need help on this one!

Discussion in 'Business Operations' started by lawnguy09, Jan 13, 2012.

  1. lawnguy09

    lawnguy09 LawnSite Member
    Messages: 4

    I am redoing a few of my commercial contracts this year and need to raise the prices a little because last year I just wasn't making what i should. One is a small commercial acct that I charge 10 bucks a mow.. it is small but I need to make a little more on it to cover cost and make money. How would you go about raising the price, and what would you tell the client?

    Thanks in advance!

    "All American Property Maintenance"
  2. weeze

    weeze LawnSite Fanatic
    Messages: 12,746

    you could go with the high gas price excuse or just tell them you need to charge a little more to cover your expenses.

    You should have a minimum price for mowings. that way you don't get into things like this in the future. some people have a minimum price of $35 just to drop the gate. otherwise it's not worth driving there to do the job. my minimum is $25. i have two small commercials probably similar to yours. i'm done in 5-10min but it wouldn't even be worth it to cut it for $5-$10. you gotta have a minimum price to make it worth your while on these types of accounts. generally you make more money for smaller jobs. as the jobs get bigger people usually don't pay as well. a small job you might make $2 a minute and a medium sized job you might make $1 a minute and on a really big job you may make 50-75 cents a minute. it varies but this is the general rule of thumb. people are willing to pay for smaller jobs....not much difference in 10-20 dollars....but on the bigger jobs there's a big difference in 100-200 dollars.
  3. ReddensLawnCare

    ReddensLawnCare LawnSite Bronze Member
    Messages: 1,651

    I dont know how old you are, so if you are young, you are letting yourself be taken advantage of for that price. If your not young, you should realize you are hurting the economy in your area doing something that cheap. 10 per mow is crazy low, especially for a commercial. I would just be honest with them and tell them what your new price is. If they give you any lip tell them what the average rate for mowing is in your area, and I can say with almost 100% certainty it is not 10. Keep us posted
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  4. ralph02813

    ralph02813 LawnSite Bronze Member
    Male, from Charlestown, RI
    Messages: 1,041

    For us gas is about 60 cents a gallon cheaper than it was last year. So I would send your $10 client a note and explain to them, that you would really like to continue to their property but, you have come to the realization that you have to charge them at least your minimum rate which is $25.
    On other client, the Federal government has decided that inflation for last year was 3.6% so that would be a good place to start a minimum - which would make your new minimum $26.00 Remember, if you have to run 10 miles down the road to cut that customer at the Fed mileage rate you are losing 20 cents.
    I jumped $5.00 last year on everyone and that barely covered cost.
    If you go to your dealers right now you can get good prices on this year stuff cause prices are going up by 10%, that is what I think I just might do.
  5. tony b

    tony b LawnSite Member
    Messages: 126

    I would explain to the client about your ongoing heroin addiction and you only mowed the property so you could score a high on the next corner. ..... Really! ..... $10. I don't care if your 18 or 85 guys like you make me so glad I don't have much time left in this biz. I couldn't pay for wear on the starter on my truck at $10 for the start and stop. If you work alone and I assume you do. You stop the truck which costs then unload a mower, trim and blow. By the time you paid expenses you would be in the hole $10. On the other hand if you mow 5 of these postage stamp lawns without moving the truck you might make a few dollars. Maybe you could move to Ohio and I could subcontract you all my accounts. I could make double what I do now, have no employees and live in total bliss in some tropical climate with 3 different putas a day. Sorry that was my rant for the day. Please in the future present yourself as a professional. Get and give respect. Explain to the customer, if necessary your costs of doing biz. I personally don't think your going to turn a $10 customer into a $25 customer. At this point he's thinking he will find some other sucker to mow it for $10 if you won't.
  6. Merkava_4

    Merkava_4 LawnSite Bronze Member
    Messages: 1,443

    That's probably what's gonna happen.
  7. ralph02813

    ralph02813 LawnSite Bronze Member
    Male, from Charlestown, RI
    Messages: 1,041

    That would be the best thing for you!
  8. landscaper22

    landscaper22 LawnSite Senior Member
    Messages: 852

    It really shouldn't be difficult to explain to a $10 customer that you need to raise the price. Best advice is to set a minimum as already stated. Mine is $30, and I don't care if it takes 15 mins to do the job. You have to factor in travel to and from the job, and truck fuel, etc. The only way I will go under 30 is if I have maybe 3-4 extra small accounts all together. Then, if I go $25 each I can still get $75-100 for all the jobs. To me it is worth it not to have to pack up and drive to other jobs across town somewhere. I wouldn't even drive my mower over to my neighbor's yard for $10.
  9. ralph02813

    ralph02813 LawnSite Bronze Member
    Male, from Charlestown, RI
    Messages: 1,041

    Amen brother!
  10. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Messages: 1,712

    I feel too many people on lawnsite worry too much about explaining and or justifying their price to consumers. Get over it, and just tell them the price like the rest of the business world does.

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