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question about prior accounts

Discussion in 'Starting a Lawn Care Business' started by fjay5272, Jul 29, 2006.

  1. fjay5272

    fjay5272 LawnSite Member
    Messages: 19

    So we bought a few accounts in a package deal for some equipment.
    We got there and the accounts prices we a little low for the sizes. 18 dollars for a .65 acre one. 40 for a 1.5 acre. Its kinda a grab bag, some fit the price some are really low. We wonder on percentage increase we could make during the winter. We were thinking 5 bucks for the low ones, they will still be really low, too low in fact, we may lose 2 or 3 but it will come to more money and less time over all.

    My question is, is the price hike realistic? Do you think these people will stay on? I dont think he has raised a price on some of these (ie there are a bunch of 18 buck ones) in a long time so 5 bucks is a lot percentage wise for an 18 dollar account.

    We just wanna see the general consensus around here, we dont mind losing a few but just dont wanna risk losing too many since the big ones really arent so bad when u got the exmark in the back yard and scag in the front.

    Anyway, what do u think our account loss rate will be on this and what not?

    PMLAWN LawnSite Gold Member
    Messages: 3,534

    Did you pay for them. If they came with the equipment, Charge them what they are worth. If they do not pay (cancel) good riddance.
    If you paid for them you have top be a little more careful but you CANNOT lose money. No sense in working for 2 hours (or any time) for no profit.
    You may lose some but it may really be worth it.
  3. ed2hess

    ed2hess LawnSite Fanatic
    Messages: 14,460

    I think it would be very difficult to raise prices on people that you have no experience with.....they will likely drop you.
  4. fjay5272

    fjay5272 LawnSite Member
    Messages: 19

    we paid extra for them not a lot but some. we'd like to raise over the winter after theyve got to know us. so far its went well with them since the people before was letting a lot of edges go or not edging at all and had skipped weeks of cuts in the past, not return phone calls, poor weedwhipping etc.

    most are non bagging accounts but we went thru on the ones that were too long with the bag. and the ones that seemed like and probably werent ever edge (some were grown 3-4 inches in to the sidewalk and 3 inches deep) we went through and edges back, dug out, etc.

    I guess my biggest hope is that they realize what kind of deal they are still getting even with a 5 dollar increase....

    How should i approach it? mid winter? early spring right before cutting? send a letter out or contact by phone?
  5. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    It is an interesting lesson here, you need to, before you buy accounts, go around to each and every one of them, price and address in hand. Then, before you pay, go to each customer's house with the other Lco and explain that you will be their new Lco and blablabla... Since you didn't do this last part you will likely lose a few anyhow, so I suggest you raise the price now on all the negative profit ones, I might further suggest if $5 is too much then take the 18 to 20 so it's finally a normal number lol but... $20 for 2/3 of an acre, I mean, I get closer to 45 for that, there's no raising the prices I saw to where I could stand doing them, without losing the whole lot that is... ohhhh.... lol ....
  6. CutInEdge Lawn Care

    CutInEdge Lawn Care LawnSite Senior Member
    Messages: 677

    Sounds as if not most but all need to go back out to the general arena. Sticker shock coming soon on ilse xxxx. You are a business man trying to make money and unfortunetly you have to cut grass to do that. Therefore, make the money, dont be afraid to lose them just so you can cut grass. Don't be a lco, (losing cash operator). Be a LCO, (lawn care operator). Now that you have already done work, heck for that matter it sounds as if you done cleanups, for those prices so you are seriously in the rears. Get your money up front. I would have gone to these customers on my time and said look these particular areas of your lawn need to be addressed and this is what it's going to cost to get things back in tip top shape. If they bite, they bite, if not you know what type of customer you have. Plus you created more revenue not just hard sweaty work. Good Luck!!!
  7. TurfProSTL

    TurfProSTL LawnSite Senior Member
    Messages: 693

    Sounds like alot of what you bought were just mow and go - no trimming, edging, etc.

    You've already taken the steps to get these accounts right by edging, trimming, etc.

    Do a time study on these accounts for the next few weeks to make sure you're making money (doing it your way). If not - jack 'em.

    If they cancel don't look back. There is absolutely no reason whatsovever for hanging onto an account that is losing you money every time you service it.....
  8. hickslawns

    hickslawns LawnSite Member
    Messages: 130

    I agree with TurfProStL- don't do it for free. Raise them where you need, and don't look back if they cancel. Do you want the referals from these customers? "hey hire my guy, he works his butt off for peanuts." You want quality referals, and "he works his butt off" is good, but you need to turn a profit. If you raise them and they stay, then it is good. If you are delivering the goods like you say you are, then they need to pay for the quality services they are receiving. I would send a letter out over the winter, say about Feb and inform them you are reviewing accounts preparing for spring, to call if they want any early spring services before the mowing starts. Things like cleanups in March or fert if you offer that and the other guy didn't. Then send out the contracts in early March with price increases a few weeks after your letter, but not too soon before mowing starts so they don't have 2 months to shop around. If you lose them, don't sweat it, there is always plenty of work in the spring. Get some truck signs or trailer signs, and some yard signs that you move around every couple weeks. Put your name out there and make those lawns stand out. Even on the low ones, you will be more profitable if you pick up 2 more in the same neighborhood and you can charge the neighbors a higher price. People like to conform. If the Jones's are having you mow and it looks primetime, they will want to keep up with the neighbors.

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