How often to increase prices? (+cash on hand advice needed)

Potterwood Lawncare

LawnSite Member
Location
Gloucester, Va
First post here, sorry if I do go about it poorly! I was just curious how often (and by how much?) you guys increase prices for your jobs? I personally have seen exponential growth for my business this year so far (2nd year with 2 60”s and 2 employees already) and my profit margins are not where they should be to be completely honest! Add that to inflation and everything else it’s honestly hard to keep cash on hand just starting out! I have already decided to increase prices for next season by 10%ish, is there any advice you guys could give on how to get more cash on hand starting out as well? Thank you in advance!
 

Smith Lawn & Landscaping

LawnSite Senior Member
Location
Virginia
Only you know your numbers and what you need to make for YOUR business. Just remember that exponential growth doesn't come from the amount of equipment you have, knowing your profit margins, having sales, and building on that will grow your business. With that being said, since your just starting out I would seriously look at your numbers and determine whether you need to increase so new into the business, it may scare or lose some customers which maybe good or bad depending if they are late payers, pia lawns etc.
 

JFGLN

LawnSite Fanatic
First post here, sorry if I do go about it poorly! I was just curious how often (and by how much?) you guys increase prices for your jobs? I personally have seen exponential growth for my business this year so far (2nd year with 2 60”s and 2 employees already) and my profit margins are not where they should be to be completely honest! Add that to inflation and everything else it’s honestly hard to keep cash on hand just starting out! I have already decided to increase prices for next season by 10%ish, is there any advice you guys could give on how to get more cash on hand starting out as well? Thank you in advance!

Do you pay yourself a salary? And then have a profit after that? Do you have an emergency fund? How about money for the winter? Contracts?
 

Freaky Fido

LawnSite Bronze Member
Location
Northeast USA
There's a temptation to get customers by offering low prices. If your growth is exponential you may be (probably are) charging too little. Raise prices for new accounts until you find the resistance point to them. You can't make up pricing too low by increasing volume with more of the same.
 

jonniesmooth

LawnSite Senior Member
Location
Fergus Falls, MN
If you do a budget, you know exactly where your money is going.
Gross- expenses = net
Some good points mentioned above.
I bet your top expenses are: equipment, fuel,insurance, labor, phone/internet.
You run a 3 man crew? Or a 2 man crew? Or 3 one man crews?
How many hours a day? Week?
As for cash on hand ,you should be able to cover the next months bills before you send out the invoices for the next month.
Ideally, you would have 3-6 months of retained earnings.
 

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