When I retire this year at the ripe ol age of 50, I'm probably going into the food plot business. Here is my question. I live in the middle of SC which is not a huge state. But, how do I charge for mileage say outside of a 30 mile radius? I need to make enough to cover fuel expenses, depreciation and enough to make up for lost time that I could actually be running the tractor. My dilema seems to be not charging so much that I lose revenue from jobs, but to find a happy middle ground on my mileage where I can still profitably take on the work. Thanks!
Any business savy guys here
- Thread starter LabLuvR
- Start date
- Views: 4757
bjcsc
Platinum Member
- Joined
- Feb 20, 2007
- Messages
- 559
- Location
- Johns Island, SC
- Tractor
- JD 5225, JD 555B, JD 333E, JD 225DLC
You're retiring at 50. I'd say you already are business savvy.
I wouldn't set it up so much on mileage, but instead consider the travel time as work time when you quote jobs. There are a lot of factors to consider (like your market) and some may dictate what you can do...
I wouldn't set it up so much on mileage, but instead consider the travel time as work time when you quote jobs. There are a lot of factors to consider (like your market) and some may dictate what you can do...
It's called working for the guvment since I was a youngun. Not a lot of business savy needed fighting fire.
Some guys here charge 250 an acre exclusive of seed. Others charge around 65 -75 an hour. I would rather do a job based on acreage so I can spend time with the landowner and BS a little.
Some guys here charge 250 an acre exclusive of seed. Others charge around 65 -75 an hour. I would rather do a job based on acreage so I can spend time with the landowner and BS a little.
bjcsc
Platinum Member
- Joined
- Feb 20, 2007
- Messages
- 559
- Location
- Johns Island, SC
- Tractor
- JD 5225, JD 555B, JD 333E, JD 225DLC
I agree. Hourly costs present their own set of problems (like people watching you the whole time, etc.) I'd be leaning towards the per acre charge, too. Another way to recover travel time is to have a minimum charge, i.e. your base is $XXX for up to X acres...
If you are against the hourly rate approach, you may want to consider creating a flat fee per job + a per acre rate. Think of it like a plumber or other service provider who charges a "service call", and then the repair costs are calculated on top of that fee.
You could scale the overhead fees according to mileage, but I would recommend you consider estimating an average to avoid hassels. For example, if 50% of your jobs are within 25miles, you could charge a $50 call fee for jobs in that range, and over 25 miles is $80. Since the split is 50/50 why not just charge everyone $65? The downside is that close-by customers might be lost due to your pricing models - and if this is actually more like 90% of your customers business will suffer. Maybe run with some split scales by mileages for a year or two to find out where the sweet spot is for your marketplace and customers.
You could scale the overhead fees according to mileage, but I would recommend you consider estimating an average to avoid hassels. For example, if 50% of your jobs are within 25miles, you could charge a $50 call fee for jobs in that range, and over 25 miles is $80. Since the split is 50/50 why not just charge everyone $65? The downside is that close-by customers might be lost due to your pricing models - and if this is actually more like 90% of your customers business will suffer. Maybe run with some split scales by mileages for a year or two to find out where the sweet spot is for your marketplace and customers.
bigshovel
Gold Member
I charge a service call fee of $50.00 in addition to $1.50 per round trip mile.
If job is an extended project I budget that formula on bid day and hope for the best; six month's, year, less or more. You get the idea.
Brad
If job is an extended project I budget that formula on bid day and hope for the best; six month's, year, less or more. You get the idea.
Brad
Farmwithjunk
Super Member
With the mowing business, I've found that most of my clients don't give a hoot where I live or how far I have to travel. A given job is worth no more to THEM if it's 3 blocks away or 3 states away. They just want the best price an d don't usually understand why they should be penalized because of where I live. (or at least that's how some tend to view it) Billing for hourly or cost+ jobs isn't always well received if charges for travel time appear. It creates a bad impression on the customer. Next time he needs my service, he'll tend to look locally. At that point they MAY or MAY NOT find a better price. Point is, they're looking for one. A flat rate price, agreed upon before starting, seems to work best for MOST of my customers. A few are searching for a way to get a better price. At that point I offer them the option of cost+/hourly rates with travel time included in their bill. Under those conditions, the time clock starts when we pull out of the driveway until we're loaded and ready to go home. Same rate as we would charge while in the field. I've found business owners are USUALLY more understanding of extra charges than private individuals.
"They just want the best price and don't usually understand why they should be penalized because of where I live. "
Exactly! Plus your grass business is like a food plot business. Almost, everybody owns a lawn mower and a lot of people own tractors. I'm hoping to sell myself on my equipment and knowledge of wildlife food plots. In other words, my "expertise" for lack of better terms is what I intend to sell on as much as my ability to actually do the work.
Exactly! Plus your grass business is like a food plot business. Almost, everybody owns a lawn mower and a lot of people own tractors. I'm hoping to sell myself on my equipment and knowledge of wildlife food plots. In other words, my "expertise" for lack of better terms is what I intend to sell on as much as my ability to actually do the work.
I'm not sure it is a good idea to charge more for distance. This sounds like an incentive for your prospect to look for somebody else closer. It's not your customer's fault you live so far away. It might be better to have a very competitive rate based on the perfect job (sweet when you never need to leave the cab). If you find obstructions or other issues you start adding on pursuant to a written contract (take your camera). Since junk in the weeds is your customer's fault, this is much fairer, even though it adds up to more money.
jmf
jmf
"I'm not sure it is a good idea to charge more for distance. This sounds like an incentive for your prospect to look for somebody else closer"
I would agree 100%, thus the dilema. Let's say I set a minimum of $300 an acre exclusive of fertilizer seed etc. Maybe I don't take the one acre job if it is 90 miles from my house. On the other hand maybe a 2-3 acre job justifies the trip with a nominal mileage cost of .50 to a $1 a mile on top of the acreage rate. How does that sound??
I would agree 100%, thus the dilema. Let's say I set a minimum of $300 an acre exclusive of fertilizer seed etc. Maybe I don't take the one acre job if it is 90 miles from my house. On the other hand maybe a 2-3 acre job justifies the trip with a nominal mileage cost of .50 to a $1 a mile on top of the acreage rate. How does that sound??