landscaping business increasing prices

Landscaping Business 2022 Price Increase Strategy

Do you have a price increase strategy for 2022 in your landscaping business? To start, we recommend to have accurate accounting done in your business on a consistent basis, so you can base your price increase off of your actual numbers.

The ideal approach is to increase pricing on a consistent basis and build it into the initial contract. Customers will appreciate the transparency. A small increase year over year is easier to execute, rather than a large price increase every couple of years. You will always be at risk of losing some customers that don’t want to pay the increased price, but in the long-term increased pricing will allow you to operate your business at a profit. The customers that leave are usually the same customers that don’t appreciate the services and the value that you have brought to them anyway! Companies that don’t increase pricing on a regular basis are losing out on profits, and I see this everyday with my conversations with landscaping business owners. Don’t be reactive and increase pricing when it’s too late, stay ahead of this and increase your pricing on a consistent basis.  

How much should I increase my pricing by? This depends on many factors. In today’s economy we are seeing an increase in the cost of doing business. It’s getting more and more expensive to retain employees, purchase materials and fuel, etc. There are two main factors that will help in determining the price increase figure. First, when setting up your budget you will need to determine the profit that you would like to build in. A business shooting for 12% profit may not need to increase pricing as much as a business that wants to make 18% profit. Second, the expenses that your business incurs will have an enormous effect on determining the increased pricing figure. Know what your financial goals are, and reverse engineer a price increase that helps you get there!

Before increasing price, its important to first know exactly why you are increasing pricing. Low profits may mean that your clients are not paying enough, but this is only one reason. The real problem may be with inefficiencies and low productivity within your company. You may be able to solve most of the problems leading to low profits through improvements and implementing different strategies within your business, instead of solely relying on increasing your pricing. Get creative, the answer sometimes comes with trying new approaches.

I want to be “nice” to my customers, and don’t want to increase their pricing. They are my friend, I don’t want to increase their pricing. These are two common comments I get when I suggest for my clients to increase their pricing. Remember, you are running a business, stay firm to your mission to ensure future success and profitability.

When increasing price try to test it out on a small percent of your client base. For example, send an email/letter to 10% of your clients first. Get an idea of how it goes, hear any objections, and use it to prepare you when implementing the price increase to all your clients. This approach will help to limit risk, especially when implementing the price increase with some of your largest clients.   

Increasing your pricing is a great strategy to ensure your business stays profitable, but be sure not to increase your pricing above market. Don’t get too comfortable, you need to be aware of what your competitors are charging. Charging customers a fair price and providing great service is part of long term business success.

You can try to use the price increase as an opportunity to bundle your services, or switch to a monthly subscription model. In this approach you can focus the attention away from the price increase, and more toward the added value that you will provide.  

If you have questions about increasing the pricing in your landscaping business, or you need accurate accounting to determine this figure, then feel free to contact us today.


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