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  #1  
Old 09-01-2013, 10:34 PM
BTLawncare BTLawncare is offline
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Fuel contingency

Hello. In the next few days I will be walking an HOA with the representative and putting in a bid. My first of this kind. My question is, with the Syria thing looming is there a way to put in a contingency in case of extreme rising fuel cost, or is it one of those deals where you do the best estimate and hope it works out? Thank you.
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Old 09-01-2013, 10:45 PM
ReddensLawnCare ReddensLawnCare is offline
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If your doing a contract a fuel surcharge is absolutely necessary
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Old 09-01-2013, 11:15 PM
BTLawncare BTLawncare is offline
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Thank you Reddens for the response. How would it be properly worded into the details?
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Old 09-02-2013, 10:14 AM
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MJB MJB is offline
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Keep it simple : In the event that fuel prices rise above $___ per gal. I will be forced to charge a fuel surcharge of $______.

Im sure you'll get better suggestions but this is what I have used in the past.

You could add to it Due to fluctuating fuel prices, or Due to unstable fuel prices. Just play with it and do it the way it sounds best to you.
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Old 09-02-2013, 10:29 AM
herler herler is offline
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It's your contract so you can do anything you want, no need to ask.
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  #6  
Old 09-02-2013, 11:19 AM
ReddensLawnCare ReddensLawnCare is offline
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I charge a percentage of contract price surcharge once price rises above 4.15
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Old 09-02-2013, 12:05 PM
BTLawncare BTLawncare is offline
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Thank you. I wasn't sure how to lay it out. All my customers are residential. I'm in my third year and haven't had any other opportunities other than residential.
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  #8  
Old 09-03-2013, 11:57 AM
dhardin53 dhardin53 is offline
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I don't see a surcharge for lawn care personally. I understand if your gas cost is like 33% of your cost to mow a customers lawn. But the continues slow steady raise in fuel over the past years is what I have based my occasional price increase in the account and have informed my customer's at the beginning of the year. When gas is dips down from time to time I stock up and can forgo a big fuel increase for a short time.

Lets face it for the majority of LCO as much or more of the gas cost is in the truck getting you to the job. Ok some may have a small daily route and many mowers on the ground burning more gas in mowers than the truck for that day. But on average the truck/transportation is the gas hog.

The reason I don't put a surcharge for gas in a contract up front, Is I was awarded a commercial account because the lower big that had this in there contract lost it because the business could see it costing more over a mowing season. I had less travel cost than the cheaper top bid.

If you raise your price for a gas increase you will need to lower your price if and when gas goes back down. Now this sets the stage for a confused customer.

I see over the road tuckers with a fuel surcharge, but Lawn care I would hope gas will not increase that much to do something this extreme.

Last edited by dhardin53; 09-03-2013 at 12:06 PM.
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  #9  
Old 09-03-2013, 12:19 PM
Caddyshack Lawn Care Caddyshack Lawn Care is offline
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Quote:
Originally Posted by dhardin53 View Post
I don't see a surcharge for lawn care personally.
I'm with this man. Fuel is such a small percentage of my costs that it's not a major factor in my price.

And transferring the risk from you to a potential customer puts a bad taste in the mouth of the person awarding the contract. I'd assume the risk. If the price of fuel goes through the roof you'll have to have a talk with alll your customers anyway.
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  #10  
Old 09-03-2013, 12:36 PM
Tunica Tunica is offline
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If you put wording in a contract about rising fuel costs, then you should also address falling fuel costs.
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