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View Full Version : Crunch All Numbers


tiedeman
03-08-2007, 07:27 PM
This is a perfect example why you need to crunch all of your numbers for a customer. You can present the customer with many different options, but make sure it's the best for YOU. This is only an example, and not based on real prices.

Say you have a snow removal customer that has her driveway done for $18 per time. You want to get her as a lawn maintenance customer, but she can only afford $25 bi-weekly mowing.

You figure that you do snow removal at her place 10 times a year at $18 each time, $180 total. And the lawn maintenance based on a bi-weekly schedule would be 12 times a year at $25 each time, $300 total. So you would make $480 on this property.

But, you don't want to just settle with the $25 mowing, because it seems too low for you. So you want to barter things a little bit. You decide that you will offer her mowing at $27 per time, but she will now get snow removal at $16 per time. She thinks then that she will be saving money compared to what she paid before for snow removal. But the total you would make per year would be $484. So you are already making a $4 more profit compared to if you just settled on the prices above.

Now, lets take this the other way. Lets say that you agree to the $25 lawn maintenance, but she has to agree to a $20 snow removal price. You tell her that the only way that you can provide lawn maintenance at that cost, is by raising the snow removal price only $2 extra per time. She thinks that she is saving money. But you are now making $500 per year. You are making a $20 more profit compared to it you just settled on the original deal and $16 more compared to the second deal.

And that boys and girls, is why you always crunch the numbers