Yearly price increase do to inflation?

Discussion in 'Business Operations' started by LoneStarLawn, Oct 15, 2001.

  1. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Messages: 1,415

    There was a thread on raising prices, but it is gone now so I had to start another one.

    With inflation hitting us every year do you raise prices every year based on inflation or do you wait a little longer to have a bigger increase? I understand sometimes raising rates has to do with other factors as well, but I was just wondering if inflation is added every year.

    I did some research and inflation varies from about 2 to 2.5% per year (could be a little off)
  2. KDJ

    KDJ LawnSite Senior Member
    Messages: 325

    What I do is bid higher on new jobs and weed out the lower ones with a increase. It seems to work fo me. Inflation is not a issue yet. Fuel costs are down and my bills are fixed.

    MATTHEW LawnSite Senior Member
    from NE OHIO
    Messages: 665

    I agree. I rarely have a % across the board increase. The goal for me is to retain high profit, no hassle accounts, so they may have no increase while the p.i.t.a. accounts may get a 15% increase.
    The deadbeats get a letter stating that we are not offering a contract this year!:blob3:
  4. Guido

    Guido LawnSite Silver Member
    Messages: 2,087

    If your constently growing like most companies, bid the new jobs higher to adjust for the increase and watch your profits on the old jobs.

    If you want to do an accross the board percentage increase, I think its best to do it every season instead of waiting for the big bang every 3 or 5 years, ya know what I mean? On a $40 account, a 2.5% increase is only $1.00. It looks nicer that way in their heads than going up $5.00 or $7.00, etc.

    Another thing this does is get them in the groove that you prices are not "frozen" for 20 years, they will get used to paying the minimal increase every year. There was a good letter on why you are raising prices somewhere here on Lawnsite. I don't really have time to look for it now, but if someone finds it please post it in this thread.

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