Price Increase due to fuel

Discussion in 'Starting a Lawn Care Business' started by nautica1580, Apr 11, 2008.

  1. nautica1580

    nautica1580 LawnSite Member
    Posts: 25

    Hello Fellas. How many of you guys have done price increases due to the fuel situation? Did you mail out letters with the bills or see the customers in person? How many customers did you lose due to the increase? I have been trying to hold off as long as possible but with season fast approaching I am going to have to go up on my monthly rates. If you have already done this and have a copy of the letter you sent saved on your computer could you PM me with it or email it to me. I just want to get an idea how the rest of you guys are handling this. I am just afraid with all the illegals passing out fliers each week for cheaper than I already am I will lose work because of it. Guess I cant have the best of both worlds. Cant wait to hear everyones responses/suggestions/and experiences with this lately.

    Tim
     
  2. snowjeep

    snowjeep LawnSite Senior Member
    Posts: 454

    I add a fuel sur-charge if gas goes to a certain price. Like this seasons contracts has a fuel sur-charge if gas goes over $3.55. Small lots are $1.00 per cut large lots $2.00 per cut. Gas was at about $3.30 when contracts were signed and lost no one.
     
  3. LushGreenLawn

    LushGreenLawn LawnSite Silver Member
    Posts: 2,121

    If your going to raise rates, I would not blame it on fuel. If by some miricle fuel prices drop back to below what they were when you raised rates, grandpa is going to want to know why you didn't drop your price.

    With price increases, make it short and sweet. Price is increasing due to increased costs that we, unfortunatly, can no longer continue to absorb.
     
  4. Jb3NH

    Jb3NH LawnSite Member
    Posts: 197

    Absoulutely have to incorporate a way to recoop fuel cost. I'm upfront with my customers and what i say and put in writing is something to the effect of if fuel goes over 3.50 a gallon at ( and i give them gas station i use and theres a highly visible highway sign there on a heavily traveled route) then i have to raise my mow rate. I use a percentage rate increase. I've never had a problem with any customer. Part of the thing you have to figure in, is that people are paying for more than just you mowin the grass. They want You. And you are the person that shows up every time you need you. Dependability and Reliability is key.
     
  5. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,083

    Prices going down not up....best way to lose accounts is to raise the price when everybody is putting out doorhangers in the spring. Out of curiosity how much do you think the increased gas prices cost you on a yard?
     
  6. BillyRgn

    BillyRgn LawnSite Member
    Posts: 248

    This is what i sent last year, i did not raise the prices on all my customers, just the ones who i have been doing for a while, and the customers who i am charging to little, i attached this little note with the first invoice
    Due to the rising cost of doing business (fuel, oil, insurance, etc.), we were forced to raise are rates this year in order to provide the same quality of service that we have been providing you with for the past several years. We are sorry for any inconvenience that this may cause. If you have any questions or would like to discuss this matter, please feel free to call us at any time at (203) 619-****.
    Thank You
    Billy Regan President Billy's Landscaping
     
  7. nautica1580

    nautica1580 LawnSite Member
    Posts: 25

    edhess2. Alot of my older customers have had the same prices for the past 5 years. 5 years ago gas was 1.50 a gallon. I believe considering that, I think it costs me 1.00 more in gas each time I mow, could even be alittle more. By me raising rates, it doesnt mean I'm making more, I'm making the same profit. My fuel bill has raised a bunch, so its time were I am forced to do something. As far as the guys leaving fliers, dont understand how they are able to mow for the prices they are doing. They are 10-15 cheaper than me on most yards, some even more. I am enclosing a letter with this months billing going up only 5.00 a month. Like I stated earlier, just dont have a choice at this point.
     
  8. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,083

    How much do you consider your labor worth? And if the increase is $1 why are you raising $5 that is a large amount. Most professional companies use a fuel charge that is a small percentage of the bill and the customer doesn't notice it as much.
     
  9. nautica1580

    nautica1580 LawnSite Member
    Posts: 25

    Edhess2. I do it as a monthly-year around service. 5.00 a month comes out to a $1.25 surcharge for fuel each cut. As I stated, i figured it to be right around 1.00 each yard its costing me so I am right at that number. Have you not done a rate increase?
     
  10. milkie62

    milkie62 LawnSite Senior Member
    Posts: 833

    Like the one post said you cannot blame all increases on fuel because if by some congressional act gas goes back down to under 2/gal in order to be fair you would have to drop your prices.I am in favor of a surcharge on the bill if you need to get more.That way if prices go down for fuel you are still getting your lawn price.
     

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