Pricing is a constant source of discomfort because, regardless of the market or economic environment, you’ll always encounter low-ballers and feel squeezed by clients who want to extract every penny out of a contract. It’s necessary to know your figures and give your client the correct prices for landscaping.
Landscaping prices range from $300 to $800 for small tasks and range from $2,000 to $7,000 for complex tasks. You should consider all costs, the scope of the job, and profits, before charging your clients. Note that some costs may change, so be sure to come to a flexible agreement with your client.
A landscaping firm is unlike any other service business, especially when considering the wide range of variables such as yard size, location, task complexity, unique requirements, climate, etc. While determining the costs of common goods and services could be easy, pricing landscaping contracts necessitates a more thorough examination of the many contributing factors.
Factors To Consider When Setting Landscaping Prices
I’ll go through several key aspects that can help you determine the best pricing plan for your landscaping business.:
Scope of Work
First and foremost, conduct a reconnaissance study of the site and take careful notes on every project detail. Consider the size of the complex to be landscaped, the distance from your offices, the site’s safety threats, the convenience of access, the required materials, and the client’s timescale. After that, include all of this in your pricing estimates.
Labor Cost
According to official reports, many workers are underpaid by their employers, and you should avoid being on that list of disgrace. So, keep in mind your country’s minimum hourly salary and make sure the costs you set for your landscaping services will cover all of your team members.
Material Costs
Compost, mulch, floodlights, plants, cement, trees, lawn turf, fertilizer, gravel, lumber, boulders, and landscaping rock are common landscaping materials you might utilize on a project. You should confirm current market prices before supplying them at a specific price.
Overheads
Remember to factor in office rent, electricity bills, internet fees, legal fees, advertising, insurance, etc. So that you may stay in business, the jobs you do must also cover these costs.
Profits
Last but not least, and probably most importantly, verify that the pricing you give to customers allows you to make a significant profit after the task is completed. A good target is 15 to 20% for residential contracts and 10 to 15% for commercial contracts. It’s the only way to keep your landscaping company afloat. Please don’t allow your start-up to be one of them; many new small enterprises fail to register and sustain a net profit.
It’s impossible to exaggerate how crucial it is to price your landscaping services correctly. Ensure that the revenue generated surpasses your expenses, regardless of the price approach you employ. That is, in fact, the core of the business.
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Landscape Business Pricing Strategy
Once you’ve determined how much it costs to supply your product or service, you have three price strategies, which I’ve compiled for you in this section.
Market Penetration Pricing
This approach suggests you set your pricing lower than your competitors to entice customers away from them and gain market dominance. This pricing policy has little or no margin because the primary goal is to increase market share rather than profits. It’s often utilized to develop a product, service, or company early in its existence.
Service Pricing
This pricing strategy is centered on providing a service bundle that guarantees a specific outcome. Prospects are looking for problem-solving solutions as well as individualized services. Rather than providing a rapid, single-stream service, some services are bundled together to provide complete solutions. Price is now based on the bundle rather than the individual service, allowing you to make more money and provide more value to your clients. This technique enables the development of relationships and, eventually, the upgrade to Premium pricing.
Premium Pricing
This is where the actual value – and profit – begins. Although your pricing is higher than your competitors, there is a buyer perception of high value due to brand recognition (you’ve invested in marketing and outreach in various forms, so your market visibility is relatively high) and a sense of status associated with your service. As a result, you’ll need to deliver exceptional client service and a keen interest in the buyer’s whole experience. In other words, your customers will gladly spend more money if they perceive its value and you make it beneficial for them.
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5 Important Tips to Get Paid Faster by Landscaping Clients
When it comes to keeping a healthy cash flow in your landscaping firm, getting paid quickly is critical. Having many clients fall behind on payments may be rather devastating when you have your costs to pay. I’ve compiled a list of recommendations to assist you in getting paid faster by landscaping clients.
Invoice Quickly
It’s tempting to assume that if you don’t get paid promptly, it’s the client’s fault. However, how effective are you at sending out invoices? You’ll get paid faster if you do it quickly.
There are various reasons why landscape companies take so long to provide invoices. It’s a task that gets pushed aside when you’re extremely busy. It’s time-consuming, tedious, and, to be honest, something you don’t want to do. Landscape contractors also tell us that they frequently neglect to bill for extra work. It’s more likely to be forgotten if a task is added at the last minute and isn’t the same as what the client usually gets.
Be the Squeaky Wheel
It may seem self-evident, but it is crucial to keep track of late or non-paying clients. When a bill is past due, you might start by sending a mild reminder (usually, around a week late is a good point). It appears to be straightforward, but it works. People forget from time to time, and there’s nothing more to it. A small reminder will help make a big difference.
Of course, having to remind late-paying clients is an additional headache for you. It does not necessarily have to be a lot of labor. Landscape business management software can also set up reminders for late payments, just as it can be used for invoicing reminders. After all, the sooner you send out a reminder, the more likely you will get paid.
Provide Incentives for Early Payments & Penalties for Late Ones
To avoid late payments, give your clients incentives for paying before the bill’s due date—or even for paying for the service in advance before it’s done. The best inducement is a service discount. You can figure out what is best manageable for your firm regarding a percentage or monetary amount.
For example, you might have a customer who has never missed a payment during their time with you. A penalty price imposed on a long-term customer may be a turnoff.
If you have a customer who is always late, it might be worth considering. Adding a late payment fee to your invoice can assist your clients in understanding that you are a professional company that expects to be treated. It also establishes a precedent that future late payment behavior will not be tolerated.
Of course, no matter your policies, you must communicate them. Be sure your clients are aware of your payment terms and conditions. There will be no opportunity for misinterpretation or justifications if this topic is communicated clearly.
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Be Flexible with Payment Options
Giving clients extra payment alternatives can also help you get paid faster. While there are still plenty of landscape businesses that accept cash or cheques, the trend has been toward credit cards and ACH (Automated Clearing House) payments, which appear to be “paying off” in most other industries (pun intended).
ACH, sometimes known as “electronic checks,” started as a way for businesses to receive direct electronic payments from their customers’ checking accounts. Landscape companies that use ACH have told us that it’s an excellent way to pay a regular monthly cost. Because it avoids interchange and assessment fees, it is less expensive than credit card payments.
Many clients, understandably, prefer to pay with their credit cards. People frequently have credit cards that offer them rewards like airline miles, which they want to use as frequently as feasible. Being aware that clients demand options, such as ACH and credit cards, will assist you in receiving payment more quickly.
Due to how credit cards and ACH processing function, you will benefit from rapid and efficient payments. These payments can be set up to be made automatically, so you won’t have to waste time or resources chasing down late payers. Even if clients aren’t set up for autopay, many find it much easier to pay a bill online than dig out a checkbook from the back of a drawer and mail payment. This saves you funds by reducing the number of non-billable journeys you’d have to make to a client’s house to collect payment.
Implement Landscaping Customer Portal Software
While payment flexibility is beneficial, landscaping customer portal software may make the procedure for these types of payments even more effective. Customers can pay bills on any day or night using a client portal. This is a huge convenience for your busy clientele, and it will increase your chances of getting paid. After all, the easier it is for your customers to do business with you, the better.
Client portals are essential to your website, and customers value them greatly. According to research, many customers prefer “self-service” to human contact when interacting with a company. It gives them the freedom to take care of things on their schedule.
The entire procedure has been simplified. Customers can view their invoices and pay with a credit card or an e-check using customer portal software. The account is automatically updated after they make a payment, and the funds are automatically deposited into your company’s bank account.
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Frequently Asked Questions
What should be Landscaping Costs Per Hour?
Landscapers typically charge between $50 and $100 per hour. The cost of a task is determined by the size of the job and the number of Landscapers required. The cost of landscaping labor per crew member ranges from $25 to $50 per hour. For typical lawn care, it requires a two-person team half an hour to mow your lawn, which costs roughly $100 an hour.
How much does it cost to landscape a small garden?
The cost of a landscape design for a small garden ranges from $500 to $1,500 for the plan alone. A landscape makeover costs around $4,000 on the low end.
To learn more on how you can start your own landscaping business, check out my startup documents here.
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Meet Shawn Chun: Entrepreneur and Landscape Business Fan.
I’m a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop to an import and export business to an online review business plus a few more and now I create online resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet a landscape business owner at a job site, driving down the road or anywhere else I see myself. I know how hard the struggle is to retain clients, find good employees and keep the business growing all while trying to stay competitive.
That’s why I created Landscaping Business Boss: I want to help landscape business owners like you build a thriving business that brings you endless joy and supports your ideal lifestyle.