rootytalbot: Customers don't care. I tell people I have insurance and they look at me like I think they don't carry a homeowner's policy. License? For what, James Bond? To cut grass, hahaha.
So I bid a yard, time and overhead included, $50 dollars per visit.
Next bidder (not legit), time and no (business) overhead included, $30 per visit.
Does the customer really care that I pay a business tax to help support the health insurance and retirement packages of the local government workers? Or does the customer want to keep $20 in their pocket every week for 30 weeks - $20 times 30 equals $600. And insurance, the customer probably thinks that nothing will happen and if it does their homeowner's policy will pay for it, and if they think like me they figure the county government workers don't do anything (except vote) for their Cadillac health plans, so screw 'em!
Who gets the job? Me or the other guy?
I guess he did.
Who is supposed to protect my business interests from the lowballers? Am I supposed to do it? Do I roll up and demand to see their license? Do I ask for proof of insurance? The customers never do. No one has ever asked me if I have insurance - ever. No one has ever once asked me if I am licensed. Not once. They really do not care. All they care is about is the same that I care about: How much does it cost? The bottom line.
If you are going to do commercial, then by all means get all the forms, fees, licenses and insurances you can afford. But if you are just doing a mow, blow and go on residential accounts, you might want to consider options.
So what do YOU get for being legit?
Southern grass: Well said my friend. All people care about is getting the cheapest freaking price they can.
TuffTurfLawnCare: Bid jobs in a better part of town. Qualify your customers before you even go to the property. If all the customer wants is "whack the grass down", tell them that they have called the wrong guy. There are lowballers in every town and every year there will be more. I know what I need/want to make. If they don't want to pay me, then I don't want to drop the gate. Not sure why this is such a hard thing for some to grasp, but I'm in my first year and have plenty of work. My cheapest lawn is $35 and I'm in and out in 20 minutes. The majority of them are $40 to $60 per cut, weekly. My customers like me, I talk to them and treat them as people. I sell myself harder than the work I do or the price I charge and it makes me money.
My customers don't get bids from other companies, they don't ask me why I charge the older couple (next door) with the same size lawn $10 less than them. I build rapport with my customers from the second I introduce myself and immediately try to gain their trust. I tell them things they don't want to hear about their lawns then follow it up with, "I'm not going tell what you want to hear, but I will be absolutely honest with you." The majority of people might not like what you said, but they will remember that you were honest with them.
The first time I called customers and left messages that I was skipping them due to slow growth, they all called me back and thanked me for not cutting it anyway just make a buck, or for saving them a few dollars. One felt bad since I was there looking at the property and asked me to hit her lilies with the weed whacker since they were done blooming. It took me five minutes and she insisted I take the full amount for the mowing since I was there.
Screw the lowballers and focus on your business, and more importantly focus on your customers.
Eric's Lawnservice: The fact of you having insurance is not a selling point. It's part of the cost of doing business. It sounds like your sales pitch is directed to the wrong aspect of your business. You should focus your sales delivery on reliability, professionalism and the knowledge of what you offer. It seems like you are marketing to the wrong customers. If sales is not your strong suit you should look into webinars that can give you some pointers on the basics of sales. There is way more to it then, "Hey I've got a mower, can I mow your lawn for $50?" That's what the lowballers do but they only charge $30, and they make a sale. When you hire out work for your house do you take the lowest price for a roof or a new bathroom? Or do you say, "He isn't charging enough, I bet he doesn't have insurance."
herler: What makes you think the other guy is illegal? Because you overbid grossly or because he lowballed by $20 and took the job away from you doesn't make him illegal. I got bad news for you, most newcomers either under or overbid, and more often than not it's no small amount.
123hotdog: This is the same issue in every town. Insurance is definitely something you want to shop for every time your policy is up. Almost all of us were the guy doing the underbidding when we first started. Keep your trucks and mowers exceptionally clean. Keep yourself and your employees in uniforms. I never work out of uniform. Stay as professional as absolutely possible. I swear it will pay off. It has for me. Bid for larger full -ervice properties that the average "Johnny Come Lately" can't bid on. I love residential customers. They are very loyal once you get them. But the big properties can't just get any small timer to mow them.
magicmike: If you are ever in a situation that you need a court to settle a payment you need a license or any type of contract you had with that person would be void due to the fact that you are not licensed to work in that state/county.
I feel your pain. I am a start up, and non-legit companies are killing me in my first year. I tell people why my prices are higher, because their current landscapers are not legal, they don't care.
Pietro: You need to think outside of the box. Provide a much better service for a slightly higher cost. Edge the beds, driveway and sidewalks, trim the shrubs once a year for free, pull a few weeds, do something extra that makes you stand out. If you go all out you will make your clients your cheerleaders. Once they start cheering for you, the neighbors hire you. Provide some service to your clients and it goes a long way.
Down East Prop Serv: Honesty is the best policy. The first landscape project that I did was a bid job. Cleaned out 1,200 square feet of flower beds and remulched them, mowed, fertilized and reseeded the lawn. When I was finished I asked how my price compared to the others, she said I was the highest but I did not promise her that I could make her grass grow, as the other two bidders had. She lives in a very sandy area, which takes many years to grow a solid lawn. I mow her yard every two to three weeks for $60 and she is happy.
Snyder's Lawn Inc: Talk with your city. My city about three years ago passed a new code on mowing. Anybody who mows must carry a business license and insurance, even if it's a kid. It help around here some.
I'm still working to change the code where everybody has to carry workers' comp no matter if you one guy or 10 guys Then everybody will be on same level.
Down East Prop Serv: I agree with you on the business license and insurance, but you are wrong about the workers' comp. I am a one-man operation and that is absolutely worthless for me, as it will not pay me if I am injured because I own the company. It is an added cost that comes with growth. If you stay small and do not want the headaches of multiple employees you should not be penalized for that.
mclawns365: I'm also in the one to three range. But not one of my commercial accounts have ever even asked about regular insurance, let alone workers' comp. Now I carry it, because eventually someone will be competent enough to ask, or one of my guys will blow out a bay window with a trimmer and I don't care to get sued. I'm in business for good here. I advertise in papers and decal all my trucks. That's a pretty big target to paint. Plus, we make enough money that if the IRS found me not paying taxes on it, they'd put me in a big old federal time out corner for three to five to think about what I did wrong. I say take the hit, pay the fees and keep in mind you just bought yourself some fairly expensive peace of mind.
32vld: Every trade has people that do work on the side at lowball prices.
They do so because there are people that place value on the service. They only judge value on what they pay.
forkicks: It's really not a question of being legit or not, it is more a question of knowing your demographic work area and what you need to make to be profitable. There will always be lowballers in any business, that's just the way it is. Just like there will always be someone that inherited dad's business and all his contacts. Or you will have the ones that can afford to go out and buy all kinds of new equipment because they have mom and dad backing them. and if this venture does not work out then mom and dad will bank roll something else. Or you could be competing with someone that paid their dues and has established their business over the years and can get the price that they are asking, but even for them it is still hard sometimes. But the bottom line is you have to do your homework and know the competition in your area.
"In Your Own Words" is contributed from the lawn care and landscape forum at http://www.LawnSite.com, which was named one of 10 Great Media Sites by Media Business magazine, and has been chosen as a winner of the Most Engaged Media Brands for 2010 by min, a firm that tracks the media industry. Visit them, and join in the discussions.