Fuel prices

The entire world collapses without fossil fuels. Plain an simple. countries function on trucks, planes, and cars for everything.I appreciate the need and love for electric and solar but we have 150-200 years of fossil fuels left in this world and until the alternative energy “solutions” catch up we must keep the world functioning. Fly a 767 on windmill energy?
 
Dan Cobb said:
I know it's a complete simplification, but if everyone tries to pass their increased costs for fuel on to someone else, how do we gain anything besides inflation?
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Personally I think it's part of a "plan" - in old days way back, a 60K mortgage was oh, ahh - then twenty years of inflation later - nothing much. Same with government debt - monetary policy inflates your way outa the pile of dodo and after twenty years or so, it's not so much anymore ('cept we keep adding to it).
 
ATH said:
So...you raise your rates and stay profitable or don't and fall behind. The other contract climbers have the same choice.

I'd let your customers know (I assume that is other tree care companies?) that you need to start raising rates. My guess is that they need to do the same. If I contracted with you and you said: "Any job's you've already bid planning for me to help, we'll keep the same rate. Please bid new jobs with the new rate in mind." I'd be good with that.

I actually had a client (who owns an equipment store) tell me "I hope you are raising your rates - everybody else is".
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I hear what you are saying but again that seems a little reductionist. There are other factors at play that need to be considered from a business standpoint. Is the extra $150 a month I’m paying at the pumps worth the risk of possibly alienating a client of mine that makes up 20-35% of my yearly revenue? Seems like a risk that needs to be carefully considered to me. And also I like good round numbers when I ask for a raise. If I’m going to hike my rates it’s going to be by 50$ or 100$. Asking for an extra $15 in my opinion looks tacky. My profit margin isn’t so small that this price jump is suddenly going to make me not profitable, it’s just an annoying paper cut. Cheers
 
So I raised my rates in January. Minimal increase. $5.00 an hour. My insurance renewed and went up more than expected. I changed parking locations for the truck and that added and additional $1000 per year. Just my insurance alone ate $2.03 of that $5 and hour increase. Now fuel. I'm torn between a fuel surcharge and a rate increase. If the customer can deduct that fuel surcharge by me on taxes, or not have it count towards the Workmans comp on what they pay me, then its the way to go.
 
Steve Connally said:
So I raised my rates in January. Minimal increase. $5.00 an hour. My insurance renewed and went up more than expected. I changed parking locations for the truck and that added and additional $1000 per year. Just my insurance alone ate $2.03 of that $5 and hour increase. Now fuel. I'm torn between a fuel surcharge and a rate increase. If the customer can deduct that fuel surcharge by me on taxes, or not have it count towards the Workmans comp on what they pay me, then its the way to go.
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Everything has went up in price so tree work is exempt?
I don’t think so it is was it is
The worst thing for us is we’re booked until end of August so we can’t go back and charge more but we raised our rates also
 
Dan Cobb said:
I guess all the electric car owners are high fiving themselves now.

A major hurricane can hit and do massive damage to the electrical grid. Utilities will spare no expense in restoring power as quickly as possible. And your power bill is still the same. When a hurricane is days away from maybe possibly affecting oil production facilities, fuel prices will jump before you can get to the gas station. Gotta love it. NOT.
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Not in ca, pg&e is horrible.

I'm probably going to raise my rates for chipping when that's all I do I was charging 125 per hour with a 1 hour minimum which if there are 2 people chipping is a pretty low profit margin and running the chipper and getting it there with the truck are the two biggest fuel users. I have a high enough margin on everything else I probably won't have to raise it very much.
 
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Colin1234567 said:
I hear what you are saying but again that seems a little reductionist. There are other factors at play that need to be considered from a business standpoint. Is the extra $150 a month I’m paying at the pumps worth the risk of possibly alienating a client of mine that makes up 20-35% of my yearly revenue? Seems like a risk that needs to be carefully considered to me. And also I like good round numbers when I ask for a raise. If I’m going to hike my rates it’s going to be by 50$ or 100$. Asking for an extra $15 in my opinion looks tacky. My profit margin isn’t so small that this price jump is suddenly going to make me not profitable, it’s just an annoying paper cut. Cheers
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Talk to that big client...a simple: "Hey, are you upping what you bid to cover cost increases?" opens the door for discussion without sounding demanding. If they say "no", then decide if you want to take the hot...or maybe you only spend 15-20% of your time there and more time with other clients who are more accommodating going forward. If he says "yes", ask for an extra $5 per hour. $55 is "as round" as $50. $52.73 is just odd. Even though you may not need the full $5 now, costs will go up in a year. Take it now and don't ask again next year.
 
Steve Connally said:
So I raised my rates in January. Minimal increase. $5.00 an hour. My insurance renewed and went up more than expected. I changed parking locations for the truck and that added and additional $1000 per year. Just my insurance alone ate $2.03 of that $5 and hour increase. Now fuel. I'm torn between a fuel surcharge and a rate increase. If the customer can deduct that fuel surcharge by me on taxes, or not have it count towards the Workmans comp on what they pay me, then its the way to go.
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You are a subcontractor and they pay workers comp on you?
 
RyanCafferky said:
Things are getting painful around these parts. Drove by a normally reasonable place and the price was $5.63 per gallon for diesel. At some point I am going to raise my rates to compensate for it! What is everyone else doing to compensate for higher fuel costs?
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I’m more and more stoked on my last major choice of equipment. The C10 Spider Crane might use 4 gallons in an 8 hour day. Having a big crane on a big truck with a big engine would definitely be a different story.
 
@Steve Connally , when you laid out your fuel use in a different thread, I was amazed. There’s no doubt you have a level of efficiency I couldn’t hope to match, but dang. As long as you can pass off the added expense, you’re fine, and still gonna be crushin work!
 
owScott said:
Yeah happy I bought an EV for running around. I plan on only running my diesel trucks to generate revenue. Really plan my schedule and job locations carefully. My bigger concern is the big economic picture and people willing to spend money on tree work. As long as people are willing to spend money on trees I think I can absorb the fuel costs. Part of my business plan is to stay smallish, 3-4 employees and not over extended on equipmnet. This way I can, if I have too, work for less and still remain profitable. I have 3 categories of pricing, what I want to make, what I can do it for and what is my bottom line to survive. There is a large margin between category 1 and 3. Was given good advise years ago, in business always have a line of retreat.
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That’s what I do. Except number 2 is the only real option. Haha
 
VenasNursery said:
Everything has went up in price so tree work is exempt?
I don’t think so it is was it is
The worst thing for us is we’re booked until end of August so we can’t go back and charge more but we raised our rates also
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Thats a serious backlog holy smokes. Cheers to that.
 
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