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||06-06-2009 11:38 PM
Today was going to be a business free day. The boss wanted me to work on our yard (her flower gardens to be exact). We went to Lowe's for her flowers. I wore my T-Shirt with company info on it and drove my Ford Explorer (Company signs on it) over her objection.
While there, I had 5 people ask for information. I gave them each my magnetic business card and answered their questions. My wife was glad to get her flowers but a little angry at my making appointments (I didn't make any for today so I wouldn't have to sleep with the dog)!
When we got back home, a realtor was showing the foreclosed home to my right. I had tried to get her business earlier this year and she wasn't interested. The lawn, about 1.75 acres hadn't been mosed since the first week in April. The grass was at least knee high. When her clients left she came over to talk to me. Wanted the property taken care of.
I told her that it would take at least 3 runs to mow the lawn and gave her a quote of $200.00. for a one time mowing. She told me that was ridiculous, she could get someone to do for half that price. I said that $200.00 was my price and that I would require half down and the balance upon completion and walked away.
Two other companies came to measure the lot while I was working on my lawn. At 6:00 she called me back and my price wasn't out of line and could I do it tomorrow morning because she was showing it again in the afternoon. I said I would need the $100.00 deposit first. At about 7:00 she was knocking on my door with$100.00 cash and wanted quotes for 6 other properties.
The point I'm trying to make is that I didn't lower my price (although I considered it). I will do it myself and I want $50.00 per hour. I have no travel time and I am sure I can do it in under 4 hours but I wanted to establish my price.
She then told me that she couldn't do business with anyone who didn't have liability insurance and that none of the other people she called had it and she had to get it done by her husband and son and they didn't have the proper equipment (only a residential push mower).
Now she wants me to do 5 properties at my one time mowing price and then mow every 2 weeks under contract. I imagine all are in the same condition as this one and would not give her a price without seeing them. I bought a new mower yesterday. A Poulan Pro Lawn Tractor, 19.5 Hp. I went with this because of price and that mowing is only about 10% of my business. I was looking at the various stand up mowers but decided to go with price. When people want mowing again I will get the improved mower and have the Poulon for my home mower.
The point is, don't cheapen your service costs. Provide them with the service they need at the price you need to grow. Remember, you are in business 24/7/365 and you want to stay in business.
||06-07-2009 05:00 AM
I have posted and said before we are a walking, driving advertisement of our business, I drive my truck even to run personal errands even though it would cost a fraction to take the Passat as it has brought business in while in lots or on the road, I had a guy following me Friday who call my blackberry as he saw my name and number on the truck, we both pulled over on the highway and talked, I did a quote to level 32 loads of fill and he accepted.
On your other point, clients call our bluff, I do the same friggin thing hiring service people or buying vehicles, have to be honest I have always been that way. My price is my price and I will not flex. There are very few people who have walked away from our prices in the end, I know where they are coming from, know this game well as I play it also, bottom line is this gear costs, we do excellent work, I treat my employees like owners and pay them far more than others in this business, I hire the best and their work shows it, if you want to hire us, there is a cost. We are over the new startup finding clients hurtle so it doesn't matter at this point even if we only get 1 in 5 or 6 quotes as we have so many contracts on the books, it's a comfortable place to be in as I can focus on other areas of the operation.
||06-07-2009 10:46 AM
I think part of the learning curve of a new business is to bid lower than you should just to get the job. After getting burned a few times you quickly learn.
Low balling in lawn care is nothing new. Generally the guys doing it so cheap are desperate for customers. When they finally know their operating costs they will either raise their prices or get out of the biz. :)
||06-07-2009 11:38 AM
I do think that when you first get your business started you are more desperate for work and are unsure of your costs and what you should charge so you tend to waiver a lot on your prices.
As your business is around longer you build up more confidence because you learn you can do a job and customers will pay you your price to work. This allows you to gain more customers and as we have seen stick to your guns more on your prices.
It is a lot easier to raise your prices when you have a full rooster of current clients than it is when you are desperately trying to get your first few customers.
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