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View Full Version : High Gas Prices !


JayD
05-15-2007, 07:34 PM
What, if any are you all doing about these high gas prices? Has any of you had to raise your prices up to cover the cost? If so, how did you go about doing that and what reaction did you get from your customers?
Thanks for you input.
jay:usflag:

mag360
05-15-2007, 07:41 PM
One easy way to recoup some fuel expense is to add a fuel surcharge to the monthly invoices.
We were around $5 per month last season and moved it up to $7.50 on average this year. No complaints.

JayD
05-15-2007, 07:48 PM
Really. That sounds good. Did you send them a letter first or did you just do it?

JoshC
05-15-2007, 10:55 PM
I raised my prices about $5. In the invoices for last month I left them a note stating that this month I would be increasing the prices and if they had any concerns to call me. So far no complaints.

stuffdeer
05-15-2007, 10:57 PM
Gas isn't hurting me at all. When it hits 6 to 7 a gallon it will start. I run a very tight route, and my truck gets 22 mpg towing the trailer :) 30 mpg empty.

David Gretzmier
05-15-2007, 11:59 PM
gas went from 2.95 to 3.15 in one day here last week. you know gas is going up too fast when the pump shuts off before your full because the card won't allow it to charge over 75 bucks at one time for fuel .

I get 10mpg pulling trailer to one job I do, he pays me 240 to mow 3 acres, I can do it in about 3 hours, but I spend 25 in gas to go there and back- that's 10 PERCENT of what I make in gas for the truck. so yeah, it get's my attention.

I want a 1/2 ton truck with a small turbo diesel engine. I don't need a 365 horse turbo monster, why don't they sell a small turbo diesel for towing small trailers like boats and 5000 pound rigs? It would get 25-30mpg. I'd love a dodge sprinter, but don't have 35 grand to buy.

Envy Lawn Service
05-16-2007, 12:04 AM
I made increases when it spiked after Katrina, and when I was surprised to see it creep back down, I went ahead and kept the rates the way I had them... foreseeing it would jump again... and it has... and I'm OK with it right now as a result.

LwnmwrMan22
05-16-2007, 12:12 AM
There's no reason for a surcharge. If you're not charging enough to eat the cost, then you bid the account too low to begin with.

I mow all day with the 31 hp diesel Kubota at the Senior High for the school district I mow. I use about 11 gallons, roughly a gallon / hour for 11 hours (hour lunch break). That means that even if diesel went up another $1 / gallon, that each hour I mow, I'd only be out $1.

IMO, if you didn't bid it high enough in the spring, then there's other problems, not high gas prices.

Last year I spend $16k on fuel, as a solo op. The year before $14k. 4 years ago I spend just under $9k.

Each year I raise my prices in my bid, and stress to new prospective clients that I will not raise their rates in the middle of the season.

Envy Lawn Service
05-16-2007, 12:29 AM
There's no reason for a surcharge. If you're not charging enough to eat the cost, then you bid the account too low to begin with.

I mow all day with the 31 hp diesel Kubota at the Senior High for the school district I mow. I use about 11 gallons, roughly a gallon / hour for 11 hours (hour lunch break). That means that even if diesel went up another $1 / gallon, that each hour I mow, I'd only be out $1.

IMO, if you didn't bid it high enough in the spring, then there's other problems, not high gas prices.

Last year I spend $16k on fuel, as a solo op. The year before $14k. 4 years ago I spend just under $9k.

Each year I raise my prices in my bid, and stress to new prospective clients that I will not raise their rates in the middle of the season.

True, but at the same time, who wants to eat it and take a $1 an hour pay cut over increased fuel expenses? Nobody else does, so I don't want to either.

Even though I could afford the $1 an hour pay cut....
And I am affording a $1 an hour pay cut from increased consumption right now...

When gas went up, I went up on everything I could... and I increased on everything new I took on in anticipation of future increases.

d&rlawncare
05-16-2007, 12:34 AM
LwnMwrMan22.....There is no way to predict gas prices. I bid my properties at $3.00 a gallon knowing that they could possibly hit $3.50 or so. So lets say I use 7 gallons at 1 property. At $3 thats $21. At $3.50 thats $24.50.

So I eat the $3.50...no biggie. But when it hits $4.00 a gallon this summer (The Gov says it will) should I have to eat the additional $7.00?

I guess the only way to prevent this would be to overcharge the customer JUST IN CASE the gas prices go up!!! Or you could simply have a policy that states IF the price of gas goes above $2.75 a 4% surcharge will apply. Just an example.

Jimmy Williams
05-16-2007, 12:42 AM
I've been eating the extra cost up until last month. We went up $5.00 on our lower paying accounts and sent each customer a letter explaining why. If you are doing a good job and keep good communication lines with your customers then they will understand. Good luck.

topsites
05-16-2007, 12:53 AM
I raised my prices one time by $5 across the board, I took my time implementing the change per customer, but that took care of it. I'm just not hurting fuel-wise, work is slow but that's just par for the course in my case.

It hurt, I lost a lot of customers, but I got it over with meaning I grandfathered some for a year or so, and it still took a couple of years and I have one or two yet to convert, but push comes to shove, 5 bucks, come on now, either you can afford it or you can't... I lost a lot but it helped eliminate a lot of bs too, I kept most of my better looking lots, see how that works.

I lost maybe 2 nice lots, about 10 lesser ones... So, I lost a dozen but the crap lots are 2-$300 / year accounts, the MOST I can get out of a crap lot is $400 / year compared to a nice lot is at LEAST $400 / year, heck I got most spending 600+, some 700-1000, a few 1-2 grand / year, it took no stroke of genius on my part to figure this one out.

Because really that's it, one time $5, blam, we're done.
Like a band-aid that needs to come off, grab it and tear it off in one swipe, play around with it and it never ends, so lets do this just one time +$5, it hurts one time and it's over, please and thank you.

I made increases when it spiked after Katrina, and when I was surprised to see it creep back down, I went ahead and kept the rates the way I had them... foreseeing it would jump again... and it has... and I'm OK with it right now as a result.

Yeah buddy, me too, me too.

topsites
05-16-2007, 01:29 AM
There are some things I can recommend, from experience, what it took while the +$5 was in progress, I didn't have oodles of dollars to blow on fuel (still don't but).

The truck is the biggest issue: Tighten your route, map it out the night before or the morning of, every stop of the day fully planned and mapped out (at least in your head). Line them up like ducks in a row, no doubling back and no long hauls from one end to the next and back.

I can and will do 3-4 in one area, then head off to another and do 2-3 more, that's fine. But I HAVE to have at least 3 in one section of the county before I head out that way, otherwise I reschedule, put one off a day or two, move another ahead a day, whatever, 3 per area minimum... One area might be 5-10 square miles or so, idk, no more than 5-10 minutes drive between houses, 15 tops, at least 3 (so if one doesn't need it I got 2 more).

EASY on the gas does it, planning stops well in advance (coasting down instead of braking) and hang way back in traffic helps. I find proper driving alone can boost mpg by up to 20% (but it takes time, and practice, lots of it), I know this for a fact, my '86 Dodge used to get 10-12, but much time and ado later, I got 14 mpg out of it, UP to 15 on the odd week, but 14 mpg out of a 20 y.o. D-250... The newer one gets 10-11 because of my heavy foot, I bet I could get 13 out of it thou if I just took it real easy.

Proper maintenance, and high performance parts (except fuel, do NOT increase fuel flow).
Of the least things, check tire psi and fill them up to the max allowed as printed on the tire.
I run Double platinum plugs, 10.2mm Taylor wires, High performance Accel cap and rotor, Mallory ignition coil - WoooT! If the truck doesn't leak oil, I run synthetic oil, 2x WOooT!
Regular oil changes, change that air filter (I run a less restricted air flow one).
Put a new breather cap on, and replace the pcv valve (I even run a tiny HP air filter just for the breather cap... ehhh, so it doesn't suck air out of my intake via that rubber hose).
I also almost always run premium 93 octane, it pays off in time by cleaning all the fuel intake crap real good.

The absolute hardest part is keeping the foot off the gas, the truck has SO much power this is really hard. But it has better air flow and a TON of spark, so if you can only resist the temptation, easy on the pedal does it.

pics of breather cap and hp air filter:
http://stonypointlawncare.com/gallery/Truckpics/breathercapafter.jpg

the coil and wires:
http://stonypointlawncare.com/gallery/Truckpics/mallorycoil.jpg

Yup, the old truck had this, too:
http://stonypointlawncare.com/gallery/Truckpics/d250-2.jpg

Needless to say, don't try and race me LOL!
The best part is, stay off the gas and my truck's a sleeper, you just don't know what's coming (i.e.: what's under the hood).

topsites
05-16-2007, 01:43 AM
The entire upgrade runs me around $3-400, ouch... and all dyi.
The worst parts are the coil and the wires, the synth hurts some.

I do all of mine like this, it hurts one time and it's over.
The worst is the labor, and some of the parts...
But if I have to, I do them one little bit here, and there.

So if you can afford nothing else, replace the cap and rotor with a HP one ($15).
That's it, just do that, I bet you can feel it.

If you're in the mood after that...
The air filter assembly, $20 - $25 (generic ones are cheaper than namebrand).

Spark plugs is where it starts to hurt ($3-$4 each), quad platinums are a waste of money, single platinum isn't good enough, 2x platinum. The reason they're better is they resist electrode wear for about twice as long as the dollar plugs = less spark plug changes = less maintenance labor = it runs better = it pays off in time.

The wires, 50-75 / set (Taylor is cheaper than Accel, if you can find, you need at least 8mm's).
Same reasoning, they last a good 4 years / set, great performance throughout, until about the last few months.

The coil is a bit rough, I think $80.
etc, etc, I forget...

Envy Lawn Service
05-16-2007, 02:00 AM
8mm Taylor's huh?

Who sells those?

I might have to try them sometime.
I've never had any luck with aftermarket wires.

Not long after installing them I pick up a miss or hesitation.
I lift the hood that night in the dark and I can see them arcing off.

So now I always just suck it up and go to the Ford dealer and pay their price for their wires for my engines. They last a LONG-LONG time and I have found it is cheaper in the long run to go this route.

I put them on and I don't touch crap until I have reason to.

Also... thanks for bringing up plugs.
I need to check all mine in everything.

I don't remember when I last checked them or if I replaced them over the winter or not... LOL...

mag360
05-16-2007, 07:55 PM
Really. That sounds good. Did you send them a letter first or did you just do it?

We just added an item on the invoice "temporary fuel surcharge"
No one is really surprised to see something like this with the cost of fuel being discussed so much in the media, and it's pretty easy to tweak the amount to make up the honest difference in your monthly fuel bill.

lawnman_scott
05-16-2007, 10:54 PM
I just use it as an excuse for raising prices. Kind of easy, I dont have to comeup with some other excuse if anyone asks.

Post Mowing
05-17-2007, 12:08 AM
we run a 3.5% rise once the fuel hits $3.00 till it goes down to under $3.00

LwnmwrMan22
05-17-2007, 01:41 AM
we run a 3.5% rise once the fuel hits $3.00 till it goes down to under $3.00

So, here's my point.

Say you have a yard that's being cut at $50, gas is at $2.75.

Gas hits $3.01 on Monday, but is at $2.98 on Wednesday, the day you actually cut the grass, then goes back up to $3.02 for the weekend.

Do you still charge the extra $1.10??

Or if you only invoice monthly, do you take the average number of days that gas was above $3.00?? If more days in the month were above the $3.00, then you charge the surcharge?? Or if one day out of the month, you're driving past the station and it's at $3.01, then the surcharge is charged for the whole month??

Again, this is all over $1.10 on a $50 cut.

To me it looks like I would be 'nickle and diming' the customer.

At the beginning of the year, I would have raised the rate on the yard $5, and said that it's due to projected increases in fuel costs, or $20 / month. Yes, a 10% increase.

I would have then said that I will hold this rate for 2 years. On each cut that you're charging the 3.5%, getting an extra .$1.10, I would be getting $3.90 more, for no reason other than increases in fuel costs.

Just about ALL of you guys say you've had no questions asked, no complaints. Well, then why would you, if you would just raise your rates 10% at the beginning of the year, rather than just dropping it on your customer in the middle of the season??

What if in the middle of filling your tank on the mower up, the gas station raised the rate from $3.02 to $4.03, because they got word that their supplier had a storage tank blow up.

However, station x down the street has a different supplier, and they have no problems, so they stay at $3.02. You would probably start buying gas at station x.

Or, if station x said we're not going to raise our contract in the middle of an agreed upon price.

Or say you buy a new mower, and the dealer calls you up a week later and says "hey, we didn't realize all of the shipping charges that needed to be factored into getting that mower here, we need another $500."