Fuel considerations...

Discussion in 'Lawn Mowing' started by John at JDH Select, Apr 27, 2004.

  1. John at JDH Select

    John at JDH Select LawnSite Member
    from Indy
    Posts: 66

    I have been thinking of increasing prices to my clients to offset the increasing price of fuel. I thought about using the following formula: $2.00 increase per account (x) 30 cuts per client, per year. = $60.00.

    Now, do I want to hit each client with a "mid-season" increase of $60.00, or find a way to make the money in another manner? My thought is that I can easily stick $60.00 in blade edging, mulching, landscaping, or snow removal during the remainder of the year.

    What about a letter to the clients checking in on our services to date, customer satisfaction, etc. and explain the dilemma of increased fuel prices. Why not be the hero and explain to them that we are trying to absorb the increased prices without passing them along on weekly mowings. This is not unethical because I would be absorbing the costs, but I would be looking for other opportunity profits in other areas.

    What do you think?:confused:
     
  2. vmaxbel1

    vmaxbel1 LawnSite Member
    Posts: 4

    I do not think the price of gas has hurt me that bad. I have just added a lawn a day to make up for it. if i use 60.00 in a day(on the high side for me) but i make around 300.00 in a day (yes it cuts in to profits) I do not want to take the chance that i may lose 3 or 4 good paying lawns just because of a little increase in gas prices.. JUST MY TO CENTS
     
  3. DJL

    DJL LawnSite Member
    Posts: 237

    May sound crazy and I may get a lot of criticism but this is what I did for this year. I sent a letter in the beginning of the year asking if they would like our service again. I stated there may be a significant increase to the cost of fuel. I set up two fuel surcharge ratings. Basically, I said if gas goes above x-amount during the week of lawn servicing there is "Y" dollar surcharge that week. The second is above another threshold in which the fuel surcharge is "Z". It doesn't seem that anyone has a problem with it. I did lose a customer but I lost it to their son doing the lawn. Not much I can do in that case. I don't think the fuel surcharge scared them off :p
     
  4. EastProLawn

    EastProLawn LawnSite Bronze Member
    Posts: 1,110

    DJL, I started using a fuel surcharge about 2 years ago and I have had no problems yet, except for the PITA customer you get every so often.

    I do it simply like this:

    $50.00 per cut or less = $4.50 monthly fuel surcharge

    $51.00 per cut & up = $3.50 monthly fuel surcharge

    Example: 4 cuts @ $25.00 Equals $100.00 plus $4.50

    Grand Total = $104.50 monthly

    John, I hope this helps a little at least.
     
  5. lawnmedic1

    lawnmedic1 LawnSite Member
    Posts: 122

    We set up a fuel surcharge a couple of years ago. We never had a problem,but I don't think I would want to throw it at my customers mid stream. The media has been talking about the big gas hike since mid winter. I would eat it for this year and get it in for next season.
    Try conserving now, Compact routes and such...Chuck
     
  6. John at JDH Select

    John at JDH Select LawnSite Member
    from Indy
    Posts: 66

    EastPro

    Thanks for the input...I like your set-up.

    John
     

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