2003..% increase for your services?

Discussion in 'Business Operations' started by GarPA, Dec 4, 2002.

  1. GarPA

    GarPA LawnSite Silver Member
    from PA
    Posts: 2,585

    Since many of us are in the process of renewing and signing new accounts for next I assume some of us have thought about the need to raise our fees where needed. Yesterday I was talking to my insurance agent and he said get ready for a 10 to 12 percent increase on auto and liability costs. Tied to that, inflation is not flat, although its not high either....other costs may also rise somewhat. This topic has been discussed b4 here in a more general sense but I'm interested in whether some of you have decided for sure, that some % increase is called for.
    I'm considering doing a 4% increase...this is based on my projection of my fixed and variable cost projections for next year. I have no intention of going backward financially while most of the service providers who I pay, will want more money from me next year...thanks
  2. bubble boy

    bubble boy LawnSite Bronze Member
    Posts: 1,020

    i'll be increasing some but not all.

    prepare for odd times. greenspan has overcooked your economy with low interest rates. and ours for that matter indirectly. rates may be on the rise soon. maybe factor higer interest costs in your future .
  3. KLR

    KLR LawnSite Member
    from Zone 6
    Posts: 171

    yep, i expect insurance premiums to rise, auto, gen. liability, health.

    however, we are getting lower product prices (fert./pesticides) thanks to some compitition between vendors for our business.

    along with the fact Scotts Co is pushing big in our area and other larger franchise companies, we will not have any increase for 2003.

    at least thats the way it looks right now. we send out our renewal letters in mid Jan. i reserve the right to change my mind
  4. devildog

    devildog LawnSite Senior Member
    from sc
    Posts: 270

    Here deep in the South, we typically don't renew service agreements. They're ongoing - thus we have to earn our keep 52 weeks a year.

    Typically we pass along the rate increases every 18-24 months depending on client and expenses, Therefore rate increases are every year across our client list. Late last summer I hit a group with some of the biggest ever. One at 12%, never got a call or cancellation.

    This year will be about the same, do not anticipate any below 4%; the average about 6%. with regards... devildog
  5. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    I don't think that 4% will be enough...I believe I will go up around 10% across the board. Dunno, something to think about tomorrow when I am watching the snow come down up here in the Northeast.
  6. bubble boy

    bubble boy LawnSite Bronze Member
    Posts: 1,020

    how is the return rate with a ten percent increase?

    accross the board, í wouldn't have the stones.
  7. nu83

    nu83 LawnSite Member
    from omaha
    Posts: 238

    Obviously the key interest rates will rise, however it will not be rapid or anytime soon. New home sells are probably going to fall which should help keep prime down. But its anybodys guess. IMO the fed has been one step behind the last 2 years, but they have done a good job of keeping the economy stable all things considered.
  8. bubble boy

    bubble boy LawnSite Bronze Member
    Posts: 1,020

    the fed being behind is what i think our government is thinking, they are showing signs they may jack rates (usually they follow US lead)

    rates are believed to have an effect 6 months after the change. many think that 6 mos from now the US may want to reign things in, meaning now is the time to up them.

    course others have compared the US to japan 10 yrs ago, when deflation was kicking in-what would happen to our prices then? and customers savings, income and debt levels? sorry for the eco 101

    anyone have a customer continually complain, but resign at higher prices every year??? i'm working on the prices for next yr and there are a few that i wonder about-they surprise me every yr by coming back.

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