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You’re Charging Too Much - Part 1

If you want to sustain your company over the next 36 months, you’ll need to get your prices in line with not only what the market will bear, but also what your company can endure. Step 1 is figuring out what your man-hour rate really should be. Tommy Ganz and Rick Beaver of the American Landscape Maintenance Association (ALMA) are here to help us break it all down.

 
icon for podpress  You're Charging Too Much – Part 1 [22:15m]: Play Now | Play in Popup | Download

This entry was posted on Tuesday, January 5th, 2010 at 9:54 am and is filed under ProCast - Landscape Contractors. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

8 Responses to “You’re Charging Too Much - Part 1”

  1. scott p. kirk Says:
    January 5th, 2010 at 6:21 pm

    this is the first i listen to a pro cast i enjoyed it very much and was helpful thank you scott

  2. Chris Says:
    January 6th, 2010 at 3:00 pm

    Great insight you guys, thanks… good to know I’m on the right track, just spent a few minutes updating my man our calculations based on real data from last years expenses.

    I’m mobile a lot and have an iphone, would love to have this as a downloadable podcast so I can listen straight from my iphone!

    thanks,

  3. Gregg Wartgow Says:
    January 6th, 2010 at 3:42 pm

    Thanks for listening, Chris. You should be able to right-click on the word “download” below and to the right of the “click play to listen to this ProCast” icon … will that help?

    ~ Gregg Wartgow, PRO Magazine

  4. admin Says:
    January 6th, 2010 at 5:54 pm

    The other option is to subscribe to the RSS feeds (http://www.greenindustrypros.com/procast/feed/)

  5. Joe day Says:
    January 29th, 2010 at 5:11 pm

    I still need a little help. My monthly cost to operate is 2650 a month. I have a 3 man crew avg. 9.50 wage @ 480 man hr’s = 4560. Total cost 7210 so the way I understand it is my cost per hr would be 15.00. is that correct? and how much do most people add in for profit?

    thank you,
    Joe D.

  6. Gregg Wartgow Says:
    January 29th, 2010 at 11:07 pm

    Hey Joe. You have that correct at $15 an hour. Pretty amazing when you figure this out, huh?

    Now … make sure you’re not leaving anything out so you’re not short-changing yourself. Are you factoring in equipment cost for your monthly expense? Depreciation or payments, fuel, maintenance, parts, etc.? Are you an owner/operator? Do you factor in a monthly owner’s salary for yourself? Are you saving for your retirement? All that stuff should be factored in.

    As for the net profit you should build into your rate, let me double-check some data we have, but off the top of my head I want to say a smaller maintenance-focused company can earn 10% net easy. But let me double-check.

    Thanks buddy!

    ~ Gregg Wartgow w/ PRO

  7. Gregg Wartgow Says:
    January 29th, 2010 at 11:18 pm

    Gregg w/ PRO again … I checked out a benchmarking study we did back in summer 08. Honing in on contractors who said at least 50% of total sales comes from maintenance:
    24% say net profit is 11-15%
    13% say ” is 16-20%
    22% say it’s more than 20%

    Smaller companies = lower overhead. Get a hold of Tommy at ALMA for more. Thanks Joe!

  8. tommy ganz Says:
    March 20th, 2010 at 5:45 am

    […] will put you well on your way to winning more bids. … Mail (will not be published) (required) …ProCast Blog Archive You’re Charging Too Much - Part 1Tommy Ganz and Rick Beaver of the American Landscape Maintenance Association (ALMA) are here to help […]

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