Best method for raising prices

Discussion in 'Lawn Mowing' started by Husky03, Nov 19, 2004.

  1. Husky03

    Husky03 LawnSite Senior Member
    Posts: 432

    Allright, I need some serious responces to this thread because it is very important. Here goes, next year I am taking all of the steps to become legit and I am obviously going to have overhead so I have to raise my prices drastically from this year. When I first started doing this with my push mower I had no idea I was charging so much less than others. I have now learned so much from this site it is Ubelievable, and as I said I am becoming legit. How do I go about raising prices for people I cut for this year for next season? I am not talking just a 5% increase, to get what I am worth I have to charge a lot more. For example, for a $20-25 lawn i was cutting this season I need to be charging atleast $30-35 next year to make money. How can I go about breaking this to my customers? Should I send them a letter some time in February or what? I don't give a damn if I lose every one of them because I am not going to work for cheap because I provide quality work and if I cannot make money in this business then I will find something else that interests me. I realize I am not going to make a huge profit my first few years, but you know what I mean. I plan to do a ton of advertising this spring and pick up a whole new base of customers in a different area if these people will not pay. I am really starting over. Am I on the right track? Thank you and I would really appreciate some good help from the veterans on this board :)
     
  2. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    i think you will lose quite a few customers with increases from 20 to 30, 35. i mean, how can you even explain this? " i have been running an illigitimate company, and now i'm gonna be for real, so it will cost you alot more." i don't think it's gonna fly, just my opinion. my first couple of years i was dirt cheap (thinking i was charging "the going rate", i was wrong). i don't have a single client left from those days. remember, your mowing prices go up alot, so do trimming, and all the extras. and now, you arent throwing in any "freebies" (or i should hope not). i think you will have to rebuild, almost start from scratch.
     
  3. Husky03

    Husky03 LawnSite Senior Member
    Posts: 432

    Unfortunately I think you are right Bobby. And actually I think that will be about the only thing to tell them for such an increase.
     
  4. paponte

    paponte LawnSite Silver Member
    Posts: 2,366

    Can I ask why you underbid yourself so low in the first place? A price increase is usually a smaller gradual amount over a period of time. Most I have raised at a time was $5.00, with little or no "casualties". :)
     
  5. Husky03

    Husky03 LawnSite Senior Member
    Posts: 432

    I had no freaking idea what I was doing. I said that in the post. I have learned so much just since last spring.
     
  6. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    tell them either they pay the increase, or you call the cops..........
     
  7. paponte

    paponte LawnSite Silver Member
    Posts: 2,366


    In that situation, I would sit down with each customer in a 1 on 1. I would think that they are all happy with your work. Tell them that you value them as a customer, but your not making any money. If they were to get someone else in there they would charge more, and that you have to raise them to the "going rate". I would tell them the price that you would need to raise them to. If any complained I would either drop them, or make them sign a 2 year contract, and raise them over the 2 years. :)
     
  8. packerbacker

    packerbacker LawnSite Bronze Member
    Posts: 1,433

    The good customers will not fire you. Send them a letter and explain to them about inflation. Explain the cost of running a lawn service goes up every year and you need their help in biting the cost of it. The good customers will keep you, the others...well F*** em if they cant take a joke :)
     
  9. Husky03

    Husky03 LawnSite Senior Member
    Posts: 432

    It would be dificult to set up a 1 on 1 appointment with everyone. I would also feel very out of place doing it this way. If I was to send a letter when would be the best time? I plan on sending out holiday cards, but I do not think that would be the best time to tell tham my rates are going up. :p Anything else I should include in the letter? Thanks a lot.
    Bobby: Nobody's scared of Lafayette cops :p
     
  10. packerbacker

    packerbacker LawnSite Bronze Member
    Posts: 1,433





    Send it out a few weeks before the first mow. I raised prices on 75% of my customers this year and only 1 complained. He's a single doctor living in a $400,000 house and was complaining about 5 bucks.
     

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