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I judge each job each year on its own merits for domestic - As each year there can be changes in what needs doing (Ie pond added - more work) or more bedding wanted this year.
I also judge it directly on how my costs are going up - ie £50 extra a week on fuel, so I need to find £50 extra in my income to cover that.
As for commercial - I only have 2 contracts and both are on 2 year fixed price, and need to be re-tendered at the end of it, so If they were no longer profitable I would re-tender at a higher price. Any longer than 2 years and I would expect a clause with say RPI or CPI Inflation linked rise after each year.
3% a year yes minimum .
Most of my work is lettings, usually through letting agents or sometimes direct to the landlord.
When I started out, most of my contracts were "we're going to be letting the house for two years", or something like that, so I've always offered a fixed price over the term of the contract. If there's any suggestion it'll be more than two years, I include a price review every April after the first, fixed, two years. I then fix a price for the next two years.
The reason for choosing April is twofold. Firstly, you can easily argue it's the end of the tax year so it's when you have to review your prices. More importantly, the client will have been happy with your services so far (you hope), and April is really not the time to find a new gardener as anyone worth employing won't have free time then.
My problem has always been the size of increases. We have been hit with over-inflation rises on many significant costs over the last few years, with fuel, landfill, insurance costs etc. all rising way ahead of most industries. I've been going for nearer 10% this year in order to stand still, bearing in mind that's contracts that haven't increased for two years. I'm always wary of clients that argue over reasonable increases, as I plan to be doing this for the next 20 years at least and can't afford to discount, which is effectively what not increasing your prices means.
Working over a two-year cycle also helps me as a one-man-band. It's hard to increase costs exactly in line with a percentage, whether it's 3% increase on £80 per month, or 4% increase on £19 per hour for instance, it ends up messy numbers or you are seen to be rounding up your prices. Two years gives you the leeway to increase at a round figure without seeming so greedy, you can easily go from £18 per hour to £20 per hour, or from £130 to £140 per month, and it averages out more evenly over two years.
3% based on what?
In my industry GRP has has had a protectionist tax by the EU idiots of 48% imposed.
Imports cost have gone up between 20-30%
Rent increases of 40%
Fuel going up by...labour costs up...factor in deflation...the pound must be worth at least 15% less than it was 18 months ago.
...Our increases will be at least 20% this year and that's only just covering and probably making very little.
@3% you must be losing money, big time.