What will you do about rising fuel costs?

Discussion in 'Lawn Mowing' started by LB Landscaping, Mar 6, 2005.

  1. LB Landscaping

    LB Landscaping LawnSite Bronze Member
    from Maine
    Posts: 1,309

    If they do rise like the rumors have been stating lately what will you do about the extra costs? Last year I head alot of talk about surcharges. I did not raise prices on service last year nor did I add a surcharge but I never paid more than $1.98 either. I was looking to add a fuel surcharge this year to cover my butt in case prices do climb. What do you use as a figure and at what price do you start it?
     
  2. jpp

    jpp LawnSite Silver Member
    Posts: 2,128

    In my customer letter that was just sent out I put in there if gas prices go above 2.25 a gallon then a surcharge will be assesed each month it is above that price. I did raise prices this year as well. Letter just went out Friday so I have not gotten any feedback as of yet. We will see what happens.

    JP
     
  3. Ric

    Ric LawnSite Fanatic
    Posts: 11,957

    I will be adding the BooBy Gelding Surcharge to all my future invoices. Because I am in the Chemical apply business this double effects me because Oil Prices are directly related to the Price of Chemicals. Btw Raw Steel prices doubled this last year also. So look for cars and equipment to go up also. The good News is BooBy has not offered his $ 0.02 to this thread YET.


    BOOBY where are you now that we need your SURCHARGE ADVISE.

    BTW look for Gas to reach $ 3.00 a gallon before the end of the year. China and India are both Merging Nations and only have 250 million car each now. That figure is predicted to double each year. Sure They have plenty of Natural resources. However as merging nations they can buy oil cheaper in the short run and save there resources. It will get worst before it gets better.
     
  4. paponte

    paponte LawnSite Silver Member
    Posts: 2,366

    Surcharge. If they are not willing to pay the surcharge, we ended up open bagging the houses last year as not to up their prices. :)
     
  5. Ric

    Ric LawnSite Fanatic
    Posts: 11,957


    Paul

    We haven't bagged in Florida for years now. But the point is, as such labor you save by not bagging, It will not Cover increased Gas costs. Remember Everything you buy is delivered by trucks or other Fossil fuel burners. This will effect ALL Pricing. Real estate just went up 125 % in Florida since the hurricanes. As inflation creeps in we with be the last to see a price relief. More Part time Scrubs will hit the streets looking to pay their own bills. Fact is we are still cutting grass for the same price as when I was a kid. True quicker modern machines have helped us do more Customers. But when is come to cutting corners Lawn service will be one of the first to suffer.
     
  6. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,326

    Adding a fuel charge is just another way of making your customer mad. Figure out another way to deal with this, a lot of stuff goes up during the year that affects our bottom line. Like one guy pointed out he is so mad that his cell company has about 8 of these charges he can't see straight. He changed companies.
     
  7. LB Landscaping

    LB Landscaping LawnSite Bronze Member
    from Maine
    Posts: 1,309

    I agree Ed, some customers might have a problem with it but it's not like we can go to Mobil instead of Citgo because we are unhappy. Got any ideas on how to absorb the cost?
     
  8. Toy2

    Toy2 LawnSite Bronze Member
    Posts: 1,924

    I agree with ed2hess, people get pissed if try to tack on an extra charge, they have to pay at the pump no matter what, like we all do....but I think we are screwed....they just said on CNN that local vendors are getting scared and raising prices, even before they are hit with the increase??Now thats BS.
     
  9. jpp

    jpp LawnSite Silver Member
    Posts: 2,128

    Ok if you put a surcharge of say 3.00 per month You cut a property say 4 times a month it is a cost of only .75 per cut. I really don't think you will get that many complaints. If you explain this to them in this manner then I really feel they will be fine with it. I mean come on am I suppose to eat the cost of gas prices. I don't think so. The key is to do this in a small amount as where you are not gauging the customer. If you are upfront with the customer then they will be fine. If they get a bill with a surcharge and this was not mentioned then yes you deserve to lose that customer. That is a back door charge that they were not aware of.IMO.

    JP
     
  10. DennisF

    DennisF LawnSite Bronze Member
    from Florida
    Posts: 1,381

    If prices rise above $2.50 per gallon I'll be adding a surcharge until it drops below $2.00. I'll absorb any price increase between $2.00 and $2.50. After that the customer has to pony up. If the customer complains, tell them you have no control over gasoline prices. If they don't understand that the costs to service their lawn are rising...you don't need them.
     

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