Mike AndesFounder, Augusta Lawn Care and Homeworks · Founder of Homeworks and Augusta Lawn Care

Wanna Charge More?🫰🏻Here's how 🧐 #lawncare #pricing #mikeandes

3 Dec 2024 · 1 min

Watch on YouTube

0:40

A short YouTube video conversation (Mike Andes and another speaker) explaining how to use labor capacity and 'budget hours' to decide when to raise prices in a lawn-care business. The speakers recommend assuming 75% efficiency (30 budgeted hours per 40-hour worker), giving a baseline of 150 budget hours for five full-time employees, and setting a backlog threshold at capacity so you can raise prices and let some estimates be declined to maximize profit.

Questions this video answers

75% efficiency

30 budgeted hours per week

150 budget hours per week (5 people × 30 budgeted hours)

Set the backlog threshold, then start raising prices

Chapters

If I have five full time guys and they're working 40 hours a week, I'm not going to assume they're going to get 40 budget hours done. There's me, waste, there's going to be job overages, the weather's going to get bad. I'm going to assume 30 budgeted hours or a 75% efficiency score. Three out of every four hours they work will actually be getting work done. Now I have a baseline 150 budget hours. 5 people times 30 per week is what I can accomplish. And now when I get an accepted job, I'm simply going to look at my spreadsheet like, okay, 150 this week, next week. Hey, we're booked for this week. 120. That's when we'll start. We'll start you on this. Are you getting all this? You got it all memorized? I got it all memorized, yeah. Is this in your book? You got like a. It is, it is. It is in there.
Total business turnaround, page 108. Once you hit the budget hour capacity for labor and assets, you will set the backlog threshold. Then you can start to raise prices. Once you reach that threshold, maximize your profit without losing out on potential jobs. By raising prices. By raising prices, our hope is that some estimates get declined due to price.
This will keep the.
Backlog in check and prevent it from growing too far out into the future.