A smart consumer is always price conscious. Winnipeg consumers are especially educated on price and always want to make sure they get the most for every dollar they spend. This is a good thing and a welcome thing as Hero has the most efficient yard care business in Winnipeg. There is no debate to this point as we routinely run circles around our competitors in terms of service efficiency, administrative effectiveness and using the same frugal mindset our customers do in trimming waste.
With this said, there are a lot of costs that go into a property maintenance business. The first thing that must be noted is that a snow and lawn service is essentially 2 separate entities. Equipment is needed for summer services and a different set of equipment is needed for winter services. This means each set of equipment is only being used for 5 month seasons, which greatly reduces the amount of money can be earned with the given piece of equipment. If the machines were able to work 12 months of the year they could earn the business far more money. Since they can’t, the business must pay money to buy a separate set of seasonal equipment for summer and winter. This costs money.
General business expenses that a business can expect are incorporation fees, legal/accounting fees, insurance (both liability and vehicle insurance multiplied by the number of vehicles in the operation). Other expenses include administrative fees for sales calls, invoicing, quoting, customer service, taking messages, taking payments, etc. All of these general expenses and we haven’t even began talking about snow or lawn services yet! A company pays simply to exist and these are examples of some of their fixed costs.
Of course the property maintenance operator finally has the phone ring and has to drive around Winnipeg quoting properties. This is an expenditure, and doesn’t always mean revenue as the customer doesn’t always sign up.
Sooner or later a new sale is recorded and it’s time to begin mowing their grass. It’s time to put those summer mowers to work but this also requires money. Before the mower even leaves the shop it needs to be inspected, maintained and tuned up. This is a labor expense and usually a parts expense to tune or service the mower and get it ready for grass mowing. The same process needs to occur for the tow vehicle which is usually a truck and is usually a much larger expense.
Once all of the equipment is ready to go the business starts to incur what I refer to as “servicing costs”. Those are, the costs to actually service the lawns that have signed up with Hero. This is different from fixed costs which are incurred by the business whether they are mowing lawns or not. The servicing costs for mowing grass are labor, fuel and maintenance. Labor is by far the largest expense as mowing Winnipeg properties is a very labor intensive job. The second largest expense is usually fuel. Even though Winnipeg gas prices are among the lowest in Canada, the amount of fuel consumed by a lawn service provider is far greater than that of the family car.
Once Winnipeg turns to winter, the sales and admin costs are repeated to acquire new snow removal clients. While the amount of labor is much less in winter than in summer, the biggest thing the client is paying for is to have their company on call 24/7. That goes for Christmas Day, New Years Eve and every other day in between. This requires the business resources to standby and usually that means paying employees on-call rates. The owner gets no warm vacations (or cold vacations) and must remain in Winnipeg to monitor the operation. As long as the contracts are in effect as snow services can be needed on an hour to hour basis. We stay on standby so our homeowners can enjoy their time away in the Caribbean and be welcomed back to Winnipeg with a nice clear driveway.
So as you can see, there are a lot of expenses in running a lawn and snow operation like there are with running any business. These expenses go hand in hand in determining the price we need to charge to complete services on your Winnipeg property.