Mike Andes (landscapebusinesscourse.com) advises lawn-care businesses that are busy and closing a high percentage of estimates to raise mowing/pricing mid-season rather than waiting for spring. He cites August 11, 2021 CPI data (5.4% year-over-year) as evidence inflation has increased costs, recommends simple "blind" per-cut price increases (example: +$5 if under $40, +$10 if over $40) and a matter-of-fact customer notification with an effective date. He also briefly promotes the January 2022 Landscape Summit event.
Chapters
Hey, everyone, It's Mike Andes, landscapebusinesscourse.com and today we're gonna be talking about raising your prices. Yes. In the middle of the year. So if you're watching this right now, and it's June, July, August, September, and you're thinking, you know what, I'm not gonna raise prices because we're in the middle of the season and I've never raised prices in the middle of the year. I wanna talk to you today. If you are super, super busy and if you're three, four, five weeks booked out right now with jobs, this message is for you. If you're just trying to grow and you're trying to get every single customer that you sell to, every, and you're just trying to get started or you're not booked out more than a few days, might not want to raise prices. But if you're closing every single job. I just talked to someone on the phone. They closed like literally 100% of their estimates. I said the first thing you must do is raise prices. If you're closing more than 80% of your jobs, more than 80% of the estimates you give are accepted, there's a really good chance you should raise your prices. There's a really good chance that you have way too much value in comparison to the price. If you have way too much value and not enough price, yeah, every single estimate is going to get accepted. Everyone's going to accept. I don't want everyone to accept because it means that I'm leaving out margin by having my prices too low. So the reason I'm bringing this up is the fact that today, August 11, 2021, CPI data came out and it's 5.4% higher than it was a year ago. So Consumer Price Index. That's what CPI stands for. It takes into account like the price of gas and insurance and used vehicles and rent and food and everything, energy, all of the rest of it. Those that index of prices as a 5.4%, it's gone up over the past year. And I got to ask you the question, have you raised Your prices by 5% over the past year? Because if you haven't, you're losing money to inflation. And inflation is basically just the cost of things going up. So if you've kept your price the same for the past few years, there's a very good chance you've lost 10% of your revenue, really has gone out the door to just inflation. Well, 10% of revenue is probably half of your profits. So you should really consider raising your Prices at least once every two or three years. And if you haven't raised your price this past 15 or 20 years, I can guarantee you're not making enough money. So how do we do this? First and foremost, the reason why, why you should raise your prices now in comparison to usually when I'd say, hey, do it during the spring rush or during the fall rush, like when there's lots and lots of work coming in. The reason I would say do it now is because customers and the consumer is used of prices going up. The price of fuel is going up, the price of their rent and their housing is going up. Everything is going up. Used car prices are up like 50% year over year. So it's a great time to raise prices because people understand that there's a labor shortage, it's harder to find employees, you gotta pay them more. And so people are going to be okay with raising prices. Now the question is how? How do you raise prices now? In the ideal world, you run a report of budgeted hours versus actual hours on the job and figure out which job you need to raise prices on and which ones you're making the least amount of money on. But I would imagine that you're probably super busy right now in the middle of the season. And if you don't want to wait until next spring, which I recommend, you don't wait till next spring to raise prices. But if you want to do them now, you want to raise prices now, just do a blind price increase. For example, you say, look, if Anyone is under $40 per cut, I'm going to raise them $5. If they're over $40 per cut, I'm Going to $10 per cut. If you raise someone that you're currently charging $35 on per cut and you raise them by $5, I can guarantee you 95, 98% of your customers will stick with you. And you're raising Your price by 15%, which by the way, that literally might double your profit. So I encourage you to raise the prices now. How do you tell them? How you tell them is you be matter of fact about it. Don't give them a bunch of reasons and options. And give us a call if you have any questions. And if you have concerns, let us. As a matter of fact, here's your prices date, effective this day, September 1st, October 1st. Whatever it is, your prices for per service are going to change to this. And that is how it's going to roll. And if they want to complain or cancel or whatever, that's fine. Guess what? The customers you're going to lose are probably the ones you want to get rid of anyways. The ones that aren't paying you fast enough. The ones that are causing you the most headache. I encourage you. Yes, it's the middle of season. Yes, it's out of the ordinary, but this is a perfect time to raise your prices if you're busy and you're closing lots of jobs, you. Hey, everyone. I'd like to invite you to Landscape Summit. It's a conference I have in January. It's gonna be the 13th, 14th and 15th of January, 2022. It's here locally, and I'm really looking forward to meeting other landscapers like yourself that want to grow their business.
