Adding Fuel Surcharge to the bill

[kemmer]

I am thinking of adding a fuel surcharge to my bill, i was trying to see a good number to use.

A $30 bill
6% Sale tax @ $1.80
2% Fuel Surcharge @ $0.60
Total $32.40

Does 2% look good, or should i make it higher?
I dont know what overboard....i dont want to make it 6%
@ $30 bill
3% $0.90
4% $1.20
5% $1.50

[Frontier-Lawn]

i do $2.00 a cut. becuase i use a gal per home between 2 mower's, edger, trimmer, & blower

[kemmer]

so u think 4% sounds good?

[Frontier-Lawn]

yes, & i think nothing more than $2

[ken0564]

I am thinking of adding a fuel surcharge to my bill, i was trying to see a good number to use.

A $30 bill
6% Sale tax @ $1.802% Fuel Surcharge @ $0.60
Total $32.40

Does 2% look good, or should i make it higher?
I dont know what overboard....i dont want to make it 6%
@ $30 bill
3% $0.90
4% $1.20
5% $1.50

sales tax on what? labor? i could be wrong but here you don't tax labor. just curious.

[JRAZ]

sales tax on what? labor? i could be wrong but here you don't tax labor. just curious.


Depends on your state. Here we charge tax on everything.

I just revised my billing policy to send out to all cst's at the end of the month adding a 3.5% fuel charge on all maintenance invoices. I have been against this idea but thought I would give it a shot. My catch is when we hit 2.70/gallon or higher. Almost there.

[Runner]

My analysis is this. I use approx. 1 gal per hour running the mower (just under). An average 1/2 acre lot is .4 to .5 hrs. running time. This gives me 1/2 gal of gas (including trimmer). If I consider 1/8 to 1/4 gal. for the truck, this is 2.09 per stop (based on 2.79/gal.). Now, I am not meaning to re-charge for ALL my fuel expenses, BUT if I cut that cost in half (back to the likeness of spending 1.40/gal. I can live with this, and STILL come out ahead. So, I figure about $1.00 per stop will make a significant difference. Now, I COULD refigure this, and figure it at $3/gal., and that might even be a smarter thing to do. .75 (3/4 gal.) @ $3 = 2.25..divided by 2, = $1.12. So, we are STILL better of to justcharge $1. I think I'm going to do this. $1 does NOT sound like alot to the customer. This is not to mention that much can be made up on future pricing of other sidework.

[kemmer]

Yes i do charge tax on mowing, we dont think of it as labor, but more of a service.

I think im going to make it 2.5%

[DLS1]

I am thinking of adding $1 per mowing starting in September. Please post how your customer responds to you the increase.

[PR Fect]

You need to take heed to Joe's post. Do the math and then you will answer your own question. You need to know your increase is justified. If you just bump your price with out knowing your costs its a shot in the dark, and your clients will know and if could bite you back. We are part time and use around 700 gals of premium gas for the lawn service per year. Truck, blower, mower, ect. At a 50 cent increase in gas per gal over last year we would need to make up $350.00 this season to cover our cost. That's about 1% of our total gross. So if we added 1% to our bills if would be more than enough to off set OUR cost. PR

[topsites]

You need to take heed to Joe's post. Do the math and then you will answer your own question. You need to know your increase is justified. If you just bump your price with out knowing your costs its a shot in the dark, and your clients will know and if could bite you back. We are part time and use around 700 gals of premium gas for the lawn service per year. Truck, blower, mower, ect. At a 50 cent increase in gas per gal over last year we would need to make up $350.00 this season to cover our cost. That's about 1% of our total gross. So if we added 1% to our bills if would be more than enough to off set OUR cost. PR

that's ok I just continue to run last year's prices if for no other reason than to let the competition sweat. That, and I find it a challenge.

I mean &^%*$ how much FUEL is being USED per yard? My average is 1 gallon truck + equipment and today the gallon is hardly a whole DOLLAR more than it was last year and hardly $1.50 more than throughout the past TWENTY YEARS! And all this over a lousy buck-fifty, gimme a break.

Once I cut fuel consumption to HALF what I used to burn, I saw that raising prices AFTER everyone else does it is even more FUN as the demand heads my way, creating that beautiful demand / supply problem opec likes so much.

Now I don't mess with this f*k of nickels and dimes and quarters and meager one dollar bills in this business. I always charge to the nearest 5, this helps me from outsmarting myself, before I raise prices I REALIZE what difference 5 dollars makes... Meanwhile, I don't gotta fart around with small change.

Way I do things this being an ESTIMATING business, invariably ~10% of customers end up near the top of the price range while another 10% or so is near the bottom and everyone else is in between. Now the bottom-of-the-barrel customers are the ones I go up on by 5 dollars but I carry them through the season at their current rate and before this year is over I will inform them that NEXT year it would be nice to get an extra 5 and tyvm. Here again, an extra $5 from 10% of my regular customers makes a WORLD of difference, that's like $50-$100/month and meanwhile I don't go bugging the guys who are paying middle-of-road OR top-of-rate prices because those guys will drop you in a new york minute.

sheee ...

[Runner]

that's ok I just continue to run last year's prices if for no other reason than to let the competition sweat. That, and I find it a challenge.
I mean &^%*$ how much FUEL is being USED per yard? My average is 1 gallon truck + equipment and today the gallon is hardly a whole DOLLAR more than it was last year and hardly $1.50 more than throughout the past TWENTY YEARS! And all this over a lousy buck-fifty, gimme a break.
Now I don't mess with this f*k of nickels and dimes and quarters and meager one dollar bills in this business. ... Meanwhile, I don't gotta fart around with small change.
sheee ...

Well, it wasn't 20 years ago...it was 2. and "all this over a LOUSY buck-fifty"?
$1.50 x 50 accounts...$75. That is $300 a month - $2100 a year.
Also, figure there are guys on here who have 100 accounts or better. They are looking at more than $4000 more per season for fuel costs...and how much is YOUR house payment?

[MOOSE]

I have been using a 3% fuel surcharge this year. 3% of the total bill. So if the total bill is $100 it's $103 with the surcharge. I have many who are way more then $100 every month so I diffently make up for the high cost in gas. I will also use the surcharge with fall cleanups. But 5% since we use more on cleanups. And no complaints from my clientele about the surcharge. Not one!

If you don't raise your prices or add a surcharge your screwing yourself. It's taking $$ from your pocket or food from your dinner table. Just my .02 cents worth.

[RedWingsDet]

I read somewhere, dont remember where. That if you were to compare fuel prices from 1980 to 2005, that gas was 10 cents more in 1980, providing income was equal to what it is now.

Like say in 1980, gas cost 1.17, well people only made $17k a year on average, so now when people are making like 60k on average and paying 2.70 its a big difference. Im not sure if those are the exact numbers, Im just using an example, but I did read that if you were to compare 1980 gas and 2005 gas, that it was 10cents more in 1980

[Metro Lawn]

I don't even see the need for an additional charge. It should be worked in to your base price already. After last season we raised our prices $1 per customer. This amounts to just over $400 a week. Last year gas was about $2 a gallon and we use about 200 gallons a week. $400 for fuel is our base number before adding the extra $400 of income from the price raise. Now we are at an $800 a week gas budget and only using $500 at a $2.50 pump price. We are covered up to $4.00 a gallon without sticker shocking the clients. I see so many people saying they are adding $2 a cut or $5 a cut to justify the gas price. At that rate, you may lose customers. The cost of gas is a factor in our business but not what everybody is making it out to be.

[TurfProSTL]

We've added $1 fuel surcharge per service (stop) since Spring.

About 5% of our customers have complained (mostly new ones). We don't argue, just credit and mark the account accordingly, and MOVE ON.....

[topsites]

Well, it wasn't 20 years ago...it was 2. and "all this over a LOUSY buck-fifty"?
$1.50 x 50 accounts...$75. That is $300 a month - $2100 a year.
Also, figure there are guys on here who have 100 accounts or better. They are looking at more than $4000 more per season for fuel costs...and how much is YOUR house payment?

Man I've been driving since 1985 and gas has ALWAYS been like 1.15 - 1.50 / gallon up until like a year or two ago, at the most.

Yes and 50 x 30 (rough avg. price/yard) = 1,500 gross out of $75 = 5 percent of 1.5k. 300 / month out of 75, gawddaim I DON'T CUT my customer's yards every week the entire YEAR that is a ridiculous ripoff and a swindle. Yes I am sure some of you are so proud to cut yards like 28 times a year but then customers hire ME because they are no experts and I cut a yard an average of 16 times a year and they can compare THAT figure to any of yours and they will see how with me not only do they save money but I really am looking out for BOTH our best interest and am not blinded by the greed like so many other lco's out there.

So increase a 30 dollar yard by 5 percent, you gotta be kidding I only go up or down in 5 dollar increments and if I increase the bottom-of-the-barrel AND all new customers by 5 bucks then I will see at LEAST 10 percent extra.

[topsites]

I don't even see the need for an additional charge. It should be worked in to your base price already. After last season we raised our prices $1 per customer. This amounts to just over $400 a week. Last year gas was about $2 a gallon and we use about 200 gallons a week. $400 for fuel is our base number before adding the extra $400 of income from the price raise. Now we are at an $800 a week gas budget and only using $500 at a $2.50 pump price. We are covered up to $4.00 a gallon without sticker shocking the clients. I see so many people saying they are adding $2 a cut or $5 a cut to justify the gas price. At that rate, you may lose customers. The cost of gas is a factor in our business but not what everybody is making it out to be.

In short and in nicer terms, my point exactly.

[DRM Ventures]

I have a 5% surcharge written into the contract. The funny part of it is that last year and this year it was triggered at $2.19 a gallon for 93 octane. I didn't forsee the current prices, when contacts went out in January. I have had no complaints......

Derek

[GarPA]

Granted, fuel cost, as a % of total costs is not large...but..over many accounts per month, unless there is some "slack" in the price per cut, the increased fuel cost is not something I want to eat.

We do what Joe and PR Fect do. We allocate total fuel costs(includes vehicles) per account as a %. Most accounts are allocated at between 1 and 5 gals per week with a trigger cost in the contract. This year the triggger was 2.10 per gallon. So at 2.60/gal, the avg account gets a monthly fuel surcharge of $4 to $6.

Peanuts? maybe...but not peanuts over many accounts over the entire season.
Mowing prices(even mine and we are not at the low end of prices) are no higher than they were years ago. Instead we buy bigger, faster, more costly machines to remain competitive. Profit margins are tight for those who know their numbers and eating $x,000's of increased costs is not an option for me....just my humble opinion.

[Rob's Lawn Care]

For myself, to cover higher costs the charge is 10% added to the bill. Most all of them will understand. just like all other things go up and they don't give it to YOU for free. It is a good idea to write a fuel surcharge clause into your yearly contracts or you might be sorry you didn't. just something to think about. Good Luck

[jbell113]

sales tax on what? labor? i could be wrong but here you don't tax labor. just curious.
You are correct Ken no sales tax for labor in GA.