How high of a fuel cost could you absorb before shutting down your business?

Discussion in 'Lawn Mowing' started by Merkava_4, Mar 7, 2011.

  1. Merkava_4

    Merkava_4 LawnSite Bronze Member
    Posts: 1,280

    At some point, it would cost you more to drive your truck around than what you're earning for that day -- what price per gallon would that be?
     
  2. kilgoja

    kilgoja LawnSite Senior Member
    Posts: 944

    depends on what you drive and how far i guess lol...i seriously doubt it...if you drive 5 miles which is 1/4 gallon of gas or less for my truck and cut a yard for $50 then i don't see how you are losing money...make $50 and spend $1.25 on gas at $5 per gallon
     
  3. Turf Dawg

    Turf Dawg LawnSite Gold Member
    Posts: 3,719

    If my clients can still afford my services then I am not closing up shop no matter what the price of fuel is. I may have to adjust my rates and get leaner on driving but not shut down.
     
  4. Merkava_4

    Merkava_4 LawnSite Bronze Member
    Posts: 1,280

    So far it sounds like you guys could absorb quite a bit of an increase in fuel costs no problem.
     
  5. Scagmower48

    Scagmower48 LawnSite Senior Member
    Posts: 430

    My profit margins are high enough where fuel could double in cost and I will still make enough money no problem. Net profits will deffinitly be down though.
     
  6. CLS LLC

    CLS LLC LawnSite Senior Member
    Posts: 487

    I don't understand everyone who thinks higher gas prices are going to be the end of the world for grass cutting. The fact of the matter is fuel is a very minute expense. The major expenses in this industry are labor and equipment depreciation. Over all fuel should be no more than around 3% of your gross sales. If you are a large business with 10 trucks and crews who runs on very slim margins a 25% increase in fuel will hurt a little bit. But even a 100% increase shouldn't put you out of business by any means. But as a small 1 crew operation, you should barely feel the 25% increase we've recently seen.

    If fuel doubles in price, add a fuel surcharge, just don't be ridiculous about it. If the cost of fuel doubled your expenses shouldn't change more than $1-2 per cut so don't charge your customer a $5 fuel surcharge.


    I know most people are going to tell me how stupid I am, but it's just the facts. Also people need to stop whining about it. There is nothing you can do about it. You can't get by with out it so don't bother complaining.
     
  7. Lawnut101

    Lawnut101 LawnSite Silver Member
    Posts: 2,253

    I agree. You just need to adjust and be fair. If you would go out of business, I would think you aren't making enough in the first place.
     
  8. american dream

    american dream LawnSite Senior Member
    Posts: 291

    how bout raise your prices to cover the added gas expense,but i forgot this is the only industry that still works for 1985 wages!you know im rite.
     
  9. ncknaklawns

    ncknaklawns LawnSite Senior Member
    from NY
    Posts: 379

    x3 You guys who think it matters are either cutting too few lawns or are not really tracking what you spend on expenses. I could pick up one or two more more lawn contracts and cover the increase. Now if your over extended with expenses the problem isn't the gas.
     
  10. SkinnyVinny

    SkinnyVinny LawnSite Senior Member
    Posts: 262

    i swear if i see another gas price thread im going to flip out lol... how can you ask such a vague question? everyone's business is different, everyone has different expenses.. if your that worried about gas costs, go run your numbers to account for the raised prices and stop asking what everyone else is doing... jeeeeezzzz
     

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