Raising prices with the times????

Discussion in 'Starting a Lawn Care Business' started by Doc Pete, Feb 7, 2004.

  1. DUSTYCEDAR

    DUSTYCEDAR LawnSite Fanatic
    from PA
    Posts: 5,137

    i see prices ten years ago still being charged and u give them a price and they have a fit what a joke
    people will pay a guy big dollars to plunge a toilet but wont pay u big bucks to play with crap in the yard
    there is always someone cheeper u need to provide quailty work to try to justify the price
     
  2. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    Usually how I do it is that everybody will have a raised price after 2-3 years. For example, mow a yard for $40 bucks, and 2 to 3 years later I raise it up to $43 or $45. I don't raise it every year because I don't want to scare away customers.
     
  3. Utah Lawn Care

    Utah Lawn Care LawnSite Bronze Member
    Posts: 1,310

    When I initially bid the lawn I stick to that price for that season. I time how long it takes me to service the lawn and adjust at the beginning of the next year as needed. Once the right price is established it makes sense to raise prices with inflation. If every year they get a 35cent per week raise it probably won't be a deal breaker.
     
  4. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Posts: 4,280

    Funny thing is we lost our last medical center this week. We gave a modest increase for the first time in the 8 years we have done the place. And the brand new property owner or manager I don't know which had a fit says our prices are outrageous. I wish it had been me and not my partner on the phone I would of put her in touch with my accountant to help straiten her out.

    Not going to miss this place much had a 4 track railroad bridge next to it and had an extra parking lot behind it so cleaning the property included dealing with all the sand and debris under that bridge. And around here our towns 375 years old so the roads were made long before the rail line and as a result all of them are low bridges with sunken roads under them were talking it drops like 6 feet or more to clear it. So everything washes into and collects under that bridge. It was merciful getting out of it when I think on it.
     
  5. clipfert

    clipfert LawnSite Member
    Posts: 195

    If you don't increase your prices I can guarantee one thing. Your dentist will continue to be in business and you will be out of business.
     
  6. Slimreynolds

    Slimreynolds LawnSite Member
    Posts: 96

    It's funny...I know exactly where you're talking about. My sister lives in Milford area and There are a bunch of stupid low RR bridges they need to update or rid of!
     
  7. ponyboy

    ponyboy LawnSite Bronze Member
    from ny
    Posts: 1,412

    Evey year 3% increase for ones I like and want to keep and more depending on how much you are a pain
    5% of my customers make up 95% of the complaints so yes they get a big raise if they keep me they are paying if not I'm happy
    Posted via Mobile Device
     
  8. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Posts: 7,564

    well you don't need to raise prices for the sake of raises prices.

    IF you raise your prices 3% every year thats a 30% increase in 10 years.
    the passage of time does not dictate the cost of anything.

    The economy ebbs and flows.

    Prior to 2008, prices were at a near all time high.
    But incase no one noticed there was a big economic crash.
    In our industry, many guys who were doing installs literally disappeared.
    Maintenance was the new life blood.
    More people ,not just scabs who lost their jobs, but reputable companies started getting more an more into maintenance. This drove prices down.

    Prices are dictated part by the cost of doing business, but also part by the law of supply and demand.

    In some areas people can't get over $40/hr
    in others people are getting twice that.

    The whole "oh I get high prices because my work is the best" thing, is like Dimension claiming they can guarantee you no lawn weeds.

    Most people who say that, want to live in a world that if everyone just fell in line and held to the high prices that they pick out of the air, that no one could get a lower price, and therefor people could just name their prices.

    But this isn't how competition and supply and demand work, this is the Union Mentality.

    The customer can only pay so much, at some point a $50 lawn is not worth $100, no matter how long you have had it.
    Ive seen more and more homeowners go out and buy decent lawn equipment and do it themselves, because they had bigger properties sand fiscally it actually made sense for them because what the service providers around them were trying to demand for the job.

    Many of you weren't around for this when it happened before, mid 80s.
    Back then, most decent lawns were 'in house'.

    Late 80s to Mid 90s saw a lawn explosion as companies were able to get better productive equipment and use less man power to do more.
    Before that, estates had gardeners and commercial properties had grounds crews.

    I spent much of my time early on in this industry, giving presentations to these types of customers convincing them I/We could save them money and give them a better product.

    But we are seeing that come full circle again, as properties are going back in house…. so you can't just say you have to pay more, and more and more every year.

    Just like there is a market saturation where one more landscaper will break the economy and make the work so cheap it's not worth doing at a loss, there is also a market ceiling, where the customer simply isn't willing to pay a price for it and will go without or do it himself, or find an illegal means to getting it done (like hiring illegal labor)
     
  9. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Posts: 4,280

    I don't do across the board price increases either. This winter we did the most in-depth charts we ever did on each client we had profitability we had payment history. We had clean ups and in our case not having it done got you higher marks. We had parking and drive time and likability did we enjoy the property was there issues we didn't like. We then scored them and got an honest look at who needed to be raised who needed to be fired and who was just right and fine the way they were. Only raised about 40 of them this year.

    Now say you have a 30 dollar cut from years back but today you would ask for 35. On something like that you can creep it up a little over a few years and eventually be more in line. If you raised it 5 bucks your most likely going to be fired the odds are rather high with that big of a % raise. But say you had a 30 dollar cut and due to the hill and the fact it is now a fertilized lawn and you would need 60 a cut to bring it in line well your just not going to get that and your best off cutting your losses. Properties change over time and what was once easy can become your worse account in a few years. You should be at-least honest with your self and decide if its worth it anymore.
     
  10. ponyboy

    ponyboy LawnSite Bronze Member
    from ny
    Posts: 1,412

    My office is in a building 10 year lease 3% increase every year
    My customers are on automatic Renew with increase
    Like I said before most 3-4% and pain in the a$$ get more its life everything goes up
    Trin your customers from year one and te them it wil go up and they will be fine
    Posted via Mobile Device
     

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