Another fuel cost thread....how to cope?

Discussion in 'Lawn Mowing' started by tallimeca, May 23, 2008.

  1. tallimeca

    tallimeca LawnSite Bronze Member
    Posts: 1,229

    I started to type this in another post I just made but didn't want to polute it because it didn't pertain to the topic too much, but it had me thinking how business are going to continue to adapt to the rising costs of doing business, especially with fuel costs.

    Topping of tanks for customers in the service department has doubled in cost over the past 2 years. I can't raise my prices any higher then they are, just like you some of you Lco's feel. I'd feel like a shmuck sending a machine back with a quarter tank of gas. But here's my gas calculations.

    If I have say.....10 full service jobs go out the door in a day, which we would drain the fuel out completely and start fresh because 99 percent of everything that comes in is rotten gas or full of water, that's 50 gallons a week. That's 200 dollars a week, which used to be 100. 400 extra a month in overhead, almost 5k a year out of my pocket.

    We just set a new pickup and delivery schedule for repairs to a try and avoid wasted driving time in the same areas. We have designated days we will be in certain areas. The downside from a customer service point is we used to just schedule and go get the stuff, which would mean quicker turn around. Now it might be 2-3 days longer. Nothing I can do. I figured i'm not going to loose enough business to not do it this way. These are mainly homeowners so it's not as critical as it would be if they were trying to make a living. Only other alternative is bring the equipment to us. Why you would want to spend 20-40 dollars for us to come pick up a mower than can go in the back of your truck/suv/truck is baffling to me anyway, be we do handfulls a day.

    Shipping costs are through the roof. I'm paying almost 100 dollars a machien to have a special order tractor or ZTR shipped in. It used to be 50 bucks and i would just eat it, now, i have to charge if it's something I don't stock.......and you can't stock everything. Every invoice i have come in for supplies, products has a fuel surcharge adder on it. Some of which , are illegal, but that's a whole other post.

    I know the LCO's are doing the same. I'm sure you have customers that want their lawns cut fridays to have it nice for the weekend, but they are on the other side of town, where you usually are on tuesdays. Guys just don't want to make the trip because they aren't making any money, so that customer will try and get someone else. Guy was telling me an exact story yesterday. Been dealing with a customer 8 years and demands the lawn cut on thursday or friday. He called and said listen, i can't re-route 20 other lawns so i can do yours on thursday and friday so i have to do it on wednesday. She said she'd find another cutter. So be it. If it's costing you an extra 10 bucks to make the trip then it's not worth it.

    A gentleman came in to buy a mower this week that was "sick of paying my landscaperlmost 50 bucks a week to cut the grass, and that's not even the cleanups, pruning ,hedges......they are outrageous"

    So the conversation out of cost of doing business came up and i asked him how long they were there and how many guys to do the lawn each week and he said about a half hour. So I said to him, ok you have 2 guys making 10-12 bucks an hour, so there's 12 bucks. They probably burn close to a gallon of gas while there, not to mention the fuel to get there, so lets say another 8 bucks, there's 20. Just to be at your house cutting the lawn. I then said, now, figure in wear and tear on equipment, wear and tear on the truck, on the trailor, insurance (if they have any), registration, inspection stickers, dumping costs, advertising...... I said, it's amazing if they were making 10 bucks profit on your lawn for all of that. My honest opinion is i don't know how these guys are staying in business with all the cut throat and massive amounts of landscapers out there.

    He then said hmmm, your making me think maybe it's worth it. Then of course I said DAMN LANDSCAPERS ARE SCUM, BUY THE NEW MOWER!!!! Haha, just kidding. But everyone thinks anyone in business is rich.

    Everyone's cost of business is going up up up, our prices are going up as much as they can, but how many of you are taking home any more money then you were 2 seasons ago? Not many i'm sure.

    I just got word that one of the big manufacturers in the equipment world is going up 6 % on their prices as of June 1st..........

    I'm curious as to how your costs are going up. I'm sure the costs of harvesting seed/sod has gone up. Stone masonary has had to increase with the costs of quarrying it increasing.

    We are obviously in a recession with a major case of inflation.:dizzy:

    I can't believe how many yards i drive by that look like crap that used to be all nice. People are only spending money on the necessities. Apparently the yard is not one of them. We sell Scotts lawn products and our numbers are way down as far as fertilizer and seed sales go.

    I don't see this going backwards, so the challenge is how can we turn more of a profit to help our employees and ourselves deal with the rise costs of living, without raising prices to cover overhead increase?

    I don't see any way around it. So if every busineses raises prices on good/services, that's means everyone's cost of living increases again.

    It's going to get ugly.

    Sorry for the BLOG..........Just thinking out loud this morning.
     
  2. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 16,458

    Ive had to drop a couple of far away accounts, and I want to go full time but Im really not sure where this gas thing is headed, gas went up another >10 just today, wheres the end?
     
  3. tallimeca

    tallimeca LawnSite Bronze Member
    Posts: 1,229

    i'm guessing that the price of gas is going to settle damn 5 bucks a gallon. Most other countries, that's what it is.
     
  4. buzzz427

    buzzz427 LawnSite Member
    Posts: 14

    gas just hit 4.10 here we'll be lucky if it only goes to five bucks its killing me
     
  5. doubleedge

    doubleedge LawnSite Senior Member
    from ND
    Posts: 912

    If congress allowed oil companies to drill in Alaska and off the coast, we would be sitting at aound $2 per gallon. Remember that this year when you are voting :usflag:.
     
  6. Sweet Tater

    Sweet Tater LawnSite Silver Member
    Posts: 2,123

    its not all because of the amount of oil, but there are not enough refineries to make the gas, thats the big problem.
    its at 3.81 here today. almost 40 bucks just to fill the mower :cry::cry:
     
  7. Damian

    Damian LawnSite Member
    Posts: 242

    If the oil companies were allowed to pump as much as they wanted to from the Alaskan reserves, China would just have that much more oil to use. Well, them and India. Prices here would not drop a cent - unless a big announcement were made - and even then, they would quickly go back to what they were as OPEC adjusted their output. End result? The oil companies would make even more billions of dollars profits per quarter.
     
  8. nosparkplugs

    nosparkplugs LawnSite Gold Member
    Posts: 3,445

    Just filled up my Cummins today about $135.00, ouch. The cost to fill my mowers is really getting expensive. while most would think $135.00 to fill a diesel truck is crazy. I think my gasoline ZTR air cooled engines are gas guzzlers more so than the Cummins. One good thing about diesel no one wants to steal it
     
  9. Frue

    Frue LawnSite Bronze Member
    Posts: 1,468

    well as the owner you must start doing more work yourself! working longer, routing tighter, and watching everything.
     
  10. puppypaws

    puppypaws LawnSite Fanatic
    Posts: 8,872

    This is the main problem, you hit it right on the head!

    China, Japan and India have America's money because our stupid government allowed it to happen. They are competing in the same market we are but have the money to buy all the oil; they need or want. The King of Saudi Arabia let Bush know rather quickly they were satisfying their customers and would not increase output for America.

    Think about it for a moment, you are an oil producing country, and you have several tanker ships full and ready to go to the highest bidder. America needs it very badly but China is in the market for a purchase, now who do you suppose would win the bidding war. China will buy the oil with money; they have generated from stupid Americans. I believe everyone in a government office of any type should be taken out and never allowed to be involved in any US business again. To kill cancer you must destroy every cell and this is the only way our government will ever be useful again, get rid of the problem people.
     

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