To Sell or not to sell?

[lawnfree]

good luck, with it why dont you look to some of your trusted friend s to take on larger roles in your firm have one lady driver in charge of marketing. Utilise your other friend as a supervisor for full teams of new blood. Employing friends ended up costing my partner and i lots of cash... in down time

[Woody]

The reason you are having such problems is because you aren't even close to charging enough. I won't call you any names, but I'll second the opinion that you should get out of the business!! Your charges for labor are making you ZERO money. And I mean ZERO. If you would track your expenses, and determine what your COSTS are, you would see that you are most likely LOSING MONEY on a per-hour-of-work-performed basis. The more your crew works, the less money you have.

If you think that charging $3.00 to $5.00 above your PAYROLL on labor is making you money, you're nuts. You REALLY need to run the numbers once, and see how much insurance, gasoline, maintenance, etc. is REALLY costing you! I can tell you this right now, if you were actually making a FAIR profit, you wouldn't be here asking these questions right now.

I know this much, if I sent 4 guys out to weed a mulch bed, and I was only bringing in $12.00 to $20.00 an hour TOTAL above their payroll, I wouldn't be able to afford the gasoline in the truck that got them to the job. This doesn't even begin to cover what happens when they use a mower, or other piece of power equipment.

Let's see..... You send out 3 people to work for you. Let's say they work 40 hours a week, and 30 weeks out of the year. Let's use the maximum price per hour for their work, which leaves you with $5.00 an hour above payroll for each of them. 3x5=$15.00 an hour above payroll. Multiply the hours a week times the number of weeks worked per year 40x30=1,200. So your GROSS above payroll is 1,200x$15.00=$18,000 per year. Using CURRENT exchange rates, (1 canadian dollar=0.822 American dollar) this comes to $14,796 American. If you divide this by 2,000 (the number of hours you would work if you worked 40 hours a week, 50 weeks out of the year), you quickly find out that you could make JUST AS MUCH MONEY as your GROSS INCOME off of 3 people by finding a job that pays $7.39 an hour. Around here, the video store pays $11.00 an hour to start (that's what their sign says every so often).

Of course, none of this even begins to address fuel costs (which I know were up to $1.00 a liter in canada not too long ago) for the trucks and the equipment, liability insurance (you have that, right?), maintenance on the trucks and equipment, etc. Or the fact that, at prices like that, all you end up with are the cheapskates of the world as customer.

Man, I don't want to hurt your feelings, but at this point, you're not a business, you're a charity case. Your prices aren't "lowballing", they are far below that. You're working yourself broke. If you want to be broke, get yourself some beer and sit on the couch. Might as well do it the relaxing way.

Get out of the business. Sell it as fast as you can. Or, get some SELF ESTEEM, and go RAISE your prices IMMEDIATELY!!! And don't even bother with excuses trying to justify your pricing. I'm in the same business, and I'll tell you, if I was charging that little for my services, I would be flat broke.

Woody

[drlawn]

I think that the prices here in CANADA have got to be raised. It seems that the US have a better market for lawn care. What is the average hourly rate in the US $45 - $60. In Canada what is it????????????
608 YARD you are a scub dude. you need to charge more man. You are giving other companies in canada a tough time.

[Ric]

That's a Town Car Ric. Yes, I was indeed the guy who posted "Town Car Lawn Care" last year on another forum. A man has to do what he has to do. The job must be done. It's amazing what you can pull out of your hat(or Town Car trunk) when you have to.

drlawn

What can I say that hasn't been already said??

[608-YARD]

I resent the insinuation that I am a "Scrub"!

I resent the insinuation that I am a "Scrub"!

Perhaps some of the posters are taking things out of context here.

First: My rates are competitive, just barely. Every week I get at least one or two clients telling me: "The guy that did it last year only charged $85 and he Power-Raked, Aerated, Cut, Trimmed and Fertilized my Lawns." My standard response: "Well you better get him to do it again, because I can't touch that." My work speaks for itself.

Some other Lawn service outfits in my City charge as little as $20 for a weekly cut just to keep the clients. There are hundreds of "Scrubs" here that pop up every year. They often are the ones who have no License or Insurance or even a real Business card for that matter.

They will go door to door and ask neighbors on the block of a job if they want Power-raking or Aerating for $35. $35!!!!??? Makes me wonder how the hell they can do it. Then I look and see a little Chevy Cavalier or dodge Neon with a small Utility Trailer and Equipment rented from Home Depot.

No Commercial Plates(Which means no Commercial Insurance either.), No accountability etc. It is actually totally illegal to go door to door in my City without special licensing, Insurance and Identification. But they do it anyways.

I got some satisfaction last year when I saw one of the "Scrubs" involved in a collision on a busy road. He rear ended a BMW stopped to turn Left. Hopefully, the Cops figured out (By the trailer with Mowers etc.) he was running a commercial enterprise without Commercial plates or insurance. If so...Big Fines are in store for him.

I voluntarily joined the "Commercial Vehicle Inspection Program" in my City. I saw it as benneficial because I have nothing to hide. I see it as beneficial because the C.V.I.P. Mechanics occasionally notice and point out things that my Garage miss. And hey, it's a free $75 inspection. If I pass, I get a special sticker that shows Police etc. I have passed recently.

Back to the rates thing. I assess each job individually. For Example:
Customer wants typical Spring service. I look at lot size and any unique characteristics of the lot etc.. If there is nothing unusual, I will typically charge $100 for Power-Raking and Aerating only. With one $10/Hr. helper, I can usually be in and out in less than an hour. With two $10/Hr. helpers, I can usually be in and out in 40-45 minutes. Profitable? Hell Yeah!!

"But the other guy will do all that, fertilize and cut and trim the lawn too for only $85." Now I have to explain that the fertilizer is something only Contractors Licensed for Chemical Application are legally allowed to do in this Province. I will often go on to ask them if the individual applying the chemical fertilizer uses protective gear or any special storage containers for it. The answer is usually no.

There is a huge amount of competition in my City. I get about 10 flyers in the mail every week from april through July. Some of the promotional offers my competitors are throwing around are insane! "Free Water Feature with every Season contract". Free Power-Rake, Aerate and Fertilizer with Season contract. stuff like that. How am I supposed to touch any of that? I simply can't give away anything for free. The bigger outfits seem to be able to do it though.

One guy will cut and trim your lawns for free for two weeks in a row because he is so sure you will like his work that you will call him again. Let's see, I'm going on Holidays this summer and I only need someone else to cut my lawns for two weeks.....

I charge what is fair and profitable, nothing more. My clients continue to use me because they like me. They see that I take pride in my work and that I am reliable. They know they are getting good value for their dollar. They know I am a no B.S. kind of Businessman. I will not jump to match my competitor's promotions, it is not worth it.

The $3-$5 above payroll is for jobs I don't even do. For Example: Nice old lady wants her flowerbeds weeded. I book the job, send a laborer with some hand tools and their own transpotation. I get $ for doing F-All!

Dr. Lawn: I AM NOT A SCRUB!!! I resent the insinuation that I am a "Scrub"!I am not giving other companies in Canada a hard time at all. If anything, they are giving themselves grief by offering all these insane promotions. I simply research what the market is charging and try to make sure that my pricing is competitive. I never say "We will not be undersold" like some of the other outfits here in town do.

Furthermore: I have Commercial Plates, Insurance, Licensing etc. I think I need some more clarification of exactly what the definition of "Scrub" is. Maybe I had it all wrong. I thought a "Scrub" was a fly by night operation without Commercial Licensing, Insurance, Plates etc.

[RRS]

If you're only charging $3-$5 above payroll you're losing money plain and simple. A $10/hr employee actually costs about $15/hour after taxes and insurance. Throw in all the other costs associated with running a business and if you're not billing a bare minimum of $35/hour/employee you're losing money.

A three man crew (yourself and two laborers) should bill for at least $120/hour.

I say sell it.

[608-YARD]

Thanks, but No Thanks.

I already decided to keep it. See Above.

Maybe some of my methods are "Un-Orthodox", but I do O.K. considering what I put in. Income Vs. Expenses and all, I am quite happy with the return I get for my effort. I love what I do and as soon as I can walk away from my other business, I know Landscaping is where I want to be until Retirement.

When I'm old and retired, I think I'll open a Tittie Bar to keep myself amused.

I'm only really doing Maitenance anyways.

Many charge less than I do, some charge more. I'm at a nice, Happy Medium.

[608-YARD]

I'm posting a new thread regarding Pricing, Competition and the Marketplace. Those folks who are critique-ing my prices may want to have a gander. Make sure to wear Sunglasses for the Occasional Blinding Flash of the Obvious. The Competition here is Fierce.