Penny wise, pound foolish

[ducati996]

This reminds me of an article I read recently about Marriott International's chief dealmaker (link below). The relevant quote is:

Sullivan learned early that dealmaking in the hotel world is different than in other industries because companies like Marriott prefer to make multiple deals, sometimes years apart, with the same developers. "I don't want to build 500 hotels with 500 people," Sullivan said. "I want to build 500 hotels with 50 people. . . . If I screw the other side, eventually they will find out and they'll get me."

"He gives when he needs to give, and he always leaves a little on the table so he can do another deal with them," Marriott said. "He could have taken more from time to time."



A Man of His Words - washingtonpost.com

SuburbanMD,
Im glad you felt my quote was the perfect lead in - but I disagree because
"Farmwithjunk" was giving this guy a deal for years - and it certainly didnt sound like he liked the guy or liked doing business with him at the time

see his quote:

Farmwithjunk quoted:
"I've mowed a 5-acre lot for a friend of a friend for the last 5 years. I started doing it more as a favor than anything else. That was way before I started mowing for $$$.$$ on a regular basis. When I first did it, I charged just about enough to make it worth my while but not enough to really turn a profit. ($125) Like I said, just a favor.

Well, after 3 years, I decided I needed to charge a fair rate. Fair to ME. SO 2 years ago, I told the guy I needed $250. (It's 15 miles from the house.) He balks at my price, but after he got a few HIGHER prices, he called back and agreed. I mowed it 4 times last summer @ $250.

Last fall this guy decided to plant 110 trees scattered randomly across the lot. It takes longer to mow with everything to dodge now. That and I lost my parking spot across the road. (Deep ditch on the front of the lot I mow prevents me from getting truck and trailer off the road) Adding insult to injury, he decides to "save money" by mowing 2 times a year instead of 4. Weeds and bermuda grass now waist high. In the past we cut at 18".

And when he calls last week, I tell him no way I mow for $250 under present conditions. Price is now $400. He goes off, finally hanging up the phone. Good riddence. "

 

[KrumpsBrother]

Why feed the kids? It makes them grow faster! Healthy grass will grow faster, but it sure beats half grass and half weeds. Grass that is fertilized will have a better chance at surviving a drought, the same way a healthy person will have a better chance of surviving in a famine than someone half starved already.

KBF,

I was just wondering, from what LC described, it sounds like a run down house with alot of junk, why spend the money on the fertilizer (which aint cheap), only to spend even more money paying someone to mow it weekly? Not to mention the time the absentee owners spend on thier riding mower.

Pasture grass here is fertilized according to soil analysis and desired yields per acre, weeds are treated with hebicides, which is much more effective and less costly than mowing.


KB

 

[LoneCowboy]

KBF,

I was just wondering, from what LC described, it sounds like a run down house with alot of junk, why spend the money on the fertilizer (which aint cheap), only to spend even more money paying someone to mow it weekly? Not to mention the time the absentee owners spend on thier riding mower.

Pasture grass here is fertilized according to soil analysis and desired yields per acre, weeds are treated with hebicides, which is much more effective and less costly than mowing.


KB

Sorry, it's my confusing post
It's the house next door that we take care of that we fertilized, not the place that's run down.

Spraying is NOT less costly than mowing. Insurance alone is (are you sitting down) for one guy with a spray truck (just business liability) is 8000 a year (that's right, eight thousand). No, we don't spray.

 

[john_bud]

Yeah that wouldnt fly around here - this horsepower pro-rated thing is silly to say the least. It should matter not if you use a dixie chopper or some type of batwing and tractor setup. Around here its about $100-$125 per cut for 1.5 to 2 acre lots. And its finished under 1 1/2 hours

Interesting.


A small job would probably have a hour tacked on for delivery and setup. That's relatively standard. The 1.5 acre lot would then be billed for 2.5 hours and if pay was $100 - guess what? 40 bucks an hour.

Magically, that's about the time it would take my L3410 with 5' cutter to do a 1.5 acre lot with a fair amount of obstructions. It is a 30 hp tractor $1.25 * 30 *2.5 = $93.75.

Amazingly close with both methods.

 

[ducati996]

Interesting.


A small job would probably have a hour tacked on for delivery and setup. That's relatively standard. The 1.5 acre lot would then be billed for 2.5 hours and if pay was $100 - guess what? 40 bucks an hour.

Magically, that's about the time it would take my L3410 with 5' cutter to do a 1.5 acre lot with a fair amount of obstructions. It is a 30 hp tractor $1.25 * 30 *2.5 = $93.75.

Amazingly close with both methods.

I gave a quick estimate - and that was including triming and clean up, using a ZTR (wright standers or others), and most likely its a 45 minutes job. Some lots are priced higher (2 acre), sometimes twice a week, and my size machine (and yours) would be too big. There is no shortage of customers, and the better accounts are in the commerical properties, which Im not disclosing prices or estimates.

Hope this helps

Duc

 

[Farmwithjunk]

Why you getting so huffy? I wasnt offending you - or at least I didnt think I was

anyway you mentioned a 10 acre plot - at $20 -$28 an acre - thats low to me...anyway there are so many variables that we could go on indefinately

I'm not "getting huffy", just defending what I know to be right. To paraphrase an old ice hockey term, your wording seemed a little "chippy".

 

[Farmwithjunk]

Im sure there is a lot more to the story - so forgive me with going what was given and stating my opinion - I honestly still feel you left money on the table. You should not take offense from anyone saying this

Regards

Duc

Again, I'm taking just about all there is "on the table" with most of my work. Mowing just doesn't pay as much in these parts as it apparently does in other areas of the country. The one job I did cheap was as a favor for a friend who used the lot I mowed to ride his dirt bike on. The owner wouldn't have cut it back then. It would have been overgrown and left uncut if he had to pay the full price. It's in Jefferson County Kentucky. The county government merged with Louisville CITY gov a few years back. Now the county has several "city" ordinance's requiring lots in suburban areas to be kept mowed. He has no choice nowday. My friend doesn't use the lot any longer.

I priced mowing the 5 acres at $400. That was MY price. The owner was begging to get it cut before he got fined. I wasn't going to take advantage of him, just because he's in a bind. Not my way. The lot is mowed. I contacted him today. We set up a regular mowing schedule from now on. I get my $400 which is more than double the "going rate" in this area. I charge that much now because of extenuating circumstances. (no place to park truck at the lot/too many trees/no access for bigger tractor because of drainage ditch)

 

[Farmwithjunk]

Interesting.


A small job would probably have a hour tacked on for delivery and setup. That's relatively standard. The 1.5 acre lot would then be billed for 2.5 hours and if pay was $100 - guess what? 40 bucks an hour.

Magically, that's about the time it would take my L3410 with 5' cutter to do a 1.5 acre lot with a fair amount of obstructions. It is a 30 hp tractor $1.25 * 30 *2.5 = $93.75.

Amazingly close with both methods.

The term HP/Hr was coined by a gentleman named Lester Larson. He was the Chief Engineer for the University of Nebraska Tractor Testing Lab. He laid down the protocol for testing and comparing farm tractors in the beginning stages of Nebraska Testing. His hp/hr and hp/hr per gallon fuel comparison is still the ultimate "level playing field" for rating tractor performance. It's not the above all and end all way of pricing work, but it IS a good way of determining "going rates" when you have price info from several contractors to compare. As I mentioned, it's a good "rule of thumb" for fast and easy pricing with various sized equipment. It gets you in the ballpark without a lot of calculations or guessing. The concept throws a lot of people for a loop. It's just "too simple" in some eyes. The same basic premise is used in a number of construction estimating software packages for excavating work.

The fly in the ointment in the earlier post's was attempting to relate bush hogging rates/time to finish mowing rates/time. Apples to oranges don't compare well.

 

[KrumpsBrother]

Spraying is NOT less costly than mowing. Insurance alone is (are you sitting down) for one guy with a spray truck (just business liability) is 8000 a year (that's right, eight thousand). No, we don't spray.

Do some reasearch on weed control/pasture management and check the facts.

I didn't have to pay 8000$ to the applicator who spayed Grazon P+D on my pastures. I paid 12$/acre @ 60 acres, and not a weed to be found. Cows are happy and I didn't have to mow my hay crop down either, and far less soil compaction from not having to mow every few weeks. I have my pastures sprayed once a year.

Fact is that applying herbicide IS cheaper than repeated mowings for weed control. It's a vital part of the system for proper pasture management.

Many people move from the city to the country and feel they need a 10 acre lawn, hence the repeated cuttings for weed control. I think you've got a good business filling this niche market and wish you the best of luck (at least better than last week!).

KB

 

[DTCOOPER]

I just wish that folks down here were as willing to pay for equipment, expertise, insurance, fuel, other expenses, as those in other parts of the country. I suppose a few "prostitutes" (insert slang term here) are to blame for setting the market at a ridiculously low level.
Typically, we are able to charge 20.00 per acre for mowing. Lots of trees, ponds, etc, we can usually get 25.00 per acre. I am in a very rural area, where lots of folks have tractors. Bittersweet thing is that more and more folks are moving out here to the sticks, and buying small acreages. Most will buy themselves a small rider for a year or two, until they realize that an MTD 16HP mower is not designed to cut 2-1/2 acres of knee high grass. THEN they will come around to paying the 20-25 per acre. But as I said, even at these prices, it's hard to break even, much less make a profit. Especially when you load up Saturday morning at 6:00, drive 17 miles, unload, mow a "4 acre guaranteed clean pasture" for 80 bucks, and irrepairably cut a front R1 Tire on the Case DX33.. Soooo, $15.00 fuel (tractor and truck), insurance, 2 hours, 60.00 dollar tire..... equates to lost my tail this Saturday.. Oh well, comes easy and goes easier I suppose..