I haven't raised my prices in four years. Will I lose my regulars?

The question

An illustrative letter.

The answer

My dear, you have kept your prices steady out of loyalty to the people who kept you busy. That is a kind instinct, and it is part of why they stay. But a business that cannot cover its costs cannot keep serving anyone. Raising your price is not a betrayal of your regulars. It is how you make sure you are still there for them next spring.

Why does keeping the same price cost me money?

Every year your price stays the same, the gas, the blades, the repairs and the insurance take a little more of it. What is left for you shrinks, even though the work has not changed. Four years of that adds up. You are mowing the same lawns as before and keeping less for each one.

Nobody sends you a bill for this. It happens slowly, which is why it is so easy to miss and so hard to feel urgent about. But it is as real as any bill you pay.

How do I work out what each job really costs?

Take last season's numbers from your receipts and bank statements: fuel, trimmer line and blades, repairs, insurance, your phone, and what you paid for any equipment. Spread the yearly costs across all the jobs you did. Then add your time for each yard, including the drive there and back.

Say you charge $45 for a regular yard. Fuel and line come to $5. Wear on the mower and trimmer, set aside toward replacing them one day, is another $4. Your share of insurance and other yearly costs is $6. That leaves $30 for about an hour of your work, before tax. Now ask whether $30 an hour, before tax, is what you meant to earn. Often, once people see it written down, the answer is clear.

How much should my new price be?

Start from the cost per job and the hourly pay you want, and work up to the price that gives you both. Then look at what others in your area charge for similar yards. You do not need to be the cheapest. Regulars stay for reliability, for the edging done right and for the person who shows up when promised.

After four years, one raise may need to be larger than you would like. That is fine. You can explain it simply, and from then on, small yearly raises keep you from ever being this far behind again.

While you are at it, look at the jobs that cost you most. The yard across town, the corner lot with the steep bank, the customer who wants the clippings bagged every week: each takes more time, fuel or wear than an ordinary yard. A higher price for those, or a small charge for the extras, is fair, and it often matters more than the main raise.

How do I tell my regulars?

Plainly, kindly and in good time. Give at least a month's notice, and if you can, set the new price for the start of a season, when people expect changes. Send each customer a short note, by text or on paper with their next bill:

• Thank them for their loyalty, in a line.
• Give the new price and the date it starts.
• Say why in one sentence: fuel, equipment and insurance all cost more than they did four years ago, and this is your first change in that time.
• Keep the door open: if they have questions, they can call you.

Do not apologize at length. A long apology suggests you are doing something wrong. You are not. You are running a business.

What if some customers leave?

A few may. Most will not. The arithmetic is kinder than the fear. Say you mow 30 yards a week at $45. That is $1,350 a week. Raise the price to $52 and lose two customers, and the 28 who stay bring in $1,456. You earn more, and you have two hours a week back for a better-paying job, or for rest.

The customers most likely to leave over a fair raise are usually the ones who were already asking for more for less. The ones who value your work tend to stay, and some will tell you they wondered when you would raise it.

How do I keep this from happening again?

Choose one week every year, perhaps at the end of the season, to look at your costs and your prices together. Put it in your calendar. Small raises each year are easier for you to ask for and easier for customers to accept than one big jump every few years.

Charge new customers your current price from their first visit. And when you quote a new contract, you can say up front that prices are reviewed once a year, so a change never comes as a surprise.

Your work has value. Pricing it properly is not greed. It is respect, for your customers and for yourself.

One thing to do this week

Add up last season's fuel, repairs, insurance and equipment costs, and work out what one regular yard really costs you.