going up letters

Discussion in 'Business Operations' started by Steeley, Mar 15, 2005.

  1. Steeley

    Steeley LawnSite Member
    from Maine
    Posts: 85

    Does any one have any letters to share on letters sent to customers for prices going up, I would like to go up on my hourly charge and go up on most of my lawns, because if gas keeps going up I will not be making much any help would be appreciated thanks
     
  2. LB1234

    LB1234 LawnSite Gold Member
    Posts: 3,210

    How small is your profit margin? If the price of gas goes up by $1/gallon are you really going to be making THAT much less? Sorry, just don't see it, you make it seem as if you will be scrounging.

    Check your PM.
     
  3. mastercare

    mastercare LawnSite Senior Member
    Posts: 289

    I don't have my entire letter nailed to my memory bank, but the important part goes something like this:

    starts with: Sprint is just around the corner....blah blah blah. We look forward to providing you another season of quality lawn care....blah blah blah.

    As we continue to strive to provide our valued clients with the reliable service they enjoy, we have evaluated the increasing costs of doing business. In order to continue providing you the quality service you expect, we have a determined that the price for your lawn care in 2005 will be $xxx.

    Please send back your service agreement in the enclosed envelope to let us know if we can add you to our busy schedule for the 2005 season.

    *** I don't htink it's necessary to go into detail about increasing gas prices, wages, insurance ,and stuff like that. People in general understand that the price of milk goes up, yet they never ask the grocery store for an explanation. It's called inflation. People understand that and don't need an explanation (in my opinion). Just tell them their new price, and let them respond. The more you try to Justify your price increases, the more it looks like you're not comfortable increasing the price, and afraid of losing their business. This gives them leverage. You don't want to sound like you're unsure of whether or not they'll keep you....assume they will. You don't want to come across as if you're shy about asking for more money..... you need to earn a living too.

    The second someone reads a letter that sounds very "round about" or over - explanatory, they sense your fear!! Don't give them that bargaining power.

    Demand the price you deserve. Make them think they're in an "elite" group of people who have the luxury of hiring you. When was the last time you called any professional and argued about price increases?
     
  4. Critical Care

    Critical Care LawnSite Bronze Member
    Posts: 1,654

    These are a bit like Dear John letters; people hate receiving them.

    You basically have a few options. You really don't have to say anything, you could explain things in detail, or you could just mention the price increase. For me, I toyed with the idea and finally decided to go with the latter option with only a slight reference to something like, "... in an attempt to offset the increase in fuel prices." And for me, that was an honest statement.
     
  5. Steeley

    Steeley LawnSite Member
    from Maine
    Posts: 85

    I have been in business 3 years and bought out a lawn care company that charged $25 hr for everything he had good mowers but on cleanups he used rakes, I have 4 backpack blowers and one billy goat push blower and a truck leaf loader, I use alot of gas on cleanups I need to charge $30 hr, the jobs get done twice as fast as someone with a rake and get done better. This is why I need to go up on prices, if you figure out what a $1.00 more a gallon of gas takes out of your pocket you would be surprised think about all your equipment and truck, all my jobs here in Maine are over 100 mile radius.
     
  6. LB1234

    LB1234 LawnSite Gold Member
    Posts: 3,210

    Assume you do 100 miles roundtrip in one day and you have 15 accounts you service per day. I'll also assume you get 10 MPG in your truck and you consume 1 gallon per customer. So, according to my assumptions...you would consume 10 gallons of truck fuel and 15 gallons of equipment fuel for a total of 25 gallons in a day. At $1.75/gallon thats $43.75, at $2.75/gal ($1 increase) its $68.75 total...or another $25 a day. Well, that's roughly $1.75 increase per customer per day...Obviously I don't know how much fuel you consume or # of cleanups in a day...but...

    If $25 a day is as you say "...if gas keeps going up I will not be making much..." then I hate to see what happens to your profit if a piece of equipment unexpectedly breaks and you have to shell out $200 bucks for repairs.

    Again, not trying to be a jerk...just looking at the other side of things.
     
  7. Steeley

    Steeley LawnSite Member
    from Maine
    Posts: 85

    LB1234 I was not asking for your opinion if I should go up or not, I was asking for help on a letter, I would put money on it that out of my 115 customers that I will not loose 10 if I go up $5 hr all my customers are very happy with my work.
     
  8. brbsta

    brbsta LawnSite Member
    Posts: 73

    Check your messages.
     
  9. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    Economic factors, such as rising fuel cost, workman’s compensation & insurance cost as well as other normal increases in expenses we use to provide our service forces Fantasy Lawns Inc.too increase our monthly service price.

    Monthly billing reflects the labor, equipment, maintenance, fuel, office & billing expenses, accounting, state & federal tax and many other smaller cost which all make up the cost for monthly service.

    Fantasy Lawns carry's $1,000,000.00 in liability insurance, commercial vehicle coverage as well and State Workman's compensation insurance. We are a legal operation, licensee to operate in Brevard County; we pay Federal Payroll & Income tax, Local & State taxes.

    As a Legal License Professional, we are unable to provide prices comparable to operations without such legal & liability protection, nor do we wish too. The personal liability these operations place on the customer is not worth the risk of injury on one’s property or damage that may occur.

    We hope that the overall reliability of our service & your own overall satisfaction for the services we have provided fore you, will allow us to continue service at the new monthly price. If this is not acceptable, we apologize for any inconvenience this may cause, if you do not elect to continue our service.

    We will reflect the price increase on next months invoicing, if this is not acceptable please make a note with this Month’s payment so we may adjust our schedule.
     
  10. LB1234

    LB1234 LawnSite Gold Member
    Posts: 3,210


    check your PM, I sent something earlier today.

    Just making an observation and trying to make a friendly discussion. No offense meant. If you did, please accept my apology... :waving:
     

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