Pricing and Business Practices for fall

Discussion in 'Business Operations' started by HBFOXJr, Jul 27, 2010.

  1. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Messages: 1,712

    Here is a timely article link (bottom of pg) on the current state of the shipping industry. The gist of it is, lower shipping volume computes to higher shipping shipping fees.

    I remember a number of years ago when electricity use was being cut back and the utilities raised their rates. In recent years, oil companies have raised the price of gas as we cut our usage. Airline companies have added fees. We might not like it, but it makes business sense. It is necessary to survive. Learn and adopt these lessons.

    As we head to the season of aeration, reseeding, lawn sprinkler winterization, leaf removal and any other necessary, seasonal service that folks must get done, let us not fight to cut prices, but maintain or raise them as needed to stay in business and be profitable.

    After nearly 40 years in my own business, I have seen that the fear of raising prices is almost paralyzing for many. Rational is that customers will leave like rats off a sinking ship. Reality has never supported that fear. The key to raising prices is to do it annually and with reason. Despite what we are told that this is a zero inflation economy, my costs have crept up a little. I don't make so much I'm willing to eat the increase to support the life style of my clients at my expense. My attitude is, if a client can't or won't perform the service they are seeking to buy from me, then they need to pay me enough to provide the service for them and make a reasonable profit just like they make a living.

    Why were people winterizing sprinkler systems for $35 to $60 in 2009, for people with $350-$600k homes and often cars in their driveways selling for $30-$50k and up, or renting a Jersey shore home for a week for $6k. Hey folks, we got $45-$50 to winterize in the 70s. If you do something to make money, charge enough to actually do so. And it you don't know what to charge, just copy the pricing of SUCCESSFUL industry leaders not cut it by half and think you are doing good.
  2. Az Gardener

    Az Gardener LawnSite Gold Member
    Messages: 3,899

    Great post, Just another illustration of why our industry is in the condition its in. Most are too busy looking at stripes or pictures of equipment that is the same as every other piece the manufacturer produced. Or whining about the lowballer undercutting their prices. If you are in the low price market there will always be someone to do it for less.

    You have to sell your company every day and make sure your clients know why you are worth the extra bucks to care for their lawn, irrigation system, or garden.
  3. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Messages: 1,712

    A retail example works here. You can go to Walmart, Target or some where equivalent, and the price will be nearly identical for certain similar merchandise. You don't find any retailers selling a 42" flat screen tv that most sell for $700 priced at $400 at some new store that just opened. Your not going to find a $12 pack of men's underwear for $5 at a competitor.

    So lawn cutters, copy the major national companies, fert guys copy the chains, irrigation follow the guys actually making money. Follow and emulate the successful leader, if you don't know what to do. Do not worry about what a fool competitor is doing.
  4. DuraCutter

    DuraCutter LawnSite Senior Member
    Messages: 806

    That is good advice but it's falling on deaf ears. Most guys starting have little understanding of business as a whole. What makes a difference at that store example is the owner and their understanding of cost versus profit.

    Mowing lawns for the most part is done by regular joes who should really work at a regular job while they go to school to learn business. Of course that'll never happen, so in a nutshell STAY AWAY from any business that is run by regular folks with no business savvy..... Huh...makes sense don't it...
  5. knox gsl

    knox gsl LawnSite Fanatic
    Messages: 6,251

    Thisindustry is full of part timers and guys who just want to get by. Read the different post in here, multiple times "I'm a solo company I don't need to charge that much to get by". I'm a solo guy myself and I feel I've had a bad day if I can't net 90% per week. What most guys don't get is that you can't take all that home you have to save and reinvest or you'll always be the lowballing scrub.
    Posted via Mobile Device
  6. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Messages: 1,712

    What's with the mindset of anyone wanting to just get by? Isn't the purpose of being in business to do well for yourself?

    Obviously people are willing to pay what full time, higher price companies charge. So why not help yourself to that money by maintaining close to that rate. You don't need a business education to copy. You just have to value yourself, rather than prostitute yourself.

    The money is out there. If you are really good and reliable at what you do, ask for the money. You deserve it, even if you are solo.

    Oh, and for you guys not counting your hours selling, in the office, doing equipment maintenance, travel time between jobs as working hrs in calculating your hourly earnings, I have a job for you. :) And of your wife, girlfriend, sister or mom does your books for free ton help you out, I have a job for them too.
  7. Tyler7692

    Tyler7692 LawnSite Bronze Member
    Messages: 1,086

    Hahaha, your post is true, except for the fact of....


    Just wait, just wait. The dollar is trash....

    You won't even be able to spell "inflation" onces our economy comes to head with itself.

    By the way, all of these services you mention are not "necessities"

    Just saying, this economy is only going to get MUCH worse with people scraping for work.
  8. Tyler7692

    Tyler7692 LawnSite Bronze Member
    Messages: 1,086

    You're also right, but the question these idiots don't understand is:

    "Can I make money if I had an EMPLOYEE doing the work instead of ME?"

    See, a lot of these jacka$$es think they are doing good making $15-20 an hour. Ok, Lets see, I pay my guys that so there is no way in hell I could make money charging those rates after taxes, equipment, insurance, blah blah blah.

    They have created themselves a job, I am creating a full-scale business. There is a difference.
  9. knox gsl

    knox gsl LawnSite Fanatic
    Messages: 6,251

    One more thing they aren't understanding is there is alot of the southern and central states like in my area that work dries up in the winter. Its to cold to work outside or there just arn't any services needed, but there isn't any snow either most don't understand these items. The mentality of getting by one more week will not get you very far in any industry. As far as hiring extra help, most "lowballing scrubs" in my area don't make it that far, thers's alot of competition around here, but its from the big companies running illegal workers. The difference in the big companies is they charge a good labor rate but are still undercutting the other guys running a legal work force. I've found it best to just charge what I think is a good rate for a service and not worry over the lowballers, you get what you pay for and customers usually know this. I do on the other hand talk to others I trust in the business to know what the going rate is so that I can be fair to the trade and to myself when it comes to pricing Trust me all big retailers spends millions per year to know what the competition is doing and we sould stay on top of it as well, but their overhead and cost are different so always keep that in mind.
  10. coryjones

    coryjones LawnSite Member
    Messages: 65

    A boss once told me in the HVAC industry (We don't have to be the cheapest just the best at what we do) This is what my goal is sure you can get a guy with a truck and a push mower to mow but what we do is something totally different. He knew presentation was everything you don't have to be the biggest company just look like you are. One way he did this was having a physical address and phone number in the major towns we did work. It looked like we had company's in many towns but it was all forwarded to here.

Share This Page