We are reviewing our charging for next year as from Jan.
Majority of our work is commercial and we attain high realistic rates but we do have a small number of long standing high end private clients, we will not take any new domestic work on due to the difficulty in realising decent rates. But that still leaves us with the existing private work with most at pricing levels that are not really at realistic levels taking into account expertise,service and kit we use.
It's made more difficult as we are vat registered so are mindful that this is an additional cost to the client that they see no benefit from. As mentioned clients are long standing with friendships developing which makes the task more awkward so don't want to say " well that's the price get someone else if you don't like it" Then we have the issue of the prices quoted " On what do gardeners charge" websites with £15 to £30 hr seem to be the answer, we only do price work but customers will always compare , we are at a minimum of the equivalent of £50 hr plus vat and need to get our private work upto this level.
What are everyones thoughts?
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That's going to be difficult. Most people with plenty of money know the difference between an asset and a liability and will see the garden becoming a liability.
I trim hedges for a customer, retired, nice house, nice new cars on the driveway, nice garden, nice swimming pool, nice bloke but he insists on going round behind me clearing up. This has happened since the first visit so it's not if he was unhappy with the tidy up. He obviously knows he is going to be paying me the same rate to tidy up as he is for me to trim the hedges off the ladder and wants to save himself a bit of money and do it himself.
People with the big houses and big gardens are more reluctant to part with their money than the less well off.
These are just my findings and thoughts. There may be others on here who disagree and Im interested to hear their thoughts.
Once you start earning well from big jobs/contracts it can be difficult to work harder for less working for domestic customers but I believe you know this Peter and also know that customers are unlikely to pay that rate.
My take on it Peter is to tell your private clients, sorry but we are going Commercial Only from 2026. Some might still ask you to keep them on, in which case they will need to pay your full rate as if it was a commercial job. And the ones you lose some up and coming whipper snapper will fill the gap at a lower rate. I've done a big-ish job this week that someone else quoted under half what I did. I told the client to snap the other guy's hand off. Ridiculously low price that they would have regretted within minutes of starting, if doing the job to anywhere near my standard. But the customer went with my quote. As he knows that in life, the cheapest is almost never the best
It does seem extreme to charge domestic customers vat for a ( regular ) gardening service compared to a one off where it's to be expected .
Last year our chimney sweep of many years advised us that unfortunately he will be charging vat from now on which gave us the opportunity to opt out but even with vat he is still more competitive than other chimney sweeps in the area but even if he was more expensive we wouldn't look elsewhere he is so reliable and efficient .
However we expect to pay vat for a one off annual service so you do right Peter to consider the negative impact adding vat to your regular domestic customers invoices has on their finances on top of a price increase so you have to give them the option to pay and stay or opt out as those extra charges will soon add up over a year and you probably suspect some can't afford it .
The other legal option is to tweak your maintenance schedule and reduce the frequency of your visits considerably although their garden may always look like a work in progress at least it's an option if money is an issue but then what happens next year when you put your prices up again ?
End of season good time to increase prices, I would write to existing private clients saying prices next year will increase by 10%, to reflect current trading conditions. You will lose some but others will stay . Do this every year till you reach the rate you are happy with. Nobody gets upset just your client mix changes over time.
As they are long standing clients, and as you say, these do develop in friendships, I think in person talk is best rather than sending a letter or email saying prices are going up as that then says that you value that relationship.And you just have to say that you have kept prices down as best you could, but costs have risen and while commercial prices are easy to raise and recover, you are struggling on the domestic side of the business to keep it viable and your accountant is advising you to concentrate on the commercial side so just say then that you dont want to let people down, but your prices are going to go up on the accountants advice; your commerical rate is X, and then give some sort of discount on that which is viable for your business and might keep the client on side. And say that you have provide a top service, top equipment etc but your costs/overheads to some degree make you non competitive in the domestic market so you could understand if your client wanted to look elsewhere. but you wanted to talk in person... then play it by ear.