Which Rate vs How much PROFIT

I am learning more about window cleaning (WC) [B]BUSINESS [/B]from learning more about Lawn Care (LC).

I am also teaching them more about LC by being a WC.

Example: I now know why it is more important to know, really KNOW what ONE stop makes me in minutes to know what the stop makes me in general.

LC PRO’s divide the day in three ways.

  1. Day rate. This is the amount the day generates from the moment I leave the shop until I return.
    When the truck leaves the shop, I write down the time. Period. Nothing else goes in this column. Then upon return, that number is also recorded.

  2. Route check.
    When the doors open at #1 stop (we call it ‘gate-down’ since the gate of the trailer has to go down to allow the mower out) the time is recorded.
    Then, when the gate is up on the LAST STOP OF THE DAY. the time is recorded.

  3. Time check (VITAL) First stop gate down time is recorded, first stop gate up time is recorded. Also record the $ for that stop. Example: Gate down 8:05. Gate up 8:25. Time 25 minutes. Rate $25.00.
    This stop generated $1 per minute. (assume this is a one man operation)

Repeat this for EACH STOP FOR THE DAY.

Now, take this info daily for one year.

This type of information is crucial to LC business because, without it, it is ONLY a guess trying to decide what accounts are good/bad. And more important, WHY!

If it turns out this post is interesting to others, i can delve a little deeper into what you then do with the info BEFORE you toss out or pick up any further accounts.

Lets hear more my friend.

Here’s an example of what this info can provide.

Let’s say an owner knows his Wednesday route produces $350.00 but his Monday route only does $250.00.

at first glance, one could assume Wed are better than Mon by $100.00. The owner has certainly tracked his basic expenses such as gas, mileage, time to drive etc. BUT without the exact details of THAT days ACCOUNTS, he has missed something crucial: His “man-minutes” as opposed to his man hours (labor)

This concept will take some time to truly expose here because it takes forever to explain in person. But let me give the bottom line.

Any account is measured soley by the accounts ability to be profitable. All to often we, as owners over look the value of the account by mixing in the effort or expense to acquire the account or to get to the account.

what if an account is only $25 BUT is 30 miles out of the way? Well, if the account generates what you have decided is the best man minute you can ever produce (say $1 a MM) then that account, in and of itself, is worth the effort. IF and only if, by using this info, you have learned what exact type of ‘account’ is the most profitable account first.

Now, in order to know what type of account is best suited for YOUR efforts, then (and only then) do YOU know what types of accounts to try and capture.

The $25 account above is profitable ONCE I get there. BUT the drive time is so far out of the way the issue is travel. NOT travel expense.

I can’t move my shop closer to the account nor can I move the account closer to my shop. Right?

BUT…I can fill in the gaps between here and there OR I can surround the account with accounts that produce enough MM to cover the expense of getting there OR can I add additonal service to increase either

  1. The $ per minute or

  2. More minutes.

We all to often get focused on our hourly rate rather than our minute rate. I can not change how long it takes me to get from point A to point B. But, I can increase the MM or the $ per MM to a point. But only after I know what my average is.

MM help determine what types of accounts to market for. Then, I know how to market for THOSE ACCOUNTS.

wow…this takes forever. I will go in as long as someone cares.

This is all great stuff Phil. I need to read and reread these posts over and over for the next little while to help me with my storefront wc route. On site, my per hour rate looks fine but when breaking it all down to mm’s it totally blows.

Once you know it blows, you can find out why.

Easier to explain using LC. But you’ll get the idea.

I got a yard that takes me 20 and I am right at .95 a mm. Another right next door that pays $20 yet I can only seem to get to.50 a mm.

Easy to mix these numbers and get an average, the settle for the average once I multiply that by 60. But it is wrong.

The slower yard is slower because I am doing something wrong. (I know what now and will fix it) so, now I can focus on THAT YARD until I figure out why it is slower.

The issue is the slower yard has more trees I must trim around. That adds time. BUT…once I learned that, I can burn the grass (a term meaning trim down the weeds around each tree so low it kills that area and the weeds will not grow again for a few weeks) so, for some time my speed will increase.

Apply this same info to say the Millers house. There is a shrub in my way at the back Bay window. It causes me to need a ladder or a pole. What if I trimmed the shrub back?

Or, knowing that my Mc Donalds has a drive through with cars in it from 6:00 AM until right after 8:00AM is valuable. I cannot pole the windows since the cars will hit my pole. So, knowing that can allow me to adjust my route (recall the route check?) so I can do the window there at 9:00 AM. That alone cust 15 mintues off that job. My MM went up by .20.

Until I know what a .95mm yard looks like (by tracking the info) I cannot market to those yards. Or, in our case, the window accounts.

These posts here by Phil are GOLD. Everyone should read them numerous times.

These posts are me regurgitating info taught me from the other side.

This info allows me to find my niche. Once i find my nice, then I know who to market to. Once I know who, I can figure out how.

Enter Kevin’s book.

I was thinking I wanted the high dollar yard accounts. Then, I saw that every other LC wants em too. that depressed the market. In the meanwhile, the $20 accounts are being left behind. I now know that is where my MM is the highest.

This also affects my price-point. To the degree I know, to the second, what MY time is worth.

:slight_smile:

Good stuff Phill, real good. In the example about the Millers house (How did you know that I cleaned the Millers windows, and that they had a shrub in the way of that bay window???) I could also just tack on an extra $10 to the total to make up for the time, if they don’t want to trim it right?

Sure. But the point here is so few business owners ever even check the effective use of their time. No one ever showed em how.

I use the shrub idea because it is true for me…and I can trim it.

I fell victim to the notion that some accounts were good or bad based on the total and the cost.

Great thread, Phil. Thanks for pointing out the value in data collection and analysis.

Now you’ve done it!

Phil’s next business venture: AAA Data Collection & Analysis Service

:wink:

In basics Phil - are you talking the difference between pricing windows against pricing the whole of the job i.e. travel, gas, time taken, travel to next job etc?

No. How one decides to price the job has no bearing on this.

The ‘basics’ here are simply as larry stated above. Data collection.

One would of course want to include the expense to get there. But, expense or travel is NO reason the decide if a job is good or bad.

his mind runs totally different then most peoples, that’s why he’s such a innovative and ridiculously smart guy!

I’m glad I know him and get to hang out with such a cool kat

Back at ya Matt.

Wow.

Just did some math and learned one of my favorite accounts went down to .46 a MM!

They had put some stickers on the exterior windows. Holiday items for advertising new hamburger specials. I knew they took longer but I had no clue how much!

Now I know exactly how much more time it takes so I also know how much more to charge them until they come down. OR…I can charge to take em down. Or…I can add a little now and take em down for free.

For those of you who get it…use it.