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Adjusting your prices for 2013

David Besse

New member
I stole the title from another thread on here... But I was curious to see if some of you were adjusting for 2013.
 

Chris Lambrinides

New member
We usually adjust everything up yearly.. I think this year though our commercial stuff is going to go unchanged.. Just our residential will go up.
 

Ron Musgraves

Past President
David I only do commercial, I would imagine if I did residential it would fluctuate as my demand increased prices would raise.

In the commercial market as we go over our targeted projections prices increase.

All commercial clients have a specific price code. We use this based on qualifying and also payment history.

Unlike most pressure washers I can negotiate prices anytime in a 30 day period. Some are lock in a year two year or even five year contract.

Starting at budget time we tell our clients if they have new property to schedule for 2013 we will honor there current rate for signing early. If they wait there might be a increased price for scheduling closer to start date. This usually gets them to commit sooner than later. Does that always mean we will charge them more?

Answer: it's not a black and white choice, again variables from all directions.

A. What's our demand
B. is this a large client or one with potential.
C. Is this and old customer with great payment history and sound future.

There are others I think you get the answer. Feel free to call me anytime


Text me anytime for question 480-522-5227
 

David Besse

New member
And Ron, thank you for your input! You target some key points! I will have to come back later and explain.. I need to work out some of this stuff on paper.
 

George Clarke

UAMCC Board of Directors
I strategically increased some of my minimums and bundled some services to increase average ticket prices. So basically we are going to more $500 jobs and less $150 jobs. This coupled with increase of efficiency through better chemical mixing and new equipment purchases. The Uamcc, PWRA, people like Ron, Doug, AC, Michael Kriesle and more have been an inspiration and wealth of knowledge. It helps to find out from people who know this stuff. I am more excited about this coming New Year than years before.
 

Soap Warehouse

UAMCC Associate Member
We have just been doing the cost figures from this year and will probably be doing a 2-3% across the board increase for 2013. We have not had a price change since the crazy increases in ingredient prices in 08-09. So the small crawl upwards here and there have finally caught up to need an all over adjustment. Will be making the finalized announcement first of next week so people can order before the end of the year at today's prices.
 

Ron Musgraves

Past President
We have just been doing the cost figures from this year and will probably be doing a 2-3% across the board increase for 2013. We have not had a price change since the crazy increases in ingredient prices in 08-09. So the small crawl upwards here and there have finally caught up to need an all over adjustment. Will be making the finalized announcement first of next week so people can order before the end of the year at today's prices.
Good to know Linda


Text me anytime for question 480-522-5227
 

Guy Blackmon

New member
Our prices will go unchanged for 2013 unless fuel prices go above $4 a gal.

3 years ago we saw the need (value) in making our operations more streamlined and efficient. This has meant a tremendous boost to our net earnings thus holding our prices at a constant level.
 

Tony Shelton

Environmental Consultant / Past Director
I'm in a totally different field of pressure washing than most of you guys, so this might seem strange but I'm going to lower pricing on some of our services this coming year.

I look back on some of our pricing from 2004 and wonder how we even got to where we are at those rates. Our pricing had to be higher at first to cover unknown factors at the time and to cover the extra time it took to service the accounts as we streamlined our operation.

We've always priced with an hourly minimum in mind and each year we have exceeded our goals.

Now we have systems and methods of operation in place that took years to perfect and our pricing is roughly half what it was in 2004 with still more room to squeeze out the desired profitability in case of another economic catastrophe.

A big part of being successful in any field is the ability to bring something affordable to the public/customer while still maintaining a sustainable profit margin.

No matter how many contracts one has, he is not "successful" if his marketing plan involves pricing so low that it destroys the market by offering unrealistically low prices that are not sustainable. This usually happens one of two ways, either Jim Bob, who works for beer money, offers unrealistically low pricing because he is ignorant of the costs of doing business, or Joe National offers national pricing at unsustainable rates to push out the local contractors. Either way they are both only "successful" in their own minds and within a few years they will inevitably go bankrupt or simply use their con to sell their failing businesses to unsuspecting newbies with stars in their eyes.

On the other hand, one is not "successful" if his plan involves artificially high prices like cleaning garages at rates that are 4-6 times higher than others and are sold by strong arming the customers with fear tactics and government bullying.

Both extremes are signs of a poor business acumen.

Henry Ford is a good example of an honest and successful businessman. He knew that if he could just streamline his operation he could make his cars affordable for everyone while still making an honest buck. And he made a lot more than a buck!

Most of the guys here at the UAMCC and within our industry already know this. That is why they are on the web looking to learn ways to be more effective and speedy with their cleaning. But there are still those on the extremes who will artificially move our market up and down based on poor pricing practices and plain laziness. We need to evaluate our own markets and make sure we aren't contributing to artificial highs and lows out of ignorance of the market.

It's probably time for most of you guys to raise prices in general power washing. The companies that are your customers who are still in business have made it through the 2008-2011 depression and have been holding on to money with at tight fist. Now is probably a great time to evaluate costs and raise prices.

But in my market we've been able to streamline enough to lower prices on some of our services and that's what I plan to do this coming year. Nothing dramatic, but just enough to make sure we are still within a certain range of our hourly goal but not enough to damage the market.

Good luck guys and keep on streamlining!!!!
 

Mike Woolley

UAMCC Associate Member
I was waiting to see if anyone was going to lower pricing or not! I'm glad Tony has a reason (and good one) for lowering pricing as he understands his business very well. I've spoken to other business owners in our area that are planning on decreasing their rates just so they can keep busy as things are supposedly going to go off some cliff..... The thing to be aware of is the fact that the customer will not notice or appreciate the decrease in rates as much as they will notice the increase.

Once in a while our power washing/sweeping business gets a little slow and I had an employee tell me we should lower our rates and get everything busy working. I know for a fact if you work for cheap once you've now shown the customer that it can be done and it's very difficult to charge your normal rates again. Good way to go broke fast!

For the most part our increase/decrease comes in the form of our fuel surcharge while our hourly rates have remained the same for the last couple years.
 

David Besse

New member
Great post Tony!! The reason I started the thread was to get everyone's input from the different field of our industry (commercial, resident, windows, coil cleaning, etc..!)
 
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AC Lockyer

UAMCC Associate Member
We have found a near .25 spread between shingle roof cleaning prices in Florida .08 / sq. ft. and in States up north .20 to .33 / sq. ft. So consider your region. Something that will help is find out what someone in another state is charging and ask them as well what a gallon of gas is going for as well as a gallon of milk. These two items demonstrate quickly regional differences in cost of living and inflation. Then factor in if you have much competition to see what the market will bear.

AC
 

Guy Blackmon

New member
I've spoken to other business owners in our area that are planning on decreasing their rates just so they can keep busy as things are supposedly going to go off some cliff..... The thing to be aware of is the fact that the customer will not notice or appreciate the decrease in rates as much as they will notice the increase.

Once in a while our power washing/sweeping business gets a little slow and I had an employee tell me we should lower our rates and get everything busy working. I know for a fact if you work for cheap once you've now shown the customer that it can be done and it's very difficult to charge your normal rates again. Good way to go broke fast!

For the most part our increase/decrease comes in the form of our fuel surcharge while our hourly rates have remained the same for the last couple years.
Mike be careful in the advice you take, and way more careful from the advice of employees. Whether it's an increase or decrease of prices the decision to do either should be based on what's best for your/the Company.....period.

Employees want you to lower prices so it will keep money in their pocket and don't give a rip if the Company makes a profit. Other Companies may be able to lower profits because their profit margin is already higher and they can afford to "Take A Hit" and lower prices without affecting their bottom line that much.

Remember, once you lower prices it's hard to go back and justify an increase to the customer later, unless there is very good reason.

Go back and review your business systems (The Way You Run Your Business) from office to equipment. Are there better more efficient ways to run your business saving time & money? Can this savings be passed to the customer?

Whatever you do make sure it's in the best interest of your business.
 
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