Mike Andes and Andrew Little compare pricing models for landscaping in Australia, where award wages run $25/hour plus superannuation. High-end companies charge customers $60+GST hourly, but Mike argues you need closer to $80/hour to maintain margins on that base wage.
About $25 per hour.
About 10% superannuation.
$18.83 per hour.
About $60 plus GST per hour.
Around $80 per hour.
For your minimum wage. Minimum wage is $25 an hour.
Yeah, yeah, yeah, you guys. And we go like, it's crazy over there, you guys.
Minimum wage is $25 an hour.
Yeah, yeah. Plus superannuation. So you get 10% super on top of that.
Hey everyone, it's Mike from landscapebusinesscourse.com and today we're going to be talking to Andrew Little who actually lives in Australia. And little known fact, my mom is from Australia, so I've been there before. I have some relatives over there. But today we're going to be talking about P4P. We're going to talk about contracts, we're going to be talking about minimum wage in Australia. Where he's at is $25 per hour. So don't complain if you're in the US and you're thinking about a 9, 10, 12, 15, $20 per hour minimum wage. $25 per hour is the minimum wage there. So we're gonna go jump right into it. How can you implement P4P on a model that needs that high of a minimum wage? And should you be doing contracts, should you be doing flat pricing, should you be giving just an hourly rate to your customer and then charging by how long you are there? Those are some of the things we're gonna be talking about today. So without any further delay, let's go ahead and talk to Andrew Little from 2manandashovel.com that's the name of his company. Oh, and one more quick announce.
Landscape Summit 2021 is going to be taking place.
It's all virtual.
There's no excuse. If you have snow or anything like that, go to landscapebusinesscourse.com conference and we're going to be sending out some goodies. So if you don't get this and like sign up right now, you're probably not going to get it, honestly, because I'm recording this on Monday and by tonight we have to have registrations in if you're going to get shirts and hats and the stuff we're sending out. So make sure you sign up even if you don't get the hats and the shirts because you're too late. If it's last minute, I don't care, sign up. It'll be great. Without any further delay, Andrew Little from Australia. Here we go.
Hey, there you are. Another fellow Aussie. I can say fellow because I'm half, I'm half Australian.
Cool.
Yeah, yeah. My mom, my mom is, she's from Perth. That's where she was born.
Yeah, I'm In Melbourne, so. Yeah, Very cool.
Yeah, some of my family lives over.
There, a bunch of my cousins. I've been only there one time, but I love it. I love it there.
It's awesome. Yeah, yeah, yeah, it's good.
Good stuff, man. You've been kind of following the content for a while. Cause I've seen your name before.
Yeah, yeah, I have. Like, I think I found your stuff probably April last year, and I've just been smashing it. Like, it's been, you know, it's been really helpful to the business. And I've implemented, like, a lot of stuff that you've been putting out there. So, yeah, big thanks for that.
Very cool. I looked at your website too.
I like the light.
Did you make that recently?
Yeah, just got it out like a month ago. Very cool. So, yeah, so it's going pretty good. But you can probably see in the. In the notes, this sort of the main thing I want to go on, like I said, talk about today, is just how to do it in Australia. The P4P system.
Got it.
Because I don't think anyone's doing it as far as I'm aware. You might have spoken to a few other Aussies about it, I guess, but I was thinking of a couple of top competitors, and they said they've tried stuff like this. Hasn't worked. The main landscaping coach, I paid like 1600 bucks for, you know, like a session like this with him, and he just said, no, you just gotta do the hourly rate here. You gotta do, you know, charge hourly rates, $60 plus GST per hour. But I just don't see why it wouldn't work here. I'm like, I really want to give it a go. So that's what it's. We've got a higher minimum wage as well, and so that's a big obstacle, I think, potentially as well.
So I just wanted to hear your thoughts, if you had any ideas about.
How to go about that for sure.
From a legal standpoint, because this is.
The part that I'm not as familiar. Is there anything preventing it from happening, or is that not the case?
I don't think so. No, I think.
Not. That I can see. Like, legally, all we gotta do, what we have to do is we have to pay our minimum wage. Right?
Like, that's. That's your base rate, you know, and for us, It's.
It's around $25 an hour for your minimum wage.
Minimum wage.
$25 an hour?
Yeah, yeah, yeah, you guys. And we go like, it's crazy over there.
You guys minimum wage is $25 an hour.
Yeah, yeah. Plus superannuation. So you get 10% super on top of that. So it's $25 per hour.
It's like someone, someone at McDonald's is making 25 bucks an hour, not McDonald's.
Each industry is different. So the landscaping and gardening award rate is around 25. McDonald's. If you have younger guys, it's cheaper. Like they're getting, they get paid not much because they've got like 15 year olds, 16 year olds, 7 year olds. So that's weird.
So they have a minimum wage based upon your industry.
Yeah, yeah, each industry is different. Got a different rate.
Okay, I did not know that. That is new information to me.
Okay. So there's that. And what I've been. What a lot of guys do here is you get apprentices. So I don't know if you guys.
Apprenticeships, it's not as big a deal, but I know in Australia it's a much bigger deal. My cousin is pretty involved with it.
Yeah, yeah. So.
And do they have to still be at 25 then?
So the apprentices get a lot less.
So like an under 18 year old, under 21 year old, first year apprentice. The hourly cost to me is $18, 83 cents. So that includes. Super.
That's the weirdest thing, man. That's expensive.
Yeah. So, but like I think because like you talking about how you guys, you know, 33%, you know, you get your wage, your wage expenses are 33%. Like when I spoke to landscape coaching, he was kind of alluding to, it's almost 50% here and that's what everyone's doing. But like I was like, well with.
Those kind of wages, that makes more sense. Like, but the bottom line is if someone's paying 50% of labor on a lawn care in a mowing company, almost guarantee you you're not having a high margin business. Like there's no way.
Right.
Because by the time you have overhead, insurance, gas equipment, all the other stuff, you're not getting 20% profits. That's guaranteed. Right. And so just because everyone else is doing something, honestly in my mind is like I want to run as far away from it as possible, but at $25 an hour minimum wage. And if 25 is going to be your, your base pay, like your hourly rate to the customer has to be at least 80 an hour.
Yeah.
Like what do you charge per, per hour to the customer?
So $60 plus GST. That's, that's, that's like standing great for a high end company here.
And that's what you can charge as an hourly rate. But what I've been sort of thinking is Odyssey to ideally set up the flat rate price.
