Charging Higher Prices Benefits Your Clients… The Video Above Explains Why.
The question is, “How much do I charge a lawn care client? I don’t want to overcharge or undercharge for landscape services.”
The main point I want to make about this topic is that you absolutely don’t want to be the low-priced company.
When you are the low-price solution provider, you can’t hire the best employees, have the best trucks and equipment, or spend the most money on marketing to out-market everybody else. You can’t afford to do all those things that ultimately make you a much better company at customer service. If you can’t afford the best employees because you don’t charge enough, then you don’t really have a good business. Great employees make your life easy.
Your strategy should be to be one of the higher-priced providers in your market. Not because you’re gouging your clients, but so that you can deliver incredible service to your clients. Most clients expect very little out of a lawn care business. If you can deliver anything better than the norm, you have the chance to wow them. You have the chance to get a lot of referrals and really grow your business.
Strategically, go in with the goal to be an average- to high-priced service provider. Start out average to learn the business. Get in the marketplace and study your competition. Use your competition as your guideline for quoting and for pricing. Use those same prices with your clients. Then study your own business. Learn your own business so you know how to price effectively.
If you have no knowledge whatsoever about pricing, there’s really no magic formula that says charge $55 per man-hour and this is what you do to figure out exactly how many hours there are going to be on the job. It’s all a learning experience. It’s about getting burned a couple of times and then never making those mistakes again. It’s about asking clients what they paid previously. It’s about price shopping your competition. It’s about having your friends ask the competition to come out and do an estimate at their home so that you can learn what they would charge. It’s about doing whatever you’ve got to do to figure out how to price.
Again, no magic solution, you just have to get out there and see what others are charging. Go on their websites and look around. You’ll start to build a feel. If you’re starting out first in residential, it’s really easy to figure out pricing.
Commercial, that’s a whole different deal and is a lot more difficult. That’s why I generally don’t recommend somebody that is just starting out in the lawn care industry to begin on the commercial side until you’ve got your feet wet. You have to understand the relationship of time to square footage, time to man production, time to equipment size, and then task the right equipment and the right size to the right property and the right area on the property. You also have to make sure you have the right guys working on the right task at each property. It’s a whole different game.
I recommend starting out in residential where it’s easy to figure out what your competition’s charging. Then go into the market and charge the average to get your feet wet. Learn the business for yourself. Then before you know it your pricing questions all go away.
If that doesn’t help, please ask another question and I’ll be happy to clarify again.