Pricing Stituation

Discussion in 'Business Operations' started by machine, Apr 25, 2001.

  1. machine

    machine LawnSite Member
    from OH
    Messages: 101

    Well, I kinda got myself in a bind with my pricing of a mulching job for a longtime customer that I do minimal work for cutting and snowplowing.
    In the previous years, I did his mulching for a cheap price. The reason was it was real easy and I ussually had left over mulch I would use for scince was a small job about 3 yds. Now with the increases in mulch and gas this year and the increase in my labor cost. The price for me to make any money off this mulching job is double the price what I did last year. How would you approach this with the customer without losing him for the other services you provide to him.

    Its a bit difficut to raise your labor costs form $20 to $45 an hour in one year. This problem arose, when a forgot to raise his price the previous years as everyone elses went up. I was not paying attention to the small customer when I was more busy with customers who were paying big bucks.

    I guess I will inform him in person of this stituation. I will tell him that my busnines has grown substancely in the past year and that I cannot provide mulching services for that price anymore. It will be XXXX of dollars if you would like our company to handle it this year. Any Advise?
  2. Getmow

    Getmow LawnSite Senior Member
    from VA
    Messages: 445

    Do just what you said, talk to him. Don't break your costs down for him, just a generic "because of rising costs the price to do this job is $". If he has been happy with your service and you re now in line with other professionals in your area he will probaly pay. If not you have saved yourself from paying him to let you work.
  3. Stonehenge

    Stonehenge LawnSite Bronze Member
    from Midwest
    Messages: 1,276

    I'm with Getmow. Also, if he's been getting good service from you, and he rolls over for a few dollars, then maybe he wasn't worth the trouble.

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