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Should i lowball a little?

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  • Should i lowball a little?

    hey guys whats up

    so im 16 my partner is still 15
    theres one company..my neighbor actually.. who is very big in this area..hes actually the biggest..then theres the little companies that go unnoticed with there tiny little car door magnets..
    but
    since of my age i was thinking maybe we should low ball a little bit

    not enough to put us out of business and in debt but enough to get an edge on the competition

    our business cards and flyers advertise no heavy machinery, custom packages, free estimates, pay your way, and no contracts

    No heavy machinery because were still saving for it and that might interest some people that are worred about it damaging the lawn. and no contracts cause..well were not legally allowed to sign them ahaaha

    along with all of our services

    i have some pretty nice business cards..ill show you them in a thumbnail
    so hopefully that will draw some attention along with the flyers were handing out

    but when we show up at the door they will probably be expecting men not teens..

    any thoughts?
    Just Kut Lawn and Landscape
    "Where Service is Always in Season"
    Reach for the stars so if you fall you land on a cloud.

  • #2
    Heres the business cards if you were interested..
    Attached Files
    Just Kut Lawn and Landscape
    "Where Service is Always in Season"
    Reach for the stars so if you fall you land on a cloud.

    Comment


    • #3
      Your cards look fantastic!

      As for lowballing, it all comes down to your survival. You have to do what you have to do.

      It's an interesting topic that can be two sided.

      Low-balling is bad, but sometimes it's efficient & worth doing because it doesn't effect you.

      It could have negative effects on the market however. One of your other competitors may low-ball you after figuring out what you charge, which then your customers will always expect an even lower price.

      So sure, low-ball a little & try to retain loyal customers, then raise your price a few bucks every year.

      If you keep your prices low, the market just gets tougher.

      It all comes down to quality customers vs the quantity of customers. Right now however, I suggest working on quantity in order to get quality.

      Comment


      • #4
        thanks breeze..well..cheese haah

        and my whole plan was to low ball a 2-5 bucks a lawn for this year..
        next year ill keep the prices to the customers that i have already but the others ill bump the prices..depending how things go i might bump it up on preexisting customers but i wanna try to avoid that need. And the company im competing against really wont have a problem with me lowballing..they cover almost all of porter county and have a long list of clients. if they do decide to knock there prices down ill contact them and sign an agreement against targeting the other companies clients and to keep our prices normal..

        the lowballing would be temporary just for half the season..once we start advertising again mid-season we will go back to normal pricing
        Just Kut Lawn and Landscape
        "Where Service is Always in Season"
        Reach for the stars so if you fall you land on a cloud.

        Comment


        • #5
          Good answer Scott.

          And JK I wouldn't call it lowballing, let's say you are being competitive.

          Comment


          • #6
            thanks breeze..well..cheese haah
            It's all about the cheeeese man! LOL

            Comment


            • #7
              When you say should you low ball, are you making sure you still make a profit?
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              • #8
                haha that is a better way to put it ritchie and steve im not lowballing or "being competitive" to the point where i go broke..just enough to get an edge up.
                Just Kut Lawn and Landscape
                "Where Service is Always in Season"
                Reach for the stars so if you fall you land on a cloud.

                Comment


                • #9
                  my take

                  My take on lowballing is:

                  You are charging less than the competition and hurting your desired profits.

                  If you are charging less than the competition and keeping your profits where you would like, then it's not low balling. you are charging what you need to charge to make what you want to make. This is competitive pricing.

                  Maybe your costs are less than the competition's. Maybe you are alright netting $25,000-$30,000 for the season as apposed to your competition's $40,000-$50,000.

                  In your situation, I think all this applies. You don't have the big machines. I take it you don't pay rent or bills since you live with your parents. So in other words, you would be able to charge less than the competition because YOU CAN. I would not consider this low balling.

                  You have good plans to increase your prices. you can do this as you need to. for example, if you buy a bigger mower or other of your expenses increase then you can increase your prices.

                  good luck

                  ps... You don't have a phone number on your business card. Might be a good idea to get a cell and put your number on it.

                  Comment


                  • #10
                    I just started my business this year too. The business cards are great but you have no address, phone number, do you have insurance if not its cause your 16. I'm 19 and its hard for me too with getting loans but I'm insured too. But best of luck to you and I'm competitive prices too.

                    Comment


                    • #11
                      jklawncare-

                      HECK YES!!! I brought up this point a few weeks back. I'm 17, so in the same situation as you.

                      I definitely price lower. Its almost stupid for me not to. We don't have the same expenses in the everyday world as all the older guys. No house payment, rent, kids, bills, ect. So, we can price lower, and essentially, we are walking away with the same profit.

                      My theory is to "be competitive" as you guys are calling it now, (formerly "low balling") and get as many customers as possible on your good side. Two or three years later, go ahead and raise the price a couple of bucks, and I'm sure the customer will have no problem with it because they'll no your quality of work, and they will realize they have been getting a deal. I had pretty low bids last summer. It was my first big summer for mowing, so I went out with low bids, got a decent amount of customers. If my prices were $5 higher, chances are, I may not have gotten them all.

                      Also, the age factor plays a role is us getting customers. Teenagers seem to carry a bad stereotype. Lets face the facts. Some people have the impression that we're out there to make a little extra cash to spend on the weekend, and that we won't be reliable, or do a good job. This may be the case for some kids, but I know you and I operate a whole different way.

                      Comment


                      • #12
                        There is a point in time where you need to be competitive. There is also a point in time where you are cutting your own throat. For those folks who want to undercut everyone else (no pun intended!), I tend to think about a quote my brother told me about. He found it in a trade magazine for leather work. Here is the quote:

                        We have no quarrel with our competitors prices. They know what their product is worth!
                        With that being said, it sounds like you have decent grip on the difference between being competitive and cutting your own throat.

                        Comment


                        • #13


                          I like that quote!

                          Comment


                          • #14
                            Well i'm not "cutting my throat". If we were to compare our net profit on 1 lawn, it's probably very close to the same thing. Your expenses are more than mine, therefore, you charge more. My expenses are less, so I charge less. I'm glad you can see where I'm coming from on all this.

                            Comment


                            • #15
                              My theory is to "be competitive" as you guys are calling it now, (formerly "low balling")
                              Oh trust me, low balling is still alive and well. Its just that we have to be competitive at times. Consider this, if I had ZERO competition I could charge $75 for a tune up on a push mower but because there is competition, I can't. If I charged this much I would have no business.

                              In your shoes, if you had no competition you could likely charge $100 for a yard that you now charge a mere $30 for. That is what competition does.

                              Here is what a lowballer does:

                              The lowballer guesses at what the overhead is, and just takes a stab at the prices, hoping to underbid everyone else and hoping the the potential customer will then ask for your services because of the price point. They kill themselves in more than one way. To start out with, their overhead may be $10 per hour but they don't look at that. They think it is only $2-3 so they charge $15 per hour. Now they are making less than minimum wage.

                              Personally, I am NOT after the price point shopper. I sell quality. I give you the best value. For anything less, call my competitors.

                              As far as being able to charge less because of your overhead, here is my perspective on that. If I know my overhead is $10 per hour, I may be able to charge $25 and get away with it while my competitor is charging $35 to just get the same profit as me. My idea is, charge at least $30-32. This way you are getting that additional profit that you can now invest in your business. If you do 10 yards per week and charge an extra $5 per yard, that is $200 per month to invest in your business. I am not in business to give away my services, but rather to make money and grow my business. I believe just about everyone else is in the same shoes but some are just not willing to admit it. We tend to think that "profit" is a dirty word. Its not. Everyone makes a profit otherwise, why would we be in business? But then again, this is just my perspective.

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