[groundskeeper2]

I was wandering what some other primary lawn maintanence companies are doing with the high gas prices. Gas prices are over $3.00 in Illinois and I didn't know if other companies were increasing their prices, focusing on other services, trading in equipment for more fuel efficient equipment, etc. to deal with these outrageous prices!!

[EpicInterlock]

If I were you, I would just add onto the overall prices, but the gas prices are supposed to go back down (yeah right) after they fix the refinery problems.
Instead of focusing on the fuel efficiencies of your machines, worry about the pollution emitted from them. Pretty soon both countries (US and Canada) are going to really crack down on them. In Canada, we narrowly missed banning all backpack gas powered leaf blowers. Phew.
Another thing to be aware of in Ontario is the minimum wage is going to go up to $10 cdn an hour. I have bigger worries than the gas prices right now, lol.
Good luck

[Matt Kulp]

Originally posted by groundskeeper2
I was wandering what some other primary lawn maintanence companies are doing with the high gas prices. Gas prices are over $3.00 in Illinois and I didn't know if other companies were increasing their prices, focusing on other services, trading in equipment for more fuel efficient equipment, etc. to deal with these outrageous prices!!

Since I can't get away with a surcharge on my current accounts, we are making everyone else pay for the gas hike. We have taken the total amount of fuel used last year and have come up will a estimated number for this year based on the higher prices. We then take out all fuel used to date and figure the true additional cost to us for the increase in fuel cost. We then figure how many billable hours for the entire company we have left to sell to meet our budget numbers and then divi up the extra cost to all those available hours. I know it is a little confusing, but it has worked well in the past for us. You have to have landscape crews to sell the additional money per hour, due to mowing is usually booked for the year.

If I had all mowing, you would have to use a fuel surcharge as a percentage or if you know your operating numbers you could figure out how much each account is costing you extra and bill accordingly.

[chesie]

I have been thinking about this....thankfully we don't do lawn maintenance so we can adjust pricing as needed.

My aggregate supplier gives us a fuel surcharge sheet every year that is a spread sheet.

Gas Price Surcharge
2-2:15 gallon (haha) .25 cent surcharge
2.15-.2.30 .35 cent surcharge
and on and on


Lawn guys should really think about supplying something like this to their customers with their contract renewals....then they know what to expect and how much. Just keep it simple so that you are not having to watch gas prices everyday to adjust everyday.

[Matt Kulp]

Chesie,
I like your idea, but for a delivery service it is much easier because it is cut and dry as far as the mileage. For a lawn company, I don't see a fair way to asses the charge without documenting an actual usage of fuel per account and then charging a surcharge for the actual fuel used. Due to each account being different and the varying equipment being used, this would be a daunting task. I am not against it, but I don't see a fair way to both parties to do it.

I have been trying to figure this out for the past 4 years with our lawn division, instead of spreading the cost around to the landscape customers.

[Mac]

Matt, I agree that its complicated but allocating the costs to a division that is entirely unrelated to the charges isnt quite fair either... If I were to do a fuel surcharge, I would do it strickly as a percentage of sales. You should know your budgeted hourly fuel cost. Once you excede this cost, I would add that amount to each account strickly as a percentage of sales.

In my budget, I used $3.50 per gallong when recalculating contract prices for this year... if it goes over that its simply coming from my NET and if it stays under, it goes to my NET.

If I were to do a fuel surcharge as sugested above, once I went above $3.50, I would take the surplus and divide it by my hourly rate... that is the amount I would increase each account, no matter how large or small it is. EDIT, on reading my post, this isnt exactly the mathematical procedure to follow but it is the gyst.

[groundskeeper2]

Thanks for you help!! Since I first posted this thread the gas prices have raised to $3.35 to 3.45 a gallon in Southern Illinois. Is this about the same everywhere else?? Also for those who suggested a surcharge for the rising gas prices. Do you think clients would be more accepting of just telling them that due to high gas prices that their lawn mowing will go up an additional $5.00 per mowing b/c I didn't know if some clients may not be as accepting of paying say $20.75 per mowing as this may get somewhat confusing depending on the gas prices?? I'm just curious as to what others may think.

[Forge]

Gas here in my neck of Washington is about 3.40-3.50 a gallon. When it approached these prices months earlier than it was forecasted to, I contacted all my maintenance customers and informed them that due to the unforeseen gas prices I would be adding a fuel surcharge of 2% to their bills. No one had any issues with it of my 30 or so accounts except one, and he more or less had political complaints, not monetary.

[Pelican]

It shouldn't be too hard to calculate hourly fuel consumption, then multiply by the time each job takes. Figure what your surcharge must be and apply it to the equation. If you come out on the positive side a little, bully for you!

[site]

I have an idea- how about the mower manufacturers create a shortage of blades? Then everyone can blame high mowing prices on that. Just like the oil companies blame the high fuel prices on a lack of refining capability. I doubt they are rushing to solve that problem.

[groundwork]

We bought a diesel and started it on biodiesel. We've had the truck for five months now and the price of bio has continued to go down while the price of diesel has gone up. This way we are saving money on gas AND feel good about the emissions of the truck. The only problem with it is the truck always smells like popcorn and it makes us hungry all the time!

[GLAN]

what I was surprised about is that gas prices have recently fallen.

[Mac]

Glan, that says to me their pricing is all a game... It went up to almost 350 for memorial/labor? day holiday... within 3 weeks, it was down 80 cents! I was happy for the decrease but it sure is rough to know you were overpaying just for a silly holiday.

[cutntrim]

Gas is $3.95/gallon ($1.04/litre) here in Ontario this morning. That said, my consumption costs are only up 3% or a couple hundred dollars compared to this time last year so I haven't done anything billing-wise.

Not to mention that we're in the midst of a drought right now, coupled with a watering ban, so the lawns are like burnt toast. That means we're not on-site as much or doing as much at each account. Raising prices by adding a surcharge would not go over too well right now, even if I was contemplating it. I think it's always better to do so before the season starts, and not mid-way through.

[The Sprinkler Dude]

San Diego! $4.07 for gas this morning. WOW!