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skurkp
08-14-2005, 08:33 PM
I am being asked to bid on a couple of properties. 1@ around 3000 per month and 2 @ 175 per month. Each property will be sreviced 42 times per year. I would like to start to charge a fuel surcharge so that if fuel goes up by 2-3% or more the surcharge would be added. If I bid a job and sign a contract and gas goes to $5 per gal. then I could loose profits. Is anyone presently doing this and is this accepted business practice? :confused:

Itsgottobegreen
08-14-2005, 09:55 PM
I got a "The contractor may add a fuel surcharge" in my contracts. Haven't needed it yet. But its there just in case.

Eclipse
08-14-2005, 10:00 PM
I know quite a few irrigation guys doing it around here but no maintenance companies as of yet.

2k1yzfr1
08-14-2005, 10:07 PM
I've had a $3 fuel surcharge added to every monthly statment for the past 5 months. I service 98% residentials and noone has said a thing about it. The extra $200-$220 a month covers all the extra expense on fuel.

br549oicu8
08-14-2005, 10:22 PM
We charge a $1 fuel surcharge per mowing on all accounts excluding pre-paid. It will soon be going to $2.........

Brianslawn
08-14-2005, 10:31 PM
we added 10 % last year mid year. this year just raised everyones price couple dollars more above surcharge. prob raise them again next year.

TClawn
08-15-2005, 01:00 AM
I am going to be raising my prices 10% to cover growing expenses, I have been eating the gas bill for awhile, and it is going to be part of price increase, so 10% instead of 7%.

when I first bid most of these accounts, gas was at a mere $1.80 a gallon. it is $3.00 for regular today, and will probably keep going up.

GarPA
08-15-2005, 05:34 AM
we have a fuel adjustment clause in all our service agreements. THis year the trigger for a fuel charge is 2.10 per gallon. Right now we are at 2/50 per gallon. So the 40 cent/gal increase is multiplied times the fuel we allocate to each property. Have never had a complaint about the fuel surcharge but this month and going forward, the charge will not be small as in the past so we'll see if anyone whines about it. Let them whine. Profit margins are thin enough with mowing and I will not eat these increased costs.

rodfather
08-15-2005, 06:26 AM
I've included a fuel surcharge (ranging from $5 - $30) every month for the 05 season. So far, not one peep from anyone.

QuadRacer041
08-15-2005, 07:03 AM
I started ser charging people $5 per month last June and just raised it to $7. That will proably go up again as the gas price's continue to rise.

Lawn Cops
08-15-2005, 07:20 AM
I added a 3.00 fuel sucharge last fall per visit per customer. No complaints and most actually said they were expecting it and expect more of an increase if they continue to go up. If it goes above 2.50 here it will go up a little.

craigs lawncare
08-15-2005, 01:21 PM
I have it stated in my contract that if gas escalates above $2.50 per gallon for premium gas, I will raise my prices 10%.
I have had this clause in my contracts for 4 years now and this is the first year I have ever had to use it.
No complaints so far.
I also added that should a customer request it, a receipt can be shown. Also, if the gas drops back below $2.50 per gallon, I will drop the extra charge. I just wanted my customers to realize I was not just looking for a way to gouge them.
This way it is fair on both sides. :)

Craig

Bgaz
08-15-2005, 03:27 PM
We are charging 3% of the mowing fee to cover gas from $1.75-$2.50. Sept. 1 goes to 4% of the mowing fee for gas over $2.50. Not addressed gas over $3.00 yet, most likely be 4.5%. Not one complaint from 90+ mowing customers.

Mr. Magpie
08-15-2005, 07:24 PM
If I was the signor of the surcharge contract, I would want it to work for me if the price of fuel went down!

bobbygedd
08-15-2005, 10:31 PM
the bigger companies, who have tons of overhead, will soon lower thier prices, to get more work, to make up for the hike in gas prices. soon enough, they'll be working for 2-3% profit, instead of the 5-7% they are scraping out now.

skurkp
08-16-2005, 07:24 AM
We are charging 3% of the mowing fee to cover gas from $1.75-$2.50. Sept. 1 goes to 4% of the mowing fee for gas over $2.50. Not addressed gas over $3.00 yet, most likely be 4.5%. Not one complaint from 90+ mowing customers.

I don't understand what you mean by the mowing fee. I would charge my percentage off of the visit price. There is the cost of gas to get the crew and equipment to the job location also. Am I thinking wrong?

skurkp
08-16-2005, 07:29 AM
If I was the signor of the surcharge contract, I would want it to work for me if the price of fuel went down!

From my understanding if I quote to you a certain price for service, the price quoted is at todays fuel and general supplies prices. If fuel goes up the surcharge is to cover that inflation. If fuel goes down, I don't see this happening, then the quoted price stays the same and no surcharge will be added. I personally would not drop my price because fuel went down, not unless it was considerably different.

craigs lawncare
08-16-2005, 07:33 AM
If I was the signor of the surcharge contract, I would want it to work for me if the price of fuel went down!

Mine does.
If the price goes back below $2.50 per gallon, the extra charge is dropped.
I want my customers to realize I am not trying to make gobs money on this. it is only there to protect my profits. :)

Craig

skurkp
08-16-2005, 07:36 AM
I would drop my price to the original price as stated on the service agreement not any lower. If at the end of the season the prices were still down then I would re-quote the property.

Richard Martin
08-16-2005, 09:45 AM
I'm just generally raising prices for about half of my customers next year. It will more than cover any increased fuel costs.

Lost Pine
08-16-2005, 10:54 AM
I find that people are alot less offended by it if you just "hide" it in your cost of the job. Hey, everybody's ticked off about fuel cost. I find that if you throw it in their face as a surcharge or fuel charge, it makes people furious !!

Just my opinion........