How the Big companies always make money on their lawn care pricing

all right guys i'm back with mark and today we're going to be talking about building a bulletproof lawn maintenance contract now mark can you just walk us through where guys are going to be able to find this program that'll help them do this on their own so that they're not lost right away on this because this is one of the this is one of the paid and free functions as well of lmn right yeah that's right um so contractors can check it out at go lmn.com so on the website there's a really clear description of what comes with the free software what comes with the paid version and and what those differences are but uh what we're looking at today you can absolutely get started using completely for free we do have a limit of 15 estimates that you do for free before you start paying but everything that we're going to use today is accessible through the free account for sure okay perfect and what this is going to do is this is going to take the mystery out of whether a person's actually making money or not making money so let's dive right into it this is your home screen right here right this is your where you enter the person's information yeah so i've just opened up a an estimate just to save us the the the time wasted of you know me filling in these these blanks so we're just going to jump right into an estimate i've got the address and the name of the customer in and the next thing i'm going to need to do um once i've you know kind of got the basic information taken care of is i might want to measure the site just to get an idea of the lot size um so i'm going to click on site measure very easy here to use google measure to check the lot size overall i might want to check for square footage or length you know that kind of thing but we built this right into the system so that you can very quickly um check out lot sizes and this is really helpful on bigger more commercial properties where you might want to check the acreage or if you're doing snowplow quotes that kind of thing but um yeah certainly that's built into the system um a map to the site is is built right in as well so you can check the drive time from your from your location to make sure that it's in your territory that kind of thing um but beyond that really to get started on creating a quote just like you would any other time you kind of think of the job in terms of the scope of work so first off i'm going to click on the services and pricing and i'm going to start to build my my my quote um the first thing i'm going to do is just add a service um the the service type that i'm going to add first i'm just going to um think of it how i would normally and this is mowing and i might want to price it per visit or per season in this case i'm just going to do a per season quote and then i'm going to say over the course of the year i'm going to cut um 26 times for example and this is different in every every area obviously um the the vision is grounds maintenance so i've kind of got the basics in now it's important for me to add the items associated with mowing so um in the estimating library we have um things broken down into some simple categories and they're kind of the way we work as contractors there's labor equipment material subcontractors and then we have what we call templates that make it a little bit easier and faster to price things that we do on a regular basis so if i look through my list of of um templates i can find one that will help me quote a project like this faster or i can build it myself um if i've never done that type of work before but in this case residential mowing is pretty standard i've got a template i'm going to click that and it's going to ask how long the property is going to take and it's going to kind of um prompt me to um decide for myself what that timeline looks like so if i think the crew is gonna be on that property um for a half an hour with two people then it's one man hour in total um and maybe if the crew uh truck is gonna be there for a half an hour but with some drive time maybe i round it up to an hour it's going to kind of put that price out like this and so here's the components for the year but up top what it's saying is this is the price per visit so i know i'm charging 38 and 45 cents per cut um at as a cost and then my price to the customer is actually 7418 and that's with a 9.8 profit and i think this is where often a lot of contractors aren't clear on what their cost per visit is what their break even is after they've covered their overhead costs and then what the profit is to the customer so their break even in this case is 66.90 where do you come up with these numbers where where are we is it being generated from the um the templates mark or how are we figuring out the break even because that's that's different for everybody it is and that's why we always recommend and the budgeting software is completely free but that's always why we recommend that you start using the software by building a budget um once you've built your budget in the system and we did cover that in an earlier video that allows all of these numbers to be unique to your company so that when you have a look at the analysis of a job you can really see your cost of doing business and your price to the customer and your profit because i think often contractors make the mistake of just kind of charging what everybody else charges and that may or may not be the right price for your company and when you sort of make those sort of guesses uh in terms of pricing what you're really doing is is guessing whether or not you're going to be profitable at the end of the year yeah and here if we um can we actually do real-time monitoring with this software mark where like after the guys mo we can punch in where they were at so we can know if we have to adjust our price up or down or where we're falling at right away instead of going through a whole season going wait a minute i should have made 9.8 but really i'm making 3.4 what's going on where if you can adjust it right out of the gate yeah you may lose a job if you got to raise your price but you're not working for free all year long is that a possibility it absolutely is a possibility and so what happens with our estimating software is it transfers into your time tracking software and you'll see here up top because we built the quote in the system it tells us that we've got 26 hours for this contract for the year for these 26 cuts so each time we stop in and do a cut we're going to clock in and out so any time throughout the year we can look and see how many hours we've spent on each project and we can also see if we're on track to make a profit because you know if i if i roll up here to my analysis tab and i click analysis this kind of breaks the job down for me and it says some pretty interesting things first off it tells me that this estimate is going to produce 74 dollars an hour in revenue and that's including my overhead my truck my trailer my mower the labor so i've got 74 dollars and up here it tells me that if i do this mo job for the whole year my price is 1928 my cost of goods sold so the cost of my equipment my labor all the things that it's going to take to do the job is just under a thousand which leaves me a gross profit of 928 and this is where a lot of contractors get excited and think they're gonna make a thousand dollars off of every property that they service the reality is there's a long list of overhead in every company and sometimes small contractors think they don't have overhead but in reality it's usually even a little bit higher because there's always these costs that creep into our businesses like internet and phones and um advertising costs and uniforms and all these things that we do in our businesses that add up and at the end of the day we have to pay that before we calculate our profit so what the system is telling us here based on the actual budget of this company is our overhead is 739 which makes the break-even cost of doing this mo job 1739 and at the end of the day we're only making 190 in profit from this job and i think it's worth knowing this information at the start of the year or knowing this clearly about your business rather than always wondering why it's not as profitable as it should be so you can imagine if i did a hundred of these properties and i'm only going to make 189 dollars in profit on each one i kind of know what my maximum profit potential is for the year um so it really kind of clarifies your business very quickly on a job-by-job basis when you look at it here within each estimate so this also does you have tracking software like so you route this software can route from one job to the next job this is the estimating software but in the routing do you actually route it beforehand to get the the amount of time that you spend because you're allocating for your truck and that's where a lot of guys go wait a minute why are you allocating for your truck well yeah you gotta allocate for your truck it's not free at her i mean i i've never been given one yet not tried yeah no you're uh you're completely right there so we do like to quote our projects with the labor and the equipment and the reason for that is twofold first off we want to make sure that we cover all those costs and that we're charging the customer enough money to recover those costs but then when we track the cruise and track what's happening it's really important also that we know what components were put into each job so that we can assess the profitability and that that's called job costing and what our system does is as you track the work through the routing and time keeping software that you referred to that's all app based of course on the phones but as the crew or you if you're an owner operator go through your your route and you do the work each week what's happening is we're tracking how long you're at each property so then what you can do is run reports to see if you're if you're actually getting the work done the way you estimated it and if there's a problem then you can either go back to the customer and try to increase the price a little bit or in some cases you may have to walk away from some some contracts that you have if that's not possible because on this program mark does it do it here on this program yeah absolutely it's all connected um you've got time tracking which is app-based and you've got um budgeting and estimating here which is all web-based that we're looking at right now okay got it okay so field workers have access to time tracking and routing through their cell phone or a tablet whichever you prefer so the field workers have it but they also have the amount of time that they're allocated toward every project right so they can they can look at where they're at in the day and go hey wait a minute i better speed up i'm a little bit behind on my route is that even is that that is that right yeah that's absolutely the the point of it so our scheduling software takes the the number of hours from here in the software so for example here on this property i've said it's one hour for the crew so this the the scheduling software knows how many hours per day you work so if we work an eight-hour day and we take a one-hour lunch we only have seven hours of production time and depending on some contractors like to price drive time in with with the works i'd like to kind of allocate for it separately but if you have a seven hour day and you think you can work in five or six of these properties depending on your route density as you schedule that route out it's gonna put it in the best and fastest order so that the crew drives the most efficient route and the the app will allow them to access google maps to do that and then it's going to tell them when they get to each site how long they're supposed to be at each site so it kind of keeps them on track and really makes the field worker aware of how many hours the estimator or sales person allocated to do the work and i think when you do that you kind of um bring both worlds together in the sense that um the person pricing the work and the person doing the work fully understand what the other was thinking and then the likelihood to make profit it obviously goes up exponentially because everybody's on the same page and in most companies unfortunately the people doing the work don't always find out how long they're actually supposed to be there so they guess and when they guess they often guess wrong yeah they always get a little higher than what yet you figured into it it takes longer yeah and naturally i think you know if you're not really well aware of the actual costs of doing the work inevitably i think a lot of times employees think that there's more profit in the job than there is and you can see here when i brought up that analysis you know there's not a lot of profit here at the end of the year on a mo job like this you got to be very efficient if the hours are running over all year then that 189 turns into zero profit or worse very quickly yeah don't break a window that's what i see right there mark yeah exactly one you're one mistake away from losing money it's a it's a tight margin for sure this type of work specifically okay yeah so what else should we know about software well what i mean i'm estimating just kind of keeping it light here today um once we've quoted this out the next thing that we need to do is obviously send our customer a proposal so i can do that very easily here by just going up here and i can create a custom report or i can use a standard report that's in the system i'm just going to keep it simple here and use a standard report but when i produce that report i can email it print it do whatever i like and here what it is is it's a pre-defined uh proposal as contractors you put your own logo into the system you just import it in and it automatically updates on these forms and then what this allows you to do is send a really nice clean professional proposal to your customer if you have some we have some nice sample terms and conditions and things like this that you can modify on your own or you might already have some that you can add to the system very easily just using a cut and paste but this is a very simple proposal being just a mo job and here we've got the the price um in this case i've got it set to 12 payments you can quickly change that to five or seven or eight payments whatever you'd like and you're going to send that off and then if the customer approves it you can do one of two things you can mail or email them invoices every month through the system or you can now use our customer portal where they can actually log in see their account status and make their payments um automatically through there as well um using our credit card processing system that's built right into the software so the so the last thing everybody a little technical difficulty but the last thing i heard from mark was that this system takes it right from measuring it onto the site you can type sit on your laptop to going right into a proposal to generating the route to doing the entire thing and then it'll give you real-time feedback to understand where you're at after you do your first or second mo you can put the numbers in it and analyze where you're at in real time versus projected is that right mark yeah that sums it up nicely all right perfect um is there anything else we need to cover on this one or did we we do this one i think we're good for today i mean that gives a quick overview of estimating and kind of allows uh your viewers to really understand what lmn has to offer in terms of estimating well you know the the thing that may come up the question is well where do you come up with your numbers for the hourly rate well that's something that these guys punch in themselves and we did the budgeting and we did the budgeting video and that helps these guys to set the numbers so that they know what to punch in to all the different components of their job so this is kind of what you and i are going to be doing it starts with one and then it builds off from the other ones now this one is a mowing contract the next one we're going to be doing is a hardscaping one which is a lot more complicated it's got a lot more moving pieces if i understand if i'm following along on the schedule right is that right yeah definitely we're gonna we're gonna do a little bit uh more in-depth uh installation project next so that um you know i can really kind of show you how it really sets the the goals for the crews and how it really kind of allows you to operate more efficiently as you start to to build those uh install installation prices and projects oh perfect all right you guys can find this at go lmn.com mark is there anything else you want to tell these guys uh what they can expect like i do know that mark probably won't say this but i knew like even when you do your free trial they give you your own customer service representative it's flipping it's kind of crazy to be totally honest with you but it's also kind of completely honest and it's a good way to get guys familiar with this system because it's it's probably one of the more in-depth systems that you're going to have out there but it also gives you real-time feedback real-time reports this is the kind of stuff that you're no longer scratching your head at the end of the year going why didn't i make money because almost every guy i know there's so many of them out there a lot of guys i've had that scenario once in their life and we're trying to eliminate that it's a horrible feeling trying to hold the irs more money than you have in your bank account there's a reason why that happens once in a while we're trying to eliminate that i've been there so this this is why i'm doing this so thank you mark i know this was our fourth attempt at this so i thank you for your patience on this thing um guys behind the scenes mark and i have tried to do this four separate times and we have not had success internet problems or connectivity issues or whatever so i really thank you for coming back coming back and coming back mark thank you so much all right thanks a lot stan all right god bless you guys go get em and we will catch mark and i on another one where we go deep on a hardscaping estimate we'll see on that one you guys