Now that the 2016 landscape season is winding down, or at least slowing down, this is a good time to reevaluate pricing. Denne Goldstein, editor of Irrigation and Green Industry Magazine, wrote an excellent piece on this in the latest issue.
Since the recession most company owners had to learn more professional business management practices. Hard times have a way of making people better business operators! Pricing is a major area that received focus and many already have been pushing increases through their systems.
Goldstein points out that those in the landscape trades seem to have a deep fear around raising their prices. A fear that most other business have apparently overcome. The folks he talks with say they are afraid of losing customers or not winning jobs. Goldstein says we have to get over our timid thoughts because low pricing is holding our industry back.
Cost keep going up. Taxes are higher, payroll is higher, all the expenses of running a business are higher, (don’t even get me started on healthcare!) yet street pricing doesn’t seem to increase. Some contractors reacted by squeezing suppliers and holding down payroll and benefits for their staff. Goldstein believes those paths have come to an end.
Suppliers don’t have any more to give up and finding and keeping good staff means you got to make it worth their while. I know a lot of contractors who have raised pricing and intend to raise it again. They will tell you they did not lose business they value, just the ones who tended to be pains anyway. From comments I’ve heard, few customers even noticed the increases.
Owning and operating a business is hard risky work. Why go through it if you can’t receive a decent return for the investment of your money, time, and risk? There is a point where expense or cost control can’t be cut any deeper and remain in business. That’s when the top line has to be there. In other words, enough sales must happen at a price that produces your desired profit.
Denne wraps up by saying, “If clients are shopping for low price, that’s what they’ll get, along with the lowest performance. You get what you pay for.”
