What’s more profitable for a lawn care business, small or large yards?
This is such a great question and I am glad it was brought up on the Gopher Lawn Care Business Forum. There are down sides and up sides to going each way. For instance, if you service a lot of smaller accounts, no one customer will be monopolizing your time and if they cancel, it won’t be a big shock to your business. However you will need to travel in between these jobs which will increase your wind shield time or drive time. As we have learned, you aren’t making money when you are driving so you want to minimize the amount of time spent driving between lawn care customers.
Having a larger property to maintain can be beneficial because you will be providing lawn care on a larger area without having to drive around too much. Something to watch out for especially when you are bidding on larger properties is that new lawn care business owners have a tendency to underbid jobs. They just see $$$$ signs and aren’t taking into consideration how much it will actually cost them to service such a yard. This can lead to breaking even on large jobs or even losing money on them if you aren’t careful. Let’s learn more on this topic by talking to Shawn about how he prices lawn care for his business.
Shawn: “Prices vary depending on the market. No matter what, I suggest that you set a minimum charge for lawn care. My minimum charge is $35 with prices going up from there. This is for mowing, trimming, edging, and blowing off the grass clippings. However, I was talking to a guy from Florida on here last week who said that he couldn’t get more than $25 a mow in his area. He even mows some lawns for as low as $15. What I’m saying is you must find out what your competition is charging, and what the market supports. Also, you must make money on each account. If you are not you must be charging more. Once you get going, figure out what your cost per yard is, and then set a minimum PROFITABLE price based on that assessment.”
Steve: “How do you estimate lawn service? Do you charge per acre or how do you charge?”
Shawn: “I do not charge by the acre. You should have a hourly rate for which you want your company (not yourself to earn). Mine is $45 per man hour. For example, If you have a large property that takes two guys one hour to mow you should be charging at least $90. It is ok to let this rate vary down a little bit, but not a lot. Like I said, my minimum charge is $35 which would be for a smaller, regular size yard in a residential neighborhood. I have one property that is about 5 acres(approx). It takes 2 guys about 3.5 hours to mow, trim, edge, and blow off. I charge them $250 per mowing.
Also, if you are doing fall cleanups. Make sure you are getting at least $45 per man hour on those.”
Steve: “What kind of equipment are you using on the larger properties and how do you estimate fall leaf cleanups?”
Shawn: “This large property is owned by a demanding customer who has extra high expectations. When I say it is 5 acres, this is 5 acres of well manicured fescue that the customer wants bagged. I actually only use a Walker Mower with a 48″ cut for most of the mowing. He has a area up around the house that he likes to be push mowed. This is done with a 21″ Toro. I run Stihl FS 100 RX 4 mix trimmers, and edger. He has a driveway that is approximately 200 yards long that is flanked by pine trees. Consequently, when trimming around the pine trees, the driveway becomes littered with pine cones. A large backpack blower such as my Husqvarna 170 BT. is required to clear them in a timely manner. This is one of the accounts I inherited from my previous employer. When I was there we usually had 3 guys on it with 2 Walker Mowers. This knocked the time down to 2-2.5 hours. Usually closer to 2.5 hours.
I think fall cleanups are tough to bid. I usually try to help my regular customers out, and just charge them a leaf removal charge, depending on how much longer it takes us to mow it. I break down my per man hour charge into minutes. For instance $45 per man hour equals .75 cents a minute. If it takes two guys 10 minutes longer than it does to mow I would charge them $15 dollars extra. $1.50 per min x 10 minutes.
For non customers, who only receive one cleanup at the end of the season…a good rule of thumb is to charge twice the amount that you would charge to mow. However if the property has a high amount of leaves and complications such as beds that are tough to get to, or water features you should charge more.”
Steve: “What has been you experience on servicing high end properties and large properties. Would you prefer most of your lawns to be large like this and high end?
Or would you prefer your ideal lawns to be smaller and not so high end?”
Shawn: “I would prefer for all of my accounts to be high end. It helps company morale a lot if you are taking care of high end accounts. I have found that employees take a greater sense of pride in their work when servicing high end accounts. As far as the size goes, both large and small have their positives. The thing I like about large, high-end properties I just mentioned is that you are there for an extensive amount of time and always producing. The truck stays put, and you are getting output for the whole time. You can make the same amount of money mowing 5 or 6 smaller yards in the same amount of time, but your rig has to move from account to account. Therefore, I think the larger accounts are more cost effective. The downside to the larger accounts is that it tends to tire you and your employees faster, rather than getting a break from yard to yard.”