$$$$$$

Discussion in 'Lawn Mowing' started by BRIAN GALLO, Feb 12, 2002.

  1. BRIAN GALLO

    BRIAN GALLO LawnSite Senior Member
    Posts: 282

    Lately there have been numerous posts talking about pricing, estimating, gross income, etc. I have a variation on those threads. What do you do if you know you are on the low side for what the work is worth, but can't get any more $$$ because the people just won't pay it. In my area it doesn't matter what the clientell are, they all want to pay low compared to some other areas. I love to cut grass, but I wish I could get some of the rates I see posted on this site. I am considered high compared to most other guys around me, and I feel that it's still a bit low.
     
  2. CSRA Landscaping

    CSRA Landscaping LawnSite Bronze Member
    Posts: 1,232

    Are they all one type of account? If so, why not go for a different area? Example: if they're all residential, get more commercial.
     
  3. Twotoros

    Twotoros LawnSite Senior Member
    Posts: 494

    Keep edging them up slowly. Go by the cost of inflation. Most years this what I and another guy I know does. Most years it is like 2%-3%. Most all can live with it. My friend goes with 2.3%. His prices are oddball like $31.47 or such. His customers expect a raise each season.
    In my lowball market it is better than nothing. If you fail to increase regularly you will find that one year you must raise all 2-6 bucks a pop or so. Then up to a third will bail on you. That is an option also. If you lose 20% to a big increase, the ones that stay will equal your last seasons gross. Less hours same money. I have told this to a handful of guys that raised quite a bit and kept their gross' close to the same. Once that is done a small yearly raise will keep you above the waterline.
    This year to keep the peace with my accounts I raised no prices. Although I feel I am reasonable there 75+ guys out there cheaper. Next year all prices go up 3% for mowing. Everything else goes up more.
     
  4. lamblawnscaping

    lamblawnscaping LawnSite Member
    Posts: 165

    Gary,

    If his prices are too low now and he raises them by the rate of inflation they will still be too low because his expenses all go up as well.
     
  5. I'd say we're in the same general market area.
    After a year on lawnsite checking out other markets, I'm glad to be where I am.
    On the east coast the prices are higher, but the cost of living is in the stratosphere.
    In the south and west, cheap labor holds the prices down.
    Here labor costs are a killer, but that's a bonus for a solo operator.
    No where else could an old fat guy like me earn what I do here.
    In this market;
    more production=more money.

    I was in Pittsburg last summer. Buying a big used mower.
    You might have bought it yourself if it weren't too big for your needs.
    How big a machine you'd choose depends on your situation.
    For me it was determined by something else.
    How big do they make 'em?

    Instead of increasing prices, increase production per man hour.
    Because by the time you get the prices up where you think they should be, you'll loose the account to someone cheaper.




    Dave
     
  6. lsylvain

    lsylvain LawnSite Senior Member
    Posts: 777

    Don't concern yourself with the prices that people on this site are charging. We are all over the country. Try to look at the market you are in. What are the other people in the area charging.

    Decide what type of business you want to be:

    Cost Leadership: Charging as little as possible to sell lots of product, like wal-mart

    Differentiation: Making your product seem better in the customers eyes so you can get a little more out of them, like Exxon

    Focus: Charging high prices limiting the number of customers making the product more desirable, like Ferrari
     
  7. heygrassman

    heygrassman LawnSite Senior Member
    Posts: 509

    What parts of Pgh are you focusing your effort in?

    jf
     
  8. Twotoros

    Twotoros LawnSite Senior Member
    Posts: 494

    The other part of my post said to raise closer to where he would like and prepare to lose some accounts. Then raise them each year a little.
     
  9. Not here.

    The people here would rather sit on thier azzes and collect uneployement than make $5-600 a week.
     
  10. BRIAN GALLO

    BRIAN GALLO LawnSite Senior Member
    Posts: 282

    Thanks for all the replys guys. In answer to Heygrassman's question, I am about 15mi. south of Pittsburgh in the suburbs.
     

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