Raising clients price each year.

Discussion in 'Lawn Mowing' started by AB Lawn Care, Jun 5, 2000.

1. AB Lawn CareLawnSite Senior Memberfrom OntarioMessages: 585

I raised all my prices by 10% last year and am wondering what do you guys raise on avrage each year?I know if some jobs are not paying much you would bring the price up to where you want it.But I am asking about jobs you are making good money on.What do raise these type of jobs each year?<br><p>----------<br>from:Adam<br>AB Lawn Care

2. greenlawncareLawnSite Memberfrom Sugarland, TXMessages: 105

Approx:<p>Inflation Rate + X<p>X is your really tough value. Don't just think to yourself...hmm this sounds good I'll try this &lt;B&gt; that costs you thousands&lt;/B&gt;. It's all about next year's goals. Are you tightening your route or expanding?<p>I think you can do quadratic equations in MS Excel, but this is easier:<br>Do some big-ass spread sheet with 6 columns:<br>Col A. Price<br>Col B. How many clients you figure you'll get at this price considering what's been happening with your company and the market recently. Tough, I know.<br>Col C. Labor costs to fit this demand<br>Col D. Other variable costs for this demand, including additional trucks.<br>Col E. Fixed costs that you'll have regardless.<br>Col F. Profit<p>What's the best row? Charge that price. It may be a lot of work, and there is a lot of guessing involved. But it is far better to guess in this manner that to just pick some number, or just use the same number from another company on this forum. Just think, I could have a different sized company, different local economy, different demographics for clientelle, heck, we're even in different countries. Try my method, it might make you a few extra thousand a year. <p>If you want to get really advanced, copy the sheet over 5 times and do a 5 year proforma statement. <p>Just my thoughts. What does everyone else think?

3. OP

AB Lawn CareLawnSite Senior Memberfrom OntarioMessages: 585

Thanks for the info!Any more?<p>----------<br>from:Adam<br>AB Lawn Care

4. BobbyLawnSite Senior Memberfrom Central FloridaMessages: 258

Hey Adam, I raised about fifteen long time customers around January. All residential and all five dollars per cut increase. Not one person had a problem. Makes me wonder how much I've lost by not doing it sooner.

5. GetmowLawnSite Senior Memberfrom VAMessages: 445

I, too, went up on alot of long time customers this year. I softened the blow by preparing them with my newletters. I job costed all the customers and then raised prices accordingly.<br> I would warn against going up across the board on all customers unless it is a cost of living adjustment in your contract. Unless yopu KNOW how much \$ it costs you to perform the work, an across the board increase might loose you some of the only profitable jobs you have.

6. TGCummingsLawnSite Senior Memberfrom Salinas, CaliforniaMessages: 773

Hey Adam,<p>I've done price-raising a couple of different ways, and both worked out to my satisfaction. A year after I first took over my lawn business I singled out about 20 of my then 60-70 accounts and adjusted their rates to what I felt was more in line with the others. No one complained (well, a couple quibbled but no one got upset =) and all went well. My plan at that time was to do another round of price increase in three more years, though I didn't have a notion as to what that raise would be yet. <p><br>I ended up delaying that price increase an extra year because of the El Nino weather pattern that made me feel guilty about raising prices so soon after being behind in work so much for so long (my rates are flat monthly, so regardless of whether I get to a weekly lawn four times, one time, or five times in a month the price is the same). At any rate, I finally got around to the price increase last October, and I went a straight 10% across the board. I got a few quibbles and a couple cancellations from it, but all in all I ended up essentially with a little less to do and more money each month. Worked out good. <p>Two things I've learned from this are: I never should have waited for the &quot;right time&quot;; El Nino or no El Nino, I had a plan and I should have stuck to it. The &quot;right time&quot; never really seems to come. The second thing is that I'm waiting too long in my initial plans. Costs are rising. Salaries are rising. I deserve a raise and so does my business.<p>My plan now is to raise prices again next summer and every two years following. I'll take some hits but I will consolidate my base.<p>I'll let you know how that works out. ;-)<p>-TGC

7. OP

AB Lawn CareLawnSite Senior Memberfrom OntarioMessages: 585

Thanks agian guys!I have an other question.What would you raise your clients each year if they are good paying clients.Do you guys have a min. raise?I usually raise the price by at least 5% each year.I have raised the price up to 60% in the past when I found that I was not making enought.What about you guys???<br><p>----------<br>from:Adam<br>AB Lawn Care