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domain311
10-10-2010, 12:39 PM
Its about time for us to increase our normal hourly rate...we haven't in about 5 years and probably would have sooner if it wasn't for such a crappy economy last year. Anyhow, what do you guys normally do when you have a price increase? Send a letter stating so, just do the next bill reflecting the increase, etc....Not sure what I did last time because I can't even rememeber...but was curious what others normally do?

I know when we increase the price for a lawn we don't say anything, we just add the increase in the bills-no one has ever said anything about this either...

wbw
10-10-2010, 01:50 PM
Its about time for us to increase our normal hourly rate...we haven't in about 5 years and probably would have sooner if it wasn't for such a crappy economy last year. Anyhow, what do you guys normally do when you have a price increase? Send a letter stating so, just do the next bill reflecting the increase, etc....Not sure what I did last time because I can't even rememeber...but was curious what others normally do?

I know when we increase the price for a lawn we don't say anything, we just add the increase in the bills-no one has ever said anything about this either...

Why would your customers know your hourly rate? What type of work are you billing for hourly?

domain311
10-10-2010, 02:06 PM
Why would your customers know your hourly rate? What type of work are you billing for hourly?

A lot of stuff isn't broken down...but weeding for example or some other miscellaneous tasks may be. Also, occasionally customers will ask...which I usually tell them I will give them an estimate for something in particular that they need...but if they really want to know for again, weeding, I will tell them an hourly rate.

And basically most of our work and estimates are based on the "hourly rate" that we charge-plus materials, disposal, etc.

How do you do it differently?

cpel2004
10-10-2010, 07:08 PM
Wow, I guess if it works for you. I would just raise my price increase. How long hasve you been in business, how did you do your last increase. Its really isnt any of there business.

domain311
10-10-2010, 07:51 PM
Wow, I guess if it works for you. I would just raise my price increase. How long hasve you been in business, how did you do your last increase. Its really isnt any of there business.

Wow, what? You guess if what works for me?

Been in business for 12 years...I said in the first post I can't remember what we did, so probably just did it...

Just curious to see what others might do or their thoughts on it...I see sometimes other companies...not just landscaping...it can be a deli raising the price of a coffee...letting customers know that they are raising prices.

I do contracts so this is why I am going over it in my head...for when the time comes in a few months.

cpel2004
10-10-2010, 07:59 PM
Cool your jets bro, I could care less if you have been in business for 12 years. You are the one asking such a remedial question. According to your own words its been 5 years since your last price increase, Hmmmmm. Just raise the dang prices, dont be afraid to charge. Profit is a good thing and raising your prices once a year is also a healthy thing. Try it sometimes, your customer expects you to raise your rates! just my .02!

domain311
10-10-2010, 08:15 PM
Don't tell me to cool my jets or talk to me as if I'm an idiot...if you didn't care how long I was in business for then you shouldn't have ASKED me. I was simply replying.

I do raise prices on certain things such as mowing or hedge pruning more often enough.

Again...was simply asking a valid question what others thought...you can keep your .02 if you want to reply in such a manner.

And btw, it is "their" business because they are the ones writing the checks...whether some of us notify or not, is what I am trying to find out. I'm sure some do and some don't...but wanted some input on it anyhow...

wbw
10-10-2010, 10:08 PM
Just to let you know, I am no longer in the green industry. I currently service swimming pools. My strong preference is to quote a lump sum. I try to never break my pricing down.

BTW not meaning to be a jerk but you should be able to estimate the time for weeding and just quote a lump sum price.

cpel2004
10-10-2010, 10:18 PM
I know when we increase the price for a lawn we don't say anything, we just add the increase in the bills-no one has ever said anything about this either...

"Smart one," I think you have your answer. By the way it is your business. You pay taxes... you pay insurance... you pay the shop mechanic... Ah yeah its your business.:hammerhead:

domain311
10-10-2010, 10:19 PM
I hear ya...its not that I don't know how to estimate the time it may take and lump it up-I do that whenever we do an estimate. But from time to time customers, existing or potential, will ask our hourly rate for such things-which I will tell them. There are also some cases where me may do misc work, not really predefined, and its billed out hourly. This is pretty standard practice out here.

domain311
10-10-2010, 10:31 PM
"Smart one," I think you have your answer. By the way it is your business. You pay taxes... you pay insurance... you pay the shop mechanic... Ah yeah its your business.:hammerhead:

Thanks for the reminder...I'm also not too ignorant or arrogant to ask questions and willing to listen to some reasonable feedback. Maybe I'm wrong but last I checked that's what this place is great for...

the ace
10-12-2010, 10:37 PM
We go up about 2-3% every year. Gotta keep those green backs comin' in.payup

gonemowin1
10-17-2010, 12:41 PM
I also occasionally do work on a time and materials basis. If you list an hourly rate in your contracts or proposals, just raise the figure when you send out your renewals. If you havent provided them a written price, just start qouting your new rate. I wouldn't make a big deal out of it by notifying anyone, most clients won't even notice.

Stillwater
10-18-2010, 03:34 AM
Why would your customers know your hourly rate? What type of work are you billing for hourly?

I could think of a few reasons why a regular long term customer would know my labor rates and I often list my per man per hour labor rate in a clause on a contract, sounding something like this. All change orders and work performed beyond the scope of this agreement will be billed out at ...... per man per hour plus materials.

Ahhh the old Labor rate increase letter......

Roger
10-18-2010, 06:29 AM
Some of the posts in this thread sound like the LCO is living in a time warp, somewhere in 2007 or early 2008.

4CORNERS
10-22-2010, 08:36 PM
Plain and simple, a good business man doesn't send a customer a bill with raised prices without some kind of notice. Lastly, why do some of you guys ask questions and advice and get it from guys who have been in the business for many years and then gripe? Grow up....just a little!

AndyTblc
10-24-2010, 10:40 AM
my customers don't know my hourly rate. I just do that work and send them the bill with the final total.
A lot of them if I told them the hourly rate they would crap their pants and try to feed me the "well minimum wage is $7.40, why are you working 5x higher than that". Then you have give them the speech about you have to pay for this that him her there and here. And chances are they probably still wouldn't understand.
But the hourly stuff I do is the big leaf clean-ups. Or trimming tree's or bushes or mulch.
But basically mowing, and the works are done as a set price each time.
I don't let them know if I up my prices for the hourly, because each time is different, usually it's whatever I feel like charging that day. The more grumpy I am the more they get charged. But trust me, I make money no matter what I charge.
But if I do up my prices for mowing, it is done at the beginning of the year, and I send out a letter before hand stating this is whats gonna happen.

Fresh_Cut
11-12-2010, 05:11 PM
But if I do up my prices for mowing, it is done at the beginning of the year, and I send out a letter before hand stating this is whats gonna happen.

Do you use contracts?

Or do you just call all your customers at the start of the season to see if they will need you that year?

I'm trying to find out how these "handshake" LCO's work

DanaMac
11-14-2010, 10:55 AM
Since I am strictly irrigation service, all of our charges are hourly. No set bid price, no contracts, work done as needed. If someone calls for sprinkler work, I get them on the schedule. If they are new customers I tell them the price. If they are existing customers, they already know approximately what we charge, and unless they ask, I don't tell them about any rate increases. They know and trust our experience and pay the bill. Some people are shocked at what we charge, and some would still be shocked if I charged $25 per hour less.

khutch
01-02-2011, 08:25 AM
We go up about 2-3% every year. Gotta keep those green backs comin' in.payup

So next year your $40 yard is $40.80????

Mow Man
01-10-2011, 10:54 AM
Thanks for the reminder...I'm also not too ignorant or arrogant to ask questions and willing to listen to some reasonable feedback. Maybe I'm wrong but last I checked that's what this place is great for...

Well Put!!!! There are some guys on this site that know it all???? I guess I am not one of the lucky ones either!

On a serious note, I am in the same boat as many. Worrying about loosing some customers in this tough economy by raising prices. I am considering 10% as I have not raised any prices in 3 years and my over head has been hammered. My thought is to send out letters right as the weather changes this spring requesting (not demanding) a price increase with some supporting reasons. EX. profesional crews, FUEL increase, insurance etc.... My feeling is that I will retain most, if not all of my customers. I have never tried to rake any of my customers, but I/WE can not stay in business w/o being proffitable!

Any thoughts on this aproach?