When it comes to pricing your landscape and lawn care services, you need to set a perfectly balanced rate. Otherwise, you’ll either end up either losing your clients or losing your money.
Pricing your lawn care services can be tricky business. With so many factors affecting each service you offer, it’s hard to come up with an ideal price.
What’s an ideal price?
One that ensures profitability for you and 100% satisfaction for your clients.
It’s not an easy task. But don’t worry because that’s what we’re here for! In this post, we will guide you through the process of coming up with ideal prices for all your lawn care services—no matter where you live!
Calculate Your Costs
Calculating all of your company’s expenses is the first thing you should do.
By expenses, we mean all operational costs.
When it comes to a lawn care and landscape, there are many costs to worry about, but four we’ll go into now.
When you’re offering a service (not a product), you need to hire laborers that will get the job done.
Labor is always the single biggest expense. So you have to know the completion time for each job. And the only way to do that accurately is by tracking your time.
While calculating the time may seem like an easy job, it’s actually (a bit) more complex than you may think, as there isn’t only one determining factor (time per job).
So what’s the factor you’re missing…
Employees per job.
That’s right. You need to know how many employees are required to get the job done efficiently, and then factor in their combined time.
Here’s an easy formula for this purpose:
Time per Job x Number of Employees = Total Time.
Using this formula, you can easily calculate the time spent on every service you offer.
Here’s an example to help you understand how this formula is used practically:
For a conventional, mow and blow of 20,000 sq. ft., it will probably take two employees around 60 minutes. So, that’s a total of 2 man hours (60 minutes x 2 employees = 120 minutes).
Now say this was in the United States, then you would probably have to pay around $20 per hour. So, the total cost for this job would be $40 in this scenario.
When you’re running a lawn care service, fuel is a big expense to consider.
You need to check how much fuel your vehicle consumes. Once you’ve got an idea of how much fuel is required to reach your client’s home, then you can give them a fair price.
For calculating how much fuel your vehicle consumes, use this online calculator. Simply check your vehicle’s miles per gallon (mpg) and then check how much fuel it consumes on the calculator.
Inexperienced owners believe fuel isn’t a cost serious enough to be considered. That’s one of the many reasons why they fail and are considered rookies.
So always factor in all your expenses because even though they may not seem to make a big difference, but in the long-term, they can determine whether you’ll make profits or losses.
For landscape equipment, you have to consider two costs: one for purchase and the other for their maintenance.
Properly maintained equipment lasts much longer. However, none of it lasts forever because mowing causes a lot of damage to every part of your truck including tires, blades, engines, and it even ruins your employees’ uniforms.
So you have to factor in all maintenance costs to be as accurate as possible. But maintenance cost is a bit tricky and there’s simply no way you can be 100% accurate.
That’s why it’s better to overestimate rather than underestimate. Because when you overestimate, you don’t have to worry about end up spending more than you planned.
4. Drive Time
Time is money.
As we’ve discussed earlier, you have to calculate the time it takes your employee(s) to get the job done. But what we didn’t mention was that it includes the time taken for your employee to get to the property.
So every minute your employee is driving or stuck in traffic takes dollars out of your pocket. And that’s exactly why you need to keep your routes tight and dense.
Now, these 4 costs should be factored into every service you offer to get a better idea of your estimated profit before the job starts. It is recommended to use software to aid you in automatically calculating and tracking these costs.
Know Your Competition
Great! You’ve got enough information to calculate the amount each service you offer costs.
Now, all you have to do is put a few extra bucks on it and make loads of profits, right? Not so fast…
First, you have to check up on your competition and see how much they’re offering for the same services. The amount you’ll get will (of course) vary depending on your location.
Once you’ve got their price, don’t be a rookie and simply go lowballing a few extra bucks below them.
Experimenting Your Prices
Most lawn and landscape business owners have a simple two-step method for setting their prices:
- Calculate all costs
- Add a few extra percents to make profits
And that’s exactly why most of them fail in the long run.
You know the savvy-owners who are crushing their competitors? Well, their secret is simple: they experiment prices until they come up with a perfect plan.
And that’s exactly what you need to be doing.
Most owners are afraid to try out new things. But if you want to succeed, then you have to put on your brave hat and take a step further than the rest.
You have to… charge more than your competitors!
It may not sound like a good idea, but if done right, it’s the best route to take for your business.
Instead of joining your competitors and low balling each other, you can take the high road and do something they won’t:
Increase your prices and offer the most compelling services in your area.
But you have to be smart and set some ground rules:
- Don’t price your services unreasonably high.
- Always raise money on unprofitable clients first.
- Test your prices on a small group of clients first.
But here’s the thing: clients won’t simply pay you more because you say so. You have to offer them something extra. Something that they really want but your competitors don’t promise.
You can beat the low ballers in your area by promising the following perks that your competitors don’t offer:
- Offer premium services.
- Offer coupons and discount on small jobs to attract new clients.
- Hire the best employees in your area and make sure this fact is properly marketed.
- Market your service better than the rest to build your brand and increase credibility.
- 100% on-time project completion. And if you want to go a step further, offer a money back guarantee for a missed deadline.
Even if you’re offering only a few of these, your clients will know they’re getting a good value for the extra cost. So both you and your clients are satisfied.
And last but not least:
Refuse Cheap Clients
Experts agree that long-term clients are the ones who bring in the vast majority of profits.
That’s why it’s important to stay away from cheap clients. Because in the long run, you may end up making no profits from them or worse some loss.
So, it’s best to turn away cheap clients and let the low ballers in your industry handle them.
In conclusion, you need to build your brand by promoting your lawn care service as the best in town to attract high-paying clients—the ones who make your business worthwhile.