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Replies
We don't make too much of an effort as we know what our costs are and what we want to earn, but from comments from clients we are about in the middle if not towards the top for the area.
No. I'm simply not interested in what they charge. IMHO, if I was it may screw up my ability to assess and quote for jobs objectively.
I think you need an implicit understanding of local prices (in terms of a floor and ceiling price), but within that band you price according to your own cost base.
Why ? Because if your price is below the local 'floor' price, you are leaving money on the table, or if above the 'ceiling' price, you could loose automatically.
I'm not suggesting you should never push the 'ceiling' price because personality, reputation, services or availability may over come it.
Very much dependant upon the landscape sector you working, however I think this even more so when dealing with offerings such as lawn care etc.
Just my views ;-)
I did do some research when I wrote my business plan. I worked out my costs and what I wanted to earn. I then looked at other landscapers, just to check i wasnt pricing myself out of the market. In my area day rates were as follows across the board, one man band landscapers start @ £120, the good chaps are about 180-200 the bigger outfits 200-280. Interestingly when I worked out what I wanted to earn it was towards the higher end of the big companies. But day rate does not matter, as if you price well it is all about the overall.
Gary RK said:
Gary that pretty much sums up my own thoughts on it.
I recently asked the question on social media website and the general feeling i got is that people set their prices according to their own costs, but wondered why you wouldn't make an effort to try and at least have some indication to what the other local companies are charging.
I wondered this when I was thinking about starting out and I did go and ask a few of the local 1/2 man bands and most said they charged £10-14 per hour. At £10 I would break even and work long hours so I have no idea how they make a living off it. I have learnt to price what i think I'm worth and only charge per site not per hour, I've stuck with it so far and I've not had a issue so far :)
Thank you Rory, you have hit the nail on the head.
It takes more than a little time and involvement within the industry to find out who is running a business and who has a job, albeit with several bosses - using their (multiple boss's) power supplies, their tools, being told how to do the job, scraping a living just about.
Far better to lurk in places such as LJN and Landscape Hub to learn a bit more about the mechanics of the business from people genuinely running businesses, unless you want a job too.
The only gardeners or landscapers I knew before starting were the £10 per hour guys, or even less. There just had to be a better way to explain new or newish vehicles and equipment, all smartly liveried, tending the many trading estates and private gardens around here. These are not household names but are obviously prospering. Where do I fit in? How can I find my initial opening?
I do take your point, Gary RK, but there is time enough to find out what others are doing and to fine tune your pricing levels later. At the start, getting stuck in and being able to introduce yourself as a practitioner is far more urgent.
I think you have applied them to Rory's start-up comments that were not present in the thread at the time?
However, part of any business plan (including start-ups) is to know and assess your local competitors to help understand your price points.
Mike Goodman said:
Possibly Gary. Fact is I honestly don't remember. However, I started off wondering what the market was about, given that it was obviously so mixed. The guys running the jobs in the sorts of places I wanted to get into weren't about to tell me, a total unknown. So I tested it and got business but less than anticipated so dropped a bit, tested again and will pitch in between the two levels from 1 Jan.
I still consider the demand side of the market to be at least as important as the supply side. Even if you are at or around what your most respected competitors are charging, it is important to understand what the market will happily bear and still invite you back. Which in turn will vary over time and not always in a direction which reflects overall economic conditions as related by the media.
The conclusion, then, is yes it is often useful to know what at least the pro end of the business is offering price wise, but certainly not essential to your own success.