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How Do You Raise Your Price After A Silly Quote?

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drewebb
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How Do You Raise Your Price After A Silly Quote?
#21

At only $60 an hr for ride on work ill stick to SP mowing thank you.

Exactly!! If you can get 60/70 hour with a 21'' sp you have to get double that (at least ) for a 42/48'' ride on simply cause your in and out so much quicker (on the bigger yards )


Posted 04 June 2018 - 04:57 PM

Macka
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How Do You Raise Your Price After A Silly Quote?
#22

Hi

Craigg if you average the cost of buying maintaining and running a medium sized zero turn, it turns out to be about $20 per hour. So if you were to regard yourself as just a worker, worth about $25 per hour, then that would be $45 per hour total. But if you want to be paid for all the unpaid work you do as a boss, you'd need to load 25% onto that, and get to $56. If you want to have luxuries such as annual holidays, sick days and retirement, you'll want to charge more again. So I would say anything much less than $60 per hour for ride on work would not be a professional price, in the sense that it isn't professional to go out of business after about six months or a year.

You might want to look at the numbers for the cost of buying maintaining and running the ZTR.

 

I did the number recently on a 6K lawn tractor came up with $46 per hour before paying the driver anything.

 

6k Lawn Tractor   400hrs      =            $ 15 per hr

Fuel 7tr per hour @ $1.70    =            $ 12 per hr

Blades, belts, Oils, Filters,  =              $   4 per hr

Mower Relplacement Cost  $6000  = $ 15 per hr

 

Total   $46 per hour just machine cost and thats if you you dont have any breakdowns.


Posted 04 June 2018 - 05:05 PM

spongy buffalo
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How Do You Raise Your Price After A Silly Quote?
#23

are you paying for the mower twice Macka?
Posted 04 June 2018 - 08:09 PM

Grae
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How Do You Raise Your Price After A Silly Quote?
#24

that's called replacement cost, it only gets you back to square one.

 

if you wear one out you have to replace it


Posted 04 June 2018 - 08:13 PM

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Grae
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How Do You Raise Your Price After A Silly Quote?
#25

just to clarify it is the same as a markup on goods sold

 

buying a mower and selling its use should yield at least its cost back as a profit.

 

as an example

you buy a box of widgets and sell it at cost and charge installation labour.

if the price you sell for only includes the widgets at cost and your labour, and you then buy another box of widgets you only made your labour chargeā€¦ your capital expense has not yielded a profit.

 

You should make a profit on your capital investment like every other profitable business does. 


Posted 04 June 2018 - 08:58 PM

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dean11
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How Do You Raise Your Price After A Silly Quote?
#26

Yes when I said $20 per hour I was talking about the cost of buying, maintaining and running the machine. Then I added hypothetical amounts for various other considerations.

My figure is based on my Toro MX4250 which cost about $6000 and should be good for about 500 hours. Therefore, $12 just to pay for the machine.

Fuel: it takes nearly 10 litres which powers it for nearly 4 hours, so 2.5 litres per hour, at (currently) $1.60 per litre. Which means $4 per hour for fuel.

Parts, repairs - about $500 per year, for the four years or 500 hours: about $4 per hour.

That's about $20 per hour.

I don't add the cost of the next machine, because that would appear in my calculations for the next machine, not this one.

I do nearly all mechanical repairs myself, so I suppose I could add another $4 per hour for the value of that.

//

The $60 minimum hourly rate I suggested would be for large jobs. I do 8 hours at one place.

Small jobs, less than two hours ... I wouldn't ever quote an hourly rate for them, otherwise you'd have your customer standing there with a stop watch. Quote a good job price based on walk-behind mowing, then use the ride-on for some or all of the job if it proves to be more profitable.


Posted 05 June 2018 - 12:13 AM

Craigg
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How Do You Raise Your Price After A Silly Quote?
#27

Hi Dean11
I have a Toro MX 5050. I am thanks for the prices i am in process of putting this info together to see if i can work out an average hourly rate to run the business including insurances, fuels, phone bills etc. I was told by a couple of people lawn mowing pays for the business, its the other jobs that make the money. For me time will tell.
Posted 05 June 2018 - 12:26 AM

plucka
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How Do You Raise Your Price After A Silly Quote?
#28

that's called replacement cost, it only gets you back to square one.

 

if you wear one out you have to replace it

Pretty sure you've added the cost of the mower twice there.


Posted 05 June 2018 - 06:24 AM

crocster
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How Do You Raise Your Price After A Silly Quote?
#29

Pretty sure you've added the cost of the mower twice there

Accounting maths does my head in but I think you're right there - in Grae's method, you're seeking 100% ROI - should be closer to inflation over, say, 3 years of equipment life plus the return you would have got on $6K if you'd invested it at current market rates? - so a guesstimate of around 10% or $6600 over 500 hours = $13.20 instead of $12 in Dean's calculation.

 

https://financialmen...alue-calculator


Posted 05 June 2018 - 07:37 AM

crocster
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How Do You Raise Your Price After A Silly Quote?
#30

Found this on Indmowing while googling:-

 

http://www.indmowing.com.au/rounds.htm

 

https://www.ato.gov....assets_2017.pdf

 

But probably the best way to work all this out properly is "Ask your accountant"


Posted 05 June 2018 - 07:43 AM

Macka
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How Do You Raise Your Price After A Silly Quote?
#31

are you paying for the mower twice Macka?

 

Paying for the one im using and also getting money for the new one i will replace it with.  sale of the old machine. should cover any any price increases or upgraded model. 

 

Sorry i left out other business costs, standard euipment, ute, insurance, Rego's, Trailer, Myob, stationary, etc etc  so you can add $10 a hour to that and make it $56 per hour


Posted 05 June 2018 - 08:42 AM

plucka
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How Do You Raise Your Price After A Silly Quote?
#32

Paying for the one im using and also getting money for the new one i will replace it with.  sale of the old machine. should cover any any price increases or upgraded model. 

 

Sorry i left out other business costs, standard euipment, ute, insurance, Rego's, Trailer, Myob, stationary, etc etc  so you can add $10 a hour to that and make it $56 per hour

Yeah but you're paying for the machine twice in your calculations, both the current machine and the new one at the same time.  When you get a new machine you're saying it's costing you $6000 to run, but you've already accounted for this $6000 previously, so you're saying it's costing you $12000 overall.  Also no consideration for selling the old machine,  if you sell for $2000 then the machine has only cost you $4000, not $6000.

 

Also 7L per hour for fuel?  Seems way too high.


Posted 05 June 2018 - 11:11 AM

plucka
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How Do You Raise Your Price After A Silly Quote?
#33

Sorry i left out other business costs, standard euipment, ute, insurance, Rego's, Trailer, Myob, stationary, etc etc  so you can add $10 a hour to that and make it $56 per hour

I don't have a ZTR only a SP but I keep records of all my expenses, which works out about $15/hr.    $56/hr expenses would be unprofitable, but I think your really figure is much lower than this.


Posted 05 June 2018 - 11:20 AM

dean11
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How Do You Raise Your Price After A Silly Quote?
#34

I reckon the take home lesson from all this discussion is make sure you have a good realistic idea of how much your machinery is actually costing you to own and run.

 

It might be less than some of  us have suggested, but it is still a darn lot.

 

And maybe it is a major reason why you are still half-broke despite working long and hard.


Posted 05 June 2018 - 03:32 PM

Macka
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How Do You Raise Your Price After A Silly Quote?
#35

Yeah but you're paying for the machine twice in your calculations, both the current machine and the new one at the same time.  When you get a new machine you're saying it's costing you $6000 to run, but you've already accounted for this $6000 previously, so you're saying it's costing you $12000 overall.  Also no consideration for selling the old machine,  if you sell for $2000 then the machine has only cost you $4000, not $6000.

 

Also 7L per hour for fuel?  Seems way too high.

 

The machine cost is charge  twice  so you have the money to buy a new one at the end of life.  the 1k sale of the old machine goes to the increases in machine cost or a better model.

 

If you blow a Hydro and a set of spindals you can be forking out 3k to get back going.  your not guarenteed to even get 200hrs without major repair costs,   the machine may end up costing alot more over it life.  if you only allow the cost of purchace and maintance when charging out and you end up having expensive repair costs your have just made a loss because you didnt charge extra just in case .  buy allowing for replacement cost on all machines you have a buffer if you have to fork out more unexpected cash on it.   you will always have the money for new gear and major repairs because you have charge customers for it.

 

7 ltr maybe high for some, with the revs turned up my 24hp it uses about 6-7ltr  but cuts alot faster get more done in that hour.


Posted 05 June 2018 - 05:13 PM

Lucky
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How Do You Raise Your Price After A Silly Quote?
#36

I reckon the take home lesson from all this discussion is make sure you have a good realistic idea of how much your machinery is actually costing you to own and run.

 

It might be less than some of  us have suggested, but it is still a darn lot.

 

And maybe it is a major reason why you are still half-broke despite working long and hard.

Exactamondo


Posted 07 June 2018 - 06:04 PM

Lucky
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How Do You Raise Your Price After A Silly Quote?
#37

I'll be honest I have no idea of what my equipment costs per hr. But I bet its more that I think.

 

Even fuel costs should have an added 20% on top. fuelling is time and its business time.

 

 

 

My JD Would use about 6-7 litres an hr.


Posted 07 June 2018 - 06:09 PM

dean11
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How Do You Raise Your Price After A Silly Quote?
#38

Lucky, what do you get for 6-7 litres per hour I wonder ? For 2 and a bit litres my Toro does a 42" cut at about 11kph; uses a bit more in heavy work.

 

 

My guess is it is better to put the petrol in at whatever it costs in your $ costs list, and put the time you spend fuelling into the biggest grab bag of them all, ADMIN TIME !

Loading in the morning   (if like me you have to load and unload each day)

Unloading at night

Shopping - for petrol, parts, new machines, fluoro shirts, work boots etc. etc.

Keeping records, drawing up work lists etc.

Ringing people, texting, emailing

Quoting

Travel time between jobs

Travel time for emergency repairs

Travel time to tip

Time spent participating in forums to keep in touch with what's going on in your trade

Time spent on staff if you have any, hiring, firing, co-ordinating, supervising, talking to them

Time spent chatting to lonely old customers

Et cetera

Admin time is probably 1 hour for every 3 you work ... so if a labourer's pay is $25 ph, add $8.

 

(This $8 is distinct from what you deserve extra for being the businessman who makes things happen, the risk-taker, decision-maker, inventor. Running a little mowing business isn't quite as complicated as running Qantas, so don't allow $5,000 per hour for this, but maybe $10 ph?)

 

If you take my $20 per hour for machines, $25 for labour, $8 for admin time, $10 for extra pay for being the boss, you get to $63 per hour as the minimum you should reasonably charge. And this is being (according to me) super conservative and trying to avoid exaggeration. And then you hear of people charging $40 per hour


Posted 07 June 2018 - 07:05 PM

Lucky
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How Do You Raise Your Price After A Silly Quote?
#39

Lucky, what do you get for 6-7 litres per hour I wonder ? For 2 and a bit litres my Toro does a 42" cut at about 11kph; uses a bit more in heavy work.

 

 

My guess is it is better to put the petrol in at whatever it costs in your $ costs list, and put the time you spend fuelling into the biggest grab bag of them all, ADMIN TIME !

Loading in the morning   (if like me you have to load and unload each day)

Unloading at night

Shopping - for petrol, parts, new machines, fluoro shirts, work boots etc. etc.

Keeping records, drawing up work lists etc.

Ringing people, texting, emailing

Quoting

Travel time between jobs

Travel time for emergency repairs

Travel time to tip

Time spent participating in forums to keep in touch with what's going on in your trade

Time spent on staff if you have any, hiring, firing, co-ordinating, supervising, talking to them

Time spent chatting to lonely old customers

Et cetera

Admin time is probably 1 hour for every 3 you work ... so if a labourer's pay is $25 ph, add $8.

 

(This $8 is distinct from what you deserve extra for being the businessman who makes things happen, the risk-taker, decision-maker, inventor. Running a little mowing business isn't quite as complicated as running Qantas, so don't allow $5,000 per hour for this, but maybe $10 ph?)

 

If you take my $20 per hour for machines, $25 for labour, $8 for admin time, $10 for extra pay for being the boss, you get to $63 per hour as the minimum you should reasonably charge. And this is being (according to me) super conservative and trying to avoid exaggeration. And then you hear of people charging $40 per hour

No idea. I don't use it for work generally. Its used at home. 

I have on occasion used it for work, maybe two times a year?? Rates would of worked out at over $150 an hr pretty comfortably on those id say.

Its a 1998 model from memory and its had one change of blades in the last 8 years and two belts. I may have changed the oil once and its had one battery. Its still on original tyres, albeit a bit bald. Decks been welded a few times... Been a great thing.

 

I base my rates on $1 min for SP work. $2 a min for hedging etc.

 

My admin time would not be an hr a week.


Posted 07 June 2018 - 07:15 PM

Craigg
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How Do You Raise Your Price After A Silly Quote?
#40

Hi. Looks like it is a topic that can cause some debate. We will all have different costs we include into the hourly rates.

I am in process of including fuel, runnings costs of machines, phones bills, insurances for cars, trailer, tools, public liabli####y  rego, etc. I think this will help me know what hourly rate is required then i can work off that. I know it will be a high rate but will give an idea of what it costs to run the business. The people that charge less most probbaly aren't insured etc


Posted 07 June 2018 - 09:05 PM




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