Stop the underbidding!

Discussion in 'Starting a Lawn Care Business' started by AllAmericanlawn, Mar 11, 2009.

  1. AllAmericanlawn

    AllAmericanlawn LawnSite Senior Member
    Posts: 272

    I have seen more underpricing this year than any other year. I did see it coming though. With unemployment at record high levels, Alot of new LCO's out there trying to get a piece of the pie. I dont mind the competition. What does bother me is all the under bidding on lawns. $20 half acre lawn

    A MESSAGE TO ALL NEW LAWN COMPANYS!

    STOP UNDER PRICING!

    You think you are just going to take everyones business and grow quicker this way. In fact you probably will get more calls by under pricing, but you wont keep half those customers. In the mean time you are just bringing the business down for everybody!

    If you start under pricing lawns, you think you will just raise prices next year. WRONG! You have just ruined/spoiled this customer. This customer will never want to pay more, and will switch to the next lo-baller mowing company that puts a $ 20 flyer in there mail box. And you will be out of business because you have no capital, no substantial cash flow, and no customers. PRICE THE LAWNS RIGHT TO BEGIN WITH AND WE WILL ALL PROSPER!
     
    Last edited by a moderator: Mar 11, 2009
  2. LB1234

    LB1234 LawnSite Gold Member
    Posts: 3,210

    According to all of your statements, why are you worried? The new business will run themselves right out of business and the homeowners won't learn anything and will find the next lowest bidder.

    Consider them doing a favor to the industry...weeding out the phone calls for those customers you do not want.
     
  3. AllAmericanlawn

    AllAmericanlawn LawnSite Senior Member
    Posts: 272

    I do agree with what you are saying. But it does bring down the business, even the ideal customers to get will only pay so much based on an average that LCO, s are charging. The same thing would apply to someone hiring a plumber. A plumber is getting $ 80 an hour with only a bag of hand tools. This is because there are not a bunch of un-insured, un-licensed guys going around under bidding plumbing jobs.
     
  4. mowerbrad

    mowerbrad LawnSite Fanatic
    Posts: 6,273

    It does definately bring down business. Then many guys are amazed as to why customers think $30 will get there 3/4 acre property cut each week. But in this economy many new customers will be price shopping, as long as they can get someone to come out every week to cut their grass they are happy.
     
  5. turfbuilder

    turfbuilder LawnSite Senior Member
    from WI
    Posts: 539

    The under bidders will effect our business in this week economy however like the saying goes "you get what you pay for".
    The lowballers will weed themselves out. Like I stated in another post you can't afford to cut your pricing. Do not go backwards!!. Instead offer a discount like 1 free mowing or a discount on other services. This worked in 1981, 1991 and 2002.:weightlifter:

    Turfbuilder:usflag:
     
  6. DaughtryLC

    DaughtryLC LawnSite Senior Member
    Posts: 739

    It will be SWEET in 2yrs or less when these companys are out of business and the phone rings off the hook!!!!!!!!
     
  7. turfbuilder

    turfbuilder LawnSite Senior Member
    from WI
    Posts: 539

    I think these young guys think that lawn care is as easy as loading up dads push mower and weedwacker and mowing somebody's lawn for $20. bucks.
    They don't consider the equipment maintenance and hidden costs involved in any business. That's why 80% of them fail. The other 20% realize they have to increase there charges.

    Turfbuilder:weightlifter:
     
  8. stroker51

    stroker51 LawnSite Senior Member
    Posts: 819

    I'm lucky I've got a really good list of customers that aren't price shoppers, 98% arent slow pays, and i've always had a good grasp on making my pricing competitive. After these next few years get by, I'm really looking forward to the future. In my area there are a handful of guys who have been in this for 30 years and have a lot of market share, and they are either going to be retiring or selling out, and there will be a lot of work for us younger guys that build the business during this down time. It's always frustrating, but good jobs will keep you out of worrying about this. On the flip side, my buddy has a handful of municipality bid contracts, and last year there was literally 5 companies at the bid meeting. This year there was 15. Low bid wins......
     
  9. turfbuilder

    turfbuilder LawnSite Senior Member
    from WI
    Posts: 539

    Sounds like you've got a good thing going where your at. Good luck this season!
    Turfbuilder:weightlifter:
     
  10. stroker51

    stroker51 LawnSite Senior Member
    Posts: 819

    So far so good, always trying to be optimistic, not much of a choice. I'm just glad I didnt go full bore into install work on new construction like I had thought about really serious back in 06. Good luck to you this season as well.
     

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