Lawn care pricing strategy example with worksheets

QuickBooks is the most common accounting tool at this business size in the landscaping trade. The reports below work in QuickBooks Online or Desktop; if you use Wave, FreshBooks, or another tool, the report names differ but the underlying data pull is the same.

1. 01**Profit & Loss by Class or Job**, In QuickBooks Online: Reports > Profit and Loss > Customize > Rows/Columns > Group by Class (if you have set up service-line classes) or by Customer/Job. Run for the last full quarter. This report shows you revenue, direct costs, and gross profit by service line or by customer. If you have not set up classes yet, do it now, one class per service line (Mowing Routes, Cleanups, Mulch/Beds, Fert/Weed, Design-Install, Snow). Every future transaction coded to a class makes this report more useful.
2. 02**Job Profitability Summary** - In QuickBooks Online: Reports > search 'Job Profitability Summary'. This report shows revenue, costs, and profit per customer or project. Run it for the last 90 days. Sort by profit margin % (lowest to highest) to immediately see which jobs or customers are dragging your average down.
3. 03**Time by Job or Employee** - If you track crew time in QuickBooks Time (formerly TSheets) or in your job management software, pull a time report filtered by job for the same 90-day period. This gives you actual hours per job, which you need to calculate real labor cost per job in Section 06.
4. 04**Vendor/Supplier Expense Detail** - Reports > Expenses by Vendor Summary. Filter to your material suppliers (nursery, mulch yard, supply house). This gives you total material spend by supplier for the period. Cross-reference against the revenue on the same jobs to calculate your actual material cost as a percentage of revenue.
5. 05**Accounts Receivable Aging** - Run this monthly. Slow-paying customers erode your effective margin because you have already paid crew and materials. Any account over 45 days is a cash flow problem, not just an accounting entry.

Pull your last full payroll period and work through this calculation for each crew role. The goal is a single burdened hourly cost you can plug into every job estimate with confidence.

1. 01**Step 1 - Gross wages for the period.** Pull the payroll register for your last full pay period. Record gross wages paid to each field crew member. Example placeholder: Crew Member A gross wages = $1,120 for a 2-week period (40 hrs/week × 2 weeks = 80 hours paid).
2. 02**Step 2, Add employer payroll taxes.** Multiply gross wages by your employer Social Security + Medicare rate (pull from your payroll provider's employer tax summary or Form 941, do not use a rate from this document). Add your federal unemployment cost (pull from Form 940, enter as a per-hour dollar amount from your last filing). Add your Missouri state unemployment rate (pull from your Missouri Department of Labor employer account, your assigned rate varies by experience). Formula: Gross wages × your employer SS+Medicare rate = $____. Add FUTA per-hour × hours = $____. Add SUTA rate × gross wages = $____.
3. 03**Step 3 - Add workers' comp.** Pull your policy declarations page for your Missouri WC rates. For mowing and maintenance work (Code 9102), multiply gross wages for that work by your per-$100 rate ÷ 100. For install work (Code 0042), use the higher rate on that payroll. Example: $1,120 wages × (your Code 9102 rate ÷ 100) = $____.
4. 04**Step 4 - Add vehicle allocation.** Take your monthly truck cost (payment or depreciation + insurance + fuel + maintenance) and divide by the number of billable crew-hours that truck supports per month. Example: $1,200/month truck cost ÷ 160 billable hours = $7.50/hour vehicle allocation.
5. 05**Step 5, Add tools and equipment depreciation.** Total your annual small-tool and equipment cost (mowers, trimmers, blowers, trailers, purchase price ÷ useful life in years). Divide by annual billable hours. Example: $18,000 equipment ÷ 5 years ÷ 1,600 billable hours = $2.25/hour.
6. 06**Step 6 - Divide by billable hours, not paid hours.** Paid hours include drive time to the first job, shop time, rain days, and any non-billable activity. Billable hours are only the hours you can charge a customer for. Track this ratio for one month: if a crew member works 80 paid hours but only 65 are billable, your billable ratio is 81%. Divide total burdened cost by billable hours only. Example: ($1,120 wages + $____ taxes + $____ WC + $600 vehicle + $180 tools) ÷ 65 billable hours = your real burdened rate per billable hour.

Do this calculation for your last 10 closed jobs across each service line. The median result is your real gross margin for that service, not the industry band, not your gut feel.

1. 01**Step 1 - Pull the invoice.** Record the total amount invoiced and collected for the job. This is your revenue for the calculation.
2. 02**Step 2, Subtract material cost.** Pull the supplier invoices tied to that specific job. Use actual invoiced cost, not your estimate. If you did not track materials by job, start doing so immediately, this is the most common reason operators cannot calculate real margin.
3. 03**Step 3 - Subtract burdened labor cost.** Pull the time entries for that job (from your job management software or time-tracking tool). Multiply total crew-hours on the job by your burdened hourly rate from the calculation above. This is your direct labor cost for the job.
4. 04**Step 4 - Subtract any subcontractor or dump fees.** If you hired a sub for any portion (stump grinding, irrigation, concrete), subtract that cost. Subtract permit fees and any direct job-specific costs (equipment rental, specialty materials).
5. 05**Step 5 - Calculate gross margin.** (Revenue - Materials - Burdened Labor - Subs - Direct Costs) ÷ Revenue = Gross Margin %. Example: $3,200 revenue - $680 materials - $720 labor - $0 subs = $1,800 gross profit ÷ $3,200 = 56.3% gross margin.
6. 06**Step 6 - Run this for 10 jobs per service line and find the median.** Sort the 10 results from lowest to highest and take the middle value. That median is your real gross margin for that service line. Compare it to the target bands in Section 08 and adjust your pricing if the gap is more than 5 percentage points.

• **Drive time not allocated to jobs.** If your crew drives 45 minutes to a mowing stop and that time is not reflected in your per-stop price, you are paying for it out of margin. Look at your time entries: if crew clock-in to clock-out hours significantly exceed the hours you estimated for the job, drive time is the first place to check.
• **Material waste above estimate.** On mulch and plant installs, pull your supplier invoices against your quantity estimates. If you consistently buy 15–20% more material than you estimated, your waste factor is wrong, raise it in your estimating template before the next job.
• **Cleanup and haul-away time not priced.** Spring and fall cleanups generate debris volume that takes real time to load and haul. If your cleanup price is based on mow-and-trim time only and does not include a debris disposal line item, you are giving that labor away.
• **Fertilization and weed control: product cost creep.** Herbicide and fertilizer prices have moved significantly with input cost inflation. If you set your fert/weed program pricing more than one season ago and have not repriced against your current product invoices, pull your last three supplier invoices and recalculate your cost per 1,000 sq ft treated.
• **Snow removal: flat-rate jobs in a heavy storm year.** A per-push or per-inch contract protects you. A flat seasonal contract in a year with above-average snowfall can turn a profitable account into a loss. Look at your snow jobs from last season: calculate actual hours and fuel per event and compare to what you collected. If any account ran more than 1.5x your estimated events, that contract needs a trigger clause or a per-push structure at renewal.
• **Install jobs: scope creep absorbed without a change order.** On landscape design-install jobs, the most common margin leak is additional plant material, grading, or irrigation work added verbally mid-job and never invoiced. Pull your last three install jobs and compare the original quote scope to the final supplier invoices, any material on the invoice that is not on the original quote scope is a change order that was never charged.

• **Quoting from a desired margin without checking the resulting price against your market.** If your cost math says a cleanup should be $650 but every competitor in your zip code is at $400–$450, you either have a cost problem or a positioning problem, and you need to know which before you price the next one.
• **Confusing gross margin with net margin.** A 40% gross margin job with 28% overhead allocation is a 12% net job. Operators who report their gross margin as their profit are consistently surprised when the bank account does not reflect it.
• **Averaging margin across service lines.** A mowing route at 52% gross margin and a design-install at 24% gross margin average to 38%, which tells you nothing useful about either. Track margin by service line so you know which work to grow and which to reprice.
• **Locking in recurring contract prices without an escalation clause.** A mowing contract signed at $160/month in year one that does not allow for annual price adjustment will erode in real terms every year as wages and fuel rise. Build a CPI or fixed-percentage escalation into every multi-season agreement.
• **Treating material markup as optional on small jobs.** The sourcing, loading, and delivery time on a $200 mulch order is real labor. If you pass material through at cost on small jobs 'to stay competitive,' you are subsidizing those customers with your own time.
• **Not separating billable from non-billable hours when calculating labor cost.** If you divide your total payroll by total paid hours, you get a cost-per-hour that understates your real cost per billable hour. The burdened rate worksheet in Section 11 uses billable hours only.

• **Direct labor** - Estimate crew-minutes per stop including mow, edge, trim, and blow. Multiply by your burdened hourly rate from Section 05. A 3-person crew's time is 3x the minutes, not 1x. Pull your actual time-per-stop from your last 30 days of time entries for the most accurate input.
• **Drive time between stops** - Allocate a share of drive time to each stop based on route position. A stop that adds 12 minutes of drive time to the route costs you real labor dollars. Route density is the lever: tighter geographic clusters reduce this cost per stop.
• **Equipment depreciation and fuel** - Mowers, trimmers, blowers, and trailers depreciate. Divide annual equipment cost by annual billable hours to get a per-hour equipment cost, then multiply by crew-hours per stop. Fuel cost per stop can be estimated from your monthly fuel spend divided by total stops per month.
• **Overhead allocation** - Divide your monthly overhead (from Section 05) by your total monthly billable revenue to get an overhead rate as a percentage. Apply that percentage to each stop's revenue to ensure overhead is covered.
• **Seasonal adjustment**, In Kansas City, the mowing season runs approximately April through October (roughly 28–32 weeks). If you price monthly flat-rate contracts, divide your annual per-property revenue target by 12, the off-season months are subsidized by the peak months. Price accordingly.

A weekly mowing contract for a 0.35-acre residential property in the Kansas City suburbs. Flat terrain, no gating, 8 minutes of drive time from the nearest other stop on the route. Includes mow, edge sidewalk and driveway, string-trim around beds and fence, and blow clippings from hard surfaces.

• Crew labor (3 crew × 25 min = 1.25 crew-hrs)

  Burdened rate $28–$42/hr × 1.25 hrs

  $35 – $52

• Drive time allocation (8 min × 3 crew)

  Proportional share of transit labor

  $5 – $8

• Equipment cost per visit

  Mower depreciation + fuel + trimmer/blower

  $4 – $7

• Overhead allocation (per visit)

  Monthly overhead ÷ monthly visits; verify with your overhead worksheet

  $6 – $10

• **Underpricing the first-season contract to win the account, then failing to raise it.** A price set too low in year one becomes the customer's anchor. Build a 5–8% annual escalation into the contract language from day one.
• **Not tracking actual crew-minutes per stop.** Estimating from memory produces prices that drift from reality. Time your crew on every new property for the first two visits and record it.
• **Pricing biweekly the same as weekly.** Biweekly mowing takes longer per visit because grass is taller and clippings are heavier. Price biweekly stops at 1.15–1.25x the weekly rate, not the same.
• **Ignoring route density when accepting new accounts.** A new stop that adds 20 minutes of drive time to your route costs you real money. Accept geographically isolated accounts only at a premium that covers the drive time.
• **Flat monthly pricing without a minimum-cut clause.** In a drought year, grass may not need cutting every week. Without a minimum-cut clause, customers will call to skip visits and your monthly revenue drops while your fixed costs do not.