Price increase?

Discussion in 'Lawn Mowing' started by siklid1066, Apr 4, 2008.

  1. siklid1066

    siklid1066 LawnSite Member
    Posts: 148

    There have been many threads on this topic and so far the outcome for most has not been good.Recession or not I would like to share what I do.First I would never raise at the start of the season,that gives people time to think and shop around,and LCOs in the spring are a dime a dozen.If I raise prices its mid season,and thats only if I feel my work load is heavy.Many start landscaping at the start of the season and many filter out due to low ball pricing,which leads to lack of funds to operate.You also need good clients that you can sell too.Its better to have less clients that you provide a full service program ,then a ton of just cut clients.Plus its easier to sell to your existing customers.(I never heard of anyone making a buck when the truck is driving)Think before you react,pretend you are the client before you say gas is up 45 cents I have to charge you 3 dollars more a cut.We are honest hard working people,dont be a Bush or your clients will turn on you.There will be better roads ahead,have a good season.
     
  2. Charles

    Charles Moderator Staff Member
    Posts: 7,952

    Raising prices in mid season :nono: Man not good at all to treat your customers that way imo. I think they may have a different opinion of you than you do if you did that
     
  3. CreativeEdge

    CreativeEdge LawnSite Member
    Posts: 65

    all of my customers sign an agreement that states 12 months from this the contract will renew and prices will increase 5%.They know this and see this and most of the time its not but 10-12/mo. Not outrageous, but also havent had anyone complain or say anything about it.
     
  4. siklid1066

    siklid1066 LawnSite Member
    Posts: 148

    Im talking about 3 percent,if I feel the cost to run is effecting my bottom line I will increase.My customers know I go all out for them.Why should I increase now,where all going to hurt a little this year.They dont get raised every year,and I cant predict prices to operate 7 months from now.Plus they all know Iam the very few of the honest people they deal with.(bottom line is I cant make less then I do)Prices in all lines of business change and they dont change at the start of of a new season.Its April and I pay more for items now then in February:nono:
     
  5. CreativeEdge

    CreativeEdge LawnSite Member
    Posts: 65

    I agree somewhat w/ you siklid, and all prices do change in all lines of business...I raise my prices at the beginning of the season, but this is the only time that I will raise them. Now, I am budgeted w/ my prices to be able to handle gas up to $4/gal. If these prices go above this then I will raise my prices accordingly, all of my customers received a letter that explained this to them at the beginning of the season and also a letter explaining their contract rate increases. So, nothing is or will be a surprise to them at the beginning, middle, or end of the season. You cant just out of the blue say hey, i'm raising my prices...that is ridiculous, unless you have a clause in your contract that states that your rates are subject to change at any time.
     
  6. DFLS

    DFLS LawnSite Senior Member
    Posts: 354

    My customers buy gas and milk, they know how much more it is now and would be surprised if i didn't raise my prices. Fortunately they all understand and are supportive of me and don't go looking elsewhere. Most of them came to me because the lco's they had were undependable or did crappy work so I really don't have to worry about them looking elsewhere when my prices go up. I too have a gas price clause on the bottom of every invoice for unexpected high gas prices.
     
  7. daveintoledo

    daveintoledo LawnSite Silver Member
    Posts: 2,587

    you have made an agreement to do x amount of work for y amount of dollars for the season, to change your prices in the middle of an agreement is not good business, and id be pissed as a customer and send you packing....
     
  8. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    I guess I don't understand the idea of raising prices in mid season either.

    Would it be different if you order #1 off the menu at McDonalds, and by the time they said "here you go sir" they raised the price another .50??

    Or if you buy a truck, then 2 years later the dealer comes back to you and says "I'm sorry sir, the fact that our operating expenses have gone up, we're now going to our existing customers and telling them that their prior purchase price is no longer good, it's going to increase 5%".

    IMO, if you can't plan at the beginning of the season, you're flying by the seat of your pants.

    I'm sick of seeing "oh, wait until gas hits $4 per gallon".

    That's only a .50 per gallon increase over what it was at the same time last year. About a 15% increase. My fuel bill last year was just under $14,000 as a solo op working WAY too many hours. Another $1600 on a gross of $143k is not going to make me go broke, nor is it going to cause me to stick it to my customers in mid stream.

    If you raise your customers in mid-stream, it's no different than an adjustable rate mortgage, and most know the outcome of those.
     
  9. nlminc

    nlminc LawnSite Bronze Member
    from GA
    Posts: 1,671

    I dont' see anything wrong with raising rates on customers who are not on contracts in the middle of the season.

    What about those of you who budgeted for $4.00 for diesel in January for the season and now find diesel at 4.05 and going up? Or.....budgeting for $4.00 for gas in January and charging your customers for that rate when it's not even close to $4.00? That's fair?

    Most other businesses raise their rates when they need to and not based upon their customers perception.
     
  10. nlminc

    nlminc LawnSite Bronze Member
    from GA
    Posts: 1,671



    That comment makes no sense! The dealer is selling you a one time product not a continuing service. Do you think their shops labor and parts rates have stayed the same over the years? I bet not!
     

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