Originally Posted by hackitdown
I didn't read this entire thread, so I'm probably not adding anything new, but...Guys in this business think that having a large number of mowing accounts will make them rich...so they cut prices to try to sign as many customers as possible. It is amazing to me how many people do this over and over, waiting for "economies of scale" to magically produce profits.
When I learned a little about business, I learned the difference between fixed costs and variable costs. Maintenance/mowing has small fixed, but huge variable. So there is almost no "economies of scale".
Buying customers with low prices is a recipe for losing money.
I agree! I've never beleaved in the concept of lowballing to build up the maintenance clientel. Though it seams that's what sooooo many of the companies around here in North Jersey do. I'm so sick of having to compete with all the lowballers that get every house on the block while I hold my price for the one lone house on the block. Nobody cares about quality or if you're insured any more. The customers just want the cheapscape guy that shows up with 3 men doing all the neighbors houses. The lawn maintenance business is really not proffitable unless you are a high volume, super efficient machine, & that I am not.
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