When starting a lawn care business, one of the first things you need to do is establish your pricing. How you price jobs will affect everything from the clients you get to how profitable your business is, so it’s essential to start off on the right foot.
Pricing your lawn care services properly is what can make or break your business because it factors in everything: balancing competitor pricing, employee wages, materials and equipment, and profit.
Use this guide to help you start out your plan of attack strong. We’re sharing tips from two lawn care business experts: Edward Ramsden, Franchise owner of Enviromasters Lawn Care, and Jason Creel, Owner of Alabama Lawn Pros.
In this post you’ll learn:
How to price your lawn services, step by step
1. 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 you’re paying your employees.
If you’re 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 isn’t 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 shouldn’t communicate it to your clients.
“Let’s just say that your hourly rate is $60 per hour. Now, you’re not going to speak to the customer and say, hey, I charge $60 an hour, so I’m going to time myself when I cut your grass, and then multiply that by 60. You’ll quickly learn how to estimate and then multiply that in your mind.”
Pro tip: if you’re 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:
2. Calculate your rate when you have employees
Employees can speed up your operation tenfold. But, there’s an art to pricing out their labor.
Jason explains that when including labor in your price, you should consider how much effort is required per person.
“When I say $60 per hour, I’m talking about the rate per person. So if you have a two-man crew, you’re looking at $120 per hour. If you have a three-man crew, $180 per hour. If I’ve got a two-man crew and we’re cutting grass and it took us 30 minutes to cut, that’s a $60 lawn.” Although it took half the time to mow this lawn, it required two times the effort for labor for Jason’s team.
Or, you can take Edward’s approach:
“We bid per hour. I like to walk the site, get the job requirements, and decide how long and how much labor it will take. For example, a job might take an hour and a half with three people. So I’ll bill three people on the site at $45 an hour, $45 per employee, so that $135 for labor alone.”
Notice that this price doesn’t include overhead, equipment, and materials costs yet.
3. Factor in overhead and equipment
Once you’ve got labor sorted, it’s time to add the cost of general supplies and overhead.
Overhead can include phone bills, office space, internet, vehicle payments, and gas. But, one of the most overlooked costs is maintenance and equipment.
Equipment should be costed into each job as an expense. It’s expensive to purchase and maintain equipment––even a basic mower needs its engine repaired, spark plug replaced, and oil changed. If you have more expensive equipment, then costing this into your price is critical.
Edward explains, “the fact is that equipment has to drive revenue. It could cost you $20,000 to buy, and that’s $20,000 to replace down the line, plus maintenance. We include all this in our final price.”
So, how do you cost that into your lawn care pricing?
Edward explains, “I think of it this way: I need to be making $100 an hour to use expensive equipment to make it worthwhile for commercial and residential work.”
“You’ll want to buy something new again eventually,” he says, “so you do need enough profit to do that––maybe it’s a couple dollars a job over the course of a year. Maybe it’s a percentage of all jobs, or the jobs you use that equipment on. The rule of thumb for me is that I charge two times the hourly rate of labor just to have the equipment on the site.”
Pro tip: some professionals tack on an additional 15%-20% on top of their estimate to account for overhead costs.
4. Don’t 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 down…and 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 time––all those things are factors.”
“The main thing I’m concerned with is how big the actual yard is, and the actual amount of turf that I’m going to be applying the fertilizer or herbicide to. The bigger the yard, the more of the product I’m using. That’s my biggest expense,” Jason explains.
“So, I’m 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.”
Pro tip: ensure that your profit margins stay in check over time by using software to document material expenses. This is crucial as your business grows and you regularly purchase materials. Ensuring that you have a good handle on expenses as your costs increase is critical to operating a healthy business.
How much should I charge for a fertilizer application?
There is no set amount to charge for fertilizer application. Instead, determine what you should charge for a fertilizer application, calculate the cost of the product you will need to use based on the square footage of the lawn.
In this case it’s best to use a measurement tool and pricing sheet. According to our data, the national average price of fertilization application is $91.00.
Contrary to other lawn services like trimming or mowing, the cost of your supplies will likely be higher than your labor costs.
Once you determine the cost of the fertilizer based on the lawn size, adjust your pricing as necessary to make up for the higher supply expenses.
“So for instance,” Jason explains, on a 2,000-square-foot lawn, I’m at $15 per thousand square feet. So you’re looking at $30 for a little bitty garden home that’s 2,000 square feet. Well, if I had a 30,000-square-foot lawn, then I might be all the way down to $5 per thousand square feet, which would translate out to $150.”
This price should depend on the cost of the material, the time it takes to apply the material, and the average price your competitors are charging for this service.
5. Estimate profitability
You’ll want to figure out how much profit you end up with after all the costs are factored in. Profit is important because it’s what will help your business grow.
“Make sure that your lawns are profitable––not just overall profitable, but make sure each individual lawn is profitable,” Jason explains.
If you haven’t created a profitable pricing model yet, you can always tack on a few extra dollars for starters and monitor how it accumulates over one month and a few quarters.
Review your numbers everys few weeks and each quarter. Have you accumulated enough to make an impact on your business? Can you invest in marketing, advertising, or additional employees? If you’re not, then try your best to make reasonable adjustments to your pricing as you go.
6. Factor in taxes.
The last step to pricing out your services is in including tax at the end of your quote. It’s important to include this in your rate on your quote so you can keep track of taxes on each and every job, and translate this to your invoice when you finally bill your clients.
It also helps you communicate that you’re a legitimate business that does things by the book.
If you don’t include this in your quote, then you can simply add them separately on client invoices. Either way, don’t forget to calculate them in your total price!
Lawn care service pricing averages
You may have heard this before, but you shouldn’t plan to be the cheapest service provider in your area. Too low and clients will view you as a discount service provider, too high, and you’ll miss out on average clients.
The sweet spot is somewhere in the middle of what other lawn care business are charging, yet still allows your to profit.
You absolutely should do some research on your own to determine competitor pricing in the neighborhoods you plan to service.
However, also consider the data below to help you determine for average pricing per state:
|STATE||MOWING||MULCH SERVICE||LABOR||AERATION||WEED CONTROL|
When to adjust your lawn care service pricing
Keep in mind that your hourly rate and service rates may change over time depending on your service area and business needs.
For example, you may need to adjust pricing if:
- You offer packages like mowing, trimming, and watering during the summer months, and biweekly snow removal or less intensive lawn services in the winter
- The job is out of your normal scope and requires more work than your initial terms of service stated
- The jobsite is farther away so it costs more in gas, or it’s closer by being in your neighbourhood or near other clients properties
- The cost of labor is less than the supplies for a particular job like fertilization or herbicide applications
- You want to target specific neighborhoods by offering a group rate
- The job or client has specific needs outside of your usual scope, for example the yard is in rough shape or the client needs a job done with short notice
- You want to offer discounts or special rates for marketing promotions
Choosing profitable customers
When you’re structuring your pricing and making adjustments, be aware of the types of jobs you make the most money off of and the jobs that you don’t. It’s important to focus on the customers who bring you the most value.
For example, Edward explains that he prefers working with commercial clients because they guarantee a large sum of money for a season based on contract work. “A commercial job might be $15,000 for the summer. We would need a lot of residential clients to get that kind of revenue.”
If you’re just starting out, then you may not be able to be too picky with which types of customers you take on.
However, you should still make a note of which customers bring in the most opportunity and revenue for your business model and optimize how you price them as you learn and grow. Later on, you’ll be able to be more selective with your customers.
“I thought of it this way: if I could get this condo, I’d rather take this client on because it would take me six hours with two crews. That would be 60 houses. In terms of time and effort, it’s better for us to take the condo. It takes a while to figure out what works for you and your crew.
Consider what your crew is good at, which clients are easier for you to take on, and what’s most efficient to do.”
Making a lawn care pricing sheet
After you determine how much you want to charge and adjust the amount based on local pricing, you can make yourself a pricing chart.
This should be made up of your most common services and yard sizes so it can be used for making quick estimates.
For example, you could use it to price out mowing, trimming, and watering for yards from 1,000-square-feet to 10,000-square-feet. That way, when you’re estimating a straightforward job, you can simply look at your sheet and get a base estimate to build on. This estimate can be adjusted based on the job specifications, such as distance or group rates.
This can also help you to handle clients who are looking for discounts or negotiated rates. A pricing chart will show you just how much wiggle room you have, if any, before any job-specific factors are taken into consideration.
While you can have a hard copy of your pricing sheet, it’s recommended that you use a digital version and save your pricing guidelines as tags in your lawn care business software.
Digital pricing sheets are easy to update with new prices or services and can be rolled out to all your employees at once. Quoting software can make sure that you can estimate quickly, and keep track of each client’s quote.
Interested in making pricing jobs easier than ever?
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