Pricing can be difficult. Pricing can be even more difficult if you’ve never offered a service before.
As a business owner, getting pricing right means the difference between having a profitable company or going out of business. Adding on services will help grow your client base and your company—when charging the right amount.
A user on LawnSite.com asked other members how to determine the right pricing when adding a new service to his company. See what they had to say.
millennium_123: I’m starting aerating this year and I’m not sure what to charge for that. Suggestions? I was thinking a starting price of $45 to $50? However, I have a few really small lawns that I mow for $25. I may only charge $35ish for those. Also, should I mow/scalp before or after aerating?
I MOW ALONE: Usually three times the cost, so cut = $25; aerate = $75. So, you’re really low.
cody417: Fifteen dollars per 1,000 square feet to core-aerate in two directions; does not include seeding or fertilizing.
JohnnyRocker: Yeah, don’t work too hard for too little. I usually charge $75 for aeration alone. I charged $240 for aerate, seed and fertilizer all day long last season. I’ve seen bigger companies charging $300 for that plus lime. Just make sure you do a thorough job on your aerating, and they will have no problem paying you money for a job done right. And, if they don’t want to pay, then they can’t afford your services, and move on. Good luck.
AzLawnMan: We don’t do it much here in Arizona, but when I get a call I usually tell them $275 and they usually go for it.
JayD: It would also depend on if you own or rent one.
AI Inc: I’m $15 per 1,000 square feet with a $100 minimum. Every time I do it, I still think that’s too cheap.
cody417: My smallest property is 10,000 square. Charge is $150 and I am done in 30 minutes. On a 40,000 square property I charge $600, and it will take me approximately one and a half hours to do. I will take that pay-per-hour rate any day of the week.
JimLewis: Of course, the price varies wildly depending on how large the yards are in your area. So, the responses are going to be all over the place. In my area, the lawns are what others around the country would consider ‘postage stamps.’ All lots of 8,000 square feet with lawns around 1,000 to 2,000 square feet.
Unless aerating is your main source of income, or unless it’s something you’re able to do all day, every day with a tight route (like you should be doing your lawn maintenance), then I would advise you not to worry about what the going rate for aerating is.
A lot of guys do aerating super cheap because they do so many of them each day and can do all of them in a tight area that they can get the rate down that low. Others do it for so little because their overhead is next to nothing. And, still others do it because it’s just a quick buck, and they don’t realize that they are only making money for today, and really not making the company any profit. Don’t be like that. Price your services based on your overhead. What you need to make profit.
The going rate in my area is $40 to $45, but you know what I’ve been charging for the last eight years or so? Seventy-five dollars! That’s over 180 percent the going rate! I charge that for two reasons. One, I don’t sell my services based on price. People use us because they like our reputation, quality of work, timeliness and have a good relationship with our company. They all know there are other cheapskates they could hire to do their aerating, but they would rather pay us more and rest assured we’ll do a quality job and take care of them if something should happen (e.g. broken sprinkler head). Two, if I’m going to do something, I want it to be profitable. I don’t always know or care how the other guys are doing it so cheap. I just know that at $40 it’s a total waste of my time. We wouldn’t make any profit doing that.
So, my advice is do what’s profitable for you. You may not get as many aeration jobs, but the ones you do get will be very profitable. I’d rather get 50 aerating jobs at a nice healthy profit than 150 and barely make anything.
BIOGRASS: This is a tough one to answer because you are going against boy scouts that sell it day to day for $20 a lawn (I had one on my porch last year for that rate!) In Salt Lake City, the going rate seems to be about $40 to $65. I personally will not do a lawn unless I am getting $75. That is for a lawn that is below 5,000 square feet; anything above that is going to be $90 to $250.
JShe8918: Wow! I have been looking at aeration prices here for the past few days and notice just about everyone is charging between $14.50 to $17 per thousand square feet. After noticing that I thought to myself, ‘That adds up to a lot of money if someone has nearly an acre for a lawn.’ So, I figured off of 40,000 square feet and came up with $600. I have two clients that want their yard aerated, but I don’t feel that my area would go for that type of pricing. They were leaning more towards the $6 to $10 per thousand square feet. I could still make a profit off of $10 per thousand, but I would be leaving a lot of money on the table. I don’t know what to do. I am trying to expand my business and really have to have an aerator for three yards I mow. They are going to be maintained with a reel mower this year. What’s your thoughts?
JimLewis: If you’re looking to expand, look into something that requires a little more skill. Something you can charge more for. Because if you can’t even get $15 per thousand for aerating, then what’s the point doing it? You want to have a profitable company or just a job where you call the shots? If you’re looking to have a profitable company (as opposed to just a job) then you need to be doing something that makes some decent profit. Otherwise, what’s the point of having a business?
I might suggest getting into pavers, drainage, irrigation, irrigation service, hardscapes, retaining walls. Those are all areas where you should be able to pull some decent profit and be able to charge a nice profitable rate for.
More: Want to share your thoughts on pricing? Continue this conversation on LawnSite.com