To have a finely tuned lawn care business that generates consistent profits, you may be required to look at your lawn care operation as a whole. When you take a step back and compare your business to other successful ones, you may find that there isn’t just one element you need to change but instead, more than a few of them. In this discussion from the Gopher Lawn Care Business Forum, we see how a discussion on pricing led to a larger issue of how to better operate a lawn care business.
He wrote “my brother and I are in our second year of full time mowing. We have seperate businesses but share the same marketing strategies and help each other from time to time and get together on large projects. We live in a rural/suburban area outside. The majority of our clients are residential subdivision type homes that for the most part are around the same size with little landscape. We both advertise $45 mowing, weed eating, edging, and blow package and for the most part this is what we charge for just about any lawn that is a neighborhood size yard. We feel advertising our price saves us time from having to go out and do estimates because we can just ask if it is a normal neighborhood size lawn over the phone a tell the customer it is going to be $45.
Now we have alot of customers that we cut on biweekly schedules. We do not have contracts with anyone and alot of the time, we just verbally agree to be back every two weeks but alot of the time it ends up that the customer only calls when the grass is knee high. Along with being very very busy, we both feel very unorganized with both of our businesses.
My brother and I got into an arguement this morning about changing from our standard $45 gimmick price to giving estimates and ultimately charging more. He thinks that having lots of customers we can potentially upsell to is worth keeping the low price. I think we should be charging $1 per man minute and still trying to upsell when possible.
The more I think about it, the more I am getting stuck with should we be putting people on contracts? Are we crazy for charging only $45 for yards that take one man a hour and a half to complete? We do great work but I just think there is alot more money out there and we are cutting ourselves short.
To get more insight into this issue, I talked to another landscaper that I know through the family that lives a couple hours away and asked some of the same questions. They are in a coastal area and have a larger business than mine serving more expensive homes several commercial properties. To my suprise their rate was lower than mine in! They charge $35 per hour for residential lawn care. They also said that they have about 50% of their customers on weekly contracts.
He suggested that I should change the way I operate. From now on, he said I should, give estimates and pitch a contract with the incentive of a free cut or discount or something like that. Then when their is a customer who doesn’t like the idea of a contract? I will explain that I need them on a schedule of some sort or their price will be higher.
I get a lot of customers who just want to call me when they need me but that has become such a pain and really has gotten to were it accounts for a large percentage of my business. I know that it is nuts and it makes me nuts but I always go cut them because I know they will call again I just don’t know when. As you could imagine that makes for a very unpredictable schedule and makes me very unorganized. I know I need to move away from handling things like this.”
Another lawn care business owner said “the landscaper you talked to may be able to charge less than you because of economies of scale. That means he gets so much business that he can afford to charge less and still make the money they need. Also, your hourly rate depends on your costs. Take all your costs for the season, divide them by the number of hours you predict to work this season (example 40hrs/week X 30 weeks =1,200 hrs per season). Now you have your break even point. To this, add how much you want to make per hour. (example: you want to make $25 per hour and your hourly break even rate is $20. Then your hourly rate is $45 per hour)
I had a lady call me about every 3 weeks to go mow her lawn because sometimes she mowed it herself and sometimes she didn’t have the time. I told her the day I was around that area and that was the day I could schedule her in…like a Thursday… so she would need to call me at the latest that Wednesday in order to get her scheduled in. If not, she would need to wait another week unless I could do it on the weekend on my day off. But all these other factors meant I charged more money.
You could do the same with your customers. Let them know when you are in that area so they can give you a heads up when the need mowing and you can schedule them in instead of having to go back in forth around town every different day.
Ultimately though, you should have more customers willing to hire you for the entire season. That is where you make your money. As you gain more customers willing to be weekly customers, you should consider dropping the sporadic customers.
Never give out estimates over the phone like that. And never include your price on your marketing material. When you do that, you are making the most attractive part or the sale, the price. You never want to compete on price if you are looking to make a profit. Instead give estimates in person. This allows you to use your sales skills and helps you get more money and more upsells!
Avoid doing jobs where the grass is knee high. That’s equipment suicide. It is risky in more ways than one. Long grass could mean hitting water mains, toys, sprinklers, and other trash, etc.. All of this is stuff you don’t wanna bump into with your equipment.
Even then, sure you can cut the grass… but because it was so long, you can’t really ‘perfect’ it’s appearance as you could a weekly maintained lawn. Neighbors of these customers won’t be impressed with your work.
So keep these things in mind.”