Raising Prices?

Discussion in 'Lawn Mowing' started by Tlvoskamp, Sep 4, 2007.

  1. Tlvoskamp

    Tlvoskamp LawnSite Member
    Posts: 48

    I have a few questions about raising prices for my clients. I have been doing this for a few years now and as my company has been growing and I am taking on new overhead such as insurance, liscencing, employees. I am realizing that some of my early pricing is too low now and there is not alot of margin in some of those early yards. Do you think it is appropriate to send a letter explaining the cost increase of being a legit business and the necessity of higher wages to maintain decent margin in my jobs. Any thoughts on how to do this in a diplomatic way would be appreciative.

    Thanks,

    Tlvoskamp
     
  2. bigtex

    bigtex LawnSite Member
    from ma
    Posts: 151

    in the northeast we have a (cutting season) that starts in april and ends in oct. what i do and most others do is raise $ accordingly at the begining of each season. if i underbid a lawn cutting i'll sweat it out for the season and adjust next. i dont know about texas though? but a formal notice in writing and a few weeks notice of the increase is also acceptable. trial and tribulation
     
  3. jwholden

    jwholden LawnSite Member
    from CT
    Posts: 218

    I know of someone who raises the price on only 1/2 his clients every other year. It seems to spread the compliants a little thinner.

    If you raise your prices, you will lose some customers. That is a fact of life.

    You will begin to notice that the customers you lose are the ones who were the biggest pain anyway.

    When you send your letter don't go into too much detail explaining why you need to charge more. Just explain that there will be a slight increase on such and such a date so we can continue to give you the service you have grown accostumed to.

    If they call to complain stick to your guns. These people would call to complain no matter how much you raised your price and you don't want them anyway.
     
  4. Tlvoskamp

    Tlvoskamp LawnSite Member
    Posts: 48

    Thanks for the tips, I really appreciate it.
     
  5. AintNoFun

    AintNoFun LawnSite Bronze Member
    Posts: 1,807

    I was always nervous about losing customers when raising prices, but I can stay home and work for free with a lot less headaches...
     
  6. EMJ

    EMJ LawnSite Member
    Posts: 200

    I bought out a company who had low prices. I sent a letter after the transfer settled down. I only told them that in order for my company to give them the service that they are entitled to. I will be raiseing thier rates. I did not lose a customer. I did not price them so high that they would go looking, nor did I price them so low that I would make no money. I priced them competitively.
     
  7. Tlvoskamp

    Tlvoskamp LawnSite Member
    Posts: 48

    Thanks for the advice, I really appreciate it.
     
  8. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    My advise is just do it. Dont give a reason or excuse. Do you get nfl sunday ticket, or something like that? Things go up. Dont feel you owe a reason. I always lose one or two, but I always end up with more moeny for lesss work.
     
  9. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    Back in my 1st-3rd and even 4th years I'd ask my customers straight up, just ask, at least a few will come right out and give you $5 extra, others not, take it all in stride because increase or not it helps, save a tree and keep all your customers in the process as well.
    The above works well if you're uncomfortable with no-notice raises, I was for a long time, I think it just takes time, it wears off eventually :laugh:

    Then I stopped asking as much, I'd auto-raise the price on those lawns that just burned me, the bottom of the barrel, those who were getting the most for the least, one day when I couldn't take it anymore I just tack +$5 on the bill and that's the new price... Wow that helps but you can and will lose some, tough luck I remember saying.

    I stuck to that system in the end, I charge what I must get, and thank you.
    I could send a letter but I'm not a corporation and I just don't have the resources.
    The letter might work out so long it's a form-letter, same basic blablabla just edit the price and their name / address.
    Either way it take times, so best of luck.

    I heard that, now we're talking, it's all the same money at year's end, keep that schedule open or you'll find yourself turning down work because you're too busy with underpaid stuff.

    Been there, done that :laugh:

    And you know it rules to lose no money sleeping, hate to say it but why work for free?
     

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