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Cost increases 2021 / new pricing solutions to offset

Wolfgang

LawnSite Member
Location
Ireland
We usually have a small percentage increase for existing customers that carry over from year to year, but set our price for new customers a little higher so say 2-3% for existing and maybe a 5-7% increase on base price for new customers. That being said most of our work is tendered contract so cost of living increases are automatically built into the 3-5 year contracts.
 

CapeMay609

LawnSite Member
Location
Cape May, NJ
I don't understand?
All landscape jobs got a $30 raise ?
So a $5000 job is now $5030 ?
Or a $700 job is now $730 ?
I must have miss read something or I'm just slow. Which sometimes is more than true.
Yes on top of sales tax that’s what we are doing.
 

kennysol

LawnSite Member
Location
Northern NJ
My name is Ken, I am located in Park Ridge, NJ and have been in business for many years, back when getting $15 - $25 for an average size lawn was the going rate here in North Jersey in the mid-late 70's. My average lawn price now is (minimum) $45.00 and I have lawns $50 and one at $75 per cut. I work alone as I have for some years now, (had a bigger business years ago, (multiple crews) but cannot find an American young man that wants to do this work, unless he is starting his own business. At my age, I prefer working alone and keep the number of accounts to a manageable number, 25-30 weekly.
I charge from $70-$75 per hour labor for shrub trimming, spring and fall clean ups with a minimum of $100 in all it takes is 1 hour. Plus all materials of course.
Are my prices in line with other companies in my area?
Should I be considering increasing my prices for the 2021 season with the inevitable increases in the fuel and oil industry?
Thank you in advance for any helpful replies.
Kenny S.
 

Chilehead

LawnSite Silver Member
Location
Stockbridge, GA
I did fuel surcharges back in 2007/2008 when gas went above $4.00 a gallon. I explained in a nice letter to all my customers that the surcharge would disappear when gas returned to around $3.00 a gallon. Every one of my clients found my surcharge reasonable, save one.....not bad.
Also, I do a complete across-the-board price change every season as needed. You really have to be in tune with your own local market to know what changes (if any) need to be implemented. Some will go up, some will go down, and some will stay the same. It's all about being competitive, but not overpricing or underpricing yourself out of business.
 

Jeff@diyokc

LawnSite Senior Member
Location
Owasso, Oklahoma
My name is Ken, I am located in Park Ridge, NJ and have been in business for many years, back when getting $15 - $25 for an average size lawn was the going rate here in North Jersey in the mid-late 70's. My average lawn price now is (minimum) $45.00 and I have lawns $50 and one at $75 per cut. I work alone as I have for some years now, (had a bigger business years ago, (multiple crews) but cannot find an American young man that wants to do this work, unless he is starting his own business. At my age, I prefer working alone and keep the number of accounts to a manageable number, 25-30 weekly.
I charge from $70-$75 per hour labor for shrub trimming, spring and fall clean ups with a minimum of $100 in all it takes is 1 hour. Plus all materials of course.
Are my prices in line with other companies in my area?
Should I be considering increasing my prices for the 2021 season with the inevitable increases in the fuel and oil industry?
Thank you in advance for any helpful replies.
Kenny S.
Ken, I think @Chilehead posted and I think his approach is as good as any. You know your market and what the labor costs, pricing etc are!
Over the years, I’ve seen people post on here that they are proud they haven’t raised prices! I find that philosophy misguided and a poor business practice, I think a surcharge has merit, as does a pass thru cost as things go up! After all, other businesses do it and don’t seem to have a problem
 

andersman02

LawnSite Bronze Member
Location
Snowy MN
We've been around since 78. Up until I took over we rarely raised prices. Guess where they got us? The last few years we've raised everyone to be within 2-4 dollars of our price chart, while raising the price chart each year. Best thing we've done by far. I can probably count on one hand them number of people who have said anything about it.

Point is, raise your prices every year!
 

Gus McGee

LawnSite Senior Member
We've been around since 78. Up until I took over we rarely raised prices. Guess where they got us? The last few years we've raised everyone to be within 2-4 dollars of our price chart, while raising the price chart each year. Best thing we've done by far. I can probably count on one hand them number of people who have said anything about it.

Point is, raise your prices every year!
Agreed. If more companies did this the industry wouldn't be mostly stuck charging 1980s prices.
 

Hotty Toddy

LawnSite Senior Member
Location
Little Rock
Shipping prices from growers to local nurseries are going up by about 13% here in Little Rock. Thus retail prices will increase, and our contractors’ discount will decrease (current discounts are 35-50%).

Growers made a killing last year with everyone being home and turning DIYers. In 2020 Many growers dipped into their 2021 inventory quite a bit. Landscaping plants might run out early this year.
 

Chilehead

LawnSite Silver Member
Location
Stockbridge, GA
Agreed. If more companies did this the industry wouldn't be mostly stuck charging 1980s prices.
I can't believe the number of "professional" outfits that think $35.00/hr. gross is still the going rate. 70 percent of these guys are in and out of business after one season, and the rest are out of business after two seasons--all the while they hurt the rest of the industry for those of us who actually have the overhead (hence, a higher required gross rate) that one needs to do things by the book.
 

andersman02

LawnSite Bronze Member
Location
Snowy MN
I can't believe the number of "professional" outfits that think $35.00/hr. gross is still the going rate. 70 percent of these guys are in and out of business after one season, and the rest are out of business after two seasons--all the while they hurt the rest of the industry for those of us who actually have the overhead (hence, a higher required gross rate) that one needs to do things by the book.
Hey, they don't have a shop or insurance, so why should they charge for it :rolleyes:
 


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