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Rate increase

Discussion in 'Lawn Mowing' started by pasto_guy, Oct 6, 2003.

  1. pasto_guy

    pasto_guy LawnSite Member
    from VA
    Posts: 119

    I have kept my rates the same for the last three years on almost all of my customers. Back when I started, the small $25 yard was no problem. I'm not saying that the lawn is a problem now, just that $30.00 would be better and it would help my finances. How do you guys inform your customers that their prices are going to go up? Tell them in spring or fall? Do you raise every lawn by $5 or do you have a percentage for all lawns? Sorry to bombard you with the questions, but any feedback would be appreciated. By the way, most customers do not have contracts. Thanks again
  2. mtdman

    mtdman LawnSite Gold Member
    Posts: 3,137

    I do it in the spring, when I re-sign customers. If you raise their rates, make it short and sweet. Don't ramble on about the reasons. Usually I say something like ''Due to increased costs, your rate increased to $XX this year." and that's it. I usually go a few years between increases, unless I really hate the lawn and want some more change out of it. I have a big round of increases coming next year.
  3. pasto_guy

    pasto_guy LawnSite Member
    from VA
    Posts: 119

    when you wait to raise the rates for a few years, do you do it by a percentage or a specific dollar amount. I undstand that there are some exceptions.
  4. mtdman

    mtdman LawnSite Gold Member
    Posts: 3,137

    Whatever I think I should be getting out of the lawn. If I'm getting $25 and I'd like to be making $30, I up it to $30. Whatever you think the lawn should bring in for you. I don't have a specific formula. But it's usually a whole dollar amount, to keep it simple.

  5. mower_babe

    mower_babe LawnSite Senior Member
    Posts: 790

    this year I made a list of all of our accounts with several columns...And I took the hours worked so far this year - got an average on the per account man hours. So, the list looked like this....

    Name--avg hrs--2003 $--per hour--desired per hour--2004 bid

    Worked for me - a very simplistic way of looking at things. Also, I made a vow that every year after 2004 I would raise the rates about 3%, at a minimum of $1.00 raise per mowing-- no matter what - due to inflation, etc, once I raised some of the really low ones to an acceptable rate.

    We usually raise in the Spring with a nice letter, but this year we are going to do it in the fall, as there is a greater possiblity that we are going to lose some accounts due to some substantial rate increases and it would be better to know now while I have time to downsize operations or add on new clients. Good luck!
  6. Soupy

    Soupy LawnSite Gold Member
    Posts: 3,125

    I raised all of mine this year by at least $5. The way I look at it is if you lose 1 out of 5 clients you will still be better off. This is based on the $25 to $30 increase. Oh by the way I didn't lose any.

    I even raised one PITA customer from $35 to $55 with out them saying one word about it.
  7. AztlanLC

    AztlanLC LawnSite Bronze Member
    Posts: 1,045

    Mower babe has the right formula.
    At least that's what I think
    I also raise all my customers %3 or 4% every year, (cost of living increase) the difference is all my customers are on a contract.

    Do it like MTdmaster says, if customers don't understad that gasoline prices and insurance has gone to the roof, then those are the customers you don't want, period.
  8. mower_babe

    mower_babe LawnSite Senior Member
    Posts: 790

    we will see if I have the right formula - I am sending out the bills today(yes, I am late) with notification of price increases. I will be curious to know how this turns out for me.
  9. Team Gopher

    Team Gopher LawnSite Platinum Member
    from -
    Posts: 4,041

  10. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    when to comes to mowing rates I usually am calculating every year which lawn makes great and which doesn't. Then next year I can raise the rate accordingly those select few that need it.

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