There is no doubt that sooner or later you are going to run into a job that you underbid. It happens to everyone. Jobs are underbid for many reasons, the biggest being a lack of understanding what it will take to complete the job. You may also underbid a job because you are trying to please the potential customer with your price or you may feel you really need the job. Regardless of why the job is underbid, as soon as you realize it, you need to rectify the problem. That is what one entrepreneur was dealing with when he wrote on the Gopher Lawn Care Business Forum, looking for advice on how to solve his pricing problem.
One lawn care business owner wrote “I’ve been running my company for a month now and I am just realizing that I under bid some of my mowing accounts. At first, I didn’t understand that I needed to account for more time and charge more money for lawns with obstructions and now it’s costing me big as far as time goes! I’m losing money now per cut. I also know an increase with one of my customers will run him off. I was thinking of maybe trying to increase a little bit next season when losing an account won’t hurt so bad. Although I am still not sure what to do. What’s you experience with this?”
A second business owner said “are you really gonna lose money all year before asking for an increase? If you lose the account now, it will actually save you money! I would ask for more money now and not just break even money.
If your not making a profit, why are you cutting grass? That is the biggest killer mistake most new lawn care business owners run into. Pride will break you. You made a mistake. Now get your bigboy pants on and go make it right.”
A third added “if I underbid a job and it happens, I inform the client of my error, sometimes I will eat it, other times I explain what the cost will be and inform them they are under no obligation, I simply made a mistake. I can’t recall a client ever getting upset.”
A fourth shared “I would try to keep that client, especially since he knows a few people that live close by and can help you expand your route.
I would do this after a cut and not before. If you want to keep him, otherwise I would do it before the next cut if you may drop him pending outcome.
When you talk to him just explain that he has some extra obstacles that took you more time to mow around. If he says something like no it’s not worth more money, and you want to keep him, I would simply ask him if he could refer a few friends or neighbors to help you profit more while still at the same location. If those referrals work out, you could then continue the price for that season. If they don’t you could end your service with him if he was unwilling to pay a little more.
But you just won’t know for sure which way to go until you open a dialogue with the customer and ask him either to pay more or if you could get some referrals.”
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