Mike Andes says a $1.5 million landscaping business with a 70% close rate should raise prices 20% immediately across all services. Current fees: $125 service calls, $65 inspections. The risk is losing legacy clients, but the team agrees higher prices are overdue.
I don't see leadership as a big problem. Like right now, the fact that you have 3 people on overhead, I'm not too concerned. A $1.5 million business, especially because things like installation of irrigation takes significant amount more time to sell, takes more time to manage and schedule, etc. I'm looking mostly at liquidity and leads as like our 2 opportunities. I think from a 70% close rate, if that's what it is, I think we should raise prices immediately. And I know that's difficult because it's like, well, I need the leads. When I see 70% close rate, I just immediately know we can raise prices by 20% and that might go to 60% because if the average is 70% and you were saying, I think the irrigation install is more like 50%, that means like the turf and like irrigation, like maintenance, we must be closing like everything.
Yeah, I mean, irrigation maintenance again, you just don't— people don't bid that.
I mean, it's just like, hey, so why don't we charge more? We've got to raise prices by 20% on all these renewals that are upcoming right around the corner for all of our chemical and all of our turf management as well as all of our irrigation maintenance. 20% increase across the board without emotion, because I know if 80, 90% of people are accepting estimates for a service, we can absolutely increase the prices.
I agree with that because if you break those 4 services down, and I've noticed this whenever they prepay for them, and then you've got to put those numbers in on the services in the program, it's so— it's $125. That's what we charge for like a service call fee. That's not additional time and parts and all that. But then you get that June inspection and that September inspection to balance the number out to what they prepaid, it's like $65 for those two services.
Yeah, our two middles are our inspections. Yes, are like $65.
That shouldn't be that.
No, they're super quick.
And you know, I, I think a minimum should be $85 minimum.
Yeah, but really the customer is paying that prepayment. That's the dollar amount they would be changing.
I mean, I think that we could definitely increase by $40 just for that.
I think based upon the fact that you have so many legacy clients, I know it's difficult because you know them and you will get a few unhappy people. But like when I see 70% close rate, I just immediately think we need to raise prices. And it's just like everyone, like you in the weeds, you understand the business so much that it's like, oh, like, no, like this, this and this and this. Especially when I'm hearing like people don't bid out.
The truth is I'm all for raising prices, but I'm not the one that deals with the angry clients. Right.
But she's saying you raise the prices. Yes, I do. The 20% increase does not scare me. I know it needs to happen. I know we need to get into this place where you're going to lose some, probably. We're going to gain some too.
