The Price Is Right: Pricing Mowing

Creating a successful maintenance business not only takes hard work and dedication, but it also requires smart pricing techniques. The way a contractor prices maintenance services will have a definite impact on his/her bottom line.

There are many routes to take when deciding how to price mowing and many factors to consider when determining an estimate for a client. Some contractors shared their methods for pricing and explained exactly what variables should be considered in the decision to make that price a perfect fit for customer and contractor alike.

A PROPER PRICE TAG. With the various types of mowing jobs for different properties (for example, residential, commercial and homeowners' associations), there are a few methods of pricing, but most center around man-hours.

"All of my prices are from man-hours," stated Ray Bradley, president of Raymow Enterprises, Oldsmar, Fla. Bradley, who specializes in homeowner's associations and condominium owner's associations added, "I figure out how many workers will be required for a certain job. I have a set rate for both foremen and laborers and even the equipment that will be used."

When figuring these rates, Bradley takes an average of all of the formens' rates. Then he adds operating and administrative expenses such as medical insurance, workers compensation insurance and payroll taxes to the average rate. Finally, he doubles this rate and uses that final number when bidding jobs.

Tim Carr, president of Cardinal Lawn & Landscape, Rochester, N.Y., also prices by the hour and based on the equipment that is needed. Carr, who focuses on commercial properties, added that it is too difficult to calculate a square footage price because of the different variables involved.

Derek Blumberg, primarily a residential mowing contractor, explained some of the variables that he takes into consideration for each job.

"Contractors should first look at where a job is located," recommended Blumberg, president, Quality Seasons, Minneapolis, Minn. "Next, look at the size of the property. We get a square footage measurement using a wheel measuring tool. If you don't use a tool and different workers are measuring, you could get different prices. If your customers are neighbors and compare prices and they find out the prices are different, they won't be happy. You need to give them the same service at the same price."

Blumberg continued, adding variables such as looking at the terrain to figure out what equipment is needed and determining if trimming and blowing will be involved. All of these factors can combine to affect a price.

"The key is to have as much information about a property as possible," Blumberg remarked. "This is not just for maintenance reasons, but knowing the measurements helps me keep track of how much the crews are mowing a day."

Carr added competition to that list of criteria. "Notice how well the grounds have been maintained to this point. We also consider how much work we are doing or have the potential to do with that customer."

With the different prices being determined at each individual location, Dennis Barriball explained that he also prices properties individually based on the specific wants and needs of a client.

"Our price is based on an hourly rate," stated Barriball, president of Hemlock Landscapes, Chagrin Falls, Ohio. "We calculate the average crew wage plus a payroll overhead percentage plus a corporate overhead percentage plus the overhead for the equipment plus profit."

"We mostly base our prices on man-hours, then we factor in the terrain," commented Ed Galbraith, vice president/general manager of Total Maintenance Building Services, Palm Beach Garden, Fla. "We calculate price using our labor rate and establishing how many man-hours are in a job. Then we figure in the costs for overhead and the equipment maintenance repair."

Overhead is a major key on the road to profits. "Often, contractors new to this business don't consider the overhead and they try to live on what's leftover at the end of the year," noted Barriball, who handles primarily residential maintenance. Without enough overhead factored in the equation, this "leftover" may not be enough.