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A Pricing System for Hydroseeding & Hydromulching

A Pricing System for Hydro-Seeding & Hydro-Mulching

Pricing a Job Based on Costs: The price charged for a job might be based on costs plus an added profit margin. This type of pricing is common on competitively bid jobs.

Competitively bid jobs are sometimes expected to only yield a certain amount of grass coverage (not sod quality results). This will likely lower the contractor's cost. A job site may be nearby or it may be many miles away. Water for filling the machine may be easy to access, or water may be some distance away. The job itself may be easy or difficult. The customer may be a first time customer, and the contractor might perceive this particular customer as being over-demanding. On the other hand, the customer may be a regular customer. These and many other factors affect the contractor's job costs.

Pricing a Job Based On Value: The price charged for a job can be based on "value to the customer". If the contractor provides the customer with a Total Sod Quality Job, the true value to the customer for this job exceeds the value of solid sod because the finished product is truly better than sod. Since the contractor's cost for this job is significantly less than the value to the customer, the situation provides the contractor an opportunity to make a significantly greater profit margin when pricing is based on value instead of pricing based on cost.

A contractor can provide the customer with a Total Sod Quality Job. This can be done by using premium variety grass seed and an excellent mulch application, providing total service including watering, mowing and fertilization during the establishment period, and producing the perfect premium lawn. In most cases, and particularly on larger lawns, a contractor can do this job for far less than the cost of laying solid sod.
 

A Pricing System: A pricing system based on a minimum charge, plus a fixed amount of incremental increases for additional area, provides the contractor with a pricing structure and a reference point. This pricing structure provides an overview of "pricing according to cost" and "pricing according to value". The following spreadsheets each has only four blanks for the contractor to input data. The computer program then fills in the calculated data and the contractor can view the schedule and make subjective judgments as to what to charge for a specific job.

1. The "minimum charge". This is the price the contractor determines must be charged to make a profit, even if the job is very small. The costs for a very small application includes selling costs, time spent with the customer, time driving to the site, time to set-up and actually make the application, and so on. Lots of time can be spent and lots of expenses can be incurred on a very small job.

2. The area to be planted for the minimum charge must be determined. Frequently, a contractor will provide up to one tank load of application to be included for the "minimum charge".

3. The price charged for the area planted that exceeds the "base area" (The base area is the area that is included for the "minimum charge"). This "add-on" pricing is primarily based on the anticipated costs of the time and materials required, per 1,000 square feet of application, for the rest of the job.

4. The costs of solid sod. This part of the pricing schedule provides the contractor with comparison and a dollar amount of what he is saving the customer if the customer were to choose sod.

A few samples of the Pricing System Spreadsheet Program are on the following page links:
    

           example 1                     example 2                         example 3
 

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