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Development contract work and pricing

Hi All, 

I'd be interested to see options on pricing for housing developments. 

 

Background on myself. Most of my work is private residential fortnightly maintenance for relatively well off professionals. My standard hourly rate for regular customers is £35ph. 

I've taken on a small private development a few months ago of 6 houses and they are paying my standard rate. It's only a couple of hours a fortnight and plus a few extra hours certain times of the year. 

Iv been asked by another local development of 25 eco homes in my village to come in and help maintain the grounds. I already do private work for two of the houses on the development. My focus will be clawing the beds back and getting in shape. They will get a grass contractor in as I don't have a ride on and it's too big for a walk behind.

The site will get 8 man hours a fortnight at £35 per man hour. 4 from me and 4 hours from a gardener who I'm subbing in to work with me. (Someone I've used before and who costs me £25ph)

What are others pricing for work like this... Have a missed something by pricing at my standard hourly rate? Should it be more for development work? Green waste is staying on the development and going in brown bins.

 

Thanks

Tim

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  • Tim, 

    Don't wish to come across as too much of a know all and hope that my opinions are of some help. 

    Firstly, as discussed on the forum previously and many times charging an hourly rate is never going to maximise your profits. £35 is just too low, once tax and NI is deducted that leaves £24.50 to pay your fixed and variable costs that are your business overheads.  Appreciate once you've started charging an hourly rate it's difficult to change existing customers to a fixed price and ideally this should be a fixed charge to cover 12 months with the customer paying a flat rate every month, it's an easy sell as many will be used to paying a regular amount to their energy supplier.. Suggest you only take new customers on using this model and try and convert existing customers. 

    As to the housing development,  this should be priced on a fixed price monthly maintenance charge  we maintain many such developments varying from several hundred houses down to smaller of around thirty , our charges on a fixed price basis equate to an hourly rate of between £65 and £75 plus vat.

    Think you're missing a trick not getting involved in the mowing  it's another profit opportunity and there's always the risk that whoever is doing the mowing is asked to quote for the work you're doing and you could lose it all.  It's always more convenient for clients to have one contractor maintaining a site than several,  I would give this some serious consideration.  Hope all that helps. 

  • As Peter says, well worth getting involved in the mowing, as could probably charge a bit more per hour for using a ride-on. And if for that one job only it needn't be an expensive model. Also that would mean you have full control of the grounds maintenance of the site and how it looks overall. And no conflict of both turning up at once and getting in each other's way. As for hourly rate versus a fixed monthly fee. Points in favour of both of course. With hourly billing it allows you to charge for the exact time you have spent, if the residents or whoever unrealistically expected better/faster results, or the grounds need more work to bring up to standard, as initially they sound a mess, you don't risk the issue that the more time you spend there, the less per hour that you are earning. Maybe after a few months on the hourly rate they would be confident to consider an annual fee split into 12 monthly payments

    • PRO

      If untidy offer a clearance/tidy price first then go to a price for regular maintenance.

  • PRO

    What Peter said 👍

  • Thanks for the replys guys. All good info and recommendations. 

    I guess the way I've been looking at it is that I look to earn £280 on a 8 hour day (£35 and hour) and as I'll be making £45 and hour myself as I'm making £10 an hour off my subby it seemed ok to me. Regards to over heads I'm a one man band and they are very small. About as small as you can get. One van, insurance and I maintain my own equipment. 

     

    Funny you say about the mowing. The last day I've been looking at that I'm I'm tempted to get involved. The current contract charge £280 + vat a cut and they are using a large wide deck walk behind and takes them 5 hours. Completely the wrong took for the job in my opinion. 

    If I invested in a zero turn ride on I think I'd get it done in 2 hours tbh. I'm not VAT registered so even at £280 I'm cheaper as it's a privately residential run management company that's not Vat registered so they are swallowing the vat themselves. The vat saving for them would save £1000 a year, over two cuts a month march to November and a one monthly cut December, January, February to keep the site tidy

    Looks like a great money maker to me. The mower will pay for itself in 2 years just on that job alone while still paying my basic hourly rate aswell and then it gives me an opportunity to diversify and get other mowing jobs that could pay well. 

     

    Whats your thoughts?

    • Tim,

      I would go for it , approach the management  and tell them you can save them the £1000, provide a better service as you will be on site more frequently if you are doing the mowing so can address any issues promptly.  I would still try to get a flat rate monthly charge as if you say you can do the mowing in around 2 hours and you're still charging your time at £35  they're saving £210 per cut plus the vat !!  Sell the benefits of the residents having the reassurance of a fixed monthly cost for 12 months but be clear what's included and what isn't.  Be interested to hear how you get on.

      • maybe do the mowing at a fixed price of £300 per cut, at an unspecified "as and when" type of frequency as certain times of year grass growing faster of course, meaning if left too long is much harder work and looks the worse for it. Yet if get a late cut in end of November/Early December it shouldn't need doing over winter and still look top notch.

        • Yea the deal is boarder work is on a separate contract at an hourly rate. They have been let go so badly. I couldn't do it at a fixed price. It will be a case of chipping away at it for 8 man hours a fortnight at £35 and hour as general gardening ( 2 of us for 4 hours but I make £10 an hour off the subby) then the grass cutting is £240 a cut won't take longer than 2 hours. 2 cuts a month

  • Price per cut is always the way to go. Anywhere from £60 to £100 p/h is the correct pricing. It varies of course due to type of work, i.e. churchyard, modern cemetery, commercial site, large private garden, small private garden, country estate work or playing fields.

    It comes down to being able to work out, in advance, how long any particular job will take.

    I would buy a machine that is capable of being used on as many different sites as possible. I have a zero turn mower, they are very good, but have a look at the Stiga Parks machines. I have one of these also and it’s often horses for courses as to which machine is better suited to a particular job. The zero turn is a John Deere Z535m with a 48 inch deck, the Stiga is a PWX 740 with a 1m deck, but it is four wheel drive and is therefore the one to use on banks, slopes and tighter access sites.

  • I'm from Northern Ireland and can see that I'm working for peanuts compared to you guys.. wish I could fall in with more work close together. Or a job like looking after an amenity or housing area..or thing iv been told by some dog dung makes it hardly worth the while.

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