Should I lowball my lawn care prices a little?

Is it ever a good idea to lowball your lawn care prices? If so, when is it the best time to do it? Can you perhaps lowball just a little to give yourself a competitive edge over another local lawn care business? That is the question which was asked on the Gopher Lawn Care Business Forum and it brought out a great response that should really get you to think and consider your lawn care business plan.

One lawn care business owner wrote “I have a few lawn care company competitor in my area and the biggest is my neighbor. Then there are other little companies that go around unnoticed with there tiny little car door magnets. To gain more customers from my neighbor’s business I was thinking maybe I should low ball a little bit with my mowing prices. I won’t do it enough to put myself out of business but just enough to get an edge on the competition.

When it comes to my lawn care marketing, I try to accentuate my positives in my business cards and flyers. I advertise that I use no heavy machinery, free estimates, pay per mow, and no contracts. No heavy machinery is popular in my marketing because some people worry about the damage it can cause to their lawns. We advertise no contracts because my largest competitor will only mow with a signed annual lawn care contract and I know that many people don’t like to sign contracts for lawn care. Basically in my marketing, I try to be everything, my larger competitor is not.

My whole business plan is to low ball by about $5 bucks a lawn for this year. Then next year I’ll keep the prices with the customers I have but all the new bids I go on will have a bump in their prices. Depending how things go I might bump the prices  up on preexisting customers but I want to try to avoid that because then those customers will most likely drop me.

The one concern I have with this is if my larger competitor decides to knock their prices down too, I could then find myself in a bad position.”

A second lawn care business owner said “I think to some extent my own lawn care company could be seen as lower priced on certain jobs, the simple reason for this is I have the gear that can do it faster, cheaper, and better. I also have little overhead and the staff are well trained. But I am most certainly not low balling.

My view is that you have to be priced competitively. If your overhead cost is lower than your competitors then you can charge less. But the problem with going for cheaper customers is that they value cheapness more importantly than quality. With such customers you will never make much if any profit. You can try and undercut a competitor and get as many customers as possible now, but two or three years later, when you go ahead and raise your prices, you may find your overhead costs have increased and newer competitors have entered the area looking to charge less than you. There is always someone out there willing to charge less.

I feel there is a difference between pricing competitively and low balling. When you low ball, you basically are charging what ever it takes to get the job, regardless of your costs and your need to make a profit. There will always be those out there in business who don’t know what their costs are and can not make a realistically priced estimate for a lawn care job. These businesses will be destined for failure. If you don’t know what your costs are and you are bidding on jobs just to get them, you are destined for failure too.

I also would like to add that there is another big problem with being the low-baller. Once you have a lawn care customer established at a certain price, it becomes very very difficult to get more cash from them to do the same job in the future. You would be far better off to offer a special ‘first month deal’ or ‘first cut free’ but you must state your normal price right off the bat or you will have issues raising your rates when the time comes. If you want to argue that you are young with little overhead, you need to keep in mind that your overhead will increase as you purchase better, faster and newer equipment. To be able to afford such equipment, you need to save for it and to save for it you need to profit from your work.

To be able to find profits and price competitively, you need to find services that start up lawn care businesses can’t easily offer. One example of this is wood chipping. My company is a lot bigger than the local small guys and I have equipment that does an amazing job that they can not even rent. Sure they could go out and rent a smaller wood chipper at $240.00 a day but what takes them three days we could do in one. This gives us a competitive advantage and allows us to price competitively while still making a healthy profit. My competitors could go out and buy the a similar wood chipper that we use however they are $21,000+ each. Because of the high price, only big companies or towns/cities buy this grade, little companies simply can’t afford the monthly overhead for them.

On the landscaping side we utilize compact utility tractors that do a lot more than a skid steer, are faster and produce better results, yet we are the only landscaping company I have seen with them in the area. My competition simply doesn’t know what they can do and can’t afford them.

On excavation I have three excavators in various sizes. I can do the jobs the little lawn care companies can’t and we have gear that gets into tight spots the big excavators can’t. Due to the fact that the really big excavation companies are not interested in jobs under $10,000 most of our jobs are $2,500 to $8,000, and this is an excellent market to focus on, as we can barely keep up with demand for the services.

So in short if you are making a 30%+ bottom line profit, adjust your prices accordingly if needed. No one wins in a price war and big companies can crush a small company if they get you in their radar. This was a concern of mine when I first got started too. I no longer have worry about this because I have found a great niche with the different services I provide.”

Stop lowballing and learn what you should be charging with these lawn care estimators for Android.

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Lawn Care Business Books And Software.
How To Get Lawn Care Customers Vol. 2
The landscaping and lawn care business plan startup guide
A rebellious teenagers guide to starting a landscaping & lawn care business
The GopherHaul Lawn Care Business Show Episode Guide.
Stop Lowballing! A Lawn Care Business Owner\'s Guide To Success