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Costing / Pricing - Unit Rate

I have just analysed our last ten thousand lawn mowing jobs and what is absolutely clear is that the Unit Rate (per Square Meter) is very low on small jobs, and the larger the job becomes the higher the UR becomes.

For example, (using 21" mowers), on a very small job, the area of grass cut can be as low as two square meters per minute, but on larger jobs the area cut can be as high as 44 square meters per minute.

This rule also applies to most other maintenance work, such as hedge trimming, leaf clearance etc, etc.

Knowing the UR for your work is essential if you you give a "price per job", but not so if you work by an hourly rate.

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Replies

  • PRO
    Your example has lost me, can you explain a little further please? Many thanks
    • PRO

      Time to cut each square meter is longer then smaller than job is using the same mowers.

  • PRO
    But surely you don’t use the same unit rate for 50m2 as you do for 20000 m2?
    Be nice if you could mind!
  • PRO

    This is why smaller lawns have a minimum charge and bigger lawns need to be scaled down in pricing.

    The time for a job, is, for example,

    getting there, reading paperwork, greeting customer, unloading van, checking kit, mowing lawn, edging, blowing, loading van, doing paperwork, saying bye to customer.

    So much of this is fixed, irrespective of lawn size, so needs a fixed price before any work is done, call it fp.

    So price = fp at the moment.

    Then you add your work rate mearsure or price per sqare metre etc,

    price  = fp + ( area * pps)

    But, in reality, as areas get bigger, your a lot more efficient, less turns, bigger mowers etc, so we have a larger area fudge factor discount that scales larger areas by a bigger percentage discount as they get bigger. If you didn't have something like this you're pricing for mid size compared to large size lawns or vice versa would be silly, or very un-competitive.

    So finally price = (fp + (area * pps)) * a % discount(for an area)

    A lot of people do this in their heads through expertise & experience. I'm too lazy so put it into a simple pricing table in excel.

    • if you use bigger mowers won't that incur larger costs such as purchase price, fuel, servicing,  deprecation etc.    

  • I made a mistake on the above statement. The UR is greater on small jobs and decreases as the jobs get bigger.

    So on a lawn measuring just 50 Square meters the UR might be as low as 3 square meters per minute, but on a 100 Square meter lawn the Unit Rate might be around 10 square meters per minute, and when you get to a lawn that is a few thousand Sq meters, the UR will could be in excess of 30 Sq Meters per minute.

    We have looked at all the jobs at 100 square meter intervals and find that there is a distinct change at each level, the greatest changes between these levels are in jobs under 1000 square meters.

    The reason we do this is to be able to provide accurate  costing, pricing and profit margins.

    • PRO
      It could be past 500m2 a minute!
      I regularly mow at 350 and there are bigger machines than mine!!
  • PRO

    Have you really analysed 10,000 lawns and compared/cross referenced the data? Surely you don't need to compare that many did get a reasonably accurate result? 

    • With the software we use it's an easy task, and you can analyse any amount of jobs within a few seconds.

      Using a 21" mower the average Sq Meters covered per hour is 1086 on a single flat lawn with no obstructions. 

  • PRO

    Once it's in a spreadsheet & algs set-up it's the same time to analyse 200, 1000 or 10000...

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