Gas Surcharges this year?

Discussion in 'General Industry Discussions' started by jpp, Feb 16, 2006.

  1. Green-Pro

    Green-Pro LawnSite Bronze Member
    Messages: 1,420

    Seems to me the thread RF started in the Industry Polls forum kind of addresses this issue to a point.
    We are all keenly aware of how skyrocketing fuel costs affected not only mowing but every other aspect of being in business.
    To that extent you can be assured IMO our clients realize this and were affected on a personal level as well.
    I was fortunate in that my suppliers of all my materials fro fert to stone did not impose a fuel surcharge, but you can dang well bet your bottom dollar cost of these goods will increase a healthy percentage this year (some already have notified of this). I did not impose a surcharge last year as my prices were still in line to keep us very profitable. I did however institute some healthy price increases of my own without any complaints or drops. IMO as a business owner I need to be able and willing to sit down and take a long calculated look at not just what fuel cost us to operate last year but everything associated with being in business. I then need to go beyond this and plan a budget that reflects the general economic climate associated with costs in 2005 i.e. fuel wildly fluctuated and wildly increased last year. I research as much as I can as to what caused this and the very real likelihood of this occurring again and getting worse. After analyzing this I then make a determination as to how this will affect my pricing structure for my customers and set prices accordingly to cover these costs. I posted in the other forum regarding fuel prices that I am budgeting for possible fuel increases of up to $4.00 per gallon. In the long run I firmly believe this method adds to client retention and stability as opposed to imposing a fuel surcharge, which likely will become an every season occurrence in the foreseeable future.

    JM .02
  2. The Cowboy

    The Cowboy LawnSite Senior Member
    Messages: 617

    Green-pro, like I said, I am only anticipating fuel not going past $3.50. To increase my normal mowing price to respond to anything past that as well as normal inflationary increases would be too much. I have neglected increasing prices as it is for the past few years. To add too much fuel with my increase will make it hard on the customer unless something bad happens. What if gas hits 6 bucks? I'd rather have the option to raise prices midseason by getting customer approval first. If they say no, I'll have to eat my losses. That way they know I am not scalping them, if they are reasonable they will understand my predicament. It would have worked out better had I raised prices a little every year, but that was my mistake.

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