High Gas Prices !

Discussion in 'General Industry Discussions' started by JayD, May 15, 2007.

  1. JayD

    JayD LawnSite Silver Member
    Posts: 2,060

    What, if any are you all doing about these high gas prices? Has any of you had to raise your prices up to cover the cost? If so, how did you go about doing that and what reaction did you get from your customers?
    Thanks for you input.
    jay:usflag:
     
  2. mag360

    mag360 LawnSite Silver Member
    Posts: 2,446

    One easy way to recoup some fuel expense is to add a fuel surcharge to the monthly invoices.
    We were around $5 per month last season and moved it up to $7.50 on average this year. No complaints.
     
  3. JayD

    JayD LawnSite Silver Member
    Posts: 2,060

    Really. That sounds good. Did you send them a letter first or did you just do it?
     
  4. JoshC

    JoshC LawnSite Member
    Posts: 92

    I raised my prices about $5. In the invoices for last month I left them a note stating that this month I would be increasing the prices and if they had any concerns to call me. So far no complaints.
     
  5. stuffdeer

    stuffdeer LawnSite Bronze Member
    Posts: 1,557

    Gas isn't hurting me at all. When it hits 6 to 7 a gallon it will start. I run a very tight route, and my truck gets 22 mpg towing the trailer :) 30 mpg empty.
     
  6. David Gretzmier

    David Gretzmier LawnSite Gold Member
    Posts: 3,645

    gas went from 2.95 to 3.15 in one day here last week. you know gas is going up too fast when the pump shuts off before your full because the card won't allow it to charge over 75 bucks at one time for fuel .

    I get 10mpg pulling trailer to one job I do, he pays me 240 to mow 3 acres, I can do it in about 3 hours, but I spend 25 in gas to go there and back- that's 10 PERCENT of what I make in gas for the truck. so yeah, it get's my attention.

    I want a 1/2 ton truck with a small turbo diesel engine. I don't need a 365 horse turbo monster, why don't they sell a small turbo diesel for towing small trailers like boats and 5000 pound rigs? It would get 25-30mpg. I'd love a dodge sprinter, but don't have 35 grand to buy.
     
  7. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Posts: 11,062

    I made increases when it spiked after Katrina, and when I was surprised to see it creep back down, I went ahead and kept the rates the way I had them... foreseeing it would jump again... and it has... and I'm OK with it right now as a result.
     
  8. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    There's no reason for a surcharge. If you're not charging enough to eat the cost, then you bid the account too low to begin with.

    I mow all day with the 31 hp diesel Kubota at the Senior High for the school district I mow. I use about 11 gallons, roughly a gallon / hour for 11 hours (hour lunch break). That means that even if diesel went up another $1 / gallon, that each hour I mow, I'd only be out $1.

    IMO, if you didn't bid it high enough in the spring, then there's other problems, not high gas prices.

    Last year I spend $16k on fuel, as a solo op. The year before $14k. 4 years ago I spend just under $9k.

    Each year I raise my prices in my bid, and stress to new prospective clients that I will not raise their rates in the middle of the season.
     
  9. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Posts: 11,062

    True, but at the same time, who wants to eat it and take a $1 an hour pay cut over increased fuel expenses? Nobody else does, so I don't want to either.

    Even though I could afford the $1 an hour pay cut....
    And I am affording a $1 an hour pay cut from increased consumption right now...

    When gas went up, I went up on everything I could... and I increased on everything new I took on in anticipation of future increases.
     
  10. d&rlawncare

    d&rlawncare LawnSite Senior Member
    Posts: 741

    LwnMwrMan22.....There is no way to predict gas prices. I bid my properties at $3.00 a gallon knowing that they could possibly hit $3.50 or so. So lets say I use 7 gallons at 1 property. At $3 thats $21. At $3.50 thats $24.50.

    So I eat the $3.50...no biggie. But when it hits $4.00 a gallon this summer (The Gov says it will) should I have to eat the additional $7.00?

    I guess the only way to prevent this would be to overcharge the customer JUST IN CASE the gas prices go up!!! Or you could simply have a policy that states IF the price of gas goes above $2.75 a 4% surcharge will apply. Just an example.
     

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