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View Full Version : Opinion needed?


walker-talker
09-23-2005, 09:31 AM
Usually I don't ask for opinions of this nature, but I am curious and could possibly use some help on this one.

I gave an estimate for mowing lawn A for $27.50...that was my estimate. It took me longer than planned and had planned on raising their rates the following year to around $34. Well, before the year was up I picked up their two of their neighbors (through their referral). One next door and one across the street. Now, mowing all 3 I am making more than my planned hourly rate. Do I still raise their rates or live with it?

I choose to live with it. I thought about telling them before next season what I was going to do, but under the conditions I will keep their rates the same, but if I lose one or both of their neighbor's, the increased rate will apply immedietaly. Should I do this or not?

I already have a referral plan in place and owe them 2 free mows, which I will honor. I also do the leaf removals for the Lawn A. Lawn B I have picked up their leaf removals, chem apps and aerations. Lawn C I have picked up their aeration, leaf removals, overseeding (working on chem apps). Acutally, lawn C told me to do whatever their lawn needs and just bill them. All three are weekly service.

As ruthless as it may sound, the best finanacial decision would probably be go ahead and raise their rates and should they drop, no big deal....their services are not bringing in near the numbers as their neighbors, but I don't have near a full schedule, so the revenue is still helpful and I feel I owe them something for giving me all that new business.

What do you think?
Matt

Branchland
09-23-2005, 11:52 AM
I would keep the rates the same. You might loose one of the yards later but you might gain more. It's always better to stay in one place and mow a couple than off load for one. With that one yard the customer wants you to do what ever is needed, you may pick up even more work. This year I picked up a customer and I hated the yard. It is in real bad shape but I'm already in the neighborhood and he's been paying on time. After the first time mowing it I thought I might have to go up on price or just drop him. Well a couple of weeks later I picked up his neighbor so it made it hard to drop. Their yard is crappy too. It's just hard for me to drop a yard if I have a couple in one stop.

olderthandirt
09-23-2005, 12:10 PM
Your cost of living go down? No of course not, so if you keep the prices the same your actually doing them for less money next yr than this yr.

jbell113
09-23-2005, 12:42 PM
I would try raising the price in a smaller increment like go from $27.50 to $30 instead of $34 especially if your making more per man hour than you need.

walker-talker
09-23-2005, 12:51 PM
Your cost of living go down? No of course not, so if you keep the prices the same your actually doing them for less money next yr than this yr.
Good point Mac and I guess I forgot to mention that all my rates will be going up. Not quite sure yet on how much until I figure my expenses at the end of the year.

Nosmo
09-23-2005, 03:33 PM
It somewhat sounds as if on one hand you want to keep them and on the other you don't mind losing one of them or maybe all.

If I wanted to keep all three I would not raise the price. I probably wouldn't raise the price on the other two if one of them dropped.

Look at it from another situation. A small apartment house has 3-renters. One renter moves out because he is the last person on earth who would live in that room and finally had enough. Do you raise the rent on the other two
because one moved out ?

Nosmo