Can one lawn care employee be responsible for both selling and scheduling?
This question is about coordinating sales efforts with scheduling. The question is, “I’m constantly adjusting to accommodate the relationship between sales and scheduling. I don’t want to sell more work than I can handle or vise versa. When I scale, I’m concerned about delegating these positions to separate people. Can one employee be responsible for both selling and scheduling?”
No, I don’t believe so. Maybe very early on, however, if you have a really great sales person you want to have them sell all the time. You don’t want to bog them down with anything else. You want to let them run and work in their unique ability and do that thing that they’re very best at. It’s hard to find great sales people, so you don’t want to limit this person from selling. You want to have them doing as much of that as possible, because it’s difficult to find more great selling people. You can find people to schedule.
The other thing too is, when you’re going to scale you’re probably going to have more than one salesperson. The idea that you’re going to have just one salesperson as you scale and that same person could schedule, I’ve not seen that play out. You’re going to need more than one salesperson.
I think these are two different positions. Even when you’re small, I think it’s two different positions, personally. A salesperson is more expensive than a scheduling person, so let the salesperson sell, find somebody to schedule. They need to work as a team, and they need to communicate, and they need to talk to each other.
A salesperson, at times, might have to be redirected because we need to communicate that we need to back off on up-selling, or we need to back off in selling a new service to certain clients. There’s a lot of examples where the sales team has to ratchet down the selling or take a bit of a break because of what’s going on operationally with the backlog. That does require communication.
A consideration is, how are you compensating your sales team so that when you have to do such a thing, you don’t put them in a situation where they can’t make any money and they possibly have to leave your company.
The two positions must talk, must communicate, must be aligned. It’s very legitimate that the sales team, at times, has to back down so that scheduling and operations can keep up so that you don’t create too big of a backlog and let down your clients. That’s a communication problem, and it’s not solved by putting the same person on both activities.
Here is the number one way to upsell more work.
One of the absolute best ways to grow the revenue of your business is to sell more work to the clients you already have. It’s a lot easier to sell them more work than it is to go get additional clients.
One of the best and fastest tricks to do this that I’ve found is to have your technicians, your crews, your teams in the field, take a picture of any issue that they see or anything that needs to be done. The same could be true for your inspectors, or your managers, when they’re out at the property.
In years past, trying to have a tech or a crew write down notes on a route sheet was somewhat of battle. They’d do it but you had to really stay on top of them. It’s so much easier to get them to just snap a picture.
Let’s use bushes as an example. They’re out at the property, the crew sees the bushes need to be trimmed because they’ve been trained to know what to look for. They don’t have to do anything more than snap a picture of the bushes, maybe a couple pictures, and then when that phone comes back to the office those pictures are uploaded and they are emailed to the client.
Email the client and say, “Hey, while we were out today we noticed that your bushes need to be trimmed. Let us know if we can help.” Sending a picture is a great way to sell. That picture really makes all the difference.
In an example like this you get credit in two ways. One, you can bring more revenue into the business because this is one of the most effective ways to up sell work. And two, it’s also perceived as a high level of customer service. You are paying attention to what’s going on at your client’s property.
I would highly recommend if you want to sell more work and make more money that you consider this approach. Just simply have your teams take pictures in the field, bring those pictures to the office, and then email the client the picture with a quick note. You can pre-write this note so within whatever system you’re using or email system you can have a number of different pre-written emails. One for bush trimming, one for irrigation, one for pest control, one for all the different services that you offer.
We have found this to be such a compelling and successful way to up sell that we built this functionality right into Service Autopilot, but you don’t have to have Service Autopilot to do it. If you’re a Service Autopilot user, you’re listening this, we have all of this now on the dispatch board, on the mobiles, and in the document templates. If you’re not using Service Autopilot, then I’d recommend having your teams use the phone that they’re using now and then bring those back in to you every day. It’s worth the effort even if you don’t have a system that will facilitate this.
Listen to this lawn care door hanger critique to optimize your marketing and get more customers.
I am critiquing this door hanger, and giving feedback. Originally there was a phone number at the top left, in the center there was a logo, and at the right there was a web address. Down below it said “call today”. It had a phone number, it said “visit us” and it had a web address. I’ve removed the identifying information, and I’m critiquing this door hanger for an individual. You can listen to my feedback. This is in no specific order and I’m not going from notes. I’m just going to go down through here and give some pointers.
On this door hanger there’s no door hanger hole and I personally think that is ideal. I don’t believe you want a door hanger hole, so I think that’s good. In certain markets you may feel that you need one, but generally I don’t see most door hanger companies using the hole to hang the door hanger on the doorknob. That’s good that gives you more space. In your email you mentioned that on the other side of this door hanger you were going to use some pretty pictures and some imagery. My suggestion would be that you use some imagery on both sides, and also that both sides have some compelling information.
Whether the door hanger has a hole, or you rubber band it to the door, what you don’t know is which direction this will hang on the door or which side will face out. You can imagine that the individual grabs the mail off their door and they walk it to their trashcan in the kitchen. You don’t know which direction your door hanger will be facing as they’re holding that and walking your door hanger to the trash. For that reason I recommend that your door hanger has a headline and something compelling at the top on both sides.
My first thought on this is at the top you have a phone number, your logo, your web address, and so it could be that that’s the first thing I see. But, nothing about that communicates to me what’s in it for me. So, you have just a couple minutes to catch my attention. Your main hope with this piece is that I am in need of lawn care, and when I see this I think to myself, “Well, lawn care’s exactly what I’ve been looking for. I’ll call these guys.” You’re banking on lawn care, and the words “landscape” and “lawn care” to resonate with me because I have immediate need. But, that’s the only way you’d grab me at this moment with this piece.
My suggestion would be that at the top, you have some type of a headline that grabs my attention, and states a benefit to me. That headline could be what you’re going to do for me, what problem you’re going to solve, or some type of promotional benefit of what I’m going to get. Such as, if I sign up for lawn service, I’m going to get a free iPod shuffle or something along those lines to catch my attention. But, you’ve only got a couple seconds to do it, and it needs to be at the top. I’d recommend that same statement to be on both sides because you don’t know which side I’ll be looking at as I walk your door hanger into the house to the trashcan. That’s point number one.
You need to think about what your client’s number one, two, and three wants are, what their top one, two or three fears are, and you need to answer those in the headline. Give them some reason that they should contact you versus anyone else. If I’m your competitor and my door hanger’s on the door with yours, why is yours going to get their attention over mine? You need to have some type of headline that pulls them in, gets them to read, and continue reading this door hanger.
If for your services you have lawn maintenance, landscapes, snow removal, and then you have some additional services down here. I think that is important to call out the specific services that you offer. You don’t have a price on here, anything like that and I think that’s perfectly okay. What you’re doing here is you’re calling out the key services so that if I have a need, I see these and I think, “Oh this might be for me”, and I continue reading. Good job with that. I would continue that. You might try a slightly different design. Let me come back to that, let me mention design.
If you’re going to print ten thousand of these and you’re going to distribute them, you’re going to have some cost. I would recommend spending one or two hundred dollars, or some amount of money, and get somebody to quickly put together the design for you. I know you’re running out of time here, but it could make all the difference in your results. By spending a couple hundred dollars you could potentially double your response rate. I would absolutely have somebody help you with the design of this. The cost could be all over the board. They could lay it out in Photoshop or Illustrator or professional software and they could get it laid out in font. They could use all the same font types and they could make it look really nice for you and bring in some imagery and your logo and make it look like you’re a large operation.
This is not doing justice in appearance to your business. In terms of what you actually are as a business, this doesn’t look nearly as professional as you are or nearly as professional as your website. Your website looks really professional, but this doesn’t communicate that same message. I would recommend having a designer try to bring that same level of look and feel and professionalism to this, so that when I see this I get immediate confidence that this is a professional company. I would spend the money on that. I’ll just focus on copy from here on out.
The reason I said all that is, within that design I would probably somehow bullet point or call out the services here. It’s maybe not the first focus point. The first focus point, the biggest copy, the thing that my eye falls on, should be the headline. Then this would be another focus point, but not the primary one, somewhere on here where all the services that you offer are grouped together. That would be one thing I’d do.
The direction you’re going with an interesting fact, that’s a good one. Your thought process, in my opinion, is good. I hope you don’t take offense to anything I say here in terms of critiquing this. I would go a different direction based on what I’ve learned. I don’t know your market, so it may be different. My hunch is that you’re not trying to convince the guy that doesn’t have his lawn mowed to suddenly start hiring a company to mow his law, or provide whatever service you’re trying to sell. Rather, your buyer is most likely someone that already has lawn care company, has already decide that it’s worth spending the money, and doesn’t need to be convinced; they’re your easiest sell. I would market to them.
For example, if I was competing against you in your market and you gave me 20 home owners that don’t buy lawn care and haven’t in the last three years, or you gave me a list of 20 home owners that buy lawn care and have been buying lawn care for the last 5 years, I would only market to those people and I’d ignore the 20 that don’t buy lawn care. There are a small number of them that will convert and most that do convert may not stay with it long term. I don’t even want to focus my energy on them. You don’t know who those individuals are when you’re putting out your door hangers, so you need to at least craft your message to your most likely buyer and your most likely buyer already has a lawn service.
The direction here is good. An alternative would be to speak directly to that individual that has lawn service now. What is their concern going to be? Their concern is going to be that my gates are not being closed, that the last lawn care company that I had, the one that I’m looking to replace, doesn’t show up consistently, that the company I have now when there are weather delays or problems they don’t tell me what they’re doing or when I can expect them. They just show up, they don’t answer their phone when I call, I never get my invoicing on time, it’s always a different individual at my home and the work is never consistent. You could go down the list of the complaints you’ve heard from your potential clients about the companies they’ve been working with and that’s why they’re calling you. Answer those objections here.
What you’re doing with the interesting fact, great idea, but how could you tell me some of the benefits that I’m going to get. Bullet pointed lists work well on this stuff; it’s easy to read. It’s easier to read a bullet point list and it’s easier for the mind to quickly sort it out then it is to have to read several paragraphs. It might be that you bullet point out some differences and why we’re your best solution.
That’s another point. I would use more of “you” in this. This is about “you” as in the client. When you’re talking, make sure you’re using a lot of words like “you” instead of words like, “we”, “our”, “us”. Try to shift the writing just a little bit so you’re focused on the person that’s reading it, because it’s about them. You might make your headline something like, “You will receive this”, “you will get this”. Something, again, about them, that’ll be part of the headline. Then, make your bullet points, again, something about them. “You will experience this.” “You will get this if you use our company.” List out the ways you’re different than everyone they’ve used in the past. Tell them what the services are that you offer, and then give them a reason to take action with you.
“Spring is right around the corner. We are now booking our lawn mowing accounts for the year. So call today.” My critique here would be yes, you’re reminding them that spring is right around the corner. Again, I hope you don’t think I’m being too harsh. Where I’m going with this is I don’t know if “Spring is right around the corner” is necessary to say. They know it. The reason I say that is, one thing I’ve learned, and I don’t necessarily do a good job at this, is I’ve heard that great writing is about editing out every unnecessary word. I tend to be a wordy person and so I don’t think I’m necessarily good at that. I’m thinking that maybe this doesn’t help sell anything. I would probably edit those words out and focus on just power words and bigger things that you need to communicate because you have limited space.
Where I felt like you were going, “We are now booking our lawn mowing accounts for the year.” You could go a couple directions with this. One, maybe you are trying to say that “We serve your neighborhood and I’ve got one crew available. We can accept 14 more accounts in your market, in your area, in your zip code, in your city, and then we’re filled up for the year.” Maybe there is some angle like that where you can tell me, “You need to respond right away if you want to do business with our company.” At the top you lay out in the headline the benefits of why I should use you. In the middle, you tell me what you can do for me and why my experience with you is going to be different. Why are you better than all your competitors? Then, at the bottom give me a reason to take action immediately. One could be that it’s limited, in some way there’s a limitation. If I don’t take immediate action I’ll miss out, there’s scarcity. That could be that we only have one crew in your market and there are only this many slots left on that crew and we won’t have availability until next year.
Then can you give me something? If I sign up and I become your client, could I get something from you? You have to imagine what those things might be that you could give away, that you’re comfortable giving away. I don’t tend to like things like $5 off, or the second mowing free. People do that and I think it works, but I think you can come up with something little bit more powerful. What is an account worth to you? What could you potentially give them that would be of value to them? You want to work maybe those two things in. Can you create some scarcity? They need to call you right now or they’re going to miss out. Then, what do they get if they call you over the other door hanger?
If I’m looking at these two door hangers and they both look about the same, the companies feel about the same and appear to be pretty good, then why is it that you’re going to get the call over the other one? What can you give them to get them to call you? Maybe it’s as simple as promising you answer the phone and you’ll get them an estimate the day of. That’s pretty difficult to do in spring. Think about that and those points.
I would put your headline and such at the top. At the bottom, that’s where I think our logo, your name, phone number and email address or web address is most important. I would make the top a headline versus your logo and your name. Again, it’s all about them. They don’t really care who you are until after they start working with you and like you. Right now your logo means nothing to them. My logo at CitiTurf means nothing to anybody, nobody cares. What they care about is what they’re going to get and how they’re going to benefit. I make it all about them at the top and then have your stuff more towards the bottom.
Continuing on with your second piece, just a different version. I again, would say that make sure you use both sides. You have room to put copy on both sides of this piece. On both sides you want to have your headline, and on both sides you want to have your web address, your phone number, potentially your logo. Then you could vary the copy in the middle. I’m picturing a headline at the top, phone number, web address, things of that sort at the bottom on both sides, and then the middle could change.
I would like to see, in my opinion, some imagery on both sides. It doesn’t have to be a lot, maybe a nice use of color, things of that sort. I’ve violated what I’m about to say with success, but I tend to prefer black copy not white reverse copy. Not a black door hanger with white copy. It tends to be a little more difficult to read.
Continuing on here. The nice thing about this is that lawn maintenance, landscapes, snow removal, are right at the top. I immediately know what you do. That’s important. Your headline should probably include lawn care or something like that in it, that way I immediately know what you do as I’m walking your piece to the trash. It might make me pause and think, “Actually, I’m looking for a lawn care company. Maybe I should read this.”
A couple things I’d like to see you do on this…105% lawn mowing guarantee, what does that mean to me? What does it mean exactly? It would be nice if you made that guarantee a bit more powerful and said, “It’s 105% money back guarantee!” meaning that if you are dissatisfied with our service and for any reason we can’t make it right, then we will pay you back the full amount of that service that you paid us for, plus 5%. Maybe even with your picture next to it to make it a bit more of a powerful guarantee.
GT Lawns loves cutting grass and it shows. I would say on this one, this is more about you then it is about me. How could you re-position this line to make this to my benefit? Right there you’re talking about yourself, 33 years, that’s okay in my mind because you’re building credibility. Again, this “still having fun” is a little bit about you. Not that it’s bad, it’s just how could you maybe reword this to make it about me and what I get out of this? I get to work with a company that has 33 years of experience, I get to work with a company that has a strong reputation taking care of high profile properties in my local market. What are those big benefits that you can communicate to me and word in such a way that it’s about me and not so much about you? That’s definitely something I’ve learned over time, is make it about them.
I think that talking about your people, your training is valuable. I think that it’s worth mentioning that. I think sometimes we have to be a little more clear on what that means to them. For example, why do I care that you train your people? That’s definitely something I’ve learned. We spend all our time in this business so a lot of times when we picture what we’re saying … for example, we have a visual picture that goes with the words we’re saying such as, where was it, “detail is in the people”. You have a mental picture in your mind of what that means because you’ve been doing this business for so long. But, Mrs. Smith hasn’t the faintest idea what you’re doing and actually thinks what you’re doing is very easy and doesn’t put value into how hard what you do is. The “detail is in the people” might mean nothing to her. Who knows what that picture in her head will be.
Sometimes when you say something like “we train our people”, it’s not so much “we train”, it needs to be repositioned as a statement of benefit, such as “we background check our people” . I would not say it this way but, “We background check our people to protect your family” or something along that line. Background check is the word you want to use but what does that mean to me? What that means to me is that you’re not going to put anybody on my property that you haven’t checked out and you’re not 100% certain that I do not have any concerns about them being around my home, my belongings, or my family.
When it comes to training, what does that mean to me? That means that you’re going to actually close my gates, that I’m going to get a consistently well mowed lawn every single week, there’s not going to be route marks, there’s not going to be debris left in the yard, that the edging is going to be good. What does that training mean to me? You’ve got to almost paint the picture of what that means. State that as a benefit.
When it comes to services, I even like to state the service as a benefit. You can say lawn care, but maybe you want to say something along the line of “beautiful weed free healthy lawn” or “we make your flowers brilliant”, I don’t know, that’s not a good word. How could you state even flower installation in a different way? How could you state flower installation in a different way? Let me add this…you do lawn care, what’s the result of lawn care? You’ll end up with a well manicured, healthy lawn. What’s the benefit of snow removal? It will ensure you can get out of your driveway and eliminate the risk that you slip and fall. Or, however you want to say that. Tell me what the benefit is. You can work the benefit and the word snow removal into one sentence and outline what you can do for me.
I would go back through this, work on some headlines, work on maybe restating some of these services into bullet points. Then I would also think about why you are better than all of your competitors and tell me what those reasons are. Why should I do business with you? Just lay it out for me and then give me a reason. Here you’re making an attempt, our schedule fills up in April, you’re making an attempt to tell me that I better hurry up or you’re going to be full in April. You’re creating some scarcity and reasons for me to take action. Maybe you could define that just a little bit better and make it a little bit more clear to me why your schedule filling up in April matters. Such as, my example I used earlier, you have one truck in my neighborhood this year or you’ve got 14 spots available, do I want one? Historically they’re filled by April 17 every year, or something like that. Tell me why I should take action.
I hope that helps. Thanks a lot.
Watch Jonathan’s video to learn why you should raise lawn care prices 10% and how to get your clients to agree to pay it.
If I’ve been guilty of anything in business, it’s been under-pricing, not asking for enough money, and questioning the prices that I’m asking for even after I think through how much I need to charge.
I’d recommend that you take a look at, or do a few Google searches, around the topics of if you can raise prices by X and lose X number of customers. For example, you might Google something like, raise prices 10% and lose customers. Just look around and do some reading.
Several years ago, I read some books on pricing and so I raised prices in my business. I had done some price increases before but generally I had been scared to do that. I’ll tell you right now, I’m still under-priced in everything we do.
A lot of times the reason we’re under-priced is because we don’t have the confidence to raise prices. Or, we are not communicating correctly to explain to our client exactly why the price that we’re charging is the price that we should be charging and why it delivers to them tremendous value. I think most of us make that mistake so you might check yourself and see if you have that same mindset as well.
Here’s the concept, and this number that I’m about to state will change so your profit margin will affect what I’m about to say.
If you raise lawn care prices 10%, you could theoretically lose 25% of all your customers and make the same amount of money at the end of the year in terms of take-home profits. Remember, take-home profits is all that matters. There’s been some studies in the service industry that say if you raise prices 10%, you can lose up to about 37% of your customers. That’s huge.
I am positive that if I raise my prices 10%, I would not lose 25% of my clients. If I lost 5%, think about how much additional profit that would make me in my business and think about how it would affect your business. If you could raise prices 10%, only lose 5% of your clients, how much more money would you make?
The point here isn’t to give you the exact answer. It’s to give you a concept that proves to be true every single time you dig into it. Do some Google searches to research this and it will give you additional confidence to price your services correctly.
Watch this video to learn how to set lawn care pricing to earn the most profit for your business.
If you’re watching this video, I’d highly encourage you to watch video number one and video number two if you have not already, because this video is based on the last two videos. And in it, I’m talking about how to figure out lawn care pricing for yourself as your business evolves.
In the last video, what we did was figure out the time for eleven properties within the seven thousand and seven thousand nine hundred and ninety nine square feet range. Remember, we’re using mowing as an example and we determined that our price based on hitting our target of forty dollars per man hour, the price needs to be twenty nine dollars and seventeen cents to mow properties within this range.
So basically what we’ve done, is we went through our business and we just simply tracked our time and measured our properties and we figured out, for all the different square footage ranges, what we need to be charging to hit our goals and we could do this for every service…fertilization, weed control, lawn mowing, aeration and all the different service types. Then, what we do is we basically build out our lawn care pricing. We call it a price matrix in Service Autopilot. It could be just a layout like this for you inside a spreadsheet. We figured out in our business, hypothetically I’m saying your business, that for five thousand to six thousand square feet, you might need to charge twenty eight. And for six to seven thousand, you might need to charge twenty eight dollars. Again, keep in mind, we’re using fictitious numbers to lay out a simple example.
So, just simply lay out something like this for the different services at different square footage ranges. Then, when you go out, you measure the property with a measuring wheel or you go online and you measure it with satellite imagery or pictorial imagery. You can literally look at the square footage, look at your spreadsheet, or if you use Service Autopilot, it will figure out for you based on the price matrix and it will give you a price. Service Autopilot really simplifies pricing and it also helps ensure that you’re always pricing your properties to achieve your target man hour rate.
So, that’s the basic premise of figuring out your lawn care pricing from the beginning so that you can set it and then price off of it from that point forward.
Now, something you might find as your business evolves, you might have originally set prices like this, at twenty eight dollars and twenty eight for this square footage. But, then what happens as it evolves and as your property makes changes and maybe as a little bit of the market you serve changes or the demographic you serve changes, you’re going to notice that maybe you’re starting to achieve a little bit different man hour rates. So, maybe your goal is to achieve a man hour rate clocked around forty eight dollars. So, let’s just go with that.
If you’re trying to achieve forty eight dollars per man hour when you’re mowing, and you’re nailing that on this property right here, five thousand to six thousand square feet. But, now on six thousand to seven thousand square feet, you’re not. You’re more on this forty six dollar per man hour range. So then, you’d probably need to raise that price to about twenty nine dollars to continue to achieve a forty eight dollar per man hour range.
In video number two, we went through and we tracked all of our time and that helped us figure out how much we’re making per man hour. Then, once we figure out how much we’re making per man hour, and we figure out averages across the square footage ranges, we can then really analyze our business and we can really adjust the business. Something we found years ago at our business is, we were really doing okay in this five thousand to ten thousand square foot range. But, as soon as we got into the bigger stuff, fourteen, fifteen, sixteen thousand square feet for residential, we weren’t making money, or, we were not making good money. It wasn’t holding up.
In my example right here, notice what happens, we’re pricing six thousand to seven thousand square feet at twenty eight dollars. Remember that these are made up numbers, these are not my exact pricing and it would be totally different for you and your market. But in my example, notice that, six thousand to seven thousand square feet is priced at twenty eight dollars. We’re pricing fifteen to sixteen thousand square feet at thirty two dollars. But what’s happening on those properties based on how long they’re taking us, we’re only making thirty seven dollars per man hour. Our target in my example, was forty eight, so notice how far we’re under performing.
So what that would tell me as the owner of the business is that, we either need to stop doing properties like these or we need to figure out how to be more efficient. Maybe we need to construct a route that has bigger equipment on it, so that we can go through this type of property faster and we basically group all of those properties into one crew and get through them faster. You’ve got to watch out on the back side though. You could drive up your non-billable time. You might get your per man hour time, you might optimize it and make the per man hour time you want, but then your non-billable goes way up. You may end up with tons of drive time and so you still don’t end up profitable for the day.
There are lots of considerations here and those are things to think about. And, I know that I’m not going to win as much business, but at least when I do win the business, we’re making money and that’s the goal.
And so, the point of this screen here is to show you two things. Once you figure out your average pricing by square footage, you then take that and you set that for each of the square footage ranges. Then over time, you re-analyze your business and you figure out by square footage range, what man hour rate you are earning right now, on average. If it’s too low, you back into it. If you want to go up to earning forty five here, if you want it to go up to forty eight, how much do you need to raise this twenty eight dollar price? And if you watch my video number one, or excuse me number two, and you paused the video on some of my formulas, then you can kind of figure out how, this one here is about raising the price. So you can look at my formulas and figure out how to do this for yourself.
I hope that makes sense. If you have questions about this, post them in the comment section and I will, based on the comments, potentially record additional videos on this topic.
Learn how to set lawn care pricing to earn the most profit for your business.
In a prior video, we were talking about how to price. This is part two. Part one sets this video up and I recommend watching it. We’re talking about the subject of how to learn to price your work versus copying the pricing of someone else. Let’s now look at some actual numbers. There’s a couple of things to know as I go through this video.
One, we’re going to talk in terms of per man hour pricing. How much are you making per man hour? When I’m talking in terms of per man hour here, for example, I could tell you that you need to be making forty dollars or more per man hour. When I say forty dollars or more, that includes their salary and their labor burden meaning the taxes you’re paying them. It would include worker’s comp. It would have overhead things in there such as insurance and truck and fuel and administrative costs in the office.
All of that is rolled into this one number that you need to be making per man hour to pay for that employee, all the overhead that goes into selling the work, and having the office administration support that individual. As we’re talking about these per man hour numbers, that’s what all is included within that number.
Let’s talk details here. In this example, I have eleven properties. First, what we did was, we went out and measured all of our client’s properties and figured out for those eleven properties their gross lot. Let’s just use gross lot square footage. We’re using a mowing example so in video number one we were using a mowing example and I’m going to continue to use a mowing example. For these eleven properties, they all fall within the seven thousand to seven thousand nine hundred and ninety square foot gross lot. I know that’s a small property. I’m just trying to keep this example really simple.
Then, what we did was we went out and we tracked time for all of the mowing jobs that we performed. When the truck arrives, we start the clock. When the crew gets back in the truck, we stop the clock. For these eleven properties, here’s how much time we were on the property. We were physically there for twenty minutes, physically at this property for twenty-three, physically at this one for twenty-one. We ran three man crews, so when you take the time we were physically there, multiply that by the number of individuals in the truck, we had total time at the property of sixty minutes. That means three men were there for twenty so, twenty times three is sixty.
Now, what we did because we weren’t sure how to price, we heard one of our competitors say, “Hey I charge thirty dollars per man hour for a property that’s seven thousand to seven thousand nine hundred and ninety-nine square feet.” Now if you watch video number one on pricing, you’ll know why this is such a disastrous thing to do. Don’t copy someone else’s pricing.
Let’s say you did that. You heard that I said thirty dollars is a good price for seven thousand to seven thousand nine hundred and ninety-nine square feet so you went and you charged all of your clients that have that square footage that price. But, now you’ve started tracking your time and you’ve figured out what you’re actually making per man hour.
Now, something else I’ve said is I believe that at a minimum you need to be charging about forty dollars per man hour, minimum. Now look what happens because possibly you copied my pricing. Once you start tracking time on this job, you made thirty a man hour. On this job, you made twenty-six dollars a man hour and let’s look down here, you made thirteen dollars a man hour on this job. It took you one hundred and thirty-two minutes, over two hours to perform this job. You made thirteen a man hour.
You pay your guys fourteen dollars an hour so you’re not even recovering what you paid them per hour. Not to mention the overhead which includes fuel, the truck, the taxes you’re paying them, and the insurance. So, you’re really losing money. You’re basically paying this client to let you mow their lawn. That’s what happened because you may have copied my pricing and because maybe you weren’t ever tracking your time to know how you were doing.
I say “you” in general, not “you” specifically.
All right, so what’s happened now after tracking these eleven jobs, you’re making an average of twenty-four dollars a man hour. That is not a profitable number that you can build a good business on. I’m positive of that. I don’t care what market you’re in. You’ll see some really low numbers in the commercial business but they just have totally different margins. It’s a different business. But, all of what I’m talking about holds up in residential and in commercial. All of my numbers in red here are the result of copying somebody else’s price and you’ve ended up with basically very low profit margins and probably a business that you don’t love.
Now that you’re tracking your time and you’ve measured all of your properties, you can actually figure out what to charge. For example, if I want to make forty dollars per man hour and I know that that property took me sixty minutes, then I can do a little bit of math and you can see my formula is right up here. If you want to copy this stuff and just pause the video, you can reconstruct this spreadsheet. But, you can see that I need to charge this client forty dollars, not thirty dollars if I want to make forty a man hour. On this client, I need to charge them forty-six dollars, not thirty dollars if I want to make forty a man hour.
If I go through here and work on all of my pricing, it will show dramatic results. Here look at this one. I need to charge sixty-six dollars, not thirty dollars for this property to get myself to an average price of forty dollars per man hour. Once you’re aware of pricing and where you stand as a business, you can start to make some decisions on how to set pricing. If this were my business and I was looking at this, here are some things I would do.
First off, I’m not quite sure what this fifty-three is here so I’m going to delete that. Something is not quite right about that number. The calculation must have been wrong. Oh that’s what it was. I know what I did there. That was actually correct. Here’s what this tells me. If I look at my eleven jobs, then I need to be charging on average fifty-three dollars to mow a seven thousand to seven thousand nine hundred and ninety-nine square foot property. That’s what these numbers are telling me.
If I want to make forty dollars per man hour, that needs to be my price. By the way, for me in my market, that’s way high. I would never get that so my numbers are fictitious. I made up these numbers in terms of how long this took. As a result, these numbers are all false. I could never get fifty-three dollars. In fact, thirty dollars in my market is a high-end price. It’s towards the top of the market for just mowing a small lawn like this. Don’t get caught up in these numbers please, but this is what the data is telling me. I need to be charging fifty-three dollars.
Now, here’s what I would first do. I’ve taken a bunch of properties. I’ve figured out how long they take so that I can figure out what the average amount of time it takes me to do a property of this size. That allows me to find my average pricing. Immediately, I would look at some of the anomalies. This one here, this one here, this one here, and the ninety-nine minutes down here. I would look at these and figure out why these properties take so much longer than all the others. Is it us as a company we’re doing something wrong? Is it that there’s something about these properties that isn’t right? Or is it that these properties are in an area, maybe that they have tons of trees on these properties?
Then I could make some decisions. You can look and see that you just aren’t making money on certain types of properties so you decide not to do those any more. If that were the case and you took your worst performers off the table, now look at what it does. It gets your price down to twenty-nine dollars.
Now we’re starting to get into a more realistic price. I’ve just gotten my poor performers off the table. I either fired or I left the market which probably meant firing them, but I made some decisions in my business and now I’ve got more accurate pricing. Maybe it’s a part of town where you just don’t make any money on properties that size so you leave that part of town and you go where there are more properties like this one and this one. These are properties that I can get through a lot faster, maybe I go find a lot more of those types of properties.
Since I got rid of some properties, I’ve got a new price. I’ve figured out that I should be charging about twenty-nine dollars on average for a property between seven thousand and seven thousand nine hundred and ninety-nine square feet. I set that price and now that’s what we start to quote. Then periodically I come back through here, and if you use ServiceAutopilot, this is on the job costing report. Out to the right you can figure this stuff out. We have a training that teaches you how to do this or you can copy all of my formulas and my spreadsheets and you can figure this out for yourself.
As your business evolves and you optimize the business meaning as you raise prices, you become more efficient, you change your setup, and you change different procedures and training within your company, these numbers are going to change from year to year and you can go back and reset pricing. Another option is, if within seven thousand and seven thousand nine hundred and ninety-nine square feet you just find a ton of variance, meaning that at the top end versus the low end of those seven thousand square foot properties there’s three or four dollars in pricing variance, then maybe you break all of this down into ranges.
You look at all of your properties from seven thousand to seven thousand and five hundred square feet. You plot the time. You put in how much you want to make per man hour and notice again in my formula I have forty dollars in there if you want to copy this, it’s forty dollars. You put in how much you want to make and it tells you what you need to be charging and you figure out your pricing based on that.
Everything I just told you, you can do it for yourself very easily and you can do it for every single service you have within your business.
It’s true. It does take work. It’s absolutely true that it would be easier for me to just to tell you how much you should charge, but look at how dangerous that is. I think it’s impossible tell someone how much they can charge, but it’s possible to give hints and say, “I feel you need to be at least forty a man hour or fifty a man hour or sixty-five a man hour depending on what that service is.” For each service, pest control versus lawn care versus mowing, you do need to be achieving a different man hour rate. You have a different cost for the people. You have a different cost for the trucks that they’re running.
You do need to be achieving a different man hour rate depending on the service and in some cases it doesn’t cost you any more to provide one service over the other, but the market will support a higher price. You should be charging a higher price. That’s the way to think about it.
In video number three, we’re going to move on to looking at setting rates.
Learn how to set lawn care pricing to earn the most profit for your business.
I receive a ton of questions, and I would say in the top two or three is, how do I price? How do I know exactly what I should charge? I think this is the right question to be asking. The dilemma is that I struggle with giving the exact price and here is why.
I can give you exact pricing, but it’s a cop out for me to do that. That’s the easy solution for me. The problem is, I’m very concerned with giving you accurate advice. I don’t want to be wrong. I don’t want to screw up your business, and I want to give you wise advice. Giving you the exact price to charge is not wise advice.
In this video, I’m going to show you exactly why. I’m going to show you the factors that go into pricing and why I can’t give you the exact price. I’m going to tell you exactly how to figure out the best pricing for you. I’m going to show you numbers and how to do it. You’re going to learn how to price. Once you’ve priced your work, I’m going to show you exactly how to figure out of it’s profitable. I’m also going to show you how to figure out your pricing by square foot. Basically I’m going to show you how to do it, and I’m going to show you how you continue to look at your pricing as your business grows.
Now, to do this I’ve got to go through a few points so this is going to be a three-part video. I’m going to go through and talk about pricing, and then I’m going to show you how to do it. I’m going to show you actual numbers.
There are two things to know. One, there are all kinds of services. Mowing, fertilization, weed control, aeration, pest control, you name it. At the end of the day the pricing is all based on time. For the sake of my example, I’m going to use a residential mowing example. This concept also applies to commercial and it applies to every different service type including digging a whole and sticking a bush in the ground. This is the universal truth behind pricing, and that is pricing is based on time.
You and I are in the business of selling time. Let’s say your competitor has figured out in their business that they should charge three extra dollars for every 1,000 square feet for fertilization and weed control. If they’re smart, they didn’t just copy their competitor. Rather, they figured it out based on time and they know that to do an extra 1,000 square feet it takes this amount of extra time to walk it. They spray it at a certain rate and they figured out what that charge needs to be.
I’m going to go through the example based on mowing, but know that square footage pricing is based on time. It’s not based on square feet. You figured out your square footage pricing based on time. That’s important, so hopefully I’ve made my point.
We’re using a mowing example. If you want to arrive at square footage pricing, which is sort of the premise of this conversation, then you want to figure out if you want to price by gross lot square feet, or do you want to price by net or by turf. You might price from one service to the next differently. For example, you might price mowing based on gross lot square footage. Whereas, you price aeration based on turf, and pest control based on the home square footage.
What net is, and this is how some companies price, you take the gross lot square footage and you pull out of that the footprint of the home and maybe the pool. It depends on how your company works. That’s net. That leaves concrete in. That leaves turf in. That leaves flower beds in. That’s something to know and think about as you’re setting your pricing and as you’re figuring out your pricing by square footage.
The other critical thing is the only way you can price is if you track time. Otherwise, your only other options are to guess and copy your competitors, and neither one of them gets you to the place you want to be…a highly profitable business. I mentioned this already. It’s just about the most important thing I’m going to say. We’re in the business of selling time. Pricing is going to be based on time.
Now, one last thing before I get into the details. Let’s say, now you’re wondering how to price fertilization and weed control because there’s product costs involved. The number one item on your P&L sheet, meaning the biggest expense on your profit and loss statement is labor. Labor is the thing that you want to manage above all other things inside the business because it’s your biggest expense. You’re, again, in the business of selling time. When you’re determining pricing, you first start with how long it’s going to take to perform. Then you figure what you have to charge just purely based on selling time and labor.
Now, you can layer on top of that additional things if you’d like. This could be a whole three-hour conversation in and of itself. But, for the sake of our simple example, we figure out that for fertilization and weed control it takes a technician one hour to do a property of a certain size, and we want to make $40 a man hour. That means, I need to charge $40 any time we do a lot of that size. Let’s just put a number to it of 8,000 to 9,000 square feet. That’s not accurate. That’s just my example.
We figure out that when you were doing 8,000 to 9,000 square feet for fertilization and weed control I need to be charging $40. That covers my time, makes a profit, recovers overhead and does all of that. Now, on top of that, I’ve got chemical costs. For that size property I know on average across the applications for the year that I’m going to have an average of $7.50 in chemical cost. My price for that service might be 47.50. I’m making the $40 on the labor, and then I’m recovering my cost on the chemical. You could mark it up. All of that’s up to you. You are setting the pricing. But, that’s the idea. Figure out labor first and then you can layer on top of that your mathematical cost, your product cost, and your chemical cost.
Again, this is going to be a couple-part video because there’s a lot to cover here if I’m going to give you the full details.
Now, why is it that when you ask me what I should charge to provide this service that I struggle with answering that question, and why I feel as though if I tell you the exact pricing I’m doing you a tremendous disservice? There’s nothing that would make me feel worse then knowing that I gave you a price that led to unprofitable work or led to potentially harming your company. Here’s why.
If I charge, let’s just make up a number, $30 to mow a little bitty lawn. I tell you for this size lawn you should charge $30. What does your business look like as compared to my business? I’ve worked on my business. We just turned 10 years old. We’ve been working on our business. We’ve become more efficient. We’ve optimized things in our business. We’ve changed. We are nothing like what we were 8-9 years ago, not even similar.
Think about how many men are on your truck versus my truck? At $30, if I have two men on the truck and you run three men, and maybe the three-man may not be as efficient as two. That means you’re going to be on the property for longer and that means you’re not going to be making money at $30 per visit like I do.
How’s your truck set up? Do you pull trailers? What’s the basic setup? If my truck setup shaves four minutes off of my visit time and your truck setup doesn’t, then I’ve immediately got efficiencies you don’t have. My pricing doesn’t work for you.
What’s your equipment setup? Are you out there with 48″ walk-behinds, whereas I’m there with 21″ mowers? Or, am I out there with a 61″ rider and you’re out there with all walk-behinds? Again, who’s more efficient? If I’m more efficient than you, I just killed you by telling you to charge what I charge because I’ve got a totally different setup.
What’s the frequency? Is it biweekly? Is it weekly? Because in mowing that has a huge impact on how long it takes to do the work. Are my properties all flat, whereas you are in a market where there’s a lot of terraced properties? Are your properties wooded where all of mine are builders that came in and cut down all the trees and planted two new trees in the front yard, so I have virtually nothing to mow around? Is mine flat and you have hills? I’m in Texas after all. It’s pretty flat.
Do you mulch or bag? For example, if I mulch most of my properties and you bag, you’ve just added time that I don’t have.
Are your properties constructed in such a way where you have tons of concrete? That means you have a lot more edging. That means you have a lot more blowing, whereas I hardly have any concrete on my properties for the same square footage because now, yes square footage is the same but we’re performing different services. That means different time. In services, I mean we’re spending more time mowing maybe, whereas you’re spending more time blowing. If it’s super-windy in your market and it’s not windy in my market, what’s that do to blowing?
My point is, I’m belaboring it here, but you get the idea of how many variables there are. What about stick edging? In my market I have to stick edge weekly. What if in your market you only have to stick edge every other week or once a month. What about fences? We have fences. What if you don’t have fences? What if you have metal fences versus wood fences? What’s that mean to weed eating time.
Then finally, what’s the spring effect in your market? How much longer does it take you to mow a property in spring than it takes me to mow a property in spring, based on leaves and all kinds of other factors like the type of grass.
This is why the pricing is literally different all over the board, and copying price is a disaster. This is why I could say I charge 30 for this, and if you’re in Toronto and you charge 30, and everything about the way we operate is different. I really, really did you a disservice.
Now, how do you figure this out for yourself? Because it’s really not that hard. If you want to make a lot of money, than you want to learn how to do this. You’ve got to track your time, period. When you’re tracking the time, you need to know how many people are doing the job. That’s easy. Then you want to have measured the property, measured the gross lot square footage. I’d recommend the turf lot square footage. You don’t have to get out there with a measuring wheel. There are measuring tools built into Service Autopilot and there are measuring tools for free all over the web.
What’s the calculation? I’m going to give you numbers on these other spreadsheets here in a minute, but what’s the basic calculation? Basically, you take the start and end time of the job and you figure out the number of men. Then you get the total time. I’m going to show you what I mean by this. Here’s how you do it.
Let’s just use the example of you’re running a crew of three. You pull up in the truck, you turn off your engine, you write down the start time, or if you’re using software, you clock in. You perform the work. Then when everyone gets back in the truck, you stop the timer. You start the engine, you drive away. Now you have your start time and your end time.
Let’s look at how that would play out. Your property is 10,000 square feet, 4,414 square feet of turf. You are on the property from start to end, meaning they got out of the truck, got back in the truck. Start to end is 20 minutes. I’m keeping the math simple. There were three individuals. The total time on the job was one man hour. You had three men there for 20 minutes. That equates to one man hour or 60 minutes. If you charged the client $30 to mow that lawn, than you made $30 per man hour. If you had been there for 40 minutes, so 40 minutes times three, so you were there for two total hours and you charged $30, then you would have made a man hour rate of $15 per man hour. You kind of get the idea of how the math works. This is the core of pricing every single service.
Now, let’s say that you look at this and you say you’re only making $30 a man hour and you heard me say that you should really be $40 and above per man hour, which is my argument. When I started in the business, I was in the $25 range because I copied a bunch of competitors. Then I was in the 30s for mowing and some other things. I quickly realized those were not good numbers, but I was copying what my market was doing. If you look at your business and say, wait a second, we’re only making 30 a man hour on this property. That’s too low, so what’s your option? Your option is one, to raise the price on that client so that you can make enough money based on the amount of time you’re there. Or, you need to become more efficient and do that property faster.
Where do you find efficiencies? A few of the clues are up here. How many men are doing the job? What’s the setup of the truck? What kind of equipment are you using? Are you picking the right properties, meaning are you predominantly serving a market where the properties are too big or there’s too many trees, whereas if you were to go focus on a different market you could make more money? Those are some of your decisions. All of that goes into pricing.
Now in video part two, I’m going to start showing you numbers and I’m going to show you how to figure this out.