price hike

[garth1967]

petrol here in aus hit $1.40 per litre.when i first started my business it was$.90 cents .i think its time to put prices up .have any of you guys needed to do it and how do you approach your customers about it

[stuffdeer]

Well, According to my Caculations,

We are at around .81 cents in here America.

1 gallon = 3.7 Liters

1 gallon of gas = 3.00 / 3.78(Liter in a gallon) = .81

Hope that is right

[Evergreenpros]

Actually if he's talking AUS dollars they're only $.75 per 1 USD. So they're about $3.50USD per gallon of gas.

$1.40 x 3.33 x 0.75 = $3.50USD or $4.66AUS per gallon.

And I don't really believe in raising prices for a fluctuation in gas prices. It's kind of naive to believe $1.00 gas will ever return. We're stuck with $2 gas in the winter and $3-4 gas in the summer, same as the previous number of years.

It costs about $1.80 per gallon for the crude to make gas and you only get 19 gallons of gas out of a barrel (42 usg) of oil. This doesn't count refining costs, transportation costs, taxes, retail markup, etc. As long as crude is above $50 a barrel we're stuck with $2+ gas. And remember tax is almost 50 cents a gallon in most states.

[Richard Martin]

It costs about $1.80 per gallon for the crude to make gas and you only get 19 gallons of gas out of a barrel (42 usg) of oil. This doesn't count refining costs, transportation costs, taxes, retail markup, etc. As long as crude is above $50 a barrel we're stuck with $2+ gas.

Wow, that's really misleading. You make it sound like the only thing refineries get out of a 42 gallon barrel is 19 gallons of gas. The other 23 gallons are not lost in the process. There are many, many products that come out of that liquid carbon including oils of every type and description, fertilizer, plastics and thousands of other products.

[garth1967]

Lads This Is Not Meant To Be An Argument About The Conversion And What Have You ,please Read The Other Half Of My Question

[Green-Pro]

I budgeted for gasoline to go up to $4 per gallon this year. I then raised my prices accordingly prior to the season start. I don't like fuel surcharges and I'm sure my customers don't either. Personally I think its better business to plan for higher costs (even off the scale, so to speak) and then set price structure based upon that rather than spring surcharges and increases on customers during the season.
JMO
P.S. Every one of my suppliers frome the stone yards to the fert & pesticide folks never put a surcharge on last year. They did raise prices this year across the board for product and delivery, but I'd bet my first born there will be no surcharges again this year.

[garth1967]

so you mean you look at cutting costs in other areas

[ArkansasLawns]

I went up on the bottom half of my customers last year. The ones that I was charging less per cut. This year I went up on the ones that did not get the increase last year.

I just told them straight up, face to face, that I was going to have to go up in price. This was back in early March. Most had no problem with the increase. They just smiled and said they expected it.

I have one customer that I went up 25%, $10. Should of gone up last year. I have mowed for her 4 years and she even moved once with no increase. She went out and got the best lawn fertilizer service in town and now her grass grows like crazy. I never had to bag her back yard but now I need to bushhog it first and then bag(not really but it seems that way) to make it look good. Still have her yard.

If you lose a customer over the increase you will find others to take their place. Especially if you do the quality work like I know you do. Referrals and word of mouth, keeps my phone ringing.

[garth1967]

thanks mate good post

[The Kiwi Lawn Ranger]

Garth , I am accross the ditch our gas is at $1.71 a litre. I have a little comfort padding but if the price goes to $2.00 per L which they are predicting i am sure going to have to raise the price .

The Lawn Ranger
Taupo New Zealand

[Green-Pro]

so you mean you look at cutting costs in other areas

Well thats a good place to start. I was referring more to the fact that, at least here in the U.S. we know what happened to fuel prices last year every time a manmade or natuarl disaster occured. I thought it prudent to budget my fuel price increase for 2006 at a higher dollar amount than one normally would and base price increases for all services on that pre-set amount, at least in regards to fuel.

[garth1967]

Garth , I am accross the ditch our gas is at $1.71 a litre. I have a little comfort padding but if the price goes to $2.00 per L which they are predicting i am sure going to have to raise the price .

The Lawn Ranger
Taupo New Zealand

taupo ,what a beautiful place.wow $170 thats expensive and i know all the basics are quit expensive in NZ .what do you charge for a basic lawn there:waving:

[garth1967]

thanks greenpro good post mate

[topsites]

Lads This Is Not Meant To Be An Argument About The Conversion And What Have You ,please Read The Other Half Of My Question

My prices go up a little every year, it is a slow but constant, steady process.

Since I round to the nearest 5 or 10 dollars, a price increase is at least 5 dollars hence I focus said increase mostly on the least profitable yards and new customers every year. By fall, those who are least profitable are either informed or in some cases asked about next year's increase - Specifically, those whom I would hate to lose over 5 bucks are asked and I only inform customers when their current price can not be tolerated any longer.

However, customers almost never see an in-season increase and usually once a price has gone up, it can stay that way for 3-4 years, sometimes longer. It adds out to about a dollar / year, maybe 1.20 or 1.25 or whatever.

The only time a customer may see an in-season increase is when for some reason the cost of a material skyrockets but also for those who like to pinch the penny until one day they pinch a little too fast or too hard. Specifically, folks who like to either cut the grass themselves when it's nice then come summer when it's 104+ outside they decide to call me, and those who like to act as if their 10-day lawn only needs cutting every 2-3 weeks, stuff like that sees the quickest increase and usually once the penny pinching has been spotted, I already know the conclusion but this is off-topic by now lol

[garth1967]

thanks for the post topsites .some may criticize you for your lengthy posts.on this this occasion i must say that is exactly what I'm looking for .you have just validated what i have been thinking all along .thanks once again