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Trials & Tribulations - The drama of running a business and of life. It's not as easy as it looks. Running a business is full of drama. Customers, employees, money, family, time. You name it, it's a problem. Share with us your drama and how you handled it.

Lowering prices. Bah!


Trials & Tribulations - The drama of running a business and of life.

It's not as easy as it looks. Running a business is full of drama. Customers, employees, money, family, time. You name it, it's a problem. Share with us your drama and how you handled it.
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  #1  
Old 07-03-2009, 04:44 AM
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Default Lowering prices. Bah!

I got a call from a referral yesterday so I went to measure the lawn. The lady isn't happy with her current service and I cut her neighbor's lawn who is happy with me.

My price came to $31 + tax. She seemed a bit startled so I asked what she's paying now. $25 even. So, I lowered the price to $27. I didn't think of it at the time but since the guy isn't charging tax then he probably isn't insured either which is a good selling point. Plus I obviously do a better job that the lawnhack.

I'm a legitimate business, registered federally and locally, certified and insured. I've got to stop lowballing myself. I didn't really mind lowering this price as I don't have to drive to the job, I'm already there doing the neighbor's lawn and I'm surely not going to complain about new work.
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Old 07-03-2009, 09:10 AM
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Quote:
Originally Posted by mark123 View Post
I got a call from a referral yesterday so I went to measure the lawn. The lady isn't happy with her current service and I cut her neighbor's lawn who is happy with me.

My price came to $31 + tax. She seemed a bit startled so I asked what she's paying now. $25 even. So, I lowered the price to $27. I didn't think of it at the time but since the guy isn't charging tax then he probably isn't insured either which is a good selling point. Plus I obviously do a better job that the lawnhack.

I'm a legitimate business, registered federally and locally, certified and insured. I've got to stop lowballing myself. I didn't really mind lowering this price as I don't have to drive to the job, I'm already there doing the neighbor's lawn and I'm surely not going to complain about new work.
I did several bids this spring on $40.00 lawns that people wanted to pay only $25.00.
Most of those people said they were getting estimates for $25.00 $30.00 for these 1/2 acre lawns.
I was getting $30.00 for lawns in that subdivision 15 years ago.
Sometimes you gotta stick to your guns. Hopefully when the economy turns
around these lowballers will be gone.
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Old 07-03-2009, 10:13 AM
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Quote:
Originally Posted by mark123 View Post
I got a call from a referral yesterday so I went to measure the lawn. The lady isn't happy with her current service and I cut her neighbor's lawn who is happy with me.

My price came to $31 + tax. She seemed a bit startled so I asked what she's paying now. $25 even. So, I lowered the price to $27. I didn't think of it at the time but since the guy isn't charging tax then he probably isn't insured either which is a good selling point. Plus I obviously do a better job that the lawnhack.

I'm a legitimate business, registered federally and locally, certified and insured. I've got to stop lowballing myself. I didn't really mind lowering this price as I don't have to drive to the job, I'm already there doing the neighbor's lawn and I'm surely not going to complain about new work.
I just got back from an estimate on a 39,000 sq ft lawn to a senior citizen. He wanted weekly mowing. A lot of trim and edging involved. I quoted him $190.00 ($200.00 minus 5% senior discount). He told me I was crazy. The last quote he got was $90.00.

I told him that was only $22.50 a week. That would just barely cover my gas to and from the job and for the mower. I asked if the quote was from someone licensed and insured? He didn't know.

The job would be 32 miles round trip. That is 2 gallons of gas or about $6.00. Another $3.00 for gas for the mower. Leaving $13.50 for the mowing.

As I was leaving he said, "How about $125.00 a month?" I said, $190.00, thanked him for the opportunity to bid and left.

I doubt he found someone for $90.00 per month and the job is too big for him to do (he is in his late 80's early 90's). The house is probably in the $250,000 range and he had a Escalade and a Lincoln Town Car in his 3 car garage. I spent over an hour walking the land, figuring the estimate and $6.00 in gas. I need work, but I am not going to do it to break even!

Steve
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Old 07-04-2009, 05:19 AM
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This does get you thinking. If you can get a lawn nearby to a current customer, how much extra wiggle room does it give you on the price if the customer is looking for a lower price?
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Old 07-04-2009, 07:10 AM
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This does get you thinking. If you can get a lawn nearby to a current customer, how much extra wiggle room does it give you on the price if the customer is looking for a lower price?
I find that having more than one lawn at the same stop is the key to making money. It adds to your efficiency.

I charge a $13 stop charge for each property. Basically, when I give an estimate I measure the property, multiply the size of the lawn by what I want per square foot and add the stop charge. (edit to add) I also add for extra long driveways that need string trimmed or ditches that I can't put a mower in or if they have 300 trees that need trimmed around.

The stop charge is basically what I want to get me there and unload/load my equipment so if I only have to drive to one place and unload/load once to do two or three lawns then I can play with the 13 bucks. I've never had to go more than -$4 though and so far I'm at 100% on selling at an estimate.

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Old 07-04-2009, 07:13 AM
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Quote:
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This does get you thinking. If you can get a lawn nearby to a current customer, how much extra wiggle room does it give you on the price if the customer is looking for a lower price?
Not much Steve, when you start out you are not making much, as business grows & the routes tighten, you finally become more profitable. If there is a discount to be given, you should be giving it to your existing customer who reffered the neighbor. If you "give" the service away because your already on the block then how are you ever going to start making any money to speak of? I don't recommend discounting new customers especially if it means they get a lower price than the established client you already have.
What happens when they talk & the client you've had for years realizes you gave the new person a better price than they have been paying all this time?
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Old 07-04-2009, 07:19 AM
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... What happens when they talk & the client you've had for years realizes you gave the new person a better price than they have been paying all this time?
The clients really don't know my formula and unless they go and measure the lawn they won't know the difference in size. I'd just tell them there are many factors to determining the price of a lawn.

"Sure their lawn is bigger but there is no weed-whacking and their driveway is short so that it only takes 30 seconds to blow clean." There are just too many variables to get into.
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Old 07-05-2009, 11:37 AM
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I would have stuck to my guns on the price sir. After all the $25 service they were receiving wasn't making them happy.
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Old 07-05-2009, 01:24 PM
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I would have stuck to my guns on the price sir. After all the $25 service they were receiving wasn't making them happy.
Yes, of course. You are correct. However, I'm not going to turn down extra work right now. I have 2.5 empty days per week and I'm going to fill them before turning away customers.
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Old 07-16-2009, 10:52 PM
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I just started my business tis year and have many estimates. One man was unhappy with last years lawn guy and he paid 50.00 per mow. He has 3/4 acre and I told him 70. He thought about it and signed the contract. He has been very happy with our work and does not complain at all.

I have three and a half days off and trying to fill the spots. I won't lower my price just to have work. I want to be paid for the quality of work done and doing it correct. This is my opinion, Good luck on your choice.
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