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"How much should I charge for this?"
Lawn care prices seem so ... made up. You worry that the cost of your services is too high or too low. Nobody wants to scare away clients.
Use this Lawn Care Pricing Strategy to make sure your clients coming back:
This question is so old, they were asking it before lawn mowers even existed.
I will give you the secret to beating other Lawn Care owners in the next section (hint: you DON’T want to undercut them)...
...but first, we'll look at the root of the problem:
Operational Costs, or overheads, are the baseline of any business. You must know your overheads if you want to know how to price your services.
You are in the business of selling time.
Labor will always be your biggest expense on any job. You need to know how long it takes to complete a job.
The only way you can answer this question ACCURATELY is by tracking your time.
"This is the core of pricing ANY service: (Time per Job) x (Number of Employees) = Total Time"
For an easy residential "mow and blow" (10,000 sq. ft.), it might take two guys 30 minutes. That’s a total of 1 man hour (30 minutes * 2 employees = 60 minutes).
For an average wage, we went with $11.50 per hour.
Note: Some factors on the property will slow you down:
Until you can judge these slowdowns from GPS or your mapping software, you should walk around the property to figure this out.
Let's say you drive a pickup, a Ford F150.
The MPG from an older Ford F150 is about 14 with stops. With gas prices at $2.17. This yielded about $0.78 for the drive out there, or $1.56 round trip.
Add in $0.50 for equipment fuel, which gives us $2.06 for one job.
Not too expensive, but it adds up. Especially if you do 20+ jobs in a day.
I used this calculator to figure out fuel costs.
When your equipment is properly maintained, it will last much longer.
However, nothing lasts forever.
Mowing causes a great deal of wear-and-tear on blades, engines, trucks, even the uniforms your lawn employees wear.
Estimate your yearly maintenance costs. It is better to overestimate, but try to be as accurate as possible.
Then, divide that by the amount of hours one employee can work in a year. (Let's say a normal week in Texas is 40 hours * 36 weeks = 1440 hours for a full schedule.)
This will give you a baseline maintenance per hour number. For ease of explanation, we will say this maintenance per hour comes out to $5.00.
You are in the business of selling time.
That includes the time it takes for you to get to the property.
This is why it is IMPERATIVE that you keep your routes tight and dense. Drive Time costs you money. You MUST pay employees for Drive Time.
Let’s say this job was 5 miles away. 10 minutes there + 10 back.
That’s 20 minutes, round trip. For two employees, that’s an extra 40 minutes you have to pay. That drive time cost you $7.67.
There is a way to optimize all of your routes ... in a single click. Our software will connect your jobs for the least distance possible, so you spend less time on the road.
This will GREATLY cut down on drive time costs and save you gallons of gas - per truck - per week. Click here to see how Service Autopilot will instantly cut down on your overheads.
Now, all you have to do is figure out how much profit you want from this. For this job, you could charge a nice, even $35.
That lands you with $8.77 in profit, if you are out of the field.
If you are part of the labor, and you pay yourself for your work: that's $14.52 per 30 minutes, or almost $30 per hour in profit.
In a perfect world, you could get away with charging less (maybe $32 or even $30), but if you really want to make money in this business, you should aim to be a premium business:
This is the same approach you should take with ALL of your services.
This is how most clueless lawn care owners price:
They find out what their competitors charge.
Then, they undercut them. That is a TERRIBLE idea for 3 reasons:
Stanford scientists performed a study on Pricing. (The study focused on Wine, but it’s very relevant to the lawn care and landscaping industry.)
Two glasses of wine were placed out in front of the study participants:
Every time, the participants preferred the taste of the $45 wine. And every time, they said they would be more likely to purchase the $45 wine.
What they didn't know was that the two wines... were the same.
Let this be a lesson to you: if you are the cheapest guy on the block, clients will be LESS LIKELY to buy from you.
Aim to be the premium lawn care provider in your Market. You will charge more, but you will also do a much better job.
Everyone will agree you are the best.
Hopefully, you understand the importance of tracking time...
...because it is the only way to guarantee you make a profit on every job. Otherwise, you risk doing work for FREE.
Example: You charge 35$ for one man hour of mowing. That gives you $8.89 in profit.
Small time delays add up. If your two-man crew goes twenty minutes over, you lose 40 minutes of billable time. That shrinks your profit from ~$9 dollars to almost ZERO.
A waste of time will always cost you.
If you track time, you can guarantee that your services are always profitable. We highly recommend you use time tracking software to keep you and your employees accountable.
With Service Autopilot’s Mobile App, time tracking is simple. You can record Drive Time, non-billable hours, and Billable hours all in one tap. Most importantly, it guarantees you will make more profit on every job you perform.
Take our free Lawn Care Software Tour here. If nothing else, it will give you more ideas on how to run a smooth, healthy lawn care business.
These tips will ensure that your lawn care services are priced just right. With these pricing methods, clients will flock to you because you know what you are doing.
...and the next time you hear a lawn care owner say, "I just can't make money in this industry!" you can laugh all the way to the bank.
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