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View Full Version : Should prices be lower because of efficiency?


Lawn-Scapes
09-03-2004, 09:27 PM
10-15 years ago the price to mow an acre would cost you $75 around here... now it's $35. Why? Because equipment is more efficient... right? Doesn't the equipment cost more?

Why shouldn't we be making the same money ($75/acre) that people were willing to pay 15 years ago? People were making less back then and paying more... they're making more now and paying less. This doen't make sense to me... does it to you?

I have always thought there should be a standard price for mowing... for example $1.25 (or whatever) per thousand square feet and then add in X dollars for degree of difficulty. However people argue that you should base your price on what you need to make per hour... or Joe Blow with the 36" walkbehind can't do it in the same amount of time as the guy with ZTR.... so he needs to get his hourly rate. I say too bad for him.

If there were more of standard price in this business people would be looking for the best instead of the best deal...

olderthandirt
09-03-2004, 09:44 PM
It aint ever gonna happen Tom. The best thing that happens is a bunch of people on this site won't be on it in 5-10 yrs. COLA goes up and our prices come down, if you have'nt planned ahead 25-35 yrs you just won't make it in the long haul.

Mac

locutus
09-03-2004, 09:51 PM
No prices should not go down due to efficiency. Profits should go up. The newest technology and goodies that create this efficiency generally cost more as well.

impactlandscaping
09-03-2004, 10:35 PM
We have some accounts that were with us from day one. Some of these used to take an hour with 21's, and now take 12-18 minutes with larger, better mowers(STANDERS!!) I have raised everyones prices about 5-8 % per year over the last 5 years, and no one complains about paying more for less site time.It's good to have quality minded clients. It just depends on where you are and who your target base is I guess. Mac, some of these guys on LS won't be around in one year, let alone 5. They pop up all over in the spring, and are ghosts the following year....more $$$ for me..:D

dkeisala
09-03-2004, 11:01 PM
It's far more efficient to build a car these days than it was 100 years ago but they certainly aren't any cheaper.

jphag
09-03-2004, 11:13 PM
You need to charge what you feel your worth. I aim for a $1 a min. on residential or $5 per 1000 sq ft for commercial properties. However, I do have a few old timers that only want 21 inch mowers on there property so I am up front with them and tell them it will cost more due to the extra time it will take me.

olderthandirt
09-03-2004, 11:39 PM
Originally posted by impactlandscaping
We have some accounts that were with us from day one. Some of these used to take an hour with 21's, and now take 12-18 minutes with larger, better mowers(STANDERS!!) I have raised everyones prices about 5-8 % per year over the last 5 years, and no one complains about paying more for less site time.It's good to have quality minded clients. It just depends on where you are and who your target base is I guess. Mac, some of these guys on LS won't be around in one year, let alone 5. They pop up all over in the spring, and are ghosts the following year....more $$$ for me..:D

Yes Bill there are a bunch that never survive the yr. those are not the ones I was talking about. I was refering to the guys that loose a few accounts to a lowballer and starts to panick or doubt himself and lowers his prices to be competitive thus lowering the prices for all lco in the area. And then after 10 yrs wondering why he's in the same position he was 10 yrs prior. There's to many post about "I can't raise my prices or they will drop me" I'm saying if you don't raise your prices to keep up with cola you will be out of business. So your choice is will you raise them now when you need to and maybe loose a few customers or try to make it up with more customers at the lower rates. more productivity at the same price is a disaster waiting to happen. Price a new mower now compared to 10 yrs ago You need to generate more revenue to make the same purchase and you just can not do it with out raising rates. 10% a yr should be normal but its going the opposite way.

Mac

Lawn-Scapes
09-03-2004, 11:46 PM
10% is a bit much.. don't ya think? Those that were paying $75 10 years ago would be paying around $235 now :eek:

$235 an acre would be sweet :D

impactlandscaping
09-03-2004, 11:47 PM
Well said, Mac. I rarely lose a client due to price increase. If I do, I replace them with another, and move on. Most people(I say most..) are not so fixated on price that they are willing to switch services because their rate is going up 2-5.00 per week. The ones that are, are better off with Joe Blow and Go, not me..:D

Lawn-Scapes
09-03-2004, 11:49 PM
Oh.. I see now you said per year. I need some glasses

impactlandscaping
09-04-2004, 12:05 AM
Tom, the more I think about this thread, I can't help but think about our industry as a whole. People pay 2.00 for a gallon of gas that they bought in the 70's for 25% of that price. People pay 3.00+ for a gallon of milk that used to cost .79, cars have went up2-300%, as has housing,people pay it without a second thought...but....why do people get so bent on a few more dollars per month for lawncare? I have done estimates for people who have told me they used to pay $ 20.00 ten years ago for a .5-.75 acre lawn mowing, and now think it shouldn't cost more than $ 25.00 when I tell them closer to 60.-75.00. Everyone in the "mainstream workplace" gets at least a 2-3% cost of living raise each year, why shouldn't we? I guess we'll never understand the thinking of some people, or just leave them behind to live in the past..:D

Lawn-Scapes
09-04-2004, 12:14 AM
Because people need a car, gas, and milk... they don't need lawncare.

Lawn-Scapes
09-04-2004, 12:32 AM
...wait a minute. 10% is 10%... I feel like a dummy.

olderthandirt
09-04-2004, 12:36 AM
Thats the catch!!!! they don't need us. At least thats what they think, Thats where salesmanship come in. If you can convince them that they need you then you can set your price and get it. I'll catch he!! for saying this but you can do the best job in the world and a good salesman can still steal your job becuase great BS beats great work. If you want to double your work load don't worry about hiring the best employees and equipment. Hire the best PR saleman you can.

Mac

out4now
09-04-2004, 12:53 AM
[QUOTE]Originally posted by impactlandscaping
[B]why do people get so bent on a few more dollars per month for lawncare?
It's because there are so many scrubs out there trying to lowball all the time. Here in AZ if one scrub goes under there are always more to take their place so homeowners think that a reputable company is too expensive. Corporate accounts are the ones to get because the scrubs really can't compete in those areas. The high capital investment of riders helps to keep them out of that arena. A homeowner thinks your equipment is just like the cheap stuff they see at Home Depot or Lowes and that you can afford to do it cheap. I explained to an old lady once why her Lawn Service cost so much each month, insurance,gas,oil,parts,employees etc. and she said she honestly never thought about all that and then went on to say she was on Social Security and couldn't afford much. I guess it's all perspective.

gramps
09-04-2004, 03:26 PM
Originally posted by Lawn-Scapes
10% is a bit much.. don't ya think? Those that were paying $75 10 years ago would be paying around $235 now :eek:

$235 an acre would be sweet :D
That seems a little high. $210. seems too work here.:D