Most landscaping owners price jobs based on what competitors charge or what feels reasonable. That works until it doesn’t. You win a big job, your crew works for two weeks, and when you look at the bank account afterward you wonder where the money went. The problem is almost always the same: you didn’t know your true cost per crew-hour, so you priced too low.

Profitable pricing starts with knowing three numbers. First is your direct labor cost per hour, which includes wages, payroll taxes, and workers comp. A crew member earning $18/hour actually costs you closer to $22-24/hour once you add employer taxes and insurance. Second is your materials and equipment cost for the specific job. Third, and this is the one most landscapers miss, is your overhead per crew-hour.

Overhead includes everything that keeps the business running but doesn’t tie directly to one job. Truck payments, fuel, insurance, equipment maintenance, office costs, your own salary. Add up your total monthly overhead, divide it by the number of billable crew-hours you produce in a month, and you get your overhead cost per crew-hour. If your monthly overhead is $8,000 and your crews produce 600 billable hours, that’s about $13.33 per crew-hour in overhead that needs to be absorbed by your pricing.

Healthy landscaping companies keep their total cost of revenue (direct costs plus overhead) between 60-70% of revenue. That means for every dollar you bring in, 30 to 40 cents is gross profit. If your fully loaded cost per crew-hour is $55 and you want a 35% margin, you need to bill around $85 per crew-hour. Price below that and you’re slowly bleeding money even if every job feels busy.

The only way to know these numbers with confidence is to track costs at the job level. When you track labor hours, materials, and equipment usage per job, you build a history of what different types of work actually cost. A spring cleanup has different cost dynamics than a hardscape install. Mowing routes have different overhead absorption than one-off tree removals. Job costing gives you real data so you can price each type of work based on what it actually costs you, not what you hope it costs.

Without that data, you end up in a common trap. You price competitively on big jobs to win the work, then subsidize those losses with smaller jobs where your margins happen to be better. You stay busy but never build cash. Worse, you can’t tell which jobs are profitable and which ones are dragging you down.

Once you have a few months of job costing data, pricing gets straightforward. You know your cost per crew-hour for different service types. You estimate hours and materials for a new job, apply your target margin, and quote a number you can stand behind. If a customer pushes back on price, you know exactly where your floor is. You can make an informed decision about whether to negotiate or walk away.

This all depends on having clean, accurate books that track the right things. If your expenses are lumped into a few vague categories and you don’t know your real overhead number, every price you quote is a guess. Rock Steady Bookkeeping works with landscaping and home service businesses throughout Wisconsin to set up the kind of tracking that makes profitable pricing possible. Getting your numbers right isn’t just an accounting exercise. It’s how you stop leaving money on the table every time you send a quote.