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Image, prices, profits

Discussion in 'Business Operations' started by JLong, Jul 26, 2008.

  1. JLong

    JLong LawnSite Member
    Posts: 103

    As business is slowing down a little this time of year I was thinking about the future of my business. I am 22 and really want to do this for the rest of my working life. I have a few questions I would like imput on:
    *with some of my older customers (been doing this since I was 16) I do not think I charge them what certain services are worth, or if I do they think it is high since they remember when I was young and did it for like 20 an hour, what can be done about this?
    *should I be afraid of pricing my self out of business with new customers (some say my prices are great other compain about being high)?
    *How important is image: truck lettering, company shirts, that kind of stuff.
    *Best advice for priceing services competitive market that seems to go from people only wanting to pay 15 per cut or hour for labor all the way to 75 per cut and don't care about the price?

    Sorry if this is kind of hard to understand, I have a lot going on in my head and am trying ask it the best I can. Any business advice would be appreciated. and thanks in advance.
  2. MowHouston

    MowHouston LawnSite Bronze Member
    Posts: 1,012

    If you are on a more informal basis with them, just explain it to them. "Hey, I've gotta raise my prices a bit. I started when I was 16, now I'm an adult. Real life is biting at my heels and the economy isnt that great. Mention fuel prices and thats who gets the blame, not you :) If you are working for less than what your time is worth, then you aren't really working for much right? You should replace those customers with customers that understand, or accept your prices. Otherwise, you're just working for peanuts.

    Nope. If you've got customers that accept your prices, that means there are other people out there that will accept them. You may be high, but if the customers like your work, you are doing well and earning what your time is worth. Shoot. I have very cheap prices because of my setup and even I get people asking if I can do it cheaper. :laugh: Stand firm on your prices, you dont owe anyone an explantation. Rule #1363.3 Dont let the customer control how you run your business.

    Sometimes image can be everything. Its just me and one other guy working my routes right now, but my website, www.mowhouston.com delivers a very high image to the customer about my company. I always have customers ask me when "my guys" are going to be able to start service. Or how many guys will be at their house. lol. I dont tell them any different and I always refer to the company as "we". I think a good image can deliver alot for a business.

    Screw what other people price. There's the joe blows charging $15-$20, I average $30 per cut, and there are guys that dont accept less than $40 per cut. Who cares what the other dude is pricing right?

    As I have mentioned, price YOUR time at what it is worth. If you are cutting superbly, attention to EVERY single detail, get paid for that effort. If you just wanna blow through the lawn and just make sure it is done at an acceptable standard, go for that. Do what fits YOUR business plan. Not Joe Blow, and the guy that does only high end customers. That is the most important thing.

    You wont get every customer but even if you charge $15 per cut, you may not get every customer.

    Hope this all helps, and good luck.
  3. Flow Control

    Flow Control LawnSite Bronze Member
    Posts: 1,267

    I started my company when I was 21, now I am 32. I went through the same process of adjusting my prices to be profitable. When I was 21 I would drive 20min each each way and spend 30-45 min on the repair and charge $50. Now that same repair is $125. But now I am married and have 10x the customers and 4x the overhead. But I know if I don't charge the $125 I am not going to make any profit and would be unhappy with the fact that I am trying my best 6.5 days a week to provide a quality service and don't have anything to show for it. I don't have a problem letting go of any customer that complains about our pricing, it has worked out for the best to lose those customers that more concerned about the pricing besides quality of service.
    I will trade 4 cheap customers for 1 good customer any day. Company's evolve over time it is where you want to take yours that matters.
  4. JohnnyRoyale

    JohnnyRoyale LawnSite Senior Member
    Posts: 616

    Theres no quick fix, and it takes time to evolve. Drop the cheap stuff, work less and go after the higher paying work only. Your rewards will be greater, and any referrals tend to be of the same caliber. A cheap client will tend to boast on how cheap he's getting stuff done, and refer you to all his cheap friends. A good paying client will comment on how great of a job you do, and acknowledge the fact you charge more, but well worth it and they see the value of your services, their friends will also in most cases. A high end client will have the disposable money to spend with you where as a retired old lady on a pension check has done all their spending already, and now has to watch how she spends.

    This has worked for me. A few years into my business life, I dropped half of my client base, and restructured-life is good now, and has been since i decided to make that move. Good Luck.
  5. Flow Control

    Flow Control LawnSite Bronze Member
    Posts: 1,267

    No, you are setting the standard of your company as you take on new customers. I look at it in the following way: a cheap customer is always concerned about $$ and that's it, realize you are not able to sell a 50lb bag of potato's for the price of a 10lb bag. Customers that are willing to pay for a quality service realize just that, it is a quality service.

    The image of your equipment looking like it is in good working order and your employees are not dressed to offend anyone is important. IMHO a new truck with lettering rolling with a crew in uniforms is similar to a crew rolling in a late model truck unlettered that is in good condition with workers all wearing presentable clothes. I am a big fan of company shirts and employees wearing flo colors when working near streets. Safety first...

    Separate yourself from the the competition with a marketing plan. Get any certifications in your industry and advertise them. You are not going to just break into highend work it is going to take time and more importantly a highend reputation.

    Don't work to make payments, work to make money. Anyone can be a operator of a business.
  6. Flow Control

    Flow Control LawnSite Bronze Member
    Posts: 1,267

    Well said.........
  7. JLong

    JLong LawnSite Member
    Posts: 103

    thanks for the input. I guess i'm a little spooked about taking a leap like dumping paying customers to attempt to get higher paying ones. especially since I have a mortgage, utilities, and other fixed costs. The comment about referals was great, i'd kinda thought that before seems different hearing it from someone else. thanks again and please keep the info coming

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