In general, it seems the first way a new lawn care business owner comes up with to stand out from their competitors is to charge a lower fee for mowing. I think a lot of it has to do with the fact that when you are new, you don’t know much about the business so you normally can’t perform a better quality lawn maintenance job than a more experienced competitor. So to figure out a way to stand out, price then seems to become the way. As we will see in this discussion on the Gopher Lawn Care Business Forum, going the cheap price route has many disadvantages.
One new lawn care business owner wrote “I was thinking about how I could make $10 a lawn work and then get as many customers as I can with that business model. Let’s say you pay your employee $10 per hour and in 1 hour your employee can mow 2 lawns on average. You are paying them $5 per lawn gross pay. If they work 8 hours a day, you pay them $80 gross.
I was thinking I can charge $10-$15 per lawn in my area and make 2-3 times as much money as I was making at my previous job and still be charging 1/2 to 1/3 that of the competition. I know you may be thinking, ‘he’s gonna be broke in no time!’ But consider this, what if you already have a brand new riding mower with a ton of attachments (including snow blower), trimmer, blower, etc. and you already owned a pick up and small trailer, big enough to put the mower in?
This is almost the perfect scenario for one to be able to start a lawn care business charging $10 - $15 per lawn. Previously I was only making $8.50/hr at a factory job, so any more money than I was previously making would be all gravy.
I mean, this is probably why there are so many new competitors trying to charge so low…they figure, I already have equipment to use, my overhead is low since I’m not gonna pay insurance or register a business.
So let’s say a lawn care business owner pays 65% in overhead, 20% to the company for profit, and 15% for owner profit. Out of a $30 lawn that’s $19.50 for company costs. The company and owner combined are only making $10.50 on the lawn.
I think it’s possible for someone in this situation to charge $15 for the same lawn that a larger lawn care business owner would charge $30 for and still make about the same amount of profit. That’s about $30 per hour if you mow 2 lawns per hour. I know of landscapers who charge $30 per labor hour and that includes their overhead.
What do you guys think?? Would this lawn care business plan work?”
A second lawn care business owner shared “just wait until you get yourself started with that business plan, you are going to quickly see it is very short sighted.
By lowering your mowing fee, your costs to run a lawn care business don’t go down. You still have to pay the same amount of operating costs as the other guy charging double.
I can use $55 in gasoline a day just in my truck and mowers. That doesn’t include my mix fill ups every other day. Insurance, Lo-Jack on the trailer, blades, tune-ups etc etc etc.
I don’t foresee someone charging $10 a lawn, staying in business, because the moment their mower breaks, their business stops. I’m scared to death of my mower breaking on me, and I can afford to replace it. I can afford to replace it because of the prices I charge. My prices allow me to save since I don’t cut my own throat by charging too little. How do you expect to keep a customer for next season when you tell them: ‘Oh, just so you know my prices have gone up…ya, last year I only charged you $10, but this year I have to charge you $20.’ That’s a huge jump, and will leave the customer thinking that they should find another $10 lawn mowing guy.
Even $15 per lawn would barely cover my vehicle and liability insurance! So if you are charging $300 per week, if you put a rock through a windshield while mowing, you stand to lose a months pay replacing it. Not only that, once the clients and city find out you are not insured they will more than likely put a stop to your business and fine you. What about taxes? Have you forgotten you need to pay taxes on your income?
Why is there always this rush to the bottom? Why not instead of trying to figure out how you can charge $10 a lawn, surviving on beans, while living in a cave, you figure out a way to perform the best quality lawn care possible and charge the most the market will bear for it? Wouldn’t you rather make a profit than give your work away for free? Wouldn’t you rather build a legitimate business that you can be proud of and promote without the fear of being shut down by the next accidental situation waiting around the corner? Because it is out there, just waiting to happen. So why not prepare and educate yourself and do the best you can instead of the worst at the cheapest price?”
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