Surcharges for gas prices

Discussion in 'Lawn Mowing' started by Ocutter, Jan 18, 2001.

  1. Ocutter

    Ocutter LawnSite Senior Member
    Posts: 314

    I asked about this topic last summer and wanted to ask again. Now that you know gas prices are going to go up will you add in your contracts and agreements a surcharge if gas goes beyond a certain price. I have raised my prices to accomodate up to $1.55, (its now $1.33 here). I can always adjust landscaping prices a little, but what about you guys and gals that rely only on lawn cutting.
     
  2. Michael Fronczak

    Michael Fronczak LawnSite Member
    Posts: 230

    I figured it out last fall for snowplowing, with the amount of gas I went throught (20 gal) per trip, the increase cost me an additionl $ 150 through season, divided by all contracts I would have had to raise seasonal prices by somthing like .5 % to account for that(nothing), I normally raise my prices every year anyway so it didn't matter. I would assume roughly same percentage for lawn work, I also raise that so I don't worry about it.
     
  3. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    I average 92 cents in fuel and oil per lawn cut and that includes 2 cycle oil and oil changes on the mowers. My average price paid for gas was 1.539 this year. My average service is $33.35. Even if gas were to go up a dollar a gallon it still wouldn't cost me 50 cents more per lawn. I cannot justify using the price of gas as a way to charge a surcharge. If gas goes up 20 cents what am you going to do? Charge them a 8 cent surcharge? You simply treat increasing gas costs as you would any other cost associated with any business. I raised prices on almost 50% of my customers this year by 5 dollars a cut. That should cover any increases in gas costs. In fact, the additional money received as a result of the increase will pay for the entire year's gas and oil cost.
     
  4. powerreel

    powerreel Banned
    Posts: 481

    SMART!!!
     
  5. bob

    bob LawnSite Platinum Member
    from DE
    Posts: 4,254

    Last year, Chem-Lawn added a $1 fuel sur-charge on every visit they made.
     
  6. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    We have always figured our pricing based on fuel consumption at dollar-79 per gallon. I dont think I will be adjusting them for a while, regardless.

    Kris
     
  7. If I was able to guess how much gasoline will cost 3 months from now, I sure wouldn't be a L.C.O..:)Your operating cost most often always go up,not down. The best way is a general price increase all accross the board. Don't use gas as an excuse. Use your operating cost as a reason to raise prices. How much, it's very rare to loose a client if you only raise your price up a $1 per cut if you use that system, or $3 to $5 for a monthly billing system.
    John
     
  8. 1st impressions

    1st impressions LawnSite Member
    Posts: 58

    When gas hit $2.25 a gallon last summer I put a surcharge
    on my maintenance accounts that lasted approx. 2 months.
    Only 2 customers balked. I don't use contracts so maybe
    it was easier for me to do.
    This year I'm just going to raise my seasonal rates to reflect where I think prices are going to go. If they climb over $2.00 a gallon again I will consider imposing the surcharge again.
    I work hard for my money. I am just not willing to eat an
    extra .75 a gallon. Many other industries saw no ploblem
    imposing a temp. hike. I know the airlines and U.P.S. did.
    People understand.
     
  9. MOW ED

    MOW ED LawnSite Fanatic
    Posts: 5,028

    No surcharge but rate increases for multiple reasons, along with gas , insurance, maintenance, advertising, parts, new equipment and oh ya I forgot to mention - PROFIT.

    None of the above have come down except profit, we will change that this year or I'll have more free time.
     
  10. awm

    awm LawnSite Gold Member
    Posts: 3,354

    Around here going up is tough with competition
    and such.But they all fussing about gas prices
    so if i ad 5 to lawn chg,they just blame it
    on the gas company AND I FUSS RIGHT ALONG WITHUM
    BAD BAD GAS COMPANY.
     

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