$$$$$$

[BRIAN GALLO]

Lately there have been numerous posts talking about pricing, estimating, gross income, etc. I have a variation on those threads. What do you do if you know you are on the low side for what the work is worth, but can't get any more $$$ because the people just won't pay it. In my area it doesn't matter what the clientell are, they all want to pay low compared to some other areas. I love to cut grass, but I wish I could get some of the rates I see posted on this site. I am considered high compared to most other guys around me, and I feel that it's still a bit low.

[CSRA Landscaping]

Are they all one type of account? If so, why not go for a different area? Example: if they're all residential, get more commercial.

[Twotoros]

Keep edging them up slowly. Go by the cost of inflation. Most years this what I and another guy I know does. Most years it is like 2%-3%. Most all can live with it. My friend goes with 2.3%. His prices are oddball like $31.47 or such. His customers expect a raise each season.
In my lowball market it is better than nothing. If you fail to increase regularly you will find that one year you must raise all 2-6 bucks a pop or so. Then up to a third will bail on you. That is an option also. If you lose 20% to a big increase, the ones that stay will equal your last seasons gross. Less hours same money. I have told this to a handful of guys that raised quite a bit and kept their gross' close to the same. Once that is done a small yearly raise will keep you above the waterline.
This year to keep the peace with my accounts I raised no prices. Although I feel I am reasonable there 75+ guys out there cheaper. Next year all prices go up 3% for mowing. Everything else goes up more.

[lamblawnscaping]

Gary,

If his prices are too low now and he raises them by the rate of inflation they will still be too low because his expenses all go up as well.

[David Haggerty]

I'd say we're in the same general market area.
After a year on lawnsite checking out other markets, I'm glad to be where I am.
On the east coast the prices are higher, but the cost of living is in the stratosphere.
In the south and west, cheap labor holds the prices down.
Here labor costs are a killer, but that's a bonus for a solo operator.
No where else could an old fat guy like me earn what I do here.
In this market;
more production=more money.

I was in Pittsburg last summer. Buying a big used mower.
You might have bought it yourself if it weren't too big for your needs.
How big a machine you'd choose depends on your situation.
For me it was determined by something else.
How big do they make 'em?

Instead of increasing prices, increase production per man hour.
Because by the time you get the prices up where you think they should be, you'll loose the account to someone cheaper.




Dave

[lsylvain]

Don't concern yourself with the prices that people on this site are charging. We are all over the country. Try to look at the market you are in. What are the other people in the area charging.

Decide what type of business you want to be:

Cost Leadership: Charging as little as possible to sell lots of product, like wal-mart

Differentiation: Making your product seem better in the customers eyes so you can get a little more out of them, like Exxon

Focus: Charging high prices limiting the number of customers making the product more desirable, like Ferrari

[heygrassman]

What parts of Pgh are you focusing your effort in?

jf

[Twotoros]

The other part of my post said to raise closer to where he would like and prepare to lose some accounts. Then raise them each year a little.

[LAWNGODFATHER]

Originally posted by David Haggerty
On the east coast the prices are higher, but the cost of living is in the stratosphere.
In the south and west, cheap labor holds the prices down.
Here labor costs are a killer

Not here.

The people here would rather sit on thier azzes and collect uneployement than make $5-600 a week.

[BRIAN GALLO]

Thanks for all the replys guys. In answer to Heygrassman's question, I am about 15mi. south of Pittsburgh in the suburbs.

[65hoss]

The best idea is to compete with yourself and not others. Know your expenses and keep your business lean. Be as productive in the working hours as possible.

[David Haggerty]

Originally posted by LAWNGODFATHER


Not here.

The people here would rather sit on thier azzes and collect uneployement than make $5-600 a week.



Although you're both south and west of me, aren't we in about the same market? Middle America.

We seem to have nearly the same climate, foilage and labor problems.

The "gateway to the west" must be the western edge of middle America. Pittsburgh about the eastern edge.



How's the H2B labor there? Are there a lot of them around?


Dave

[John Allin]

If you think you can, or you think you can't...... you're right.

[kutnkru]

Originally posted by JAA
If you think you can, or you think you can't...... you're right. Wasnt it Tony Bass (SuperLawnTrucks) who when he was in the biz went over $2M in an area of around 80,000 potential clients???

We have to remember that we sell quality, and with that has to come a sense of value for the client. When we sell services by the dollar we are the ones who lose out, because there will always be someone to do the same job for less money. Thats business!!!
~~~~
Here is a lenghty (double the Grasshoppa) reply I made to a similar question:

Consider looking at things from a complete sales perspective of selling "PLans" without selling per cut services. Say that the $25 mark is your average price for a 6m/sf property and you want to get 28 cuts per season. You should develop a pricing plan to "offer" your prospective clients a choice just like some of the larger fert companies do.

Lets say that you have decided that your basic services will consist of Mowing, Seasonal Clean-Ups, Aeration, and Lime. We'll call this the Putters Green Plan.

Next lets say that you have a source who will sub out to you his fert sevices. Now you can add Basic Feeding to your inital plan and we can call this your Emerald Green Plan.

As the crème de' la crème you will offer them Weed and Feed plus Grub Control, and include Power Raking calling this your Estate Plan.

....

Lets say hypothetically you have calculated the Putters Plan to be $1068 annually, the Emerald Green Plan to be $1252, and the Estate Plan to be $1486. If you figure them out over an 8 month season and offer the option for a 9 month billing cycle this will break your plans down as follows:

Putters Green: 1068 - (8) $34/wk - (9) $30/wk
Emerald Green: 1252 - (8) $39/wk - (9) $35/wk
Estate Plan: 1486 - (8) $46/wk - (9) $41/wk

....

Now its up to you to be the creative sales man, use your figures and sell them the service!! You just use the term service (singular) referring to your company while they will be thinking of the different aspects of the lawn as you flip-flop from 8 to 9 month plans accordingly.

You would obviously sell the client on how much easier it is having a complete one-stop-shop contractor than dealing with multiple service providers to accomplish the end result. They will more than likely be thinking about what they have paid for the cutting previously, and this is how you sell them on an upgrade of services.

If they have been paying $25/cut they all know that their neighbors and most have been paying $30-35 for the same services. You can elaborate on the potential their property has and comfort them with a guarantee of no price increases over the next two years (minimally in your mind), and that for an additional $9 you can not only handle the grounds and shrub care, but ensure that they have a healthy, more beautiful longer lasting lawn by allowing you to be the sole contractor with the fert control as well.

Now what they usually think is that not only are they getting their lawns mowed but your dumb enough to fertilize for $15 because you are selling them on the service(your company), and they are doing the math for the fertilization.

The last struggle is to get them to spend the extra $3 weekly for the upgrade in the fert plan but even if they dont its okay because not only have you guaranteed 28 cuts from them plus Spring and Fall Clean-Ups, but you have gained the Aeration and Liming while keeping Tru-Green and/or some other moron off your properties!!

Regardless of what happens even if they go with the "basic" plan they have agreed to more services than just the mowing. Its a win-win for you.

I realize it too damn long but hopefully you see what I mean by value over dollars.

[LAWNGODFATHER]

OK I'll elaberate a little more too.

It's a numbers game.

Sell the clients on a full service contract that pays year round.

Say they have a $25 a cut lawn. Have them pay $30 a week for the entire year and have it include all the other services they will need.

Example;

$25 x 28 = $700 cut only

$30 x 52 =$1560 full service

What you do is add up all the other jobs you want to sell them and divide it by how many weeks, or months.

Kris White/kutnkru is better at explaining this so I'll let him do it.

What JAA put means if you think you can't, you are going to belive you can't and with out trying you will never know.

And if you think you can, you belive you are able.


David; yup middle America.

Labor here is bad, the H2B guys are making a killing, I would say there is about 600 of them. about 500 split between 3 big LCO's.

Loyette, Brickman, and Top Care.

[David Haggerty]

Originally posted by LAWNGODFATHER


Labor here is bad, the H2B guys are making a killing, I would say there is about 600 of them. about 500 split between 3 big LCO's.

Loyette, Brickman, and Top Care.


Wow! that's a lot. Have you considered using H2B labor? H2B is just getting started here.

I just saw a new employment agency in Wilmington the other day. "Garcia" The only people going in there were imigrant laborers.

Dave

[J&JPROPERTY]

We are located between Dayton and Springfield Ohio, the New Carlisle / Huber area. If you want to see an influx of migrant workers come on down, 2 big nurseries and several small companies employee 1000+ yearly and probably 2000 seasonal. We have migrant housing and the state even built them a migrant daycare/head start for the kids!:confused: they get tax breaks and public assistance ( including housing)

Just my 2 cents,

[65hoss]

We've had tons of these guys around here for years. For the last 15 years or longer they have made up the majority of labor for construction and landscaping companies. They are actually the fastest growing minority in the memphis area. I'm talking H2B, Mexican legals, and of course a huge amount of illegals.