Lawn mowing business can be a great opportunity for earning money. Since people usually employ lawn mowers to keep their lawns and gardens beautiful and trimmed, you can expect success in this business. But remember starting the business is one thing and keeping it profitable is another. Therefore the most common problem that lawnmowers face is how to price the lawn mowing job or grass cutting job? You don’t want to quote it too high because then the customer might reject it. Also, if you quote it too low, you won’t have any money left with you. Today’s topic- How to Price Lawn Mowing Jobs?
So if you are also facing this problem, the answer lies in this article where you will know various factors that you should consider for determining the right price of lawn mowing jobs.
If you want to effectively price a grass-cutting job, you need to consider various factors. The first consideration will be the fixed costs like the equipment, salary, etc. Then you need to look at variable costs like fuel required for running the machine, transport, etc. Once the fixed and variable costs are calculated, the objective should be to keep a healthy profit margin.
Let’s look at the detailed procedure to determine the three essentials namely fixed costs, variable costs, and margin.
How to Price Lawn Mowing Jobs?
- Fixed Costs:
Fixed costs, in any business, refers to those costs which are incurred to smoothly run the business. These costs don’t have any relation with the amount of work you do because they are incurred even if no work is done. These costs are also called overhead costs. In a lawn mowing job, fixed costs are the primary costs that are incurred. Various fixed costs incurred in the lawn mowing business include:
- Van depreciation cost (because van/vehicle is important for transporting the equipment to the location).
- If the van is on lease then the lease cost
- Servicing costs of the vehicle
- IT expenses
- Equipment costs
- Expenditure on marketing
- The salaries that are to be paid to fixed staff.
To determine the right price with relation to fixed costs, you have to first add all these costs and divide them by the expected number of days that you hope to find work. Let’s look at different fixed costs in detail and the way to determine them.
- Employment costs:
A major fixed cost in this business is employment cost. You should be paid for all the hard work. If you are employing someone else for mowing then you have to incur their salary costs. The salary of a person is dependent on the area you are living in, the area in which you are going for mowing, your proficiency, and repute in this field, etc. For reference, the average annual salary of a mower is around 30000 USD. Besides salary, employment costs also cover other benefits like pension contribution, training of the employees, etc.
So if you want to calculate employment fixed costs, it’s advised to multiply the actual salary with 1.2 i.e. 30000*1.2= 36000 USD. These will be the expected employment costs that you have to cover.
- Fixed cost of vehicles and fleet:
The next major fixed costs incurred in lawn mowing jobs are fixed costs on vehicles and fleet. Transportation cost is one of the biggest costs for a lawnmower. Besides the actual buying/ lease cost of the vehicle (van), you also need to consider depreciation costs, road taxes, the repair costs of tires, servicing costs and insurance premiums, etc. Make sure that the vehicle you are using is safe and reliable.
- Fixed costs on equipment:
Equipment is very crucial for lawn mowing jobs. So you need to make some form of investment to buy good quality equipment for lawn mowing. Even if you take proper care of your equipment, they have a life of only three to five years before becoming a scrap. So accordingly you have to decide the fixed costs for the equipment. Don’t forget to include servicing and repair costs for the equipment. Some of the equipment that you will necessarily require:
- Mower (Commercial and roller)
- Loop handled strimmer
- Cow horn handled brushcutter
- Blower, etc.
Once you have calculated the purchasing cost of these pieces of equipment, add the expected depreciation cost and repair costs also.
- Fixed costs for marketing and administration:
Besides the much-required costs, some additional costs are incurred for promoting your business. Prominent administration and marketing costs in a lawn mowing job include:
- Accounting and legal costs,
- Insurance costs (if any)
- Business cards, stamps, pamphlets, etc.
- Website maintenance cost (inclusive of domains and email costs)
- Mobile phone for attending the calls
- Google advertising for better reach (because online presence helps in the growth of your business).
You can subtract or add some marketing costs as per your business’ reputation and popularity.
Therefore the fixed costs for a lawn mowing business will be calculated by adding the final fixed employment costs, transportation and fleet costs, costs on equipment and administration, and marketing costs. Lastly, divide this figure by the average number of days you expect to work.
- Variable costs:
Variable costs refer to those costs which are incurred in the actual course of work and keep on increasing as you work. Some of the examples include fuel cost for transportation, the fuel cost of the mower, labor cost if you are hiring someone, etc. In these costs, you must also consider the expenditure on refreshments. Once you have invested in fixed assets, you will start incurring variable costs from the time you get your first job call. You will incur fuel costs for reaching the desired place. Then you will add some fuel to your equipment (mower and strimmer) that will also come from your pocket.
Besides these, you might also incur costs of complementary equipment like strimmer line, blades of the mower, etc. Also, if the journey is long you can’t go without refreshment, which will further add to the costs.
So you have to be mindful to include these expenditures in the final price that you charge from the customer. Let’s look at different variable costs and how to calculate them.
- Calculating the transport fuel cost: To calculate the fuel cost, calculate the expected distance (including the return journey) and multiply it with the fuel cost. For example, if the job is 5 miles away and the fuel cost is 14p per mile, you must necessarily include the cost of 140 p (14p * 10) in the price that you quote.
- The mower fuel cost: The next major variable cost is the cost of fuel to be used in the mower. Depending on the engine installed in your mower, the requirement of fuel will vary. For instance, if your mower has a capacity of one liter and can work for 1.5 hours, the fuel costs will be incurred accordingly. To properly include the cost of mower fuel:
- Write down the cost of the fuel (per liter) you are using for the mower.
- The number of hours your machine can work in a full tank. Based on this you will calculate the cost of fuel spent on each minute of mowing.
Example: 1.5 hours: 1 litre (costing 14p)
For 1 hour the cost will be: (1/1.5)*14 = 9.34
Now multiply it with the expected time you spend in the mowing of the field. If you spend exactly one hour then you have incurred 9.34 units as the cost of fuel for the mower.
It’s advised to use good quality fuel for mowers like Aspen that are also affordable and environment friendly. Otherwise, it’s your will to use whichever fuel you feel is fit for your mower and other equipment.
- Some additional minor variable costs that should be also considered:
Some additional minor variable costs that you also need to take into account are the costs on the strimmer line and the blades of the mower. Since lawn mowing is a tedious task (especially in the summers) it’s wrong to assume that a person can work without any refreshment. So you can also include refreshment costs in your final price.
Also, if you are using a payment method where you will be charged some additional fee, you can add that too in the final price that you charge from the customer.
Besides this, there are some licensed waste disposal sites where you need to pay some money for disposing of the grass that you have mowed. So don’t forget to include this cost in the quoted price.
Also, if you take up some additional activities besides mowing like lawn fertilizing, lawn top dressing, winter salting (gritting), supplying plants, lawn seeding, supplying or installing mulch, etc. you have to take into consideration their variable costs also.
So, here are the variable costs: Fuel for transportation + fuel for equipment + additional costs (like refreshment, payment method, etc.)
How to use these variable and fixed costs to arrive at a Fair Lawn mowing price?
After calculating the fixed and variable costs, you need to consider the time which we are going to spend on-site. So you will
- multiply the total time on site with the fixed costs
- Multiply the fuel cost with the total distance covered (to and fro the place of mowing).
- Multiply the fuel cost of the mower with the number of hours spent by you on mowing the lawn.
Add these figures and you will arrive at the total costs that you have incurred in the whole process.
How to calculate the price if you have employed employees for lawn mowing?
If your lawn mowing business is not solely run by you i.e. it includes some employees, you have to add their salary costs, too in the quoted price. Now for determining what labor cost you have to add, you have to first see if the field size is too great and how many workers it will require. First, make sure that the field would require more than one worker and if the customer is willing to pay. The pay scale of employees is mostly based on the number of hours.
To determine the expected time for mowing a lawn, you can use time tracking software in beginning. It will help you figure out the labor hours. For example, if a field can be mowed by three employees in one and half hours, you will include each person’s pay.
Employees can come in handy when you have to mow large lawns. For instance, if one person was charging 60 USD per hour for mowing and it took him 3 hours alone the cost would be 180 USD. But contrary to this if two persons mowed the field together and it took them one hour and they charged 75 USD then also, you have to pay them only 150 USD. So, you can hire wisely and gain profits.
How much profit margin to add?
The purpose of any business is to gain profits. If even after so much hard work you are not able to earn profits then you will not feel motivated to take the risk to start the business. So it’s very important to keep a profit margin in the actual price that you tell the other person. Once you have calculated all the operating costs of your business, you have to add a reasonable profit margin. This reasonable profit margin can be very subjective. But usually, the people in this business consider thirty percent as the optimum profit margin.
To put it in a nutshell, Total costs= Fixed costs + Variable costs
Finally, the final price that you should charge= Total costs + 30% profit (or any other profit margin that you set).
Important tips to keep in mind while charging the lawn mowing price
- Don’t charge based on hour solely:
Hourly rate is one of the most quoted rates by a lawnmower. But as we have seen that a lawn mowing business requires several factors. Therefore it’s wise not to tell the hourly rate to the customer. It’s better to tell the customer a fixed price for the job rather than charging an hourly rate. The advantage of a fixed price is that you will be paid the whole price even if you complete it in a lesser time.
- While calculating the on-site time, you need to consider several factors:
At the beginning of the article, we saw that we also need to consider the time spent on the site. But this time does not only mean the time spending in mowing. It can also include the time for loading and unloading the equipment, fuelling the equipment, preparing them for the grass cutting, talking with the customer for his inputs, etc. So consider all these factors to decide the appropriate time for calculating the costs.
- Use the right technique to calculate the area of mowing and use appropriate tools:
While calculating the area of mowing, measure each side properly. Since edges are the complicated part, calculate the expected time for striming around the edges. Also, don’t forget to consider the debris because you need to remove that too. Based on all the calculations, choose the right mower for grass cutting.
- While quoting the price of mowing to the customer, ask some relevant questions first and then quote the price:
Many times, people either through call or mail ask about the price that you charge for a lawn mowing job. But don’t quote at once. Ask relevant questions like the property name, reasons for asking the price even before starting, etc. When you ask questions you are in a better position to decide if you are quoting a profitable price. Details like the location of the job, size of lawns, how well cared that garden is, etc. help you decide whether you will be able to work on the lawn without incurring additional costs. The measurements will help you to apply the technique given above and you can land on the appropriate price.
- Writing everything on paper will further help you stay organized with the demands of the customer and the price you should quote:
It is advised to keep a pen and paper handy because you don’t know when you will need to write something. This paper sheet would help you to make notes about the length and breadth of the garden, get the signature of the customer for approval of the work, etc. Also, it would help if you keep some business cards handy that would help you to generate some new customers. All this will help you to look professional and accordingly charge a reasonable price from the customer.
- Gather appropriate data from the customer to avoid waste of efforts and time:
Your time and your hard work are the real money for you. Therefore make sure that you have taken proper details from the customer about his requirements about the garden. First, walk around the garden and ask the person if he wants mowing all in specific areas, the frequency of mowing, the location of the dustbins, etc. You can praise the person for the garden to make more impact.
Pricing the lawn mowing jobs might seem an easy task but sometimes it becomes very difficult to ascertain the right value. But no worries. In case you face a problem in ascertaining the price of a lawn mowing job, refer to the above points and use them to reach an appropriate value. Always leave some scope for a bargain by keeping a reasonable profit margin.
FAQs (Frequently Asked Questions)
Q1: What are the things that one should write on a paper after surveying the field?
Ans: You should write the customer name, property address, Date when you visited, the price that you wish to quote (based on all the calculations above), the mower that you plan to use according to the features of the field, the height of the cut, the waste disposition, total fixed price for each visit, payment conditions and the method of payment (cash or cashless), general terms of your business policy and at the end the signature of the customer.
Ques 2: How to convince the customer that you have quoted the right price for mowing?
Ans: Quoting the price can be a tricky task. But be confident and clear while explaining the price that you quoted for mowing.
- Start by telling them that you have done all the calculations and the price that you have arrived at.
- Also tell the frequency of visits (like fortnightly, monthly, weekly, etc.). Tell them special things about your service.
- You can say that no matter how much time the work will take the price will remain the same, to show them that the price is reasonable.
- Also, you can talk about how you will send all the details of mowing and they don’t have to worry about it.
- Refer to the secure payment method and conclude by asking if they would give you the job.
The customer might ask some questions. Answer them patiently. If needed, you can negotiate a bit to get the job. If they tell you that it is too high, start talking about how you have to incur huge expenditure on mower, equipment, transportation and after all, you will work so hard in the heat. Don’t be disappointed by a ‘no’ because a better deal is waiting for you.
Ques 3: What things one must keep in mind after getting the mowing contract?
Ans: After the customer has agreed to hire you for mowing the lawn, complete all the paperwork and give them the date from when you will start. When it’s finally your first visit to their lawn, work diligently, be on time, and take customer feedback when your work is done. If they are not happy with something fix it and thank them for the opportunity. Lastly, send the invoice to collect the payment for all your hard work.
Ques 4: What are some of the occasions when you might need to increase the price for lawn mowing?
Ans: You will need to increase the price of mowing
- if you are offering additional services like trimming, watering, less intensive services, etc.
- The job location is too far than expected as a result of which the costs you estimated for fuel became high.
- Another possibility could be that the shape of the field is very rough or the work needs to be done at very short notice.
- In case you employ other people, the costs can rise if the cost of labor increases.