Just the facts Harwood says he has clients who have had to raise prices 30 percent from where they were a year ago. Instead of steadily increasing prices, he says the industry has worked to become more efficient over the years, but that’s not enough in the short term as the cost of business continues to rise. “We’ve become better and faster, but it hasn’t meant that prices have gone up. We’ve been able to hold prices and remain profitable as an industry,” he says. Harwood has advised his clients on several approaches to the difficult proposition of increasing prices. Both center around a simple principle: Be very matter-of-fact about it. “Everyone is expecting price increases, and anyone who is not is playing with you. If you look at gas prices, they have doubled in the last two years, the cost of groceries, take-
hundreds of contracts to increase pricing, and now it looks like it might happen again,” he says. Like Harwood, Gembel is well aware customers are also facing a squeeze with the increase in the price of gas and goods and how difficult that can make the prospect of asking them to pay more. “We’re just trying to be mindful about it. We don’t want to scare people into saying, ‘Do I want to work maintenance and fertilizer services out of my budget?’” Gembel says. Atlas Outdoor has continued to try to find ways to be more efficient, Gembel says. Strategies include studying route density, tightening its service area, and increasing daily revenue goals. Gembel hopes those practices will help keep his business on its upward trajectory throughout the ongoing squeeze.
out food, lumber, clothing, and a lot of things,” he says. Sam Gembel, owner of Atlas Outdoor in Flint, Michigan, believes businesses who haven’t increased prices in a long time or those who pride themselves on being “value-driven” contractors might face the hardest climb in increasing prices. “The companies that have built their brands on being more value-driven contractors, I feel like those are the ones experiencing the toughest transition. Because people are just not used to them coming and saying, “I need more of an increase,” says Gembel. Gembel’s company rewrote contracts and considered a fuel surcharge on invoices. With the uncertainty surrounding gas prices, he foresees another potential price increase coming soon. “At first, we weren’t thinking too deeply about doing a surcharge, whereas now it’s like we went and rewrote
The author is Associate Editor of Landscape Management magazine.
Issue 3 / equip / 20
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