Download pdf - How to price your landscape services

Presents

Millionaire’s Club Virtual Conference

How to Price Your Servicesor

The Price is Right!

By

Head Harvesters Bill and Ed

The Goals for Today

#1: Learn How to Develop the Right Price

#2: Have the Right Price and Compete

Other Pieces to the Right Price

EstimatingMarketing and Sales

Right RevenueDelivering Consistently

Efficient and Safe Execution

Two Parts

Part 1: How to Arrive at the Right Price

Part 2: Have the Right Price and Compete

Part One

How to Arrive at the Right Price

The Goal

Arrive at the Right Price to make the Right PROFIT!

Using the Gross Margin Model

KYC – KYC – KYC : Know Your Costs

Revenue - Price 100%

<Direct Costs> 55%

=Gross Margin 45%

<Overhead Costs> 35%

=Profit 10%

Know Your Direct Costs

Direct Costs = Labor + Burden + Materials

Know Your HAWsHourly Average Wage : Labor + Burden

Example HAWs : Labor + Burden

Foreman $16 / hr.Worker $12 / hr.Worker $11 / hr.

Total $39 / hr. for 3 people = Average $13 / hr.

Plus Burden Payroll Taxes – Workers Comp Ins – Health Ins

= Assume 25%

HAW = $13 x 1.25 = $16.25

Know Your Overhead Costs

Overhead Costs = Indirects and SGA

Know Your Costs to Perform the Work

Estimating Process with Production and Application Rates

Estimating Determines Your Direct Costs


<Direct Costs> 55%

=Gross Margin 45%


=Profit 10%

Know the Budget Basics


<Direct Costs> 55%

=Gross Margin 45%


=Profit 10%

Know How to Mark Up Your Direct Costs

Arrive at Price/ Mark Up Direct Costs

Direct Costs Divided by

Reciprocal of Desired GM

To Achieve a 45% Gross Margin

Total Direct Costs: Labor + Burden + Materials = $1,000

Direct Costs $1,000 / .55 (reciprocal of 45%)

= $1,818 (Price)

Know the Price Influencers



The Competition – The Right CompetitionPay Rates: Lower Isn’t Always Better

Fair Market Value


Market Density – Location Smart Purchasing Using Leverage

Overhead Costs


Supervision Ratios Working Efficiently

Estimating Accurately


Marking Up Direct Costs Correctly All Gross Margins are not Created Equal

Size - Market Type - Location


Beware of:“Sell More at Lower Margins” Strategy

Come in Low then Go High

Part Two

Have the Right Price and Compete

The Goal

To be priced within 10% -15%of

Qualified Competition

Know Thy Competition

Perform Competitor Recon

Review Public Works Bids Submitted

Ask Friendly Customers

Perform Lost Job Debriefs

Know Fair Market Value

Interviewing People

Compare with Friendly Competitors

Review PLANET Cost Study

Read Lawn & Landscape Articles/Columns

Benchmarking Business Report

Listen to Webinars Like This One!

Let’s Sum it Up!

KYC – KYC – KYC: Know Your Costs

Know Your Direct Costs

Know Your HAWs: Hourly Average Wages

Know How to Arrive at the Cost to Perform

Know the Gross Margin Needed

Know how to Mark Up Direct Costs

Know Thy Competition

Know Thy Market

Thoughts - Questions - Comments

Contact:

[email protected]

[email protected]

Thank You!

Now Go Out There and

“harvest your potential”

With the Right Price!