Should your lawn care business add on a fuel surcharge?

Fuel costs are going through the roof for lawn care business owners and some are trying to figure out what to do to cover those costs. This was a great post made in the Gopher Lawn Care Forum that I had to share with you.

One forum member posted “fuel is part of operating expenses, and with fuel price going up, I need to apply a surcharge. If i apply a 1% fee to clients bill, based on their monthly bill, the 1% will cover my fuel increase. Just need to know what everyone else is doing, and how do you handle it on your tax’s? It’s not income?”

Keith shared with us this great insight “To handle your tax question first: A surcharge is simply a temporary increase in the amount billed to the customer. It is probably still considered income and it is offset on your taxes by your fuel costs. It doesn’t matter if lawn mower fuel is $1.00/gallon or $4.00/gallon, it is still expensed against your income and the surcharge is included in your income calculations. As far as fuel for your vehicle, you are allowed to take a milage expense on your taxes which has been adjusted upward in recent years. This is my opinion, so, check with your CPA.

I wonder if you will be well served with a 1% surcharge. On a $30 lawn, 1% = $0.30. If you have 100 weekly customers, you will make an additional $30 per week. If you lose even one weekly customer out of 100, you will be losing $30/week in revenue…practically a complete offset.

Is it really worth all the hassle for 30 cents per customer?

What about a different approach? On your next billing cycle, send a note explaining your costs for fuel. Instead of raising your prices, explain that you want to offer additional services to them to help you offset fuel costs.

If you don’t already offer edging, included it as an additional service. For a few extra minutes work you can add $10 to each bill. I bet your customers will be thrilled to help you this way instead of being annoyed at an “additional fuel charge” they are required to pay.

Edging is just one of dozens of extra services. What other services can you offer?.”

Brandon: “that is a great idea. I have been tossing around the fuel issue for a while, and at a loss as for what to do. I will think about this idea of yours, and see if I can make it work.”

If you would like to join this discussion on lawn care business fuel surcharge visit the Gopher Lawn Care Forum here.

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