The New Gas Prices..Are You ?

[Partsangel]

The new gas prices are kicking my but** are you charging your customers more for this ?

Why ?

Why Not ?

Curious Mike

[Tyler7692]

On average, prices are up 3-5 dollars a cut for me. Pretty good considering most cuts average 40 bucks. Haven't had one customer complain.

[yard_smart]

raise all accounts $5 per cut

[DaughtryLC]

raise all accounts $5 per cut

I did the same thing Jan. 1, Im soooooooooooo glad I did!!!!!!!!!!

[TexasFire221]

I sent out 5 test emails to raise prices four dollars per cut. 4 accounts cancelled immediatly.

[Lawn-Sharks]

I sent out 5 test emails to raise prices four dollars per cut. 4 accounts cancelled immediatly.

Thats what my wife is worried about! i want to raise prices just a little not even $10 a month but she's nervous that we will lose business.

[POPO4995]

Everything is locked in by contract for this year but I will be raising everything starting with Snow Removal Contracts this fall. How in the world cant you adjust prices...????:confused:

[Frontier-Lawn]

Everything is locked in by contract for this year but I will be raising everything starting with Snow Removal Contracts this fall. How in the world cant you adjust prices...????:confused:

i have a clause in my contracts for a fuel surcharge.

[PMLawns]

I am curious as to how you guys determine your fuel surcharge? I suppose what I am asking is ....how do you determine your increase according to fuel rate? Does the lawn potentially cost more at each cut....or calculated monthly ? And in the same token , do your customers understand their costs? Please explain.

[yard_smart]

I plainly put that price WILL fluctuate with cost of materials or fuel . . .

Greenkeeper if your accounts dropped you over 4 bucks were they really worth it???? i mean those are not the customers i want to target!!!!

[Carolina Cuts]

85% of my customers raised themselves without my asking.
the other 15%.... will soon get dropped by me.... :walking::walking::walking:

[barefootlawnsandlandscape]

Raise them if you have to. The ones that drop you, drop you, but at least you know you are profiting on the ones that you raised the price on. You can't be scared to lose accounts for doing what you need to do to remain profitable. This is something that I just realized. I know Brian's Lawn may chime in and chastise me for raising prices, but you gotta do what you gotta do.

[TexasFire221]

Well yard smart they were very good properties. What pisses me off is one client rants and raves about how professional and great we are. She gives us a $10 tip every cut and she cancelled over $4.00 cause she said she couldnt afford it.

[Looking Good Lawn Service]

Greenskeeper, if she gives you a $10 tip every cut, why raise her?? shes already given you extra? I dunno, I see what you are saying they are rich, have it all and you ask for a measly 4 dollars and they freak, oh well, what are ya gonna do

[yard_smart]

Well yard smart they were very good properties. What pisses me off is one client rants and raves about how professional and great we are. She gives us a $10 tip every cut and she cancelled over $4.00 cause she said she couldnt afford it.

thats not right . .. sorry to hear that man



but on the optimistic side you can look at it this way (sorry guys im big on numbers)

say you mow 10 yard for $20 a yard (we'll keep it simple)

you raise the price 5 bucks but loose two accounts

so now your doing 8 yards for $25 a yard . . . HEY THATS THE SAME AMOUNT OF MONEY !!!

Your now making the same amount for less work which in turn means your being more profitable . . . so you find two more yards for $25 and now you instantly have and extra $50 a week to spend on marketing to make even more money!!!

[Lawn-Sharks]

Good point!

[yard_smart]

thanks :) i love this stuff they call business . . . I'm ruined though . . .only 19 and already pledge to never work for some one again lol

[fitzg2md]

That would make sense if it werent for the fact that you are paying much more for fuel (the reason behind the surcharge). So now your cost/account is higher, you have the same or slightly higher sales, but you are not any more profitable. The surcharge covered your added expense which is all it should do.

Dont add more of a surcharge than is needed to cover your higher cost and get you back to the profit % you bid the job at. A 5 dollar surcharge on a 40 dollar account is a 12% price hike. Considering you used (on the high side) 1 gallon of gas for equiptment, your fuel expense has increased from about 2.50 to 4.00. So basically 1.50 on that account. Of course fuel for your truck has gone up too, but in basically the same percentage. If you want more money, raise your price on the bid.

Those companies able to cut back on fuel cost through the use of efficient equipment, tighter routes, better planning, and better mpg autos will have the advantage of higher profits.

[barefootlawnsandlandscape]

Fuel is not the only thing that has gone up. Many of the supplies and parts that are used to keep everything rolling has gone up dramatically.

[Mrs. H]

David hasn't raised prices in a long time...until now. He has talked to all the customers. Most understood and were willing to pay for the service, some he couldn't raise because they are locked into a budget (commercial/industrial) and a very few had to drop us and do it themselves. He still has more work than he can handle and maybe our budget will be saved.

[PerfiCut L&L]

thats not right . .. sorry to hear that man



but on the optimistic side you can look at it this way (sorry guys im big on numbers)

say you mow 10 yard for $20 a yard (we'll keep it simple)

you raise the price 5 bucks but loose two accounts

so now your doing 8 yards for $25 a yard . . . HEY THATS THE SAME AMOUNT OF MONEY !!!

Your now making the same amount for less work which in turn means your being more profitable . . . so you find two more yards for $25 and now you instantly have and extra $50 a week to spend on marketing to make even more money!!!


I totaly Agree!

I have been telling a colleague of mine who has 300+ accounts, all at minimal rates, who also spends 40+ hours a week in OVERTIME the same D A M N thing.

Raise your rates 10%-15%, if you lose 5% of your customers who cares. Your making the same if not more money on fewer custoemers. Plus you've cut your overtime expense, so now your making way more money on less accounts. Its a no brainer. He is stubburn and wont do it. Dunno why.

[jimmyburg]

i went up on my repair rates and materials 5.50

[georgiagrass]

We raised our rates an average of $5 per cut at the beginning of this year. We have not lost any customers as a result.

[Partsangel]

I was hesitant to raise my pick-up and delivery charges by 5 bucks because I figured the customer was get hit from all side already, but its a matter of the numbers as many of you have pointed out. I'm getting hit from all sides as well.. including the parts I buy to resell, so I have to Up my pick-up and delivery and parts just to stay equal with profits. so far it seems everyone understands that everything including the food that they buy cost more...and thats just life. I feel for you lawncare guys and gals because at some point your customers are going to figure out that they can buy a mower and mow it themselves, but dont feel lonely because I am shooting myself in the foot by teaching people how to fix there own mowers :nono: Gawd will this craziness ever end.

Mike

[Stillwater]

I sent out 5 test emails to raise prices four dollars per cut. 4 accounts cancelled immediatly.

this is why raising prices is risky.....

[Stillwater]

thats not right . .. sorry to hear that man



but on the optimistic side you can look at it this way (sorry guys im big on numbers)

say you mow 10 yard for $20 a yard (we'll keep it simple)

you raise the price 5 bucks but loose two accounts

so now your doing 8 yards for $25 a yard . . . HEY THATS THE SAME AMOUNT OF MONEY !!!

Your now making the same amount for less work which in turn means your being more profitable . . . so you find two more yards for $25 and now you instantly have and extra $50 a week to spend on marketing to make even more money!!!


this doesen't check out

[yard_smart]

Hows That Not Check Out????

[smithnaz]

say you mow 10 yard for $20 a yard (we'll keep it simple)
you raise the price 5 bucks but loose two accounts
so now your doing 8 yards for $25 a yard . . . HEY THATS THE SAME AMOUNT OF MONEY !!!

I'm not in landscaping, but this is a HUGE assumption to make. What if you lose 8 accounts instead of 2 - what happens to your money now? Customers are hard to come by, why even chance losing customers you already have? Look for new customers and adjust your pricing with them.

[yard_smart]

Because if your well i dunno about you but if MY customer is going to drop me over five dollars a week thats 20 a month i don't want to be servicing them any ways . . . .

You have to get out of the "scared to loose em" mind set . . . on pressure washing my closing rate is around 60% that is actually a little high which means i could raise my prices a little.

You have to find the point of diminishing return to be at the top of your game. . . make your service not for just any one! Make your service like a Porsche. Would you rather build 6 chevy cobalts and sell them or build one porsche and sell it and make the same money as the 6 cobalts?

[brianhanson37]

I run a lot of my fathers company (unrelated to landscaping) and whenever he raises prices he does it on Jan 1st. I would not recommend you changing prices mid-season, maybe just tough it out and raise it a bit next summer to make up for this summer.

[smithnaz]

Because if your well i dunno about you but if MY customer is going to drop me over five dollars a week thats 20 a month i don't want to be servicing them any ways . . . .

You have to get out of the "scared to loose em" mind set . . . on pressure washing my closing rate is around 60% that is actually a little high which means i could raise my prices a little.

You have to find the point of diminishing return to be at the top of your game. . . make your service not for just any one! Make your service like a Porsche. Would you rather build 6 chevy cobalts and sell them or build one porsche and sell it and make the same money as the 6 cobalts?


I'm not in the "scared to loose em" mind set at all. I'm in the parking lot sweeping business. My prices have been the same for 4 years now. Gas is my number 1 expense. When gas was cheaper, I made a bit more money per job. Now, I make a LITTLE less per job. Pricing each job correctly in the beginning is the key. I don't see increasing prices on existing customers for a long time still - I just add new customers and price them correctly.
And personally, I'd prefer to build the 6 cobalts than the 1 porsche as in your analogy. That's 6 happy customers to refer you to the next 6 jobs instead of just 1 - I like those odds better. Just my $0.02.

[PlatinumLandCon]

The new gas prices are kicking my but** are you charging your customers more for this ?

Why ?

Why Not ?

Curious Mike

What % of gross was fuel last year? And now this year? I'm not a lawn guy but I don't think it should be much more than 5-6% of gross so even if prices go up another $1/gal, it shouldn't make much dfference. How many gallons per cut do you use? Maybe 1 or 2? Thats a $2 increase at MOST. Remember, customers are getting gouged as bad at the pumps as you, the difference is your service isn't necessary so they'll cancel at anytime.

[davis45]

Alot of my acounts are only 5k-10k sq ft. So I raised all of those $3-5 without losing any of them. I have about 6 that are 1.5 - 5 acres, I raised all of those $8-10. Everyone seems to be pretty understanding about it.

I lost one early in the season, I was charging $75, and the extremely wealthy man asked me to drop it to $65. I walked away from that one, 75 was too low to start with.

[yard_smart]

I'm not in the "scared to loose em" mind set at all. I'm in the parking lot sweeping business. My prices have been the same for 4 years now. Gas is my number 1 expense. When gas was cheaper, I made a bit more money per job. Now, I make a LITTLE less per job. Pricing each job correctly in the beginning is the key. I don't see increasing prices on existing customers for a long time still - I just add new customers and price them correctly.
And personally, I'd prefer to build the 6 cobalts than the 1 porsche as in your analogy. That's 6 happy customers to refer you to the next 6 jobs instead of just 1 - I like those odds better. Just my $0.02.

Dude you HAVE to raise prices!!!!! if your pricing has stayed the same for 4 years your profit margins have to be messed up . . . isn't it in your business model what your profit margin needs to stay at???

and as far as the porsche and cobalt analogy thats just dumb . . . . why do 6x the work i do to make the same money ???? because my profit will be greater i can out advertise you and be selling more . . . Its just simple business

[yard_smart]

Here is a post one of my buddies made over on ptstate.com

this is one of the best ones i've read although its from a power washing site it still hold true in every industry. . . . This is the point i was trying to get accross


The Corner Barber charging less than a Salon

The corner barber has worked from sunup to sundown 6 days per week for 30 years. He put his kids through school, he paid off his $40,000 30-year mortgage and he lived humbly but happily. (his wife cheated three times during their marriage because he was never around but other than that it was a good marriage) When times got tight he hit his mother up for a loan, his wife went back to work, and when the FamilySalon opened around the block he was hurt quite a bit. This guy was raised old school. Give people a good service for a fair price. Not really understanding his real operational costs he was underpriced at first. He built a good neighborhood clientele and never had to advertise.

In Mario's shop you were greeted. You were placed in the big chair with some hot towels. While Mario gave you an incredibly close shave he asked about your wife and kids. He knows your family well. Like any human being though, Mario had some bad days. He wasn't always as talkative. Maybe some days he was too talkative. Some days the air conditioning didn't work right. The experience was not always consistent but the haircut was always good and you paid a peasant's sum so you were happy. Since Mario went out of his way to be professional and offer friendly service he had a loyal clientele that demanded higher customer service. Or so he thought.

Let's get a couple customer's perspectives:

Loyal Customer One:
"I've been going to Mario's since I was a single guy living at home. Mario always gives me a great cut and shave for a cheap price. He is what America is all about.

Upon retreiving mail, the customer speaks out loud to his wife.

"What's this postcard? Hey hon, look, there is a new FamilySalon opening on Main St. There is a coupon for getting a free kid's cut with any adult haircut. I need a cut and so does Mikey Jr. Maybe I'll go check it out since Mario's is closed on Sunday."

That Sunday it is blazing hot. Mikes Sr and Jr jump in the SUV and head across town. There it is.FamilySalon. Fresh, clean, well air conditioned. When they walk in the receptionist greets them with a smile. 12 chairs are are filled with customers. This place just looks prosperous. Sr and Jr are shuttled into a waiting room with food machines, Tv set, and some kids toys. Within 10 minutes both gentleman are seated and within another 15 are sporting stylish new haircuts. Jr, whom usually is unhappy and cranky on haircut day is smiling away. Dad is smiling away as well because he looks good and his stylist was a very well built 26 year old brunette. What an experience. At the cashier Dad presents his coupon and is charged $20 saving $10. At $30 that would be 100% more than Mario charges for the same two cuts. Dad says to himself, I'm going back to Mario's. Before Dad leaves the salon he looks in the mirror again. Did his other haircuts always look this good?

Fast forward three weeks. Dad gets another postcard addressed to him. It reads boldly "Hi Mike, its been three weeks since your last cut. Come on over and take advantage of our $5 off Preferred Customer coupon. signed -Your stylist, Dorothy"

Mike keeps the coupon, fondly remembers Dorothy and vows to hit Mario's on Saturday. He keeps good on his promise all the way until he drives up to Mario's shop. The front door is open.. a sure sign the A/C is on the fritz. And.. Mario is in there alone which means he'll want to chit chat. Mike just wants a convenient, consistent experience. He wants to get in and out. He goes to FamilyCuts again and that's all she wrote. Mike now pays 100% more for his haircut because the experience is a pleasant one.

Loyal Customer Two

"I cannot stand the lack of customer service these days. When I go to Mario's he knows my name. He knows what I want and even though I am a woman, I get a good cut. Before my husband passed away we would go together once per month. Mario's place is a little run down and you are either hot or cold in there but customer service is where its at for me."

That Saturday, Mario's shop is closed. The sign says "Family Emergency". Beatrice is a little frazzled, she has a luncheon with a ladies club and needed her hair done. Mario's is closed because Mario can not afford to hire someone to keep the business open when he is not there. Last winter the shop was closed for a week because he had the flu.

Beatrice remembers that FamilySalon just sent her a postcard. She knows where it is located and heads in that direction. She is skeptical of the bright lights and not knowing the place but she relaxes when she is greeted by the receptionist. She is told that while they have a full book at the moment they will squeeze her in with plenty of time to make her luncheon. Beatrice is given a cup of coffee and offered a Danish to tide her over.

When Beatrice gets into the chair she is asked about coloring and highlighting. She doesn't know much other than that she colored her hair herself after Mario would cut it. She always hated that part. She agrees to the highlighting upgrades. When Beatrice is finished she cannot believe the woman in the mirror is herself. The cut and color took 20 years from her face. When she gets to the cashier she is charged $120. In the back of her mind she knows she paid Mario $35 but that didn't include the highlighting, superior cut and longer time spent blowdrying so she feels she received her value. The ladies at the luncheon rage over Bea's hair and all vow to visit the new salon. Bea doesn't mind the cost. She lives in a higher demographic down the bloc from Mike. Her husband left her well off.

Final tally: Two loyal customers lost for Mario's and a total of five new clients gained by FamilySalon. FamilySalon will thrive with referrals because the buzz has already been started. Family Salon will pay a ton of taxes localy and federally. It will employ 15 people on a consistent basis. It will generate enough profit that its owner can continuously advertise and upgrade her shop. She can hire enough people so that all tasks are defined and everyone in the company knows their role. Most importantly, the owner never picks up a pair of scissors.

Mario will work until he can no longer stand. His kids don't want anything to do with the business so when Mario dies, the business dies with him. mario didn't create a legacy, he owned a job for all of those years. Now in his out of date, always uncomfortable shop and house above, Mario will serve out his days. Am I being overly dramatic here? Perhaps to make a point but hopefully this post will make you think.

[Stillwater]

surprised you took the time and typed it all out

[Stillwater]

Hows That Not Check Out????

My answer is not going to be agreed with by all and will also not apply to all and probably will not be understood by all. Your math certainly checks out but it does not take into account several important facts for longevity and a sound business foundation.

1)I have been in business since 1979 and my experience reflects that you can consider the 2 that canceled you "6" because they will not speak highly of you. Word of mouth in this industry is king.

2) It is mid season it is not professional to raise mid season unless your service agreement has a fuel cost clause that will dictate what their per cut cost will be according to local fuel cost

3) if you need to raise all accounts by a paltry 4 dollars a cut mid season you were borderline lowballing to begin with.

4) It shows your business plan is not structured correctly or you are not following it or you don't even have one. if you do you should adjust your profit threshold according to the PROJECTED CONDITION of your local economy and your projected operational costs for the upcoming season. this should have been done in the beginning of the season and have anticipated and accounted for the rising fuel cost.

5) the accounts are already on your route and even with the high cost of gas as it is... exactly how much gas are you burning mowing the lawn you are driving by anyway to begin with? 3 dollars tops? what ever you were charging for the cut after the 3 dollars may not be all profit but it is certainly is lost revenue that could have been kept and added to the additional customers you say you are after that will have a higher per cut charge to start with. I realize their will be some that don't agree and that is fine I don't want to get involved in a argument that would be a waist of time....

[yard_smart]

My answer is not going to be agreed with by all and will also not apply to all and probably will not be understood by all. Your math certainly checks out but it does not take into account several important facts for longevity and a sound business foundation.

1)I have been in business since 1979 and my experience reflects that you can consider the 2 that canceled you "6" because they will not speak highly of you. Word of mouth in this industry is king.

Who will they refer me to? Their low paying friends? NO thanks I don't want them!

2) It is mid season it is not professional to raise mid season unless your service agreement has a fuel cost clause that will dictate what their per cut cost will be according to local fuel cost

Can some one please tell me where i said i raised prices mid season?

3) if you need to raise all accounts by a paltry 4 dollars a cut mid season you were borderline lowballing to begin with.

I don't have this many but a paltry 4 dollars x 4 cuts a month x 60 accounts is almoat a thousand dollars

4) It shows your business plan is not structured correctly or you are not following it or you don't even have one. if you do you should adjust your profit threshold according to the PROJECTED CONDITION of your local economy and your projected operational costs for the upcoming season. this should have been done in the beginning of the season and have anticipated and accounted for the rising fuel cost.

Who said i didn't ??? These cost where raised at the begining of the season. I don't understand, if i put it some where that it seemed i charged more mid season i apologize.

5) the accounts are already on your route and even with the high cost of gas as it is... exactly how much gas are you burning mowing the lawn you are driving by anyway to begin with? 3 dollars tops? what ever you were charging for the cut after the 3 dollars may not be all profit but it is certainly is lost revenue that could have been kept and added to the additional customers you say you are after that will have a higher per cut charge to start with. I realize their will be some that don't agree and that is fine I don't want to get involved in a argument that would be a waist of time....

There you go with the don't wanna loose em mind set. There are two business basic models A) High Volume - Low Price B) Low Volume - High Price if your total cost for a year is 26k in expenses and you do one job thats 26k of expenses per job but if you do 1000 jobs thats $26 per job

Im not trying to preach to any one im just giving you what successful people have taught me and also just giving you the facts!!!!

[Stillwater]

Im not trying to preach to any one im just giving you what successful people have taught me and also just giving you the facts!!!!


Yard-smart...

What is a gallon of reg going for in KY?

[yard_smart]

3.98 here in carrollton. . . but what relevance does that have?

[Stillwater]

3.98 here in carrollton. . . but what relevance does that have?

none, I was curious

[Stillwater]

What % of gross was fuel last year? And now this year? I'm not a lawn guy but I don't think it should be much more than 5-6% of gross so even if prices go up another $1/gal, it shouldn't make much dfference. How many gallons per cut do you use? Maybe 1 or 2? Thats a $2 increase at MOST. Remember, customers are getting gouged as bad at the pumps as you, the difference is your service isn't necessary so they'll cancel at anytime.

gas needs to hit well over 5 a gal for it to start touching my margins

[PushingupDaisies]

I may be totally out of my league here, but that big of a hike per lawn seems excessive. I know there are a lot of factors at play: how many lawns, how large, changes in equipment, etc. I am a small business this year (instead of scaling up, scaling back. change of jobs and divorce). I work 1 day a week and have pretty loyal cutomers. Don't get me wrong, I'd love more but raising prices that much is a bad move for me. With my 1 work day and the lawns I have, I have considered a $2 raise because the cutsomers I've kept are spread out. The guy I am sincerely indebted to for his help in me getting started has about 90 accounts. He continuely works to improve efficiency on his routes. The way he has it set up, he figs that he would obly need to raise about $.50 or so to cover his cost. More lawns, done efficiently=less gas between jobs so less impact. I would hope for the larger 60+ lawn LCO's that they are running as efficiently. You could not run a big business the way I am this year with the distance between customers I have. Even at that, $2 should still cover my additional cost. I haven't raised my rates because I am small and looking to stay in a holding pattern this year meaning I can't afford to lose cutomers.

To try to sum up. Yes, if you had 60+ accounts, you could make more money by raising prices. If you have 60 + accounts in a week, there has to be some organization and you can't be driving huge distances between each customer. $4-5 seems like you would be using gas prices as justification to either inflate your profits beyond actual cost increases or as a way to try to correct lowballing (yes I have been guilty of that due to ignorance).

Doesn't Honda sell more and have a larger net profit than porsche? (I'm really not 100% sure on this, but my guess is that the Civic line alone makes more profit) Having many decent accounts makes you less suseptible to market fluctations and customer turnover.

Try this spin on for size. I used to work for Nextel (when it was Nextel). 4th largest carrier in US. About half the customer base that Cingular and Verizon had at the time. Highest average revenue per user (customer paid more for their service then VZW and Cingular customers did), most profitable wirless company in the country. Sold out to Sprint, market conditions changed. Sprint began charging more to Nextel users on top of what they had paid and started toying with fees etc. When I left Sprint, they were dying on the vine. They were losing all their good cutomers that paid high amounts for their service and tended to be better quality. All this over greed. Now they are grasping at straws to fix it. All over stupid price tricks and gimmicks. Cutomer turnover is huge.

I would rather sell value and qulity to my customers and have a decent profit over gouge them and hope they don't care. Maybe I'm old school but I still prefer the barbers. Never got a cut I really liked when I've tried Fantastic Sam's or whatever. In fact, I will pay more to my corner barber in tips, etc just because it gets done right. You will always have the price minded cutomers. Try to keep them happy. Be honest and considerate to your good customers and don't gouge them with ridiculous increases. Unless you have poor equipment (believe me, not bragging about mine), neighbor boy prices or a mix, $4-5 seems high and not your actual cost.

To each his own....just let me have mine.

Off the rambling soap box.

[yard_smart]

none, I was curious

HAHAHA okay i thought you were about to bust my ass about gas prices or something lol

[yard_smart]

I may be totally out of my league here, but that big of a hike per lawn seems excessive. I know there are a lot of factors at play: how many lawns, how large, changes in equipment, etc. I am a small business this year (instead of scaling up, scaling back. change of jobs and divorce). I work 1 day a week and have pretty loyal cutomers. Don't get me wrong, I'd love more but raising prices that much is a bad move for me. With my 1 work day and the lawns I have, I have considered a $2 raise because the cutsomers I've kept are spread out. The guy I am sincerely indebted to for his help in me getting started has about 90 accounts. He continuely works to improve efficiency on his routes. The way he has it set up, he figs that he would obly need to raise about $.50 or so to cover his cost. More lawns, done efficiently=less gas between jobs so less impact. I would hope for the larger 60+ lawn LCO's that they are running as efficiently. You could not run a big business the way I am this year with the distance between customers I have. Even at that, $2 should still cover my additional cost. I haven't raised my rates because I am small and looking to stay in a holding pattern this year meaning I can't afford to lose cutomers.

To try to sum up. Yes, if you had 60+ accounts, you could make more money by raising prices. If you have 60 + accounts in a week, there has to be some organization and you can't be driving huge distances between each customer. $4-5 seems like you would be using gas prices as justification to either inflate your profits beyond actual cost increases or as a way to try to correct lowballing (yes I have been guilty of that due to ignorance).

Doesn't Honda sell more and have a larger net profit than porsche? (I'm really not 100% sure on this, but my guess is that the Civic line alone makes more profit) Having many decent accounts makes you less suseptible to market fluctations and customer turnover.
No Honda was 5 Bill. in net while porsche was 6.2

http://business.maktoob.com/NewsDetails-20070423131253-Porsche_net_profit_triples.htm
http://www.computerwire.com/companies/company/?pid=C0FE5F43-305F-4755-83E3-185F8BD7019F

Try this spin on for size. I used to work for Nextel (when it was Nextel). 4th largest carrier in US. About half the customer base that Cingular and Verizon had at the time. Highest average revenue per user (customer paid more for their service then VZW and Cingular customers did), most profitable wirless company in the country. Sold out to Sprint, market conditions changed. Sprint began charging more to Nextel users on top of what they had paid and started toying with fees etc. When I left Sprint, they were dying on the vine. They were losing all their good cutomers that paid high amounts for their service and tended to be better quality. All this over greed. Now they are grasping at straws to fix it. All over stupid price tricks and gimmicks. Cutomer turnover is huge.

I would rather sell value and qulity to my customers and have a decent profit over gouge them and hope they don't care. Maybe I'm old school but I still prefer the barbers. Never got a cut I really liked when I've tried Fantastic Sam's or whatever. In fact, I will pay more to my corner barber in tips, etc just because it gets done right. You will always have the price minded cutomers. Try to keep them happy. Be honest and considerate to your good customers and don't gouge them with ridiculous increases. Unless you have poor equipment (believe me, not bragging about mine), neighbor boy prices or a mix, $4-5 seems high and not your actual cost.I won't they are not my target market

To each his own....just let me have mine.

Off the rambling soap box.

Its not about just raising prices for gas. Its about raising prices for more profit!!!!


But as you said to each thier own . . . . i would just prefer to sell Porsche instead of Honda!!!!

[PushingupDaisies]

Its not about just raising prices for gas. Its about raising prices for more profit!!!!


But as you said to each thier own . . . . i would just prefer to sell Porsche instead of Honda!!!!

The spokesperson said part of that figure was a cash value and part was the capital gains value of VW share options that Porsche continued to hold when the fiscal year ended.

A re-evaluation of Porsche's outright holding in the Volkswagen auto group also resulted in a one-off contribution to the results of 520.8 million dollars, it added.

Porsche has increased its stake in VW to 31 percent and is now believed set to make a takeover bid for the biggest European car maker.

Guess you better by a VeeDub as well!;)

LOL, think this is hilarious really. If I just didn't have an addiction to arguing over nothing. Oh well, personally think Honda is pretty happy with where it is headed. :waving:

[yard_smart]

The spokesperson said part of that figure was a cash value and part was the capital gains value of VW share options that Porsche continued to hold when the fiscal year ended.

A re-evaluation of Porsche's outright holding in the Volkswagen auto group also resulted in a one-off contribution to the results of 520.8 million dollars, it added.

Porsche has increased its stake in VW to 31 percent and is now believed set to make a takeover bid for the biggest European car maker.

Guess you better by a VeeDub as well!;)

LOL, think this is hilarious really. If I just didn't have an addiction to arguing over nothing. Oh well, personally think Honda is pretty happy with where it is headed. :waving:

I am . . . I Power Wash and Clean Roofs :laugh:

[Stillwater]

HAHAHA okay i thought you were about to bust my ass about gas prices or something lol

Nope no reason to bust your ass.... I payed about 4.03 per gal on sunday filling the jeep in MA.

[ShovelMonkey]

I charge monthly rates, and I just raised everybody around 10%- I am nervous, If I don't lose customers, I gain a good amount. If I lose a couple of jobs, I might lose everything I just gained. But I have a good customer base, some jobs for over 10 years and nothing under 1 year old ( I keep my business small) so I think I will be all right

[ShovelMonkey]

I just paid 4.35 at a discount gas station. some stations here are over 4.45 and 25 miles south of me its 4.60+
30% increase over last year!

[luckydooley]

Here is a post one of my buddies made over on ptstate.com

this is one of the best ones i've read although its from a power washing site it still hold true in every industry. . . . This is the point i was trying to get accross


The Corner Barber charging less than a Salon

The corner barber has worked from sunup to sundown 6 days per week for 30 years. He put his kids through school, he paid off his $40,000 30-year mortgage and he lived humbly but happily. (his wife cheated three times during their marriage because he was never around but other than that it was a good marriage) When times got tight he hit his mother up for a loan, his wife went back to work, and when the FamilySalon opened around the block he was hurt quite a bit. This guy was raised old school. Give people a good service for a fair price. Not really understanding his real operational costs he was underpriced at first. He built a good neighborhood clientele and never had to advertise.

In Mario's shop you were greeted. You were placed in the big chair with some hot towels. While Mario gave you an incredibly close shave he asked about your wife and kids. He knows your family well. Like any human being though, Mario had some bad days. He wasn't always as talkative. Maybe some days he was too talkative. Some days the air conditioning didn't work right. The experience was not always consistent but the haircut was always good and you paid a peasant's sum so you were happy. Since Mario went out of his way to be professional and offer friendly service he had a loyal clientele that demanded higher customer service. Or so he thought.

Let's get a couple customer's perspectives:

Loyal Customer One:
"I've been going to Mario's since I was a single guy living at home. Mario always gives me a great cut and shave for a cheap price. He is what America is all about.

Upon retreiving mail, the customer speaks out loud to his wife.

"What's this postcard? Hey hon, look, there is a new FamilySalon opening on Main St. There is a coupon for getting a free kid's cut with any adult haircut. I need a cut and so does Mikey Jr. Maybe I'll go check it out since Mario's is closed on Sunday."

That Sunday it is blazing hot. Mikes Sr and Jr jump in the SUV and head across town. There it is.FamilySalon. Fresh, clean, well air conditioned. When they walk in the receptionist greets them with a smile. 12 chairs are are filled with customers. This place just looks prosperous. Sr and Jr are shuttled into a waiting room with food machines, Tv set, and some kids toys. Within 10 minutes both gentleman are seated and within another 15 are sporting stylish new haircuts. Jr, whom usually is unhappy and cranky on haircut day is smiling away. Dad is smiling away as well because he looks good and his stylist was a very well built 26 year old brunette. What an experience. At the cashier Dad presents his coupon and is charged $20 saving $10. At $30 that would be 100% more than Mario charges for the same two cuts. Dad says to himself, I'm going back to Mario's. Before Dad leaves the salon he looks in the mirror again. Did his other haircuts always look this good?

Fast forward three weeks. Dad gets another postcard addressed to him. It reads boldly "Hi Mike, its been three weeks since your last cut. Come on over and take advantage of our $5 off Preferred Customer coupon. signed -Your stylist, Dorothy"

Mike keeps the coupon, fondly remembers Dorothy and vows to hit Mario's on Saturday. He keeps good on his promise all the way until he drives up to Mario's shop. The front door is open.. a sure sign the A/C is on the fritz. And.. Mario is in there alone which means he'll want to chit chat. Mike just wants a convenient, consistent experience. He wants to get in and out. He goes to FamilyCuts again and that's all she wrote. Mike now pays 100% more for his haircut because the experience is a pleasant one.

Loyal Customer Two

"I cannot stand the lack of customer service these days. When I go to Mario's he knows my name. He knows what I want and even though I am a woman, I get a good cut. Before my husband passed away we would go together once per month. Mario's place is a little run down and you are either hot or cold in there but customer service is where its at for me."

That Saturday, Mario's shop is closed. The sign says "Family Emergency". Beatrice is a little frazzled, she has a luncheon with a ladies club and needed her hair done. Mario's is closed because Mario can not afford to hire someone to keep the business open when he is not there. Last winter the shop was closed for a week because he had the flu.

Beatrice remembers that FamilySalon just sent her a postcard. She knows where it is located and heads in that direction. She is skeptical of the bright lights and not knowing the place but she relaxes when she is greeted by the receptionist. She is told that while they have a full book at the moment they will squeeze her in with plenty of time to make her luncheon. Beatrice is given a cup of coffee and offered a Danish to tide her over.

When Beatrice gets into the chair she is asked about coloring and highlighting. She doesn't know much other than that she colored her hair herself after Mario would cut it. She always hated that part. She agrees to the highlighting upgrades. When Beatrice is finished she cannot believe the woman in the mirror is herself. The cut and color took 20 years from her face. When she gets to the cashier she is charged $120. In the back of her mind she knows she paid Mario $35 but that didn't include the highlighting, superior cut and longer time spent blowdrying so she feels she received her value. The ladies at the luncheon rage over Bea's hair and all vow to visit the new salon. Bea doesn't mind the cost. She lives in a higher demographic down the bloc from Mike. Her husband left her well off.

Final tally: Two loyal customers lost for Mario's and a total of five new clients gained by FamilySalon. FamilySalon will thrive with referrals because the buzz has already been started. Family Salon will pay a ton of taxes localy and federally. It will employ 15 people on a consistent basis. It will generate enough profit that its owner can continuously advertise and upgrade her shop. She can hire enough people so that all tasks are defined and everyone in the company knows their role. Most importantly, the owner never picks up a pair of scissors.

Mario will work until he can no longer stand. His kids don't want anything to do with the business so when Mario dies, the business dies with him. mario didn't create a legacy, he owned a job for all of those years. Now in his out of date, always uncomfortable shop and house above, Mario will serve out his days. Am I being overly dramatic here? Perhaps to make a point but hopefully this post will make you think.

Excellent analogy! Thanks for posting!