Calculate Your Hourly Labor Rate
How much are you going to charge per person, per hour for the average job? This number should be based on things like the going rate in your area, how much money you want to earn per hour, and how much youre paying your employees.
If youre just starting off, look at the work and estimate the time it will take you to complete the job. Then consider how much you want to make per hour.
Pricing by the hour makes sense because lot size isnt always an accurate pricing metric. For example, garden homes might take you half an hour to complete, even if they are the same size as a quarter-acre lot, which could take you 45 minutes to complete.
Jason Creel explains that your hourly rate is important, but you shouldnt communicate it to your clients.
He explains:
Lets just say that your hourly rate is $60 per hour. Now, youre not going to speak to the customer and say, hey, I charge $60 an hour, so Im going to time myself when I cut your grass, and then multiply that by 60. Youll quickly learn how to estimate and then multiply that in your mind.
Pro tip: if youre just starting out and not sure about how long a lawn will take, keep track of the time it takes you to complete the job using time tracking software or a stopwatch. From there, find the average of your labor hours over time before figuring out exactly what speed you work at.
Prefer watching a video? Jason Creel talks about pricing out lawn care services below:
Determine The Overhead Costs
Overhead costs are the costs associated with running a business. You have these expenses even when youre not working . Overhead includes expenses such as insurance, business license, a website, the fee you pay your accountant, bank fees, phones, marketing, storage unit rental, computer, copy machine, paper and toner and other non-job expenses. Whos going to pay for your truck? What about gas, oil, insurance, title, tags, repairs, maintenance and air filters?
If you can estimate your overhead expenses for the year and the number of jobs youll have, you can add that amount of overhead to each job. You can also come up with a percentage. Green Industry Pros estimates that approximately 20 percent of landscaping sales go to covering overhead-related costs.
What Not To Do When Expanding Into Commercial Lawn And Landscaping Work
Part of taking the right steps to be successful in the commercial landscaping market means avoiding some costly pitfalls.When youre first starting out, it may be tempting to buy a job to get a foothold with an account. But, thats a lose-lose situation. Stick to your set profit margins.You also have to educate your employees. Just because your sales team is good at landing residential accounts doesnt mean theyll be as successful in the commercial sector. In fact, without the right training, they will probably fail miserably and quit, Delany says.Commercial lawn accounts and landscaping contracts can bring in large checks, but make sure your business isnt too dependent on one account. You need to have a good mix of property types. You dont want to have all of your eggs in one basket, Schill says.With the right business tools and preparation, you can make commercial accounts a profitable part of your landscaping company.If you have the patience and are willing to deal with slow payments and losing/replacing large accounts, Delany says, go commercial.
Want more sales insight and advice? Enter your email below to receive new articles instantly . And be sure to check out our Tip Sheet with practical advice on how to market and sell commercial landscaping work.
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Your 1st Goal: Meet With The Decision Maker
Right now, your 1st goal is to simply get your foot in the door.
For small and medium lawn or landscaping companies, networking is the only reliable way to get a commercial lawn care contract.;
In other words, you have to approach them.
One solid strategy is to craft an email or a letter for each business you want to bid.
When you start sending these emails, try hanging them up in HOAs to get your name into the right hands and get them to respond to you.
Another option is to head over to the right local networking events:
- Local businesses: You’ll get to talk directly to the owner , which makes sales and upsells easier.
- HOAs: Talk to HOAs and other Real Estate groups. You can find these by searching HOA or Real Estate Groups in .
- BOMA: Set up a meeting with your citys Building Owners and Managers Association.
- Chamber of Commerce Meetings, CEO Forums, and other networking events will help you meet potential clients, especially if your town has a commercial district or sector with above average commercial density.
When all else fails
it’s time for some cold, hard knocks.
Drive around and look for properties that need fixing. When you see a business that could use your services, go knock on their door and introduce yourself. This one works very well if you are good at in-person sales.
How To Make Bids On Lawn Mowing
Mowing lawns on your own or managing your own lawn care business can be a lucrative way to spend time outdoors and work for yourself. But as much as you might enjoy being your own boss, you need to be business savvy to turn lawn mowing into a profitable venture. A large part of that effort includes pricing your bids for mowing jobs correctly. There is no set strategy to pricing a bid, but the best results come from studying your local market and taking a hard look at the nature of the lawn mowing job and the associated expenses.
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Divide the bid price by the square footage of your lawn to reach an estimate on price per square foot charged in your area. Avoid charging much higher than local rates; customers will simply hire another company to cut their grass.
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Visit the property that has work bids available, if possible. Square footage alone is only a rough approximation of what you should be bidding on a lawn. A visit to the property can help you determine if there are problem areas, such as ditches, that will require extra attention. Tailor your bid accordingly.
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Consider the advantages of per-hour bids if a square footage bid isn’t profitable for your lawn mowing business. Per-hour bids ensure that you make a living wage, regardless of any unforeseen issues that arise during lawn mowing.
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References
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Protect Your Lawn Care Business From Potential Liability
Since the best clients care about lawn care businesses being licensed, bonded, and insured, they’re willing to pay more for your lawn care services.
Plus, mistakes happen and just one lawsuit can break your business.
In other words, you have zero excuses to avoid it, and you NEED to get your lawn care business licensed, bonded, and insured BEFORE you service another property.
Plus, if you’re licensed, bonded, and insured, you can easily charge more for your lawn care service.
After all, the best clients don’t want to hire a lawn care business that doesn’t protect itself.
To find out more about protecting your lawn care business, read our complete guide.
Livin’ Large: Commercial Accounts
Tom Heaviland remembers “Black Friday” at his company.
“It was like the stock market crashed,” he compared. “We had a big, commercial developer during the last recession who pulled all the funding on an industrial park, and we had to lay off 10 guys that afternoon.”
The contract shrunk, leaving Heaviland Enterprises, San Diego, Calif., with only a few lot owners in the housing development, and they couldnt support the costs. Though the company reconstructed the maintenance agreement to cover the bear minimum, it suffered losses in both profit and morale. “At that time, we werent as large as we are today, so that was a huge blow,” Heaviland described.
Now, his business employs 85 people and his account mix is more diverse, stirring up his 100-percent commercial maintenance company with both large and small clients. Heaviland knows firsthand that contractors put more on the line for large, commercial clients than a mow-and-go job. This includes investments in labor, time and materials, plus an extra flurry of paperwork, added Lance Schelhammer, president, Grass Roots, Lenexa, Kan.
“Its kind of like moving from the $5 blackjack table to the $100 blackjack table,” he compared. This is not to say that commercial work is a game of chance. Contractors who book their schedules with a collection of large, commercial accounts and organize their businesses to cater to their different needs will find quite the contrary.
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Finally Keep Up With Market Changes
Every year, or even every quarter, look into how much other companies charge for similar services. Once you build your client base, you can also ask how they feel about your services. Youll want to know if they think your prices are fair and reasonable, and how much theyre willing to pay.
If a few customers decide to leave you, ask them why. Take note if its because your prices are too high. You may want to make a change. Alternatively, you can also offer a seasonal deal or package.
When it comes to how to price your lawn care, do what you can to serve your clients, offer them great quality, and stay profitable. And above all, remember prices can change. Keep up with the market and you’ll keep your business going strong.
*Monthly payment calculations do not include initial premium down payment and may vary by state, insurance provider, and nature of your business. Averages based on January – December 2020 data of 10% of our total policies sold.
Emily Thompson
I earned a B.A. in Journalism from the University of Wisconsin at Madison . After realizing my first job might involve carrying a police scanner at 2 am in pursuit of newsworthy crimes, I decided I was better suited for freelance blogging and marketing writing. Since 2010, Ive owned my freelance writing business, EST Creative. When Im not penning, doodling ideas, or chatting with clients, youll find me hiking with my husband, baby boy, and 2 mischievous mutts.
How To Bid Commercial Lawn Care Jobs That Require A Lot Of Materials
Bidding some commercial lawn care customer jobs is fairly straight forwards and similar to the way you would bid a residential job. But as the jobs get larger and the amount of materials needed is increased, you can find yourself in a cash crunch. The last thing you want to have happen is finding yourself in a position where you are paying thousands of dollars in material costs early in the season and you arent expecting to get that money back until months later. You are not a bank and you shouldnt need to front large material costs for customers. Here is a great discussion about this from the Gopher Lawn Care Business Forum that should give you more insight as to how to bid such jobs.
One lawn care business owner wrote this is the first year. I am a new company and have an amazing opportunity to take a lot of market share in my area.
Right now I am trying to get more commercial mowing accounts as it seems to be more steady work. I bid on a few of them already and was awarded two, but they were for landscaping jobs. These jobs did not include the cost of mulch and flowers, they were considered extra with the approval of the managers.
Commercial Lawn Care Bidding
I am currently working on my first bid where they are requiring the cost of mulch, flowers, etc all included in the bid. The company is an HVM, . Im not asking for specific numbers but what I do need is some advise on how to bid such work and how to stay competitive with my bid.
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How To Give Lawn Care Estimates From Anywhere
Lawn care estimates can be a pain because you have to:
- Schedule the appointment
- Drive out to the clients property
- Take time to measure the property
Then, after all of that, you might not even win the bid. What a waste…
However, theres a faster way and better way using the best lawn care software.
When you choose Service Autopilot, you’ll have the ability to unlock tools like Smart Maps to measure properties from anywhere.
Get precise property measurements to find the gross, net, or turf square footage. Create estimates with the utmost accuracy – without ever leaving the comfort of your desk.
Give estimates while you’re on the phone with a clients to improve your closing rate and capture clients more quickly with timely estimates.
Plus, you can utilize Service Autopilot’s rapid route optimization to increase your route density – instantly saving you money and increasing your profits.
Develop Relationships With Existing Contractors
Being a subcontractor for other contractors can increase your chances of winning bigger accounts of your own down the road. Not only does it give you the experience and client roster, which is especially important if youre just starting out, it also allows you to get your foot in the door and make new relationships.
You never know when a commercial account youre subcontracting for might become unhappy with their provider and look to you, someone who has already worked on the account who they trust and know does good lawn care. Dont pass up these low hanging fruit opportunities to build relationships and make money while youre at it!
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Dont Forget To Price Special Services And Materials Differently
Special services like mowing, mulching, and weed control and fertilization application should be priced accordingly, rather than lumped into one cost.
Jason explains that these are actually very different services because they require different types of labor.
Weed control and fertilization, for example, is typically a one-person operation, so your labor is cut downand that one person can actually generate a lot more revenue than one person can mowing, he explains.
But there are expenses in the weed control: the actual fertilizer, weed control product, labor, and drive timeall those things are factors.
The main thing Im concerned with is how big the actual yard is, and the actual amount of turf that Im going to be applying the fertilizer or herbicide to. The bigger the yard, the more of the product Im using. Thats my biggest expense, Jason explains.
So, Im pricing strictly based on the square footage. I need to get an accurate measurement of the square footage of the lawn so that I know how to price it. Then I use a pricing chart that shows square footage from 2,000 square feet all the way up to 30,000 square feet.
I can then look at my pricing chart and give them a price quickly. So as the square footage goes up, the price per square foot actually goes down.
How Low Can I Bid Before I Lose Money
Winning a bid is often a matter of offering the lowest prices. But some victories are not worth it.
Take the scientific approach.
Measure the property yourself.
Note all of the irregularities that will slow you down or cause you problems.
If you cant win a bid without underpricing yourself, then its not worth it.
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How To Get Started With Commercial Lawn Care Contracts
Commercial lawn care contracts are centered around building relationships. From the very beginning, you should be focused on getting to know the property managers and real estate board members in your service area.
1. Make contact with them.
You can do this through phone calls, emails, postcards and flyers, or meetings.
Even though some property managers wont necessarily be looking for a contractor right now, they might be in the future. The objective is to build a relationship so you can ensure youre the one who gets the job.
2. Make sure you have quality references from previous clients.
Ed explains that referrals are one of the most important parts of landing commercial clients.
If they offer a fixed contract, theyll want an established company for it. Theyre not just going to hire anybody to do it. They want to see a reputation.
Most commercial clients will want to call the property managers youve worked with in the past. So, tailor the references you give based on the client for the best results.
For example, if youre trying to land a contract with a condo property manager, try to find a referral from another condo property manager youve worked for before.
How to get started without commercial experience
If you dont have referrals yet, Ed suggests getting your name out there by doing some basic industry discovery.
Ed explains that you should start by assuring them that youre not trying to win their business, but just trying to learn about the industry.
Calculate And Enter The Cost Of Your Lawn Care Equipment
Keeping track of lawn maintenance and landscape design supplies is vital to get paid what you are due. Go to “Item” and click on “Product” to input a list of your supplies. Type in “lawn care fertilizer,” “garden mulching,” or “new plant supplies” in the “Description” line, for example.
Make sure that you use layman’s terms so that customers easily recognize the items. No one wants to receive a landscape proposal with vague numbers, chemical terminology, or Latin names for plants. Keep it simple to promote quick acceptance instead of wasting time on constant explanations that delay your bid acceptance.
Input the cost of the item under “Unit Price” and finish off the line item by capturing the number of supplies under “Quantity” . An automatic total for the items will appear under “Amount.” Create a new line for each additional product as needed.
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