is your price per hour you need to run your business.
Divide once more to get your price per minute you need to run your business!)) So say it is $2.50 per minute.

So you take the 75 minutes it takes you to do the job and times it by the cost you have to make per minute ($2.50) and you come up with $187.50. Plus the 5% mentioned above for unforeseen things, and you come up with $196.88 you will need to do this lawn.

If you low ball you will not be able to buy that shiny new skid steer or bobcat, this is why it is important to not low-ball.

Everyone has an operating cost; most scrubs have not bothered to take the time to figure office, insurance, repairs and acquiring new equipment out. This is why $20 for a lawn might seem like a lot to them, until they realize that $18 is going back into operating costs and only $2 was profit! If people lowball, they will not have nice, running equipment and will not be able to provide new services to their clients. If a lowball scrub drops a crankshaft on their craftsman residential riding mower, how are they going to mow lawns when 100% of their income has been allocated towards porn and a 12 pack of "The Beast". You cant run a business and think you can keep 100% of the income, more like 10%, 20% at best.

A business is a money-eating monster. You keep too much of the income you kill the monster by starvation, no more business! You barely feed the monster and it gives you some crumbs. The less you take and the more you feed it (upgrades, advertising), the more crumbs it feeds you!!!

So you want to make more than $2 per lawn after operating and upgrading costs? Raise your lowball prices! This is why I cannot do a lawn for less than a certain price. I have a certain price to just break even, let alone upgrade and get new needed equipment, and those several acres for greenhouses I want. The more you lowball, the less you can do with your money. Get it too low and you cant even operate. There is a base minimum to just break even, no profit. There are always hidden costs in operating a business.
You could run around offering to mow people’s yards and you pay them $50 a yard to mow it. You would have every lawn in town, but what would you make? You would hemorrhage money.

I would rather maintain 1 yard for $100 dollars, while lowballers mow 10 yards for $10 dollars each. This isn’t a race to see who can mow the most yards; it is a race to see who can make money and stay in business.

Now if we are making the same money, do you really think we are making the same money?

I am mowing 1/10th as much so I will have:
1/10th wear and tear, repairs, tires, belts, air filters, blades, oil, gas on my mowers.
1/10th the wear and tear, repairs, tires, oil, gas, everything else, on my truck.
1/10th the wear and tear, repairs, oil, gas, blades and line for trimmers, edgers and blowers.
I will make a boat load more money because I will save lots of money on the decreased use of my truck, mowers, trimmers, edgers, and blowers.
I will also be mowing 1/10th less so I will be 9/10th less tired and have 9/10th more time to get more $100 jobs or go and have fun if I do not get the right paying accounts.
I could mow 25-$100 dollar jobs in a week, lets see a lowballer mow the 250-$10 dollar accounts to make the same $2500 per week, but they would have to mow more than that to make up for the increased use of their equipment, just to net the same as me.

I hope I have put some things in perspective and I hope this way to formulate price per yard and operating costs will help someone who is trying to run this as a business and not just a way to make a few extra dollars for beer.

And no, the above times and prices are not mine, this is just a basis on how to calculate things. Everyone will have their own operating costs and times it takes them to do it.

[soccaplaya1985]

So in theory then, you should not be worried about low-ballers because they will eventually price themselves out of the lawncare game. Now, I understand the quick argument you could come back with is that there are a lot of scrubs out there.

I am 19 and live in northwestern Pennsylvania. While I am in college full-time during the school year, I also mow residentially during the summer. I do not yet have the capital to work with much more than my little push mower and my '97 Ranger. While I do not believe you defined a "scrub" as others in the forum have, I am sure I fit into this category. I would like to differentiate between a scrub and a low-baller (if you believe it is even possible to do so). I am sure to landscapers like yourself who are well-situated and rooted into your business by now, you are appalled by land service suppliers (I don't even know if I am a land"scaper" by definition) such as myself.

I had 13 regular customers last year paying about what you mentioned a guy like I would charge (around $20 per lawn for a bit less than 1 hour of work). Also a sidenote to add is that in my area, few customers would not pay quite as much as you listed. I'm unfortunately not in Florida or California. Anyhow, these 13 lawns along with other residential side projects amounted to about $5300 of revenue for my summer. I believe after counting in my expenses for mower maintenance, depreciation to my truck, gas, other miscellanous supplies and such, I had a net profit that broke down to around $16.50 per hour. I don't have many overhead expenses quite yet. Not bad for a 19 year old kid who used to work for $6 an hour for someone else. This said, I plan on becoming more profitable in the years to come. I have already employed a few workers and am in the process of getting more customers through distribution of 2200 flyers. I am auditing a Business Organizations class at college this upcoming fall and plan on filing my company and going legit next year.

I guess my point is that everyone has to start somewhere unless you have had a prior job and have a lot of capital to start a larger company with or unless you plan on taking out a large loan (which is not feasible at my stage in my life). While I do plan on becoming legit and enlarging my business, for now, I must work within my own niche. This includes working for older, widowed ladies who can not pay $2.50 per hour. I have become friends with many of my customers and even when I do upscale my efforts, I will not charge these particular customers more than I am charging them now. I just wanted to let you know that not all "low-ballers" are taking business "away" from you. Some customers can not afford you, and for people like these, I may be the better choice for them.

That said, however, I do agree with your disappointment over people who hurt the lawnmowing business by lowering prices to customers who could pay more. I also found your formulas insightful and helpful. I myself do account for all of the depreciation and expenses that you think (probably accurately) many lowballers do not account for. I plan on growing my business into the years to come, yet do not see myself mowing yards for more than the next summer. The next hurdle that I must cross will be legitimizing my business, although I have taken the proper steps to have accomplished this within a year.

I guess the point of my rambling is that you shouldn't necessarily worry too much about low-ballers because if you believe what you said above, they will price themselves out of the industry...right? In fact, wouldn't it be better that they remain low-ballers rather than established companies like yourself? If they stay low-ballers, they will be forced out of the industry while if they took the steps necessary to price correctly, they will become long-term competition. Which one do you want? The short-term or long-term threat? I suppose it all depends on how much grass there is out there...

Thanks again for your well-written article and insightful message.

Eric

[Elwood]

I have a few questions regarding pricing by the ft2. How will you pay your employees? Hourly or by peice? What about "market share"? You may like to do only one $100 lawn per week vs. ten $10 lawns, but there are things like upsells to account for. If you are servicing 10 people, you have 10 times the opportunity for upsells, which generally profit more than mowing, you can grow at a better rate.

While I don't like lowballers, being competitive in the marketplace is key to growth.

Back on pricing. What about travel time? Some lawns may be 5 minutes from your shop, the same sized lawn may be 30 minutes away. If you are paying your employees hourly, you are paying for 50 minutes of travel time to employees that you are not going to collect if you price by the ft2. Just increasing your price by 5% will not make your numbers work out and errors in pricing result in loss of profit.

Pricing time in reality is SO much easier than pricing by the ft2. You just need to understand YOUR REAL COSTS of doing business, as they will differ from other companies. As your company grows, you will require a secretary, sales people, foremen, Crew leaders and many other things that are NOT directly related to the job site. These things are a lot easier to figure cost based on time instead of square footage.


I am not saying square footage is completely wrong, comparing square footage vs. cost vs. price on very similar properties is a good tool to use, but using it as your sole pricing tool can be difficult. If you actually do account for many variables, such as travel time, difficulties on the site, etc., your pricing structure is so "varied" that you are very far away from what you are calling "the truth".

Knowing how to estimate time will give a more acurate price because you should know to the minute how much it costs your company to operate. In a very competitive market, you can't be too far off and expect to gain market share and grow your company.

[bobkessler]

Micro-Management

Estimating your real labor time may be better than calculating it. After all, what about all of those other variables that render those kind of numbers meaningless. You will never spend the exact amount of time on the same property, twice. Too many confounding factors like weather, season, turf length, and just the simple fact that you cannot replicate movement down to the second. I won't even mention traffic, equipment failure, and the line at McDonald's. Yeah time is money and that means ALL TIME, not just when you're on property.
By the time you're done calculating I already did another property.
I have to go lay down now. Your numbers wore me out.
Oh by the way, when was the last time you checked your tire pressure? Balanced your blades??

[The Professional]

First, I didn’t mean to offend anyone.
There is a difference between scrubs and an ambitious person who is using what they have to get to where they want. I knew a guy that built a trailer out of 2x4's and plywood and hauled a push mower behind his bicycle. If he was going out and mowing at super low prices so that he could buy an old truck to haul his push mower in, and then kept mowing so he could buy a trailer, then kept mowing to get a better mower, and so on, this would be an ambitious person trying to start their own business.

But when the same person is hauling a mower in a homemade trailer behind a bike like this guy was, with no intentions of making upgrades or trying to even think of it as a business, and was just doing it to make beer money, that is a scrub.
Now it is up to each person to ask himself or herself if they are a scrub. I cannot drive down the road and look at everyone who has a mower stuck in their truck bed or car hatchback and say they are a scrub. But I know that most of these people are just doing it at low prices to get extra cash with no intention of doing anything more with it.

I, and I am sure others, don’t mind a whole lot if someone lowballs a bit if they are trying to make something out of it, because there are plenty of yards out there to mow. If everyone raised their rates there would still be plenty to mow.

But is it fair if 100 guys in town are going out and mowing just so that they can buy a dime bag of meth or weed every night or a 12 pack of beer or so they can send most of it out of the country? They just want to get ghetto rich for a few days.
(I am typing this with my hands that I have 5 blisters that popped and I worked through the day with open blisters while doing a landscape removal job yesterday. I sold a $500 rifle for $150 earlier this year, so I could operate till my first month’s invoices came in. I am buying a $600 bagger system for the mower so I can provide a better service, instead of buying that new plasma screen TV. I spent $1000+ earlier this year on new blowers, edgers, and trimmers, instead of a new cd player for the truck and a new less lumpy bed to sleep on. So yes, I know sacrifice, dedication and ambition.)

How is this fair to those of us who started with nothing and are now trying to run a small business we started with nothing? Can you honestly blame people who are trying to run a small business for not being happy because they loose jobs to people who are lowballing not because they want their own business too, but because they just want a few bucks to get intoxicated, buy junk, or send elsewhere? If I tried to go and do real estate or surgery or psychology, just because I wanted a few extra bucks, I would be in jail.

Any non-crippled person can mow a yard. My 8-year-old adopted brother mows my dad's yard. It isn’t brain surgery to mow a yard. But I can drive around town and tell you which ones were done by pros and which were not. Most scrubs try to speed through a lawn, mow in a spiral pattern or their lines are wavy because they are going so fast. They try to do as many, as cheaply as they can. Some people just want their lawns cut and don’t care how it looks so long as it is short. If scrubs would stick to mowing the "I don’t care if it looks like ray charles mowed it" lawns I wouldn’t mind. They are needed for that type of lawns. I do mind a bit when I am doing a commercial account for $60 and not making much of a profit, and people come by and mow it for $20. I can’t do it for that. It now looks like it was mowed by ray charles. I was doing a nice job on it and I got stopped while doing it by a guy and got a $90 commercial account off of it because I was doing quality work. There is a niche for all lawn/landscape people, just stick to mowing cheap yards if that is what you want to charge, but don’t go and bid a nice yard worth $60 per service, for $20. I don’t try to take the $20 yards from the quantity mowers; so don’t try to take the $60 jobs from the quality mowers. That is all I was saying.
I wasn’t calling anyone on here a scrub, if you are here; you obviously are trying to learn more about the trade, as am I. I definitely do not know everything. We all learn something every day. I know that it has taken me some time to figure stuff out. I was just trying to share it with other people who want to know. I thought maybe it would save someone some hassle. If you can eyeball it, or you are psychic and magically get the right price for you to operate every time, great. I tried to eyeball it my first few accounts and was WAY under on some and WAY over on others. I tried to figure a way to make things more consistent. Now, on to questions.

elwood,
I don’t price per the square foot really, I price by the hour. I just found that I could do so much area in so much time. As I said, I keep a journal on the time it takes to mow, trim, ect, on every account, every time I mow it. The key is, say I can mow a 4000 square foot lawn in a "bulls out" top speed of 15 square feet per second. I don’t price it for the fastest time. It also took me say, 10 square feet per second. So I bid a lawn like that for 12.50 feet per second. If you mow it and the ground is dry one week and you do it in 15ft per second and the next week it is wet and takes 10, you are still on target for your average. Bid at the lowest time if you want to really be on the safe side. Not all lawns are the same feet per second, which is why I don’t charge a flat feet per second on all lawns. I actually charge a per hour rate. I also take a picture of the yard so I can compare it to the bid I am giving. I also measure the slope of the yard and the number of trees/flower beds/obstacles on the yard so I can figure how many trees/flower beds/obstacles per square foot, into the time.
How to pay employees? Well if it takes me 30 to mow and 30 to do everything else, 1 hour total by self. If I had a second person, I could do the same quality work in half the time, so we could do twice as much, so I would still make the same amount if I paid them half. But if I paid them 25% I would make an extra 25% on top of what I was making by self. If I had 4 other employees I could do 5 times as much and if I paid them 25%, I would make twice as much. But with employees comes headaches, not showing up, showing up intoxicated, quitting, etc. I figured the price of operating and equipment and everything else into my price per minute. I also figured my salary/employees separately. If you pay hourly, you get people who usually want to do as little as possible. If you pay per piece, you get people who rush and do a bad job so they can get done faster and drive faster and are more likely to get in a wreck or loose an account because of poor or unfinished work. Not good either way. I might pay a salary and if they get so many job complaints or tickets in so much time they are let go. No good way to do travel time because routes change. Also, have all new employees sign a non-compete form immediately when they start work. 3 years or so, whatever the law allows. That way they don’t work for you and learn the tricks and then quit and start their own.

Up sell I don’t worry about. If I do quality work and work for people who pay more, I can get more per mulch and get other jobs that the lower paying customers cant afford, fountains, decorative retaining walls, bigger landscape jobs, etc.

So basically, I do charge per hour, I just know that I can do so much area in so much time. Say you need $100 a day to operate at your cost. My formula did show you a per day cost. And you do 4 $25 accounts. Your operating costs are covered. Drive to the bid, time it, take the time times your per minutes operating cost, and add it to the bid if you want. Double the time it took you if you want to be safe for traffic or hold up at McDonalds.

bobkessler,
While I value and respect the fact that you have been in the business since 1971, I am not trying to hock my knowledge for a fee. "Based on his many years of experience in the industry, Bob now offers several books (See the Products page) and consulting services (See the Services page) in addition to Live Classes and Web Classes". You have impressive credentials, so I am surprised when you say "Estimating your real labor time may be better than calculating it". I did this, I went to bid an account and half of it was on a hill. I thought I could mow it safely sideways, I cant. So I am making half what I need to on that lawn because I estimated it (eyeballed). I also lost other bids “estimating it” because I was way over priced. To recap, estimating, I lost money by being to high priced, and lost money thinking I could do something in less time than it actually takes. So how is estimating a win-win situation? With my way I can bid a lot more consistent so I don’t loose jobs or loose money on jobs. If you bid not on a top speed all the time, but an average speed, you might be a 3 minutes slow 1 week and 3 minutes fast the next, so it averages out to being correct. It may not be perfect, but is closer than eyeballing. If you have a formula for “estimating it”, please feel free to teach us. The operative word there was free. If there is a better way of doing it, I would be willing to do it, but I don’t see how you can come up with a consistent formula for “estimating it”(eyeballing it).

And as for the snide comment about tires and blades, that was uncalled for if you meant it that way. I check my tires usually daily. I run about 8 psi in back and 20 psi in front. It makes for a softer ride and the less pressure in the front makes less of a rut in the lawn when I mow. If one tire has more air, it can make an uneven sloped cut. I have a stack of new blades I balance on my new cheap 2-piece balancer, but usually they are fairly factory straight. I have a stack of old blades that need sharpened, but waiting till I get one of those groovy blade sharpeners I have allocated for in my operating costs.

Again, I didn’t mean to offend anyone, I was just trying to help. If my help is not wanted I have other things I can do with my time.

[TRANSMAN]

Ramble on any TIME!!!

So in theory then, you should not be worried about low-ballers because they will eventually price themselves out of the lawncare game. Now, I understand the quick argument you could come back with is that there are a lot of scrubs out there.

I am 19 and live in northwestern Pennsylvania. While I am in college full-time during the school year, I also mow residentially during the summer. I do not yet have the capital to work with much more than my little push mower and my '97 Ranger. While I do not believe you defined a "scrub" as others in the forum have, I am sure I fit into this category. I would like to differentiate between a scrub and a low-baller (if you believe it is even possible to do so). I am sure to landscapers like yourself who are well-situated and rooted into your business by now, you are appalled by land service suppliers (I don't even know if I am a land"scaper" by definition) such as myself.

I had 13 regular customers last year paying about what you mentioned a guy like I would charge (around $20 per lawn for a bit less than 1 hour of work). Also a sidenote to add is that in my area, few customers would not pay quite as much as you listed. I'm unfortunately not in Florida or California. Anyhow, these 13 lawns along with other residential side projects amounted to about $5300 of revenue for my summer. I believe after counting in my expenses for mower maintenance, depreciation to my truck, gas, other miscellanous supplies and such, I had a net profit that broke down to around $16.50 per hour. I don't have many overhead expenses quite yet. Not bad for a 19 year old kid who used to work for $6 an hour for someone else. This said, I plan on becoming more profitable in the years to come. I have already employed a few workers and am in the process of getting more customers through distribution of 2200 flyers. I am auditing a Business Organizations class at college this upcoming fall and plan on filing my company and going legit next year.

I guess my point is that everyone has to start somewhere unless you have had a prior job and have a lot of capital to start a larger company with or unless you plan on taking out a large loan (which is not feasible at my stage in my life). While I do plan on becoming legit and enlarging my business, for now, I must work within my own niche. This includes working for older, widowed ladies who can not pay $2.50 per hour. I have become friends with many of my customers and even when I do upscale my efforts, I will not charge these particular customers more than I am charging them now. I just wanted to let you know that not all "low-ballers" are taking business "away" from you. Some customers can not afford you, and for people like these, I may be the better choice for them.

That said, however, I do agree with your disappointment over people who hurt the lawnmowing business by lowering prices to customers who could pay more. I also found your formulas insightful and helpful. I myself do account for all of the depreciation and expenses that you think (probably accurately) many lowballers do not account for. I plan on growing my business into the years to come, yet do not see myself mowing yards for more than the next summer. The next hurdle that I must cross will be legitimizing my business, although I have taken the proper steps to have accomplished this within a year.

I guess the point of my rambling is that you shouldn't necessarily worry too much about low-ballers because if you believe what you said above, they will price themselves out of the industry...right? In fact, wouldn't it be better that they remain low-ballers rather than established companies like yourself? If they stay low-ballers, they will be forced out of the industry while if they took the steps necessary to price correctly, they will become long-term competition. Which one do you want? The short-term or long-term threat? I suppose it all depends on how much grass there is out there...

Thanks again for your well-written article and insightful message.

Eric

Hey Eric, i think you posted a well -written article, and very insightfull message yourself....You sound like a pretty smart guy, and i think you`ll go very far in life with that positive, good natured attitude you present...

Your absolutely right about that certain "niche" of elderly folk, or single parent moms, that just cant afford to pay rates of $45 pr cut that most others "have to" charge....There`s a lot of people out there that just squeek by on a fixed income, and can NOT afford to spend money ,that they dont have....Certain individuals liveing on a $1000 Social Security check can not make a stone bleed money,and it amases me that they also have to set aside a certain portion of the $1000 for prescriptions, that run into hundreds of $$$$$......I have no idea how they make it, but people like you are not scrubs in my book for helping them out....

Thats just my oppinion....

I know a few people across the street from some of my rental properties, and i just skip across the street , waste 15 minuites of my time,which i dont mind wasteing because i feel better about myself, and blow through their yards leaveing them with one less hastle that they "need not" worry about....

I ran into this one fello in a pub, who lives in a trailer park with about 200 units....He evedently had bought some non commercial zero turn that he picked up at lowes and cuts about half of the parks population lots..

He`s workin like people did back in the 40`s - 50`s...He`s a Vietnam vet,and told me about how the protesters spit on him when he came off the plane from "Nam" and i guess he has problems from that agent orange stuff...

He has no truck or trailer ,probably no insurance," i never asked",he just rides from yard ,to yard...Poor guys got those "kankles,"not really healthy" diabetes, high blood pressure,60`ish, but goes out every day ,and helps out the other elderly folk...He calls me occassionally if the carb gets out of wack and i`ll take the time to drive over, and give him a hand....

I would guess that the lots are around 60 X 60 and he charges $13-$15 a cut.I think theres a couple of widows he lets slide by, because he`s not into the soap operas yet and no one will hire him to fly a helicopter anymore...

He does about 100 of the 200 ,and must clearing himself $1000 a week and everyone is O.K with his approach...He`s happy ,their happy, and i believe most of the larger L.C services are slowly giveing him more of the work because they really dont want those cheapo jobs....He`s got the time to shut off his mower when the homeowners walk out with a soda ,and takes 5 minuites to give them someone to chat with....

The point being , theres a place for everyone, and this guy ,and the kid he has doing the weedwacking arent looking to run into the million dollar developements and steal anyones jobs.....Also like i said , the big guys dont want to take these low income folks last penny, nor do they have the time to chat with the lonely old people in there looking for someone to talk too....

I hope nobody is offended ,because i understand the guys with the mowers in their chevy trunks ,lurking in the nice middle-upper end neighborhoods do need to be watched....I just see some certain places where exceptions, can be made.....I know about the LAW, but some of are laws suck, and let baby/child-rapers/killers, walk the streets ,and are out of touch with reality.....The Law needs to be chaseing more high profile criminals in my oppinion......

Anyway Eric ,your story really impressed me.... It`s nice to read about a 19 yr old fella that is willing to work like you do, helping the old folk, and not expect that the world hand him over a million dollar job before he can legally drink...

The way you present yourself, leads me to believe that you will succeed in whatever venture you put your sights apon, and i will be looking forward to some more of your well written , interesting, rambleing" NOT" POSTS....

Good luck, TRANS.....

[soccaplaya1985]

Your original article did not offend me in the least. I got you off-topic, for which I feel bad about, but it was because I was not sure if you were aware that a few of the guys who might have immediately been considered scrubs may really not be. I do understand your frustration about being under-bidded by your gansta mowers who are in it for the weed and beer money. Transman, good story about the Vietnam vet. It well illustrated my argument and I think we are all seeing eye to eye on the debate I originally brought up. Sounds like he even has me beat if he's bringing in $1000 a week. Can't complain if he's doing it for the elderly though. Besides, I doubt he's getting "ghetto rich" with the money either. I hope I have that sort of ambition by the time I am that old, but at the same time, I guess I hope to be on the senior board of a large corporation by then too. We'll have to see what life throws at me.

Thanks for the replies, and hope your hands get better soon buddy. This is my last day at college for the year, but I'm sure I'll be hurting with you tomorrow .

[Elwood]

The Professional:

With experience comes good time estimation. You know the speed of your crews with your equipment. I nor Bob can tell you how to estimate your time, but your system of square footage estimation is fine, just a little over-calculating. As time goes on, you will know about how long it will take to mow your average 15k ft2 lawn, and your 20k ft2 lawn, etc. Of course adding for obsticles is required, but a series of forumulas can end up getting you further from what you really need to be. Throw in travel time being different for each account and you end up back at estimating time. Once you estimate several lawns of each size, you will start to know a number in your head after measurement for how long it will take, then add travel time, multiply by your hourly rate and your estimate should be very close or right on what you need to have.


As for "scrubs" or "lowballers" all I can say is "Welcome to the Green Industry"!!

This business is FULL of people like this because of the low start up costs and the low level of knowlege needed to start. Of course, this is why the failure rate in this business is so high. Quit competing with them, they won't last long. If a client switches to them, or chooses them over you, it is your job to set yourself apart from them on a level other than price. As for your landscaping, they are definately NOT your compeition, your competition is the new Suburban they have been wanting or that family trip to Hawaii they want to take. If they have the money, you are competing with other purchases rather than other contractors. Don't worry about others, keep focused on yourself and the cream will rise to the top!

[bobkessler]

Lighten Up

First, I didn’t mean to offend anyone.
There is a difference between scrubs and an ambitious person who is using what they have to get to where they want. I knew a guy that built a trailer out of 2x4's and plywood and hauled a push mower behind his bicycle. If he was going out and mowing at super low prices so that he could buy an old truck to haul his push mower in, and then kept mowing so he could buy a trailer, then kept mowing to get a better mower, and so on, this would be an ambitious person trying to start their own business.

But when the same person is hauling a mower in a homemade trailer behind a bike like this guy was, with no intentions of making upgrades or trying to even think of it as a business, and was just doing it to make beer money, that is a scrub.
Now it is up to each person to ask himself or herself if they are a scrub. I cannot drive down the road and look at everyone who has a mower stuck in their truck bed or car hatchback and say they are a scrub. But I know that most of these people are just doing it at low prices to get extra cash with no intention of doing anything more with it.

I, and I am sure others, don’t mind a whole lot if someone lowballs a bit if they are trying to make something out of it, because there are plenty of yards out there to mow. If everyone raised their rates there would still be plenty to mow.

But is it fair if 100 guys in town are going out and mowing just so that they can buy a dime bag of meth or weed every night or a 12 pack of beer or so they can send most of it out of the country? They just want to get ghetto rich for a few days.
(I am typing this with my hands that I have 5 blisters that popped and I worked through the day with open blisters while doing a landscape removal job yesterday. I sold a $500 rifle for $150 earlier this year, so I could operate till my first month’s invoices came in. I am buying a $600 bagger system for the mower so I can provide a better service, instead of buying that new plasma screen TV. I spent $1000+ earlier this year on new blowers, edgers, and trimmers, instead of a new cd player for the truck and a new less lumpy bed to sleep on. So yes, I know sacrifice, dedication and ambition.)

How is this fair to those of us who started with nothing and are now trying to run a small business we started with nothing? Can you honestly blame people who are trying to run a small business for not being happy because they loose jobs to people who are lowballing not because they want their own business too, but because they just want a few bucks to get intoxicated, buy junk, or send elsewhere? If I tried to go and do real estate or surgery or psychology, just because I wanted a few extra bucks, I would be in jail.

Any non-crippled person can mow a yard. My 8-year-old adopted brother mows my dad's yard. It isn’t brain surgery to mow a yard. But I can drive around town and tell you which ones were done by pros and which were not. Most scrubs try to speed through a lawn, mow in a spiral pattern or their lines are wavy because they are going so fast. They try to do as many, as cheaply as they can. Some people just want their lawns cut and don’t care how it looks so long as it is short. If scrubs would stick to mowing the "I don’t care if it looks like ray charles mowed it" lawns I wouldn’t mind. They are needed for that type of lawns. I do mind a bit when I am doing a commercial account for $60 and not making much of a profit, and people come by and mow it for $20. I can’t do it for that. It now looks like it was mowed by ray charles. I was doing a nice job on it and I got stopped while doing it by a guy and got a $90 commercial account off of it because I was doing quality work. There is a niche for all lawn/landscape people, just stick to mowing cheap yards if that is what you want to charge, but don’t go and bid a nice yard worth $60 per service, for $20. I don’t try to take the $20 yards from the quantity mowers; so don’t try to take the $60 jobs from the quality mowers. That is all I was saying.
I wasn’t calling anyone on here a scrub, if you are here; you obviously are trying to learn more about the trade, as am I. I definitely do not know everything. We all learn something every day. I know that it has taken me some time to figure stuff out. I was just trying to share it with other people who want to know. I thought maybe it would save someone some hassle. If you can eyeball it, or you are psychic and magically get the right price for you to operate every time, great. I tried to eyeball it my first few accounts and was WAY under on some and WAY over on others. I tried to figure a way to make things more consistent. Now, on to questions.

elwood,
I don’t price per the square foot really, I price by the hour. I just found that I could do so much area in so much time. As I said, I keep a journal on the time it takes to mow, trim, ect, on every account, every time I mow it. The key is, say I can mow a 4000 square foot lawn in a "bulls out" top speed of 15 square feet per second. I don’t price it for the fastest time. It also took me say, 10 square feet per second. So I bid a lawn like that for 12.50 feet per second. If you mow it and the ground is dry one week and you do it in 15ft per second and the next week it is wet and takes 10, you are still on target for your average. Bid at the lowest time if you want to really be on the safe side. Not all lawns are the same feet per second, which is why I don’t charge a flat feet per second on all lawns. I actually charge a per hour rate. I also take a picture of the yard so I can compare it to the bid I am giving. I also measure the slope of the yard and the number of trees/flower beds/obstacles on the yard so I can figure how many trees/flower beds/obstacles per square foot, into the time.
How to pay employees? Well if it takes me 30 to mow and 30 to do everything else, 1 hour total by self. If I had a second person, I could do the same quality work in half the time, so we could do twice as much, so I would still make the same amount if I paid them half. But if I paid them 25% I would make an extra 25% on top of what I was making by self. If I had 4 other employees I could do 5 times as much and if I paid them 25%, I would make twice as much. But with employees comes headaches, not showing up, showing up intoxicated, quitting, etc. I figured the price of operating and equipment and everything else into my price per minute. I also figured my salary/employees separately. If you pay hourly, you get people who usually want to do as little as possible. If you pay per piece, you get people who rush and do a bad job so they can get done faster and drive faster and are more likely to get in a wreck or loose an account because of poor or unfinished work. Not good either way. I might pay a salary and if they get so many job complaints or tickets in so much time they are let go. No good way to do travel time because routes change. Also, have all new employees sign a non-compete form immediately when they start work. 3 years or so, whatever the law allows. That way they don’t work for you and learn the tricks and then quit and start their own.

Up sell I don’t worry about. If I do quality work and work for people who pay more, I can get more per mulch and get other jobs that the lower paying customers cant afford, fountains, decorative retaining walls, bigger landscape jobs, etc.

So basically, I do charge per hour, I just know that I can do so much area in so much time. Say you need $100 a day to operate at your cost. My formula did show you a per day cost. And you do 4 $25 accounts. Your operating costs are covered. Drive to the bid, time it, take the time times your per minutes operating cost, and add it to the bid if you want. Double the time it took you if you want to be safe for traffic or hold up at McDonalds.

bobkessler,
While I value and respect the fact that you have been in the business since 1971, I am not trying to hock my knowledge for a fee. "Based on his many years of experience in the industry, Bob now offers several books (See the Products page) and consulting services (See the Services page) in addition to Live Classes and Web Classes". You have impressive credentials, so I am surprised when you say "Estimating your real labor time may be better than calculating it". I did this, I went to bid an account and half of it was on a hill. I thought I could mow it safely sideways, I cant. So I am making half what I need to on that lawn because I estimated it (eyeballed). I also lost other bids “estimating it” because I was way over priced. To recap, estimating, I lost money by being to high priced, and lost money thinking I could do something in less time than it actually takes. So how is estimating a win-win situation? With my way I can bid a lot more consistent so I don’t loose jobs or loose money on jobs. If you bid not on a top speed all the time, but an average speed, you might be a 3 minutes slow 1 week and 3 minutes fast the next, so it averages out to being correct. It may not be perfect, but is closer than eyeballing. If you have a formula for “estimating it”, please feel free to teach us. The operative word there was free. If there is a better way of doing it, I would be willing to do it, but I don’t see how you can come up with a consistent formula for “estimating it”(eyeballing it).

And as for the snide comment about tires and blades, that was uncalled for if you meant it that way. I check my tires usually daily. I run about 8 psi in back and 20 psi in front. It makes for a softer ride and the less pressure in the front makes less of a rut in the lawn when I mow. If one tire has more air, it can make an uneven sloped cut. I have a stack of new blades I balance on my new cheap 2-piece balancer, but usually they are fairly factory straight. I have a stack of old blades that need sharpened, but waiting till I get one of those groovy blade sharpeners I have allocated for in my operating costs.

Again, I didn’t mean to offend anyone, I was just trying to help. If my help is not wanted I have other things I can do with my time.

Lighten Up, no one's offended, least of all me. In the end this is a people business. We don't just make grass short, we solve people's problems. The most successful of us live that.
For me this forum is the greatest. Strength in journalism lies in dispute. We learn and grow with it. Censorship is the enemy. On the other hand humor is our friend and I am very likely to take pot shots at guys I've known for 25 years. I welcome the return. If you can't laugh at yourself you're in for a tough life. I've made every mistake in the book, and some many times over, which many of my former employees gleefully point out whenever they get a chance. So what! I love the business and all the people in it. When I'm in disagreement I let you know it, and so should you.
Hang in there. You're among friends here. Just be willing to get some bruises and bumps along the way.

[The Professional]

bob, sorry, i didnt know if you were joking or not. some people can just be mean. and sometimes what you would say to someone might get misunderstood in text. i understand now, i misunderstood. sometimes what i type doesnt read the way i mean it too.

elwood, thanks for the good advise. i am trying to not worry about them too much. i am just trying to do quality service and charge what i need to to get where i want to be. i just get frustrated sometimes trying so hard not to fail.

soccerplayer, stick with college and dont quit, it will only help you out in the end. and the numbers i gave were just for instance, i dont charge near 2.50 a minute. oh yeah, and when i was your age, i had several accounts that i drove around a craftsman rider in the back of a truck, but i didnt think of it as a business as i was going away to college the next fall. oh my gosh, i am an ex-scrub!

anyway, i just meant it as a way so that others dont have to eyeball it and loose accounts or loose money doing them. i figured i would try to help someone learn from my mistakes. it seems to be working for me untill i get good enough that i can just look and estimate accurately, but i dont have that much experience at it and had to come up with something to stay in the ballpark. use what works for you, this is just helping me stay in the game.
if it helps, use it. if it doesnt, ditch it.
talk to yall later.

[soccaplaya1985]

Perfectly understood...I didn't mean to get anyone in hot water and was never personally offended in the least.

[rustyt22]

I am very appreciative of your article. I have just started my business and am trying out different ways of bidding on jobs, including asking for help on here for the big ones. We are all on this forum for two reasons....to learn, or to help other people learn. After your article, i plan on using a lot of your ideas in my own bids, but I have also seen other posts on how to bid, and like their ideas also. IN the next couple months, i hope to come up with my own way to bid jobs that is part of a couple different formulas people use on this forum. All I wantd to say is thanks, and to keep the advice coming....it is very appreciated, and that goes to anyone else posting their learned knowledge of the business also.....Thanks!!!

[The Professional]

Thank you very much rusty for the compliment.

[enhancements]

pricing

I had no one to tell me this so I had to think about it and figure it out for myself. I do not know if it has been touched on in the forum, but I am doing so to try to help others trying to run this as a business. The more people that know how to price things means that everyone’s prices will be more similar (less lowballers) and help the quality of the industry. Feel free go and talk to and share/teach this with your local lowballers too.

There is really no difference between square foot price/linear foot price and per hour price.

Say you have 2 lawns. Both are 1000 square feet.
Lawn 1, is perfect like a golf course and
Lawn 2 is bumpy, rocks and trees, and on a 30 degree slope.

Now, both lawns have an area and both are going to take time to do, unless you are magic. So you can do so much area in so much time.

Lawn 1 will take less time than lawn 2.
Say lawn 1 takes 10 minutes and
Lawn 2 takes 15 minutes.

I use seconds instead of minutes.
Lawn 1: so you take 1000 square feet and divide by 600 seconds (10 min), and you get 1.666 square feet per second. This would be your formula for a perfect lawn.

Lawn 2: take 1000 square feet per second and divide by 900 (15 min), and you get 1.111 square feet per second. This would be your formula for a bad lawn.

Take 1.666 and 1.111, add together and divide by 2 and you get 1.388 square feet per second, the formula for your average lawn.

Now you have a square feet per second formula it takes to do a bad, average, and a perfect lawn. Do the same for trimming and edging and blowing, come up with a low, medium, and a high formula for each. Run formulas for a push mower and your zrt. They will be different. If you use a 48" regular riding mower and then use a 48" ztr mower, your prices will be a bit off.

If you don’t have these times, eye ball the first few accounts and if you get it, measure everything you do and the time it takes to do it. Buy a measuring wheel at home depot for 60 bucks. Take good and bad accounts to get varied times. Time if the grass is wet or dry, if you feel great or bad, whatever. I keep a journal on each account I do and the time it takes to do each part each week, I have them measured also.

Now when you go to do an estimate with these formulas you can look at the yard and walk the yard to see how bumpy it is and measure the slope or pitch. Then measure the size. Say 5000 square feet.
So take 5000 square feet and divide it by 1.666 square feet per second because this lawn is near perfect. You get 3001.2 seconds for mowing the whole area. Now take 3001.2 and divide by 60 minutes and you get 50.02 minutes that it will take to mow. Do the same thing for trimming, edging and blowing and then add them to the mowing time. You now have a total time it will take you to do the lawn. I always add a percent for unforeseen things, like adding gas to trimmers, edgers, blowers, mowers, line for trimmers, and things like that, or just for travel time if nothing goes wrong. Lets say 5% to the total balance.

Now take the total time to do everything, say 75 minutes and times it by your operating cost per minute.

((Say it takes you $2.50 cents per minute to pay yourself, pay office bills, gas, insurance, repair and upgrade mowers, repair and upgrade trucks, repair and upgrade other equipment, and to be able to buy new equipment like skid steers, bobcats, dump trucks, tractor and brush hog, and everything else. I estimate for upgrading trucks, mowers, trimmers, trailers and everything every 3 years. Sell the old or keep it if you want to.
Take the price of all equipment going to be upgraded and new equipment needed and divide by 3. This is how much you need to save per year to upgrade every 3 years; you could do it every 5 if you wanted. You could figure on $100,000 to $250,000 per year or for advertising alone if you wanted too! Easy to spend that on TV and radio, real quick!

Say you wanted to make 20k per year, it took you 20k to operate and advertise, and you needed 60k to upgrade your equipment every 3 years and to buy needed equipment along the way. So add your salary 20k, add operating costs, 20k, and 1/3 of 60k, 20k. You get a total of 60k per year needed to operate, for equipment, and for you to live on.
Divide 60k by number of months mowing. This is price per month
Divide new number by 4 weeks in a month. This is price per week
Divide new number by working days in a week. This is price per day
Divide new number by hours working in a day. This is your price per hour you need to run your business.
Divide once more to get your price per minute you need to run your business!)) So say it is $2.50 per minute.

So you take the 75 minutes it takes you to do the job and times it by the cost you have to make per minute ($2.50) and you come up with $187.50. Plus the 5% mentioned above for unforeseen things, and you come up with $196.88 you will need to do this lawn.

If you low ball you will not be able to buy that shiny new skid steer or bobcat, this is why it is important to not low-ball.

Everyone has an operating cost; most scrubs have not bothered to take the time to figure office, insurance, repairs and acquiring new equipment out. This is why $20 for a lawn might seem like a lot to them, until they realize that $18 is going back into operating costs and only $2 was profit! If people lowball, they will not have nice, running equipment and will not be able to provide new services to their clients. If a lowball scrub drops a crankshaft on their craftsman residential riding mower, how are they going to mow lawns when 100% of their income has been allocated towards porn and a 12 pack of "The Beast". You cant run a business and think you can keep 100% of the income, more like 10%, 20% at best.

A business is a money-eating monster. You keep too much of the income you kill the monster by starvation, no more business! You barely feed the monster and it gives you some crumbs. The less you take and the more you feed it (upgrades, advertising), the more crumbs it feeds you!!!

So you want to make more than $2 per lawn after operating and upgrading costs? Raise your lowball prices! This is why I cannot do a lawn for less than a certain price. I have a certain price to just break even, let alone upgrade and get new needed equipment, and those several acres for greenhouses I want. The more you lowball, the less you can do with your money. Get it too low and you cant even operate. There is a base minimum to just break even, no profit. There are always hidden costs in operating a business.
You could run around offering to mow people’s yards and you pay them $50 a yard to mow it. You would have every lawn in town, but what would you make? You would hemorrhage money.

I would rather maintain 1 yard for $100 dollars, while lowballers mow 10 yards for $10 dollars each. This isn’t a race to see who can mow the most yards; it is a race to see who can make money and stay in business.

Now if we are making the same money, do you really think we are making the same money?

I am mowing 1/10th as much so I will have:
1/10th wear and tear, repairs, tires, belts, air filters, blades, oil, gas on my mowers.
1/10th the wear and tear, repairs, tires, oil, gas, everything else, on my truck.
1/10th the wear and tear, repairs, oil, gas, blades and line for trimmers, edgers and blowers.
I will make a boat load more money because I will save lots of money on the decreased use of my truck, mowers, trimmers, edgers, and blowers.
I will also be mowing 1/10th less so I will be 9/10th less tired and have 9/10th more time to get more $100 jobs or go and have fun if I do not get the right paying accounts.
I could mow 25-$100 dollar jobs in a week, lets see a lowballer mow the 250-$10 dollar accounts to make the same $2500 per week, but they would have to mow more than that to make up for the increased use of their equipment, just to net the same as me.

I hope I have put some things in perspective and I hope this way to formulate price per yard and operating costs will help someone who is trying to run this as a business and not just a way to make a few extra dollars for beer.

And no, the above times and prices are not mine, this is just a basis on how to calculate things. Everyone will have their own operating costs and times it takes them to do it.

what exactly would be the upgrade avg that you speak of? I know it varies for what you have and what you want but just starting out and getting the upgrades you need how do I do that and get the right amt. I need.
Also right now I'm bidding on a job for pruning of over grown shrubs probably a days worth of work, edging, weeding, mulching, I figure with all involved it will take 4 days with 2 of us, the total sq. ft of all this taken place is 1960 sq. ft. being 2 in. of mulch. being just starting out n all I did what I need to get paid with other person included and materials and it came out 4000. does this sound right to you? please help just starting out