passing the buck to the customer?

Discussion in 'Business Operations' started by DUSTYCEDAR, Dec 20, 2007.

  1. DUSTYCEDAR

    DUSTYCEDAR LawnSite Fanatic
    from PA
    Posts: 5,134

    how much expense increase can u pass on the the customer be for they pass on you?
    i know we all need to make money and stay profitable but how much of all the price increases can u pass along to your current customer list be for there is backlash.
    how many customers will u have to add to keep pace with the upswing in operating cost?
    a friend of mine adds fuel surcharges double cuts and other fees to each months mowing bills and is now seeing customers drop him or threaten to drop him if he descent stop with all the fees.
    what about fert prices going up in leaps and bounds how r u going to pass all that cost on?
    just something to think about for the new year.
     
  2. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    not so sure if you can just pass along a 5 or 10% increase across the board whenever you want...I like to look at my accounts during the winter months on an individual basis when I have more free time on my hands. it is also a good time to be working on my business plan as well.
     
  3. DanaMac

    DanaMac LawnSite Fanatic
    Posts: 13,156

    You shouldn't increase or add fees mid-contract, unless they were massive for some reason. Possibly fuel would fall in there, but enough notice should be given to customers. But you can't pass every price increase along to the customer. We have to absorb some of them or else find ways to cut costs. I'd like to see an invoice that had an additional fee for increase in fuel, general liability insurance, workers compensation, rent, pay increase for employees, new transmission, higher cell phone plans, etc.

    Every winter I go through all my bills and see where I can cut expenses. I get my insurance looked at by my agent and shop around every few years, check on cell phone minutes and proper plans for it, buy some of my sprinkler supplies in bulk or when on sale at supply house (even if I won't use them for a few months), and things like this.
     
  4. fknippenberg

    fknippenberg LawnSite Member
    Posts: 49

    Take a look at specific customers where you are making the least amount of money and raise their prices...they will either drop you or pay the increase - If they drop you its not the end of the world as you droped a less profitable customer.
     

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