Complete Guide: How to Price Lawn Care, Mowing and Landscaping Jobs (IMPORTANT)

Hey, everybody, it's Mike Andes, landscape business course. Today I'm in a very different environment, but today we're talking about lawn care, we're talking about landscaping. And today specifically, I want to talk about pricing and the different elements that need to go into how you price your lawn care and your landscaping as we go into 2020. Now, probably the biggest question I get almost every single day from landscapers is, how much should my hourly rate be? Now, when we talk about hourly rate, we need to take into consideration there's two different sides of the equation. There's projects and landscaping, and there's maintenance and mowing and what I'd consider lawn care. Now, for the landscaping and for the lawn care, you need an hourly rate that you consistently use, and you should be making your estimates based upon budget hours. We've talked about that before, but today I specifically want to talk about what should the pricing be? I can. I get the question a lot, and a lot of times I'm pretty vague because it really does depend on your market and what type of services you're offering and what your hourly rate is usually to your employees, things like that. Now, I want to give you a very hard set answer on what I would tell you if you asked, is my hourly rate too low? Is it too high? I'm going to give you a general answer that you can specifically use in your business. And maybe I'm off by a little bit, maybe I'm wrong. But I'm going to do this because it's. It's a hard set number that you can use to determine if you're high, low, if you need to raise your prices, or if you are pricing yourself out of the competition. The general rule of thumb that I'm talking about is that your hourly rate that you charge your customer needs to be at least 3 times what your average cost per hour for an employee is. So if I'm on average paying $15 per hour to my employees, I better be charging the customer at least $45 per hour. Now, if you're in a more expensive market, like where I'm at, where the average price to have an employee is at least 20 bucks an hour on average, then you should be charging at least $60 per man hour when you're on the job. Now, some people ask, well, what about lawn care versus landscaping? Some people say, well, landscaping and maintenance is easier, so it should be cheaper. Well, in theory, maybe, but the problem is when you come to mowing and you have maintenance and you have an actual route where your Guys are driving around to 10 or 15 different properties, you have drive time and you have a lot of wasted time. And you're much more, there's a lot more waste and you're much less efficient. Whereas if you're on a project, even if it's a weeding job, they might be there for 8, 10 hours without moving the truck, and they're on site the entire day. So in general, if you're actually looking at how much dollars per hour you're charging the customer on site, your hourly rate should actually be more for mowing and for maintenance when you have a multiple stop route. But again, as a rule of thumb, you want your average payroll per hour. It's 15$20 per hour that you pay your guys per hour. You want that to be approximately one third of the cost that you charge the customer. If you have to pay someone $15 per hour to come work for you, but you're charging the customer $35 per hour, I'd highly recommend getting your prices to at least $45 per hour. Another quick measuring tool to see if you need to raise your hourly rate is what percentage of your revenue goes towards labor. If that's over 40%, you really need to start thinking about raising your prices or, or starting to consider whether or not your guys are efficient out in the field and just burning the clock. Another thing you need to think about when it comes to pricing is what's going to be your minimum charge? Now, a lot of people talk about this in terms of lawn care and mowing, but there needs to be a minimum charge for your landscaping jobs too. So for example, you might have a minimum charge of 25 or $30 per cut on your mowing. And traditionally, the higher that number goes, the bigger the equipment setup is needed for, for your average lot size. So if you're hauling around a 20 foot trailer with two massive 52 inch zero turns and a crew of three guys, you're going to need that minimum mowing charge to be higher. Now, as a general rule of thumb, you want your minimum mowing price per cut to be two times your average cost for an hourly employee. So for example, if I do have $15 per hour for my employees, the minimum charge my mowing price per cut should be is $30. Now, I know a lot of people are gonna have disagreements with that, but I'm trying to help the person right now that has absolutely no idea where to start pricing and has no clue of hourly rates or where they should start pricing things out. Now, all of that Being said, you're going to want to price check your market by having some of your friends or family ask a competitor for pricing on their property and get a general range of, of where people are at in terms of pricing in your market. Now, the minimum price on a landscaping job is traditionally going to be quite a bit more than $30, or what you would usually charge as a minimum for mowing. The reason for that is because with the project, usually you're going to need to meet the customer. And maybe it's not a project, maybe it's to clean up or a weeding job, or raking out leaves or whatever. It might be a bark installation. Any sort of time when you need to meet the customer. You're not going to want to charge your minimum mowing rate. You're going to have other cost structures in place. That's where the estimate fee, or what we call the E fee comes into place where you charge to go see the customer. Some people can charge it on the estimate, some people can charge it on the back end in terms of rolling it into their labor. Some people actually will tell customers that it costs $50 to come. Just do an estimate. Regardless of how you have that built in your structure, you, you can't have $30 as your minimum price for a weeding job. If someone has a job where you need to come as an estimator and you need your office to then put together that estimate, do calculations, you gotta schedule that job. It's not a recurring service. Like if it's not a recurring service, that is literally the definition of a project. And you need to have a much higher minimum rate. Some people have $200 or $300 or a set number of hours. So for example, regardless if it takes an hour or three hours, you might have a minimum of three hours and, and you might have a $50 per hour charge. So it's $150 is really your minimum charge for any type of non recurring work projects. Anything in terms of weeding, mulch, insulation, anything that requires you to show up and do a job that's not recurring, you're gonna have another minimum charge. It should be quite a bit higher than your mowing minimum charge. Now another thing you need to be thinking about is dumping fees. And this is going to come into play if you bag clippings or, or if you're doing cleanups with a bunch of branches, leaves or other debris. What I recommend is having a set standard price per pickup truck of debris or dump trailer of debris. And so that Every single time you come and you're doing an estimate, it's not guessing or just throwing a random number and how much you're going to charge for debris. A lot of people say, well, I can dump the debris at my house or I can dump it at my shop. But you have to manage that debris, whether it be pushing it over with an excavator or tilling it up so that it decomposes, the management of that debris should bring in revenue for your business. Now the last type of pricing that I want to talk about is material markup. And this is most important. If you do a lot of project based work, cleanups or non recurring work that's not mowing or lawn care, Material markup is when you buy plants, material, materials of any sort, and then put it on the customer's property. So if I buy a yard of bark, I am going to buy it, for example, at $30 per cubic yard. I am not going to then just sell that to the customer at $30. I am going to have a material markup of at least 10 to $15 on those materials. Same thing goes for plants. Now there's a massive range of material markup that I see in the industry that some people will do a 10% markup just to basically cover the cost of calling and setting orders. Other people will actually charge 50% or 80% markup on these materials. Now my recommendation is that you mark up your materials at least 15 to 35% in that range. And the thing that I'm not taking into account here is the fact that there's more time. Like you got to go pick up the materials from a supplier, or you got to meet the client at the nursery to pick out the plants. That's going to be hours. That's separate from the material markup. So if there's extra hours in terms of picking up supplies or choosing supplies or choosing plants, that's all going to be different and accounted for differently on the estimate. But in terms of material markup, when I put 4 yards of drain rock on my estimate and it's $30 per cubic yards, it's going to cost me $120. I want to be making sure I make at least an extra 20, $40 in material markup, that's going to help recover your overhead. Things like driving to the supplier and having an office staff. Material markup, if you're doing projects is a great way to recover your overhead. Now I know there's a lot of opinions of what prices need to be in this industry, what we should be charging. Some people always saying, oh, I'm, I'm charging $150 per hour. That's expensive. And it gets different in my market. I know there's a massive range today. I did not want to create controversy. My position here, to get you to start thinking about these numbers and giving you some parameters of what's common in the industry. And the biggest one is the one we started with, and that is your hourly rate and making sure that at least your minimum hourly rate to your customer is three times what your average cost per hour is to hire someone in your market. And that's going to change because based upon what your minimum wage is, what state you're in, things like that are going to drastically affect your pricing. Thank you so much for watching. And if videos like this you enjoy in a different setting, please let me know in the comments below. And if you could do anything for me, please hit the like button. It helps me reach other landscapers just like you that could use this free content. Thank you so much. We'll see you on the next one.