Download - 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
Revenue - Price 100%
<Direct Costs> 55%
=Gross Margin 45%
<Overhead Costs> 35%
=Profit 10%
Know the Budget Basics
Revenue - Price 100%
<Direct Costs> 55%
=Gross Margin 45%
<Overhead Costs> 35%
=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
Know the Price Influencers
Know the Price Influencers
The Competition – The Right CompetitionPay Rates: Lower Isn’t Always Better
Fair Market Value
Know the Price Influencers
Market Density – Location Smart Purchasing Using Leverage
Overhead Costs
Know the Price Influencers
Supervision Ratios Working Efficiently
Estimating Accurately
Know the Price Influencers
Marking Up Direct Costs Correctly All Gross Margins are not Created Equal
Size - Market Type - Location
Know the Price Influencers
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
Thank You!
Now Go Out There and
“harvest your potential”
With the Right Price!