Like so many individuals out there who start their own lawn care business, I worked hard to quickly build up my clientele.  Having no prior experience in the Green Industry, I needed a way to see what the other guys were charging for their services.  This would at least give me a starting point on where to initially base my pricing structure.

From spending countless hours reading forum post, I was able to figure out that most people doing lawn care basically used one of two ways to calculate their prices.  There were the price per square foot guys and the price per hour guys.  The price per square foot method seemed to me as if it would include just too many variables to be very accurate, or at least for my requirements.  Thus, I decided to attempt to do all my estimating by the hour.

Ok, now my problem was what to charge per hour, and what was my competition charging.  Since I hadn’t actually started my business yet, nobody in the industry knew who I was.  Thus, I went through the yellow pages and called several of the companies who were running display ads.  I figured these companies must be larger considering the cost of yellow page advertising, and knowing that where they were in their business was where I wanted to be, I asked for an estimate to mow my personal homes own lawn.  I was told by a few that they only did commercial properties, but I did manage to get 3 different companies to come out and bid my property.

At the time my home sat on a little under a half acre of land, with very few obstructions.  I knew it took me about an hour to mow, trim and sweep off my small driveway (I didn’t even own a blower).  Of the three guys that came out, I received one bid for $35.00, one bid for $32.00 and one bid for $20.00.

I immediately threw out the $20.00 bid as it just seemed out of place with the other two bids, and his rig and equipment looked old and dilapidated.  Of the other two bids, one guy stood out from the other.  His truck and equipment was very neat and clean.  His truck had his company name on it, and his physical appearance was neat and very professional.  He also happened to be the $35.00 bid guy as well.  So I said to myself, “Self…  if you can present yourself as a professional with good appearance, clean and well maintained equipment, then you can get more money for your services.”

Well this gave me a starting point of $35.00 per hour.  I figured if I could mow a lawn equivalent to the size of my own for $35, and it would take me approximately an hour to do it, then I would be making $35.00 per hour. 

It was several customers, and dozens of bids later that I finally got a grasp of the bidding thing and what I needed to be charging to actually make a decent profit.  That $35 an hour I initially began charging was fine and a good starting point, but it did not take into account any of the equipment cost factors.  So I developed me a little spread sheet to calculate my equipment cost.  This spread sheet worked fine until I began to add employees, and that just opened up another hornets nest of problems.

My little spread sheet ended up developing into a tool I could use to calculate my primary expenses, and tell me what I should bid new customers at.  It also let me know if the customers I was already servicing were being charged enough and whether I should be increasing my service fees.

You can download a copy of that spread sheet by clicking on it below.  Keep in mind though, this is not some fancy spread sheet designed to impress the world, it was developed to accomplish what I needed it to do.  If it helps you out that’s great, if it’s not what you are needing, then perhaps it will give you some ideas on developing your own.  If you come up with any improvements, send me a copy I would love to see what you come up with.

  Lawn Care Overhead Cost Estimating

Note:  You will need Microsoft Excel or an Excel viewer in order to open the document.

I can remember just 3 or 4 years ago when you could get a pallet of San Augustine sod for around $65.00 a pallet.  A pallet as you probably already knows covers approximately 450 sq/ft.  Thus, at the time my cost for sod was running me a little under .15¢ a sq/ft for materials.  Today on the other hand, sod is going for as high as $115.00 a pallet depending on where you purchase it from.  That escalates the price per square foot to a whopping .26¢ sq/ft.  Talk about inflation.

The crews that were installing could lay 1 ½ pallets of sod per man per hour if the sod was properly staged.  By staging I mean, you don’t want your sod winding up in the middle of where you are working, but then again you don’t want to  have to walk all the way across the yard to get more sod.  Actually I  had a couple guys that could do 2 pallets an hour, but there was no reason to just overwork  your crew.  Not to mention, when they get in a race, the quality of the installation goes down hill.  And if the weather was hot, like around August down here in Southeast Texas, then it was closer to around a pallet of sod per hour.  You’ve got to take additional rest breaks and have your guys rehydrate frequently.  I’ve had a couple of guys that had gotten close to heat stroke on different occations, and there’s no landscape job that is important enough to risk one of you employees health and well being.

Anyway, if  you put some numbers to the labor cost I would arrive at around .0148¢ per sq/ft.  Obviously the labor here in Southeast Texas was cheap.  Regular crew members were earning $10.00 p/hr wage.  I was charging the customer .12¢ per sq/ft. for labor.  With todays pricing, that would be closer to .15¢ per sq/ft. for labor.

So if you go by todays pricing, I would be pricing sod installation at around $276.75 per man hour installed.  It sounds high when you tell a customer that way.  Thus, the way I would always relay the price to the customer was by telling them we charged .41¢ per sq/ft installed.  It comes out the same, but it just doesn’t sound quite as expensive when you give the customer the price per sq/ft installed.

Again, this is in no way meant to be a pricing suggestions for different parts of the country.  This is just what I would price a sod installation job with todays prices here in Southeast Texas.  I would though be interested in hearing what sod installation is going for in other parts of the country as well if you would like to leave a comment below.

 YELLOW PAGES | PHONE BOOK ADVERTISING:

We will discuss advertising in the yellow pages first, as I consider this to be the biggest return on investment when it comes to advertising, as well as the most costly. Even with the internet age, the phone book is still the place were the majority of individuals turn to first when looking for a local business. Having your company listed in the phone books yellow pages is by far the best return on initial investment in my opinion.

With the cost of advertising in the yellow pages increasing each year, most phone book publishers have begun offering monthly payments as a means of paying for your companies ad. With prices ranging from a couple of hundred dollars annually to several thousand dollars depending on the size and location of your ad.

When we first started out, we basically had a small display ad (the smallest they offered), instead of running just a text listing. Display ads capture a potential customers attention easier and it offers a quick way of letting your potential customer know of the services that you offer. Though you can create your own yellow page ad yourself if you are adept with software such as Adobe Photo Shop. Most phone book publishers have graphic artist on staff that can create your ad based on your companies criteria.

Text ads, though cheaper to purchase, may not be the most cost effective if your rate of return off the ad doesn’t justify the initial publication cost. Try to remember the last time you looked up a company in the yellow pages. If you knew the business name that you were searching for, you probably quickly scanned down the text listings til you found the one that you were hunting for. More than likely though, if you did not know the name of an individual business, and were just looking for say a plumbing business, the display ads probably caught your eye first. Text ads do serve a purpose though, and will help an individual find your business phone number when looking for your name, as well as those individuals who are looking for just a random lawn care company.

Considerably cheaper to purchase, having your company listed only by a text ad is deffinately better than not have your company listed at all. I would recommend though that if your finances will only allow you to invest in a text ad, that you try to at least spend the money and have the listing bolded. This will help in making your text ad stand out from the others somewhat.

Most larger cities now days have more than one phone book available. Check with each one regarding pricing and distribution to determine which book will offer you the biggest bang for your buck.  Another couple of ways to determine which book to use for your advertising is to ask your friends and relatives which phone book they normally grab when looking up an individual or business in the yellow pages.  Also, when talking to the company who publishes the yellow pages, keep in mind that they all will throw out some impressive numbers of the households they are supposedly reaching.  Take this area here in Southeast Texas for example.  There are 3 major phone directories that offer yellow page listings.  The first one is through the actual telephone company and by far is the most expensive to advertise in.  The other two books are similar in size although one claims to have a much higher circulation rate over the other.  But as I stated earlier, when discussing this book with friends and relatives, I determined that this book is by far the least popular due to a poor layout of the book and nobody claimed to ever use it for anything other than a paper weight. 

We started out advertising in the second of the three books.  Though they didn’t claim to have the highest circulation rate, they were cheaper then advertising in the telephone companies book.  Eventually though over the years we ended up advertising with a half page ad in this book in the Lawn Maintenance section, and a slightly smaller but still equally as impressive display ad in the Landscaping section of the book.  We also ended up advertising in the telephone companies yellow pages as well.  And as much as I hate to admit it, we actually received the biggest bang for our buck out of this phone book even though our ad was much smaller than the other two ads we had placed in the second phone book.

Also keep in mind too, that a lot of the yellow page representatives that sell you advertising in the yellow pages are  paid on commission and you can hagle with them over the price of your advertising.  And that most yellow pages that you purchase a display ad in with also include a text ad in the yellow pages as well for free.  Well if you consider you just dropped a 1k bucks for the display ad free.

 FLYERS:

As we have discussed above what I consider to be the biggest return on your advertising investment, flyers would fall into my least return on initial investment and effort scale.

Though you may read on the many different forums on the internet regarding the use of flyers as a means of advertising, the rate of return is generally less than 2%. That means for every 1,000 flyers that you stuff under someones windshield wiper blade, or hand out as they are coming out of a grocery store, you will get roughly 20 phone calls requesting quotes. This may seem like a good deal of business on the surface, but lets put a few numbers to it.

First off most copy business charge generally a minimum of $.05 per sheet for copy service. At a 1,000 copies, you’ve already spent $50.00. Then you must calculate in at least a day to walk around and pass out the flyers. I remember when I first started out I put a dollar value on my time of $35.00 per hour. Not knowing any better, I estimated this is what it would take to pay myself a decent salary as well as pay for my equipment. This figure was low, but we will discuss that in another section. But just to have something to work with, we will use the $35.00 per hour fee that I estimated my time to be valued at.

Well if you consider it will take a good portion of a day to pass out a 1,000 flyers to individuals, at $35.00 per hour that comes to $280.00 for an 8 hour day. Combine that with the $50.00 you spent at the copy center, and your now into your CHEAP method of advertising to the tune of $330.00. That is close to what you would have spent for a text ad in the local telephone book yellow pages.

Yes, as we have discussed, you stand the potential of getting 20 new customers so let’s put some numbers to it. When first starting out, and unless the properties are extremely small, you will probably average somewhere in the neighborhood of 6 cuttings a day for residential. Less than that if they are larger properties, or less than that if you short cut and do sub standard work. At 6 yards a day, it will take you roughly 3.3 days to finish mowing your 20 new customers. But to keep the math simple, lets just assume that you can complete mowing the 20 properties in an even 3 days working 8 hour days. At your $35.00 an hour rate in an 8 hour day, minus the cost of printing and handing out the flyers, you’ve made $370.00.

Now if you divide the $370.00 into 3 eight hour days, you’ve actually earned only $15.41 per hour. I can tell you from experience that isn’t enough to pay for your equipment, much less your salary.

Now I am not totally against the use of flyers as a means of advertising, as I feel they do serve a purpose and can be a quick way to pick up some new clients. I would not advise stepping off into the green industry business with the idea that all you have to do is go pass out some flyers in order to strike it rich.

Also please note, just as a reminder, placing flyers inside a homeowners mail box is illegal. Federal Law prohibits an individual from tampering with the mail, and although your only placing a flyer inside a mail box it is still considered a felony.

 FREE CLASSIFIEDS | PENNY RECORDS

Just about any time you enter a convience store, you’re bound to see a rack with free local classified ads. Though generally nothing fancy, as they are usually in a news paper style format, they do offer a way to promote your business for a resonable amount. For generally $30 – $40 you can have your business ad run for several days or weeks. These free classifieds newspapers reach a very large audience, and though probably not the first place someone would look to in searching for a lawn care company, you can pick up the occational individual who might not have been actually looking for a lawn maintenance company but after seeing your ad remembered that their own yard needed to be mowed.

 LOCAL INTERNET CLASSIFIEDS

If you happen to live in an area that is lucky enough to have a local online classifieds website, this can be used as another source of affordable advertising. Having done both print and internet advertising, you seem to pick up a different class of customer through internet advertising than you do print advertising.

Not to try and stereotype anyone, in my experience the customers we have picked up from internet advertising tend to be a little better off financially, a little more up to date on landscaping trends, but generally will not be as tolerant of sub standard work.

 DOOR HANGERS

I really like door hangers, although I have not personally gone door to door hanging them on homeowners door knobs. Our technique was that we had door hangers printed up which stated that we were in their neighborhood servicing their neighbors yard and would like to extend our services to their home as well. Our flyers also stated that we had briefly looked at their yard and could offer our services for $xx.xx dollars per cut. The bottom of the door hanger was a detachable business card that they could remove and keep with them.  Then every time one of our crews were out mowing someones lawn, we always left the door hanger on all the adjacent homes front doors.

We had our door hangers custom printed by NEBS Printing for around $80.00.

 MAGNETIC SIGNS | YARD SIGNS

I really like this particular advertising method personally. Having good magnetic signs on the sides of your truck is an invaluable method of free advertising. Not only are you advertising your company as you drive around town from job to job, but it also makes it easy for individuals to see who it is servicing their neighbors lawn. A good set of magnetic door signs will run you around $100.00 for a set, but it ranks second on my list of must dos.

Yard signs are also excellent when it comes to prime advertising. Though you will spend probably $150.00 on a set of signs, these can be placed in customers yards (with their prior approval), making it again easy for neighbors to see who it is servicing the lawn.

In Closing

Regardless of the advertising method you choose to promote your company, a good marketing scheme is critical as word of mouth advertising will only reach so many individuals.

I understand that at first your advertising budget will be extremely limited, which is why I have attempted to list several of the most common forms of advertising methods above. To try and sum up the above though, in my personal opinion, I believe the two most valuable forms of advertising a new start up lawn maintenance company can do is:

• Yellow Page Advertising (display ad)
• Magnetic Truck Signs | Yard Signs

I recommend budgeting the most you can afford towards good quality advertising, perform quality work, and watch your business grow!

How many times have you spent hours drawing up a landscape design customized to your clients specifications only to have them gasp when you showed them the estimate and give you that “Oh, we weren’t planning on spending that much money” routine? If your like me, it has happened to your more times than you care to admit to.

For the most part, people under estimate the cost involved with a landscape job, and certainly do not understand the amount of back breaking labor that is involved with the installation process. Landscaping is a tough job, if it weren’t then the homeowner would be out doing it themselves. This is where the landscape professional comes into the picture.

With the experience and knowledge from doing several or even hundreds of landscape jobs, you the contractor already know most of the tricks to making the job a little easiers. Generally this boils down to having the right equipment available to make the job easier, but it also encompasses on the job training and knowledge as well.

Closing More Sales

In looking at that design that took you a couple of hours to draw out, and hopefully you are drawing out your designs, what if once you had completed your masterpiece and presented it to the customer you could relax and wait for the “Oh, we weren’t planning on spending that much” routine. Or even the, “Oh, we don’t have that kind of cash to spend right now” routine.

Then what if your come back could be something like “Oh really, well we do offering financing for your landscaping and irrigation projects”. That one little statement sent our company from a 40% close ratio to over a 90% close ratio. And to make it even sweeter, it didn’t cost us a nickle. Believe it or not there are some customer financing options out there that can increase your close ratio as well. The problem is, there just aren’t many green industry contractors out there that know about it.

Customer Financing Options

There are a couple of financing options out there for your customers, and yourself too for that matter. The one that I am the most familiar with is John Deere Credit. No, your not trying to get a tractor financed for your customers, your using the John Deere Partnership Program to it’s full potential.

The other financing option is through Rain Bird irrigation. Rain Bird offers a contractor financing program similar to the John Deere Partnership Program, to enable your potential customer to finance their irrigation installations. And perhaps a little more if your good with a pencil.

But for this discussion, we will talk solely on the John Deere Partnership Program. Namely because that is the one that I used the most.

John Deere Credit

Hopefully you have a John Deere Landscapes store in your local area. If not, you may want to contact John Deere Credit directly an inquire about how to sign up for their Partner Program when there isn’t a branch in your local area. But for the sake of this discussion, let’s assume that there is a local branch nearby. The first thing you need to do is visit your local John Deere Landscapes store and fill out there contractor enrollment application. This gets you an account set up with John Deere. And don’t worry if you don’t have perfect credit because you can pay for your materials and supplies as you go without having to have an open account. We had an open account and still paid as we went because it kept all the accounts payables easier.

Once your account has been created and set up, which generally takes a few days to make it through all their accounting departments before completion, you can inquire about their Partnership Program. This is a seperate application you will have to fill out. This is a basic application requesting information pertaining to your company and banking information. Again, this will take a little while to complete.

Eventually you will receive in the mail a contractor starter kit. This kit contains credit applications for your customers, initial job assessment forms detailing the project and cost, and instructions on how to fill out the forms and how to call in their credit applications. Also included in this packet will be your John Deere Landscapes contractor number which you will include on the application forms. This tells John Deere Credit where to send the money once the job has been completed

The whole process in a nut shell is, you give your landscaping or irrigation proposal to your customer. Once they have recovered from their fainting spell, you inform them that you offer financing on their landscape job and that they have a couple of different options to choose from.

Options Include:

 
180 Days Same As Cash

Just as the name implies, if you customer pays their amount owned on their landscaping job prior to the end of the 180 days, then the interest accrued is waived and they only owe the principal amount financed. This is convient sometimes for homebuilders who are waiting on their next draw or waiting to close on a house. They can defer their payment for a full 180 days and avoid owing interest payments. If the customer does not payoff their balance within the 180 days though, then the interest is accrued at 19.8%. Thus, make sure your potential customer understands that if they do not pay their balance off in full prior to the lapse of the 180 day same as cash period, then they will not only owe all accrued interest but a higher interest rate as well.

Low 9.9% Rate Financing

The 9.9% low rate financing option is the term almost all of our customers opted for. This option allows your customer to pay whatever amount you request down and then finance the rest at 9.9% interest financing. The good part is that you get to determine how much the customer must put down. We generally required between 15-20% down payment, and then would finance the rest. This gives you money up front to cover labor and some material cost so that your really not out of pocket for these fixed expenses. I always considered this to be a perk since normally we didn’t get paid for a job until it was completed. So if bad weather drug a project out an extra couple of weeks, and we have had that happen before, your not sitting on plants and materials that you can’t get paid for. And the monthly amount your customer will pay is pretty simple to calculate as well. It is equivalent to $20 per $1000 financed. Thus if you bid your customer a $10,000 landscape project and you decide you will require 10% down payment, then the amount financed would be $9,000. And their monthly payment would be just $180.00 per month.

Quick Payouts

Regardless of the financing method your customer opts for, the rest of the process is pretty much the same. You have the customer fill out the credit application. Once completed, you take that credit application and head to your truck. Crank the truck up and blast the A/C because it’s probably hot outside. You complete the contractor form detailing the financed amount and the terms the customer is requesting, plus a project code from John Deere’s list of project codes. Call the financing department and give them your contractor number and the customer information from the credit application. They will run the numbers and give you back a credit amount the customer is able to finance. If this number is higher than your proposed landscape job then your good to go. If this number is less than your quoted landscape project bid is for, then you will either need to get additional money down to cover the difference or go back to the drawing board and scale the project back some to get the price below the customers credit line.

Once this process has been completed, you get your down payment from the customer, set an installation appointment and complete the assigned work. Once the project has been completed, you walk the customer through the project and let them do an inspection of the work. Once satisfied that the work has been completed to specifications, you have the customer sign the contractor form you initially filled out signifying that they are satisfied with the project. You take this form to the local John Deere Landscapes branch and turn it in to them. They will fax the form on to the appropriate department and generally a day later your customer will receive a phone call confirming that they are satisfied with the job you’ve performed. Once satisfied that the customer is happy, John Deere Credit will deposit the money directly into your checking account. It generally takes 48 hours from the time you turn your form into the local branch til you’re bank account receives it’s deposit.

Now what can be sweeter than that? Increase you close ratio on landscape bids without it costing you one red cent. Your happy, your customer is happy, and your sales start to go through the roof.

Good luck, and happy bidding!

EvergreenLawns.com understands what’s it’s like to be a lawn maintenance company just starting out in the green industry. Having gone from a single employee working out of a personal truck and pulling a trailer, to multiple crews and 6 figure sales in just 4 short years. When we started out we serviced only residential accounts but quickly learned that if you want to keep employees on the payroll year round we would need commercial accounts. By the end of year four we were 98% commercial with year round annual contracts.

Below are some tips and tricks we learned the hard way. Though not meant to be a lesson on how to run a lawn care business, it may offer some information that you might not have thought about prior to starting a small lawn care and landscaping company.

As this website is basically a hobby, please be patient as we add additional content to the website. If you come across a link that is not yet active, try again in a few days as we may have been able to get that page uploaded.

Please Note: The following information is relavent to lawn care and landscaping companies operating within the State of Texas only as license requirements, plant and grass types, equipment distributors, and fees differ from state to state. Being from Texas and operating a commercial lawn maintenance business within the State of Texas, this is the area of the country that we are the most familiar with. Although the lawn care tips and tricks provided on this website can be useful in other areas of the country as well.