Raising prices at a landscaping company isn't just inevitable - it's necessary for survival. Yet most owners wait too long, undercharge for years, and then struggle with how to communicate increases without losing clients. The result is squeezed profit margins, overworked teams, and businesses that look busy on paper but can't afford to grow.

Here's the thing: your clients expect prices to increase over time. They see inflation at the grocery store, at the gas pump, and in their own businesses. What they don't expect is poor communication, surprise increases, or price hikes that aren't tied to any real value. The problem isn't raising prices - it's how and when most landscaping companies do it.

This guide covers the critical factors for increasing pricing successfully: recognizing when it's time, understanding how to calculate what you should charge, communicating changes effectively, and keeping clients satisfied through the transition.

Signs It's Time to Increase Your Prices

Knowing when to raise prices requires paying attention to specific indicators in your business rather than waiting for an arbitrary timeline.

Your costs have increased significantly.

When fuel, materials, landscaping equipment, and labor costs rise substantially, your pricing needs to adjust accordingly. Many landscaping companies absorb cost increases for too long, hoping things will stabilize. They rarely do. If your expenses have climbed but your prices haven't, your margins are shrinking whether you realize it or not.

You haven't raised prices in multiple years.

Even stable costs don't justify stagnant pricing. Inflation alone means that what you charged three years ago doesn't have the same purchasing power today. Landscaping companies that avoid price increases for extended periods find themselves significantly underpricing their services compared to market rates.

You're busier than ever but profit margins are shrinking.

High volume with low profitability is a warning sign, not a success metric. When your crews are booked solid but you're struggling to make payroll or invest in equipment, you're likely undercharging. Being busy at unprofitable rates just means you're working harder for less return.

You're turning down work or can't afford to hire.

If you have demand but lack the resources to meet it, pricing is often the culprit. The right pricing creates enough profit to reinvest in growth - more equipment, additional crew members, better systems. When you can't afford to scale despite having interested prospects, your prices aren't supporting your business model.

Your competitors are charging more for similar services.

Market research matters. If comparable landscaping companies in your area are charging notably more for the same scope of work, you're leaving money on the table. Price shopping happens, and being significantly cheaper than competitors often raises questions about quality rather than winning business.

Understanding the Difference Between Revenue and Profit

Revenue growth looks impressive on paper, but it doesn't tell the whole story about business health. A landscaping company can double revenue and still struggle financially if profit margins don't support operations.

Revenue is simply the total amount of money coming in from sales. Profit is what remains after covering all costs - direct job costs, overhead, equipment, insurance, administrative expenses, and everything else required to operate. Many landscaping business owners focus too heavily on top-line revenue numbers without understanding their true profitability on each job and across the business.

Profit margins reveal whether pricing actually supports sustainable growth. Healthy margins provide cushion for unexpected costs, allow reinvestment in equipment and people, and create stability during slower seasons. Thin margins mean any disruption - equipment failure, weather delays, client payment issues - can quickly create cash flow problems.

Hidden costs in landscaping businesses often go unaccounted for in pricing decisions:

• Equipment depreciation happens whether you track it or not - trucks, mowers, and machinery lose value and eventually need replacement

• Overhead expenses like facility costs, insurance, administrative salaries, and software subscriptions must be factored into job pricing

• Labor burden extends beyond hourly wages to include payroll taxes, workers' compensation, benefits, and training time

• Vehicle costs including fuel, maintenance, insurance, and registration fees add up across your fleet

• Downtime and inefficiencies such as drive time between jobs, weather delays, and equipment repairs reduce billable hours

When these costs aren't properly calculated into pricing, profit margins suffer even when direct job costs are covered.

Pricing for profit means building in the margin your business needs to thrive, not just survive. Cost recovery alone doesn't create growth capacity. Strategic pricing accounts for all costs plus the profit percentage required to invest in better equipment, attract quality employees, weather economic changes, and ultimately build business value.

How to Think About Your Pricing Strategy

Effective pricing requires a framework that reflects both your costs and the value clients receive.

Cost-plus pricing starts with knowing your true costs, then adding a profit margin on top. This approach ensures you're not losing money on jobs, but it requires accurate cost tracking. Every service you provide has labor costs, material costs, equipment costs, and overhead allocation. Understanding these numbers forms the foundation for any pricing strategy. Without knowing what services actually cost to deliver, you're guessing at profitability.

Value-based pricing considers what clients actually receive from your services beyond the direct deliverables. A well-maintained commercial property attracts more customers and tenants. A beautifully designed residential landscape increases property value and quality of life. Reliable service prevents headaches and allows clients to focus on other priorities. When landscaping companies understand the broader value they provide, they can price accordingly rather than competing solely on cost.

The cheapest price rarely wins in professional landscaping services. Clients shopping exclusively on price often become problematic customers - they question every charge, delay payments, and leave for competitors over small differences. Quality clients understand that expertise, reliability, and results cost more than bare-minimum service. Positioning your pricing in the middle to upper range of your market attracts clients who value quality over bargain rates.

Market positioning matters because your pricing signals your market position. Extremely low pricing suggests lower quality, inexperience, or corner-cutting. Premium pricing communicates expertise, quality materials, and reliable service. Your pricing should align with the reputation you want to build and the clients you want to attract. Landscaping companies that consistently undercharge struggle to shake the perception that they're the "cheap option" even when their quality improves.

Calculating What Your New Prices Should Be

Setting new prices requires methodical analysis of costs, desired margins, and market conditions.

Start by auditing your actual costs across all services.

Track labor hours and true hourly costs including burden. Document material expenses and equipment costs including fuel, maintenance, and depreciation. Calculate overhead expenses and determine how much overhead each service hour needs to cover. Many landscaping companies discover they've been significantly underestimating true costs when they complete this exercise.

Factor in the profit margin your business needs to grow and remain stable.

This percentage should account for equipment replacement reserves, working capital for cash flow, investment in training and systems, and owner compensation that reflects the value you bring to the business. Profit isn't what's left over after expenses - it should be a planned component of your pricing structure.

Account for anticipated cost increases over the next period.

If you're setting annual contract prices, consider what costs will likely do over the contract term. Labor markets, fuel prices, and material costs don't stay static. Building in expected increases prevents margin erosion mid-contract and reduces the need for frequent price adjustments.

Test new pricing on estimates before implementing company-wide changes.

Use higher rates on new client proposals while maintaining existing agreements temporarily. This allows you to gauge market acceptance and refine your approach before communicating changes to your entire client base. Track close rates and client feedback to ensure your new pricing remains competitive while improving profitability.

How to Tell Clients About Price Increases

Communication determines whether price increases strengthen or damage client relationships.

Timing matters significantly. For recurring service contracts, provide notice before renewal periods rather than mid-contract. Give clients adequate time to adjust budgets - typically 30 to 60 days for commercial accounts and 30 days for residential clients. Avoid announcing increases during peak busy season when you're less available to address concerns. Early winter for spring contracts or late summer for fall contracts often works well.

Frame the conversation around value, not just cost. Rather than apologizing for the increase, explain what allows you to maintain the quality and reliability they've experienced. Reference investments in equipment, training, or systems that improve service. Emphasize your commitment to their property and continued results. Clients accept price increases more readily when they understand the value they're receiving.

Decide between written communication and in-person discussions based on client relationships and increase size. Smaller, routine increases can be handled through well-written letters or emails. Larger increases or long-term client relationships often benefit from personal conversations. Commercial contracts typically warrant in-person meetings. Residential clients may prefer written notification with an opportunity to call with questions.

What you say matters as much as how you say it:

• Be direct and confident rather than apologetic

• Explain that you're adjusting pricing to reflect current costs and maintain service quality

• Provide specific details about what the new pricing includes

• Use language like "our pricing will adjust to..." or "to continue providing the quality you expect, our rates will be..."

• Avoid phrases like "we're sorry but we have to..." or "unfortunately we need to..." which suggest the increase isn't justified

Keeping Clients Happy During the Transition

Strategic approaches to price increases can maintain client relationships while improving profitability.

Grandfather periods for long-term clients show appreciation while easing transitions. Consider phasing increases over time for clients you've served for many years - perhaps implementing half the increase immediately and the remainder the following year. This respects the relationship while still moving toward profitable pricing. Some landscaping companies offer longer notice periods or early renewal options at current rates to valued clients.

Adding value instead of just adding cost makes increases easier to accept. When raising prices, consider what enhancements you can provide. More detailed property reports, faster response times, additional services included, or better communication systems all demonstrate continued investment in the relationship. Clients who see tangible improvements alongside price increases feel they're receiving fair value.

Handle objections professionally by listening first and responding thoughtfully. When clients express concerns about increases, acknowledge their perspective before explaining your reasoning. Ask questions about their specific concerns rather than immediately defending your pricing. Some objections reveal opportunities to adjust service scope rather than pricing. Others simply need reassurance about continued quality and reliability.

Determine which clients are worth keeping at old rates and which aren't. Long-term clients with good payment history, reasonable service expectations, and strong relationships might warrant special consideration. Problematic clients who already demand excessive time, delay payments, or question every invoice probably shouldn't receive preferential treatment. Price increases often provide natural opportunities to transition away from unprofitable client relationships that drain resources.

What to Do When Clients Push Back

Not every client will accept price increases, and that's part of the process.

Listen to concerns without immediately offering discounts.

When clients object to new pricing, resist the urge to cave immediately. Ask what specifically concerns them. Sometimes objections are more about surprise than the actual amount. Other times, clients need to understand the value equation better. Listening demonstrates respect and often diffuses initial resistance.

Know when to hold firm on pricing.

Profitable pricing isn't negotiable if you want a sustainable business. When you've calculated rates based on true costs plus reasonable profit, discounting undercuts your business health. It's appropriate to explain that your pricing reflects the quality and reliability you deliver. Clients who truly value your services will understand. Those who don't might not be the right fit anymore.

Recognize which clients might not be the right fit anymore.

Some clients built their budgets around artificially low pricing that never should have been offered. Others have expectations that don't align with profitable service delivery. Price increases reveal these mismatches. While losing clients feels uncomfortable, retaining unprofitable relationships prevents growth and limits your ability to serve better-fit clients.

The necessary mindset shift: Losing some clients to gain profitability is unavoidable

Landscaping companies that try to keep every client at any price end up with a mix of profitable and unprofitable work that averages out to barely sustainable. Strategic pricing means accepting that some clients will leave while attracting new clients who value quality and pay accordingly. The goal isn't maximum client count - it's a client base that supports business health and growth.

Implementing Price Increases Across Your Business

Successful implementation requires updating systems and preparing your team.

Key steps to implement new pricing effectively:

• Update your estimating process to reflect new pricing immediately - revise proposal templates, pricing sheets, and any standardized service packages

• Train your sales team on new pricing before clients see it so estimators and salespeople feel confident in current rates and can explain value effectively

• Adjust service agreements and contracts to reflect new pricing for renewals with clear pricing terms

• Coordinate with commercial clients well before renewal deadlines to address questions and finalize agreements

• Track which clients renew and which don't after price increases to inform future pricing decisions and reveal patterns

Ensure that everyone involved in sales and estimating has access to current rates and understands which prices apply to existing versus new clients. Outdated pricing documents cause confusion and lost profit.

Your sales team needs to feel confident in current rates and able to explain value effectively. Practice handling common objections and questions. Discuss which clients might receive transition considerations and which shouldn't. Teams that understand and believe in your pricing sell more effectively than those who feel uncomfortable with rates.

Monitor not just renewal rates but also profitability of retained clients to ensure you're keeping the right business. If renewal rates drop significantly in certain service categories or client types, examine whether pricing is truly competitive or if communication could improve. If retention remains strong, you have confirmation that your pricing reflects your value.

Moving Forward with Confidence

Pricing is an ongoing strategy, not a one-time decision. Market conditions change, costs fluctuate, and your business evolves. Regular pricing reviews - at least annually - ensure your rates continue to reflect your value and support business health. Landscaping companies that treat pricing as a static element struggle more than those who approach it strategically and adjust proactively.

The confidence that comes from charging what you're worth transforms how you operate. When pricing supports profitability, you can invest in better equipment, hire quality people, and provide the level of service that builds reputation and referrals. You stop chasing every lead and start attracting ideal clients who value expertise and reliability. Your business becomes more stable, more enjoyable to operate, and more valuable as an asset.

Successful landscaping companies don't apologize for profitable pricing. They understand that sustainable businesses require margins that support quality, growth, and stability. They communicate value effectively and make pricing decisions based on data rather than fear. When you know your costs, understand your value, and price accordingly, you build a business that thrives rather than just survives.

About The Grow Group

Led by Marty Grunder, The Grow Group is a premier coaching and education firm for landscape professionals. We provide innovative events like our annual GROW! Conference, peer groups, and real-world resources to help landscaping business owners and their teams succeed. Everything we teach is based on what we know works because we test it ourselves at our "living laboratory" - Grunder Landscaping Company, the business Marty began as a teenager and still leads today.

We don't just share theories and ideas. We share tactics we used at our own landscaping company this week that we know still work. Our team brings more than 95 years of combined field experience to everything we do. Whether you're trying to grow your landscaping business or get better control over it, we can help get you where you want to go.

Not sure where to start? Sign up for our weekly Great Idea to get free strategies, tips, and tactics for running your landscaping company delivered to your inbox each Sunday. Listen to episodes of The Grow Show podcast for practical advice you can implement right away. Or join us at our annual GROW! Conference to learn alongside hundreds of landscape professionals committed to building better businesses.