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View Full Version : Raising Prices ...? (Cost of Living, ect...)


Sharp Services
09-23-2005, 09:45 PM
OK ... hear is my question. Every year (at my full time job) in July, I usually get a cost of living raise of 1.5 to 3 %. I have never gone up on my prices. I got a yard 2 years ago for $50 a cut and I am still doing it for $50. So ... in reality, I have gone down on the cost of doing his yard every year. Good for him, bad for me. So does everyone have a yearly rate increase? Should I go up on the $50 yard next year to $51 per cut (2% rate increase)? How does everyone else handle this?

I want a raise!

Sean Adams
09-23-2005, 09:52 PM
Is $50 a good price for the lawn in terms of your time spent? Was $50 a great price for you 2 years ago or was it the right price for the job? Also, going to depend on your market (client's cost of living increases too, will your competition step in due to price increase...).

In the mowing game, if you can raise your prices, it probably means you are excellent in the area of customer service. A few dollars won't matter. Sometimes profiting just a bit less is worth it to keep clients. I'm not saying lose your behind but if you are still making a nice profit, just slightly less than in the past and this customer keeps you busy elsewhere (mulch, shrubs, etc...) and helps keep your route tight you may consider keeping the price where it is.

Nosmo
09-23-2005, 10:19 PM
Mowing is the main service offered but it also opens the door for other money making services to the same customers if they are in the market.

I'd say quote a mowing price you can live with and make money on at the same time. This still leaves you with an opportunity to offer other services with a customer you have not priced yourself out of range with what he considers too high.

Some of them may be cheap skates but on the other hand
you know what you have to charge (or close to it) and the customer knows whether to accept it or not.

Kholder
09-23-2005, 10:28 PM
Our business is operated soley on gas, if you are suffering at the pump then you should either go up on prices or try to use a surcharge for gas until prices drop. I would have bumped 10 % to $55.00. If you have a relationship with customer and do good work they won't have any problems. Most of this business is knowledge and the ability to sell yourself. That is what seperates the small guys from the large companies (plus capital). Several years ago I got away from the seasonal mowing, I went to annual set-ups for everything. Doesn't work for everyone but you wouldn't believe how many residentials wan't annual bids just because I say it is an all inclusive plan.

jblawns123
09-23-2005, 10:43 PM
It is Etc. not Ect.

Thanks

jblawns123- The Etcetera Corrector.

Sharp Services
09-24-2005, 12:22 AM
It is Etc. not Ect.

Thanks

jblawns123- The Etcetera Corrector.

Thanks ... now I can say I really did learn something new today!!

Envy Lawn Service
09-24-2005, 01:46 AM
I go up a little every year on everyone. If they don' think enough of me to allow me an annual raise, then to be honest, I don't think much of them an their needs either.

See how that works?

If they would rather go through the trouble and take the risk of trying another service than pay me a bit more to continue then so be it. No skin off my nose.

Now, how much I go up on each individual account is evaluated in an individual manor. I consult my account records, facts and figures, and also the personal elements, demograhics and geography. But even something like a mow-only type of account that I do NOT want to increase... I still raise atleast $1 per cut every year and it scales up from there into percentages or flat increases I feel I need for one reason or another.

You are correct in that if you do not give yourself a raise each year that you will soon be going backwards. The cost of everything else climbs from year to year, so why not the cost of my services? What makes them less worthy of an increase than everythiing else? (good point, no huh?)

jtrice11
09-24-2005, 01:35 PM
OK ... hear is my question. Every year (at my full time job) in July, I usually get a cost of living raise of 1.5 to 3 %. I have never gone up on my prices. I got a yard 2 years ago for $50 a cut and I am still doing it for $50. So ... in reality, I have gone down on the cost of doing his yard every year. Good for him, bad for me. So does everyone have a yearly rate increase? Should I go up on the $50 yard next year to $51 per cut (2% rate increase)? How does everyone else handle this?

I want a raise!

If done properly, you should service the yard at market value, and then implement a cost of living raise each year on the contract. I plan on raising all of my prices next year by 3-8% depending on the size of the property.

ed2hess
09-24-2005, 05:40 PM
I have been in this business 25 years and the prices on yards have not gone up very much......you aren't going to get a "cost of living increase" in this business. Everthing is run by competitive pricing. If you are a part time guy with a good first job then you raise prices until they drop you and get another customer. If you a full time service, with no other income, you suck it up and mow on at competitive prices to keep building the business. Part time guys with profit margins over 50% can't be hurt much by higher gas prices and I think that isn't the best argument you could make for raising your prices.

yrdandgardenhandyman
09-24-2005, 07:43 PM
Our business is operated soley on gas, if you are suffering at the pump then you should either go up on prices or try to use a surcharge for gas until prices drop.



You don't buy ins.? Don't you pay taxes? What about equipment? What does it cost for oil and repairs? How much does a new set of blades cost for 1 mower?
These prices all also go up. I just threw a straight 2.5% increase on the mowing and only lost one customer. She was one who was on my 'to drop' list for next year anyway. Landscape work will definitely go up more than that. Material costs and increases in labor costs.
I like your idea of trying different business models till you find your niche.

Nathan 281
09-24-2005, 10:09 PM
The cost of living has gone up here a house 2 blocks from me more than doubled in value since 1999. Another house i have been working at for a long time now has went up a lot in late 2002 he paid $ 500,000 My first thought was the guy is a idiot one story single car. Now is at $700,000 I will be surprised if he gets it.

Here is a inflation calculator

http://data.bls.gov/cgi-bin/cpicalc.pl

Last year was the most inflation we have seen in 14 years my guess is this year will be even more

PMLAWN
09-25-2005, 08:31 AM
Always adjust prices. I see that most here will price at an even # 25 - 30 - 35 - 50 It than becomes hard to raise $5.00. I like to price on the dollars so it is easy to raise $1.00 or so each year if I have to.
( I even have a contract that pays $2076.99 a month- Just the way it worked out when we totaled it at the start)