Lawn Care Pricing

[aaronstran]

I have always wanted to own my own business and after long and careful consideration, I have chosen lawn care. Lawn care is one of the best businesses to get into currently from what I've been reading and I enjoy doing it. Over the past few months my business hasn't been "official" I have had a couple job here and there, but haven't gone all in. I am here because I am writing my business plan and I am unsure about pricing. I have asked a few different people and some say I should charge hourly, by the square foot, or even a flat rate (I don't like flat rate). I was thinking I would charge by the square foot because it seems the pay would more closely reflect the amount of work. I was thinking I would charge $.004 - .005/1 sq ft. So for example my first customer who's yard is 15000 square feet would cost $60 - $75.

Some professional opinion and advice would be much appreciated thanks!

[Fulcrum]

I would use both hourly and sq ft. formulas. The trick here is to be consistent. The bulk of your work would be by the sq ft and reserve the hourly rate for the trouble jobs.

Determining your rate is what most people do wrong. You need to account for everything.

Fuel cost/hour
Machine cost/hour
Labor cost/hour
Insurance cost/hour
Vehicle and trailer cost/hour
Quoting (including lost jobs) costs
How many sq ft you can complete per hour.

Accounting for everything in that list will allow you to set both an hourly rate and a sq ft rate.

[aaronstran]

Thank you, I'll come up with everything on the list and see if this works.

[KristineS]

Fulcrum made a very good point, a lot of people go wrong when it comes to pricing because they don't consider all their costs. If you're not pulling in enough money to cover what you need to cover than you're not going to succeed.

Another thing to do is to do some research on your competitors. What are they charging. What do they offer that you don't offer? What can you offer that they don't offer? After doing some pricing research, you may find out that you can set your prices a little higher than you were thinking. Remember, being the cheapest isn't always the best strategy.

[nealrm]

The market will determine how much you can charge for mowing a yard. You need to do some research and determine your competition's prices. You will also need to determine the demand in your area. Those are what will determine the price.

Your cost is not important in determining a price. Your client doesn't care how much your equipment, your amount of overhead or anything else. He/she will only care about the price and the quality of the work.

Cost is important in determine if you should enter into a specific market. If the market price is such that you cannot cover cost plus your salary, you should not get into that market.

Don't confuse what you want or need to make with what the market is willing to pay for a service. If you charge more than your competition you better have a better product.

[Harold Mansfield]

I have always wanted to own my own business and after long and careful consideration, I have chosen lawn care. Lawn care is one of the best businesses to get into currently from what I've been reading and I enjoy doing it. Over the past few months my business hasn't been "official" I have had a couple job here and there, but haven't gone all in. I am here because I am writing my business plan and I am unsure about pricing. I have asked a few different people and some say I should charge hourly, by the square foot, or even a flat rate (I don't like flat rate). I was thinking I would charge by the square foot because it seems the pay would more closely reflect the amount of work. I was thinking I would charge $.004 - .005/1 sq ft. So for example my first customer who's yard is 15000 square feet would cost $60 - $75.

Some professional opinion and advice would be much appreciated thanks!

Will this be a full time business? If so what will you do in the off season?

[Brian Altenhofel]

Your cost is not important in determining a price.

This.

Price should be an input on your spreadsheet. Cost should be used only to determine if the product or service is a viable opportunity at that price.

[Harold Mansfield]

I can't agree with what's been said more. No one cares what you need to make, that's your problem. People buy on want, need and value. Whats in it for them.
None of my clients have ever said to me, "Let me give you a little more. I'm sure you have bills to pay." In fact it's the opposite.

You have to be competitive, while covering costs and making a profit. That's not a given all of the time. Some things just aren't viable businesses. But since others are doing it, it's a good sign that you can to. You just need to determine if you can, there is a market and opportunity for you, and if you can run it successfully.

[Fulcrum]

I have to disagree with cost not being a major factor in determining price. In my opinion it's the biggest factor. Whether or not his market can handle the price he needs/wants to charge is a different factor and more of a marketing and branding issue (providing the margins are close enough).

I've used equipment that cost $100, equipment that costs well over $750K, and everything in between. Both acquisition (or financing) and replacement cost must be factored in before any money is spent. It doesn't matter if the OP is using new or used equipment, he needs to account for the new cost of said equipment. Aside from a new truck I wouldn't be surprised to see close to $40K worth of new equipment (useful life of probably 5 years). Good labor is going to cost a minimum of $20/hour - if not closer to $30. Than there is the profit side of things, lost time due to weather, lost time due to lost quotes, mistakes, and a thousand other details which need to be considered.


None of my clients have ever said to me, "Let me give you a little more. I'm sure you have bills to pay."

I've heard that both in my current business and when working other jobs. I've also heard the exact opposite. It all depends on the target customer and what their expectations are. If the OP is in the upper end of pricing, his customers will pay if the work performed is up to par and he holds firm on pricing.

[BNB]

I have to disagree with cost not being a major factor in determining price. In my opinion it's the biggest factor. Whether or not his market can handle the price he needs/wants to charge is a different factor and more of a marketing and branding issue (providing the margins are close enough).

I've used equipment that cost $100, equipment that costs well over $750K, and everything in between. Both acquisition (or financing) and replacement cost must be factored in before any money is spent. It doesn't matter if the OP is using new or used equipment, he needs to account for the new cost of said equipment. Aside from a new truck I wouldn't be surprised to see close to $40K worth of new equipment (useful life of probably 5 years). Good labor is going to cost a minimum of $20/hour - if not closer to $30. Than there is the profit side of things, lost time due to weather, lost time due to lost quotes, mistakes, and a thousand other details which need to be considered.



I've heard that both in my current business and when working other jobs. I've also heard the exact opposite. It all depends on the target customer and what their expectations are. If the OP is in the upper end of pricing, his customers will pay if the work performed is up to par and he holds firm on pricing.


Where the heck do you live? Goodness. Landscaping labor at $20 - $30/hr????? Try $10.

One of my properties has about 10,000 square feet of grass and landscaping. I pay $35 and they cut, trim, and also handle the bushes and shrubs. Plus they will spray weeds. On my larger property, nearly 20,000 square feet of lawn, maybe more.... I pay $65 for same service. And that's about the going rate here.

The biggest factor, by far, will be what the market can handle and what type of people are doing the service in your areas.

For what it's worth, I've always wondered why the lawn people don't sell pool service also. I get my lawn cut weekly, they are already there, and it's not that much to learn to do pools. You can undercut the normal pool guys and make a killing doing both.

[nealrm]

I have to disagree with cost not being a major factor in determining price. In my opinion it's the biggest factor. Whether or not his market can handle the price he needs/wants to charge is a different factor and more of a marketing and branding issue (providing the margins are close enough).

I've used equipment that cost $100, equipment that costs well over $750K, and everything in between. Both acquisition (or financing) and replacement cost must be factored in before any money is spent. It doesn't matter if the OP is using new or used equipment, he needs to account for the new cost of said equipment. Aside from a new truck I wouldn't be surprised to see close to $40K worth of new equipment (useful life of probably 5 years). Good labor is going to cost a minimum of $20/hour - if not closer to $30. Than there is the profit side of things, lost time due to weather, lost time due to lost quotes, mistakes, and a thousand other details which need to be considered.

You are making a common mistake by mixing factors used to determine whether a business proposal is worth pursuing with factors determine how it should be priced. By doing so you are running the risk of either overcharging and driving customer away or undercharging and leaving money on the table. Look at it this way, if the OP was able to get the equipment at an extremely low cost, should he price his service less than his competition? The answer it .... it all depends on the demand. If demand is high, he should price at a level similar to the competition and make more per yard in profit. If demand is low, he should underprice his competition to bring in customers. But the key factor in this is demand, the cost of the equipment only allows the two options to be viable.

On the other hand, if he is forced to pay more for his equipment than his competition will he get a higher price for his services. It depends. If demand is higher than supply, he can as they say skim off the cream. In other words, charging a higher price because not everyone can be serviced at the current supply level. However, if demand is low, the higher price will force customer away. Again we see that demand in the key factor and not cost.

Supply and demand sets the price, your cost is what determines if a business is viable.

[billbenson]

I'm in FL and pay 35 dollars a mow. No idea what the square footage is, but is a reasonable sized lawn for a suburban house. He mows when it needs it. That is weekly in the summer but could be once a month in the winter. His workers actually make more money than he does.

[Fulcrum]

Where the heck do you live? Goodness. Landscaping labor at $20 - $30/hr????? Try $10.

$11.25 minimum wage + vacation pay + employer portion of CPP (SS in US) + worker's comp insurance rate. My employee at a $15/hour wage has a true cost around $25/hour. If the OP's a true sole proprietor with no employees, than most of this formula can be "ignored".


One of my properties has about 10,000 square feet of grass and landscaping. I pay $35 and they cut, trim, and also handle the bushes and shrubs. Plus they will spray weeds. On my larger property, nearly 20,000 square feet of lawn, maybe more.... I pay $65 for same service. And that's about the going rate here.

The biggest factor, by far, will be what the market can handle and what type of people are doing the service in your areas.

Properly invoiced or cash deal? Are these fly-by-nighters or a true registered business with a tax number? Do they have full liability insurance? If they have employees, are they properly compensated or are they considered illegal? I don't ask these to be accusatory, I just want to make sure that we're talking about and comparing based on all relevant factors.


For what it's worth, I've always wondered why the lawn people don't sell pool service also. I get my lawn cut weekly, they are already there, and it's not that much to learn to do pools. You can undercut the normal pool guys and make a killing doing both.

Good question. I don't think I've seen this very often either. I do know that the landscaping guys up here also plow snow in the winter. Some are properly registered, some do it for beer money, and others go broke fast because they "only need to charge $30/hour". (great labor rate but loose 1 transmission and there goes 2 years worth of beer money).


You are making a common mistake by mixing factors used to determine whether a business proposal is worth pursuing with factors determine how it should be priced.

Profit and enjoyment determine the former while costs + profit determine the latter. In general, neither should be ignored when making a decision. Also, not once have I stated that current market pricing should be ignored.

There is only one way to effectively determine how much a company needs to charge: direct costs (equipment costs + maintenance + consumables + raw materials [if applicable] + direct labor + whatever else can be accurately assigned to the full work) + indirect costs (indirect labor + general office expenses + any other costs that can't be accurately assigned). When profit is added to that answer it becomes what a company wants to charge. If market rates are higher than the combined numbers than a company can take a higher profit or, and it's a big or, leave the rates where they need it and force the industry as a whole to adapt to lower pricing.


..., if the OP was able to get the equipment at an extremely low cost, should he price his service less than his competition?

As you said - it depends. I do this myself and I will explain from my own experience. Everyone has to make their own decisions and their mileage may vary depending on industry.

18 months ago I bought a $40K machine for $1500. After fixing it ($2500 and a stubborn air leak that didn't want to be found), it paid for itself inside of 3 months due to reduced labor. If I can figure out how to modify it slightly, I can probably pick up another 30-40% improved efficiency. Does this mean I drop my prices? In one area- yes, and in the rest - no. This does give me a greater ability to play price games when the competition comes after me (though this is generally a short term play). However, I still need to assume that when the machine gets replaced it's going to cost me $40K+ and if I don't allow for it in cost/viability determination than I'm on a "go broke slow" path.

[David Hunter]

This is the guy you want to ask... Keith Kalfas: https://www.youtube.com/channel/UCHj4z3gLGp-cjaCIKhzctsw

You can also find him on Facebook and all over. He does lawn care, window cleaning, trees, he does it all.

[turboguy]

There are all kinds of prices for mowing. I pay a young guy 15 bucks to mow one lawn using my mower. I am not in the mowing end but am in that industry. There are some LCO'S that make good money. Having efficient equipment and customers that are grouped seems to be the key. I would suggest you check out a site called "Lawnsite". You will find a lot of good info there.

[MosheC]

There will always be clients that go for the lowest prices, those are not the clients you're looking for. They usually complain more and they will find issues to complain about in order to get you to drop you're prices. I don't agree with the statement that you should look to the other businesses and price accordingly. They might have not done the math, you would be surprised how many businesses think their pricing structure is solid but are losing money.

You decide how much you want to charge (I would advice you take Fulcrum's post seriously). You will have less clients, but they will work with you because they like you're work not you're prices. I had to learn that the hard way.

[AndrewLockman]

Hi Aaron - hope the lawn care biz startup is progressing well. Getting the advice you have already received here will no doubt have helped. If you are interested in getting extra advice/information from other lawn care specialists there is a great Australian-based website that you may like to check out. I can't paste the URL here but if you google " Lawn Club Australia" the link will show up. I have no affiliation with the site but I was involved with some biz dev work for another small business which included gathering market research and I found this site very informative. No doubt there are many others out there. Good luck.

[Wash & Dry]

Here was the real answer if anyone else is starting a lawn business. At first he should have charged a lower rate to get his first 10 customers. Then he should have raised his rates for the next 10 customers. Then for the next 10 customers he needed to raise his rates again. When his schedule is filling up working alone or with just 1 helper he needs to start raising his rates on his first customers that he low-balled on. And continue until he has his rates to where they need to be.... at a high price. The reason he can raise his rates is because he showed up!! What?? Because he showed up? Lawncare really is THAT simple.... show up and do a decent job and people will pay more. Here is why guys fail at lawn care.... they don't answer their phone and they don't show up to do the job when it is scheduled.

[turboguy]

I am not in the lawn care business but am in that industry. One of the problems you will hear about the lawn care business is the ease of entry. a college kid can buy a used mower on Craigslist for $ 75.00 and go into the business. At my former house I had a kid that mowed my lawn for $ 15.00 and it was a hilly lawn.

As far as pricing it depends on what you are planning to do. If you are just going to push a 20" lawnmower around the lawn the price you are talking about is probably high. If you are going to edge and blow the clippings it may be ok. One of the keys to making money is the route you are able to establish. In other words if you can go into a neighborhood and mow a dozen lawns going right down the street that is effective. If you have to drive 15 miles between each job it isn't.

What I think you want to work towards is having a couple of helpers, a 36-48 inch stander, a couple of push mowers, some blowers and weed wackers and hand tools and a landscape trailer to haul things on but you don't need all that from the start.

I have seen some people do really well in the industry and others not so much. Getting started is the hard part. It may be possible to buy some customers from an existing company that is trying to narrow their focus of their jobs or from someone who tried to get into the business and failed.

I can also suggest a web site for the industry that you might find useful. It is called lawnsite It is run by Turf Magazine and should be a big help to you.

[turboguy]

I am not in the lawn care business but am in that industry. One of the problems you will hear about the lawn care business is the ease of entry. a college kid can buy a used mower on Craigslist for $ 75.00 and go into the business. At my former house I had a kid that mowed my lawn for $ 15.00 and it was a hilly lawn.

As far as pricing it depends on what you are planning to do. If you are just going to push a 20" lawnmower around the lawn the price you are talking about is probably high. If you are going to edge and blow the clippings it may be ok. One of the keys to making money is the route you are able to establish. In other words if you can go into a neighborhood and mow a dozen lawns going right down the street that is effective. If you have to drive 15 miles between each job it isn't.

What I think you want to work towards is having a couple of helpers, a 36-48 inch stander, a couple of push mowers, some blowers and weed wackers and hand tools and a landscape trailer to haul things on but you don't need all that from the start.

I have seen some people do really well in the industry and others not so much. Getting started is the hard part. It may be possible to buy some customers from an existing company that is trying to narrow their focus of their jobs or from someone who tried to get into the business and failed.

I can also suggest a web site for the industry that you might find useful. It is called lawnsite It is run by Turf Magazine and should be a big help to you.