Getting your pricing right is key to the success of your landscape gardening business. If your pricing is too low, you could be running at a loss. If your books aren’t up to date, and you don’t have the required financial information to see that the business is running at a loss, then by the time you realise, it might be too late! Costs have increased dramatically over the past couple of years and it’s important that your pricing takes this into account.
Running a landscape gardening business isn’t a hobby! Landscape gardening business owners need to ensure that their prices cover not only materials, labour, and overheads, but their own salary too. Many don’t realise that they are not charging enough to cover their own wages, which can lead to trouble at year end. But if the ‘books’ are updated monthly, then they can ensure that there is enough profit to pay themselves a dividend or drawings. If there is not, they have two choices; increase prices or cut costs.
So, how do you increase prices? It can be done in a couple of different ways; either you could increase by a certain percentage across the board, or you could increase individual customers by a monetary value to bring them in line with other customers. You could run the numbers on both scenarios to help you decide which approach will work best for your business. Prices need to be adjusted on a regular basis to stay in line with inflation. Getting into the habit of increasing prices annually will help to avoid scaring customers with a big hike because you have neglected to increase your fees for a couple of years. If you do this at the same time every year, it will help you to get in the habit of increasing prices and let you plan for the process.
How to inform your customers of a price increase? You can do this in person if you have the opportunity and the time, over the phone or by email. If you are struggling for time, an email to your customers explaining what the price increase is and from when it will take effect will be the quickest option. If you have chosen to increase by a percentage across the board then one email template can be used for all your customers.
The need to increase your customers’ prices is an inevitable part of running a landscape gardening business if you want the business to be successful. The key is to be confident, stand by your price increases and know your worth.