Mulching- a growing business or saturated market?

[deniscimafinc]

While speaking of the mulching business, I'd like to ask you guys two questions:

1 - Do you mostly charge per hour, or per job?

2 - What percentage of your contracts requires you to play into the ground full time (grinding stumps and mixing soil)?


Question 1 is because, a guy that works for us to represents our products is a big fan of per-job costing, and he decided to work for us because of the difference in income our machine can make for a per-job contractor.

Basically, his opinion is:

if you have a carbide mulcher that clears, say, 2 acres of land per 8 hours, the money you make per day should pay for all your daily expenses and, hopefully, there's extra money at the end of the day (otherwise, it might be wise to consider to find another job).

Now, if you get a mulcher that can do 3 acres of land in the same 8 hours, theorically, your daily expenses shouldn't be much higher, right?

So, if you're charging per hour, whether you do 2 or 3 acres of land doesn't change a thing to your daily profit. But if you charge per job, say 1200$ per acre, then the extra acre you do with mulcher #2 is direct profit (or close to, and on top of the normal daily profit).

I like the idea, but I'd like to get your feedbacks on that. Like, how hard is it for your customer to be charged per job? Are they open to that? And if you charge per hour, how many of your customers ask you to evaluate the time it will take to complete the job (which is, more or less, a per-job estimate)? And when charging per job, would you feel more comfortable charging per acre (1200$) or per square foot (about 0.03$)? Is 1200$ per acre close to your reality (that was the situation for one of you)?


And then, question 2 (althought it looks more like, question 16 now...) what share of your contracts requires you to mulch *into* the ground? 20%? 50%? 90%? Most of the time, do stumps needs to be flatten to ground, or mulched below ground level? I think the best machine to mix material in the ground might not be the best to chip vegetation. But the opposite is also true.


Thanks in advance for your comments, it's always nice to read what different contractors from around the continent have to say about their own business situation... And from there, it can only help manufacturers to bring products better suited for these situations...



Fred

 

[Terra Firma Scott]

Question #1-Per Acre-a flat rate
Question #2-25% to 35% ground contact but only because they mostly want a fine finished product...backdragging the head seems to yield that..But also dulls my edges I dont describe my service as a stump grinding outfit.

 

[kurtga]

In the north Ga area, the burst housing bubble has affected many businesses like mulching. It seemed for a while that everyone was doing it, I'm sure many machines will be repossessed. Lots of people got into the mulching business, a few years ago, it seemed like everyone jumped into the underground boring business and then that died.

 

[rutwad]

kurtga, I was thinking the same thing. Too many people jumped on the mulching wagon too fast. But the big companies with big contracts as well as the weekend mulchers should do great.

I've got a FAE that I would like to sell, plus more.

 

[Maka]

Out here is has not even really gotten going. Logging has slowed down, land are a mess and need cleaning and burning is going away. All this and our area is growing so it is just starting here.

Guys who have the machines are backed up for months.

Maka