Problems with cheap prices

[coolgreen]

Hi, I'm new to this forum.

I recently started my lawn and garden maintenance company up after being away from the business for about 15 years.

To my horror, I found there are companies out there offering up the same prices I charged in 1985!

I can't believe people have been screwing up this industry so badly while I was away.

I had to go in cheap last season (my first season back), but this year has been a different story. I sent a letter to all my customers explaining that my prices were going to a more "industry standard" this season, and suprisingly, I got almost all of them back.

One good thing did come out of all this though. A cheapo company working in my area has dissappeared this season, and I'm picking up new clients like crazy. After I explain why my prices are higher than they paid last year (a more professional job, etc.) I find they are more than willing to sign a contract.

Have you guys had the same problem with these idiots running around charging next to nothing for maintenance and driving prices down?

They must have to take on about a thousand contracts to make ends meet.

[georgethomawannabe]

Just out of curiosity what are the prices that the idgets up there are peddeling, here in kc we are getting about $37 per application with a 5 or 6 application min.

[GrassMaster]

You are just about Right! Coolgreen

Welcome to the Lawn Service Forum Community, coolgreen!

A 100 miles north of where I did business back in the late 80's they are not getting what I was getting back then? It's sad but True.

The Market is so saturated with Lawn Service Companies & over 75% of them will be out of business in 3 years or less, due to Under Bidding & Not Knowing their actual cost of doing business!

The main problem is they have to Wear out all of their Equipment First & it takes up to three years to do that, this is when it hits home!

I had a person that came in to my shop last summer & he was bragging that this was the easiest business there is? Which he is almost right about that, but he told me that he got almost every bid he gave. (I'm seeing Red Flags & Basically Seeing Red?)

A neighborhood just up the street from me, the Homes are between $100,000 to about $150,000 & around 8,000 to 10,000 sq.ft.

He is going in & Mowing, Trimming with Trimmer, Edging, Bagging, Hauling Off Clippings & Blowing Off all Concrete Surface for $25 to $30 a Pop.

Listen to this, to make matters worse Most are Not Scheduled Maintenance? They call him when they need him? What's Wrong with this Picture?

LOL, It's me, I was wasting my time talking to him, that's what's wrong with this Picture! I was trying to Help him?

We talked & I tried to explain How The Long Term Profit Deal Works. That his Equipment wouldn't last forever & Blah Blah Blah.

I told him that back in the Late 80's I was getting about $45 or more a Pop Every 10 Days Year Round. He Looked at me like I was a Stupid RedNeck from JawJa. I'm From JawJa but I ain't that Stupid!

I told him that most of my year rounders that were between 8K & 10K that i was getting anywhere from about $145 to $185 a Month Year Round, Depending on Landscape of the Lawn.

He Again Looked at me like I was a Stupid RedNeck from JawJa.

Well he suggested that I didn't know much about the Business & that I should continue to Keep on Turning Wrenches on Lawn Mowers. Well I just...

Kept my mouth shut, Every Dog has his day & so does Rednecks T00! Remember RedNecks Most Famous Last Words? "Hey Y'all Watch this!"

Sure enough, 3 or so days later Mr. CheapestgrasscutterinthestateofJawJaormaybetheworl d comes running in & Going Ballistic.

LOL his pull rope broke on What I figured out to be a Snapper Lawn Mower after looking at it for about 2 minutes & he needed it Fixed ASAP. He Needed money to pay his rent & Blah Blah Blah!

I had quite a few customers in the store & over 120 repairs waiting to be fixed. I walked him outside & told him to roll it through the back?

FYI: If you take & fix a commercial cutters mower in front of Homeowner Customers on the Spot, you stand a chance of having a Riot! So everything must be Pop Secret! (Spelling is Correct)

OK, 15 or 20 minutes later he comes up front & is Very Happy, he thanked me for taking care of him so quick & considering it was his First repair at my shop.

So I charge him $15 Labor & $1.50 for Rope & .09 cents tax. Yeah it was $16.59 for a on the spot repair & He started Smarting off at me. He Wished he had a Racket like mine & what Thieves we were?

I told him that if he had $500,000 he could take the Shop right then & there. Everything I own is for sale or on Sale at all times, except my Dog Roscoe! He then Refuses to Pay. HE YELLS "TOO MUCH"! "HIGHWAY ROBBERY!"

So being the Good Natured RedNeck I am, I told him it was on the House, Get the Hell out of my Shop & not to come back until he could afford me!

Did I over charge him? I don't think so? I actually thought I was Helping him. Maybe I did? Since it was Free!

It's easier to apologize for price now than quality down the road? This is what I think of, when I have situations like this?

I wonder where this Joker is Now?

[Phil Nilsson]

Like GrassMaster said ... prices have been stagnant for many years and wage rates paid as well ... in the late 80's $9 or $10 bucks an hour for help was typical.

[PNA]

In my area (S.W., Florida), I am

finding that there are a lot of companies doing lawn care for fairly low prices. For a residential lot of about 10,000 feet, I am finding some of the competition bidding in the $70/month range. With summer coming up, the lawn will need to be cut once a week which places the price at less than $18/visit. How can I go head to head with these guys with those prices?

[coolgreen]

prices

These clowns are giving out residential contracts on standard 50 or 60x150-200-foot properties for $70 per month. That's including gardens and pruning.

That is exactly what I would have charged back in 1985, when I was paying my student employees $5 per hour, which was good money back then.

My price for these same properties is $110-120 per month, plus GST. Even that is too low, but the more reputable companies have been forced to go in at these prices because the undercutting idiots have been working this area for so long, and now everyone feels they should pay next to nothing for property maintenance.

Needless to say, they won't be around long. A company working the same street as me last year has apparently bit the dust, and now I am picking up their old contracts.

[Phil Nilsson]

Around 70% of all new starts fail at the bizz within the first 3 years ... they try to get a foothold with low pricing ... some learn quick and adjust upwards in time.

[PNA]

I hear you about....

the "low ball pricers" not being able to stay in business for long but the problem is I've got to run a business that makes some profit. And at those prices and 3 years before the low ballers learn, how do I stay in business? It's so scary with so many of these clowns out there....

[theLawnmowerman]

prices

hello, i am new to the business, and i plane to start up next summer here in michigan. i have worked for one of the cheap guys that under bid everything, not me i aim to be a professional , and help to set industry standards where they should be, one problem, i don't know how to properly bid jobs, i plan to aireate, cut, edge , trim, ect with a regular cut. also spring and fall clean up, help!!!!!! how do I bid these jobs so i can stay in business...

[dschoefer]

I have to admit, the first year I was in business I low balled. Though by the end of the year I raised all my prices for my existing customers and new customers. Within a year I am seeing more and more lawn maintenance trucks out on the road. A lot of solo operators, some in the upward age of their 60’s and 70’s. I suppose this tells you how bad the economy really is. Though I’ve also learned that most people don’t mind paying a little higher of a price If you take the time to do there property right.

[PNA]

There is a lot to be said

about doing a good job to justify the cost. However, with low (too cheap) bidders, it's tough to get your fit into the door with the new customers. In fact, I just lost another job this pm. This lady calls me up and wants me to do a single cut (mower, edge, and blow) on a property which is approx. 11,000 sq feet. I give her a price of $30. She tells me OK and I place her on the schedule for first thing next week. She calls me back and tells me she wants to cancel because she located someone who is more responable with the price. I should have asked her what she was payoing but she hung-up right away. Man.... how much cheaper can/should I go with my prices?

P-

[Crawdad]

Hey, at least she called. I have given bids, got the job, showed up to mow, and it was already mowed.
Crawdad