Founded in 2008. The Landscape Juice Network (LJN) is the largest and fastest growing professional landscaping and horticultural association in the United Kingdom.
LJN's professional business forum is unrivalled and open to anyone within within the UK landscape industry
LJN's Business Objectives Group (BOG) is for any Pro serious about building their business.
For the researching visitor there's a wealth of landscaping ideas, garden design ideas, lawn advice tips and advice about garden maintenance.
Replies
Here we go...
Shouldn't the question be...what hourly rate should I be charging based on my overhead and profit requirement?
You might be interested in this hourly rate calculator: http://goo.gl/MJ934
Hi Chris,
It's just not possible to quote an "average" rate. We have businesses of all sizes, different equipment and staff, domestic and commercial clients, VAT or not, and we're not only all over the UK we've even got members abroad.
Most people price by the job now, not the hour, if they want to maximise their earnings and give better value at the same time. Think about it, if I charge by the hour what's the incentive to buy a better mower, and have all the costs, but do the job in half the time? Paid by the job, I get to do twice the work with the better gear. Hourly rate have their place with some clients, but it's harder to compete with the "cowboy" operators at that level.
From last year's tax return, you'll have an exact figure of all your costs. Divide that by the hours you work, and that's a good guide to your overheads. Most of us seemed to be well over £5 per hour, per person, on costs last time we talked about it, so that's an interesting way to view an hourly rate. On £15 per hour I'd be left with about £9 after costs, and that's with all the risks of being self-employed. Better off working for someone else and getting sick pay and holidays!
Paul McNulty said:
Increasing costs are a difficult one. I've always tried to either keep my increases to inflation, or at least justify them by refering people to unusual increases such as landfill tax. Always point to things like fuel costs, or insurances, that the customer will also have been hit with; they're more likely to appreciate you increasing your prices if you show them why it's necessary.
Personally, I always raise prices in April/May. My excuse is that it's the tax year end, in fact it's the time people appreciate you most; their grass is growing like mad, and all the other gardeners are booked solid.
In the current recession we've had circumstances I've not seen before, with very low inflation but very high pessimism. We should be able to raise prices this year by 3% or so easily, I remember nearer 10% per year being the norm in the past, but some clients are quite reluctant to see any increases IME. I suppose I'm the same with suppliers, we're all still unsure about next year to some extent.
Hi Rowley,
Challenge me anytime! I mean I use the end of the tax year as the time I review prices; maybe the better word is "reason" than "excuse", but customers seem to accept the tax year-end is a good point to raise prices. It has the added benefit that most are happy to accept increases then, as they see how much I do, and are unwilling to look around for someone else when they know we're all flat-out.
I suspect that if I raised prices, even by a small amount, in mid-winter, people might take the opportunity to shop around?
I certainly make no excuses for keeping the prices raised in line with costs. Adding value would be nice, but I don't think it's good to "hide" increases that aren't my fault. Let the customer understand the impact fuel duty, or landfill tax, has on my business and the charges I have to make!
Hi Paul
Whether one chooses to charge by the hour or by the job the process for working out costs and what one needs to charge to make a target profit remains the same.
Paul McNulty said:
Hi Phil,
I have to disagree on that, and to me it's the whole point of the argument between charging the old-fashioned hourly rate (still valid for some customers), and the contract-style charging where you have a fixed price per month, all year round for the job, and include everything except unusual costs such as extra work not in the contract; a fallen tree, reducing a hedge where the contract was to maintain a height, that sort of thing.
Working out the costs for an hourly rate business is all about keeping overheads as low as possible; every corner has to be cut, equipment kept to the minimum, vehicles to the smallest an most economical. Everything is compromised, and with a fixed hourly income all you can do is try everything to cut all your costs.
That's simply not the case with contract pricing, where you have the freedom to choose how you structure the business. It's a completely different pricing-vs-costs principle, and you aren't in that position where everything is about cutting expenditure, but it's more about how to maximise efficiency and speed. That's why you can earn a higher hourly rate by not charging an hourly rate, I guess?
My business will make me more income if I plan ahead and invest, but when I was working an hourly rate it was all about how I could cut costs this season, and work slowly if that was the only way to do it. Two very different ways of working out the cost/charge balance, you're almost coming at it from opposite directions IMO.
Phil Voice said:
So what do you do you suggest when the garden your doing doesn't have a lawn or the customer doesn't need you to do that. I've been gardening most of the last 3 months with just a pair of secateurs, a pair of loppers, a hand saw and sometimes a hand fork. No power tools involved or could be. Charging by the hour does not dis-incentivise me to work fast, on the contrary, I work at the pace the 'work' commands, relative speed is not the only consideration.
-
1
-
2
-
3
of 3 Next