30,000 too high?

[lawnboy82]

i went to check up on a townhouse bid the other day. yes i know that this is late. the contact guy told me that 12 guys have bid on the place now and they are gonna narrow it down to 3 or 4 soon and i will know next week. however the guy told me that my bid is 30,000 over the highest bid. it really pissed me off that people are going so cheap.
here is what i bid.
cut the lawn every week: cut/ collect clippings/ trim/ edge gardens/ blow: 10 hours 4 guys at 150 per hour. 1500 per cut 42,000 for the year
spring cleanup: 10 guys 2 days @25 per man hour for 8 guys 35 per hour for 2. edge gardens that have never been done / light thatching with walkers / clean out gardens 3,500
fert: 10 apps at 2x a lawn cutting each 30,000
snow: 50 driveways/ 50 walkways/ skid steer for season/ salt sand roads and some drives/ plow 2 roads. 35,000 for season.
comes to total of 125,000 per season. they say that i am 30,000 too high. i had 3 guys there and they all told me that my numbers are right. so where the hell are these guys gettin 90 from? that is crazy. i mean the guy told me that there is a big difference in the quality. but quality doesnt mean that i will get the job. so this is strange. any feedback would be nice. thanx

[thelawnguy]

"fert: 10 apps at 2x a lawn cutting each 30,000"

This statement sent up a red flag. Arbitrarily charging whatever x's another procedure is sure to catch you when the numbers start to get close.

You proposed charging 2x cutting, trimming, blowing, etc. without taking any consideration as to material needed or time to spread-which is usually less than just mowing alone.

Re-figure the fert bid. You may find it to be high (or maybe find you are too low lol).

Your labor charges appear to be high for mowing. 4 guys @ 40 per hour seems steep figuring at least 3 of the guys probably dont make more than 8 an hour.

For discussions sake lets assume all 4 guys make 8 per, x4 markup is 32 cost per man x 4 is 128 vs 150. Thats 220 per day extra times 28 cuts is over 6 grand there.

I think if you re-examine my two points with an eye towards wanting a profitable contract you will find lots of fat which could be pared to get you back in the ballpark and still make money.

[John from OH]

What is the square footage of the lawn and the areas to be plowed. What equipment are you using? We used to do a 54 unit condo complex, 19 acres less the pavement, units, and beds. We were typically knocking it out in less than 25 production hours per cut. Without any indicator of the size of the property, its a roll of the dice. I would also look at your production methods. With 12 bids, your $30,000 high, everyone else is under $90,000, its highly unlikely all 11 are scabs. Its possible that some of the contractors are a better fit for this particular project or have more efficient production methods and lower overhead. Remember, a large company can spread their overhead across more employees/ production hours, and be significantly lower. An example, a $20,000 per year office manager at a company producing 10,000 billable hours cost $2 per hour. Put the same office manager in a company billing 50,000 hours and the cost is only $.40 per hour. This is a very simplified example, but when fixed costs are spread over more billable hours, financial and competitive efficiencies are created.

[lawnboy82]

ok... the guys who i know get 75 dollars per hour for 2 guys to cut grass. so if i figure out that 4 guys are cutting for 10 hours. that is 2x75x10=1,500 now also the people who i know get 2x a lawn cutting for fert. 10 fert apps, so 2x10x1500=30,000. i mean i know i am gettin good money for this stuff, however the other companies i know as fact are not doing a lot of stuff that i am doing. so there is a big quality issue. and also my guys are on the books. one guy gets 14 per hour, and the others get 10. then i have to chip into workmans comp and social security and all that other good garbage. so i dont think that i am that high.

[lawnboy82]

oh yeah, i forgot to mention that i had some friends over to look at the place who are landscape contractors. they did the numbers and i am right in there with them. i think that i am offering a lot of services that the others are not. or the guy is full of you know what. cause i can go through there with 1 guy cutting on a 61" tiger and 1 guy trim for 1 day maybe day and a half. now that is very nice that i am gonna pay my guys on average about 11 dollars an hour. however you have to figure in gas @ 1.54 a gallon. trimmer line, costs of machines to pay for them, insurance @ 2700 a year. cell phones @145 a month. no rental costs. lots and lots of stuff. how you guys are able to charge so little is beyond me. i barely make any money off grass. i make my money off the trees. fertilization is getting to the point where there are so many regs that it wont be worth it soon. then i am gonna pay about 4,000 a season for the skid steer. another 3 grandt for transportation costs for the machine. because there is no room to keep the machine there. then i will pay about 60-80 a yard for sand/salt. figure use up 30 yards of sand a year. they dont want a blizzard clause in the contract. lots of bull shot. and they only keep guys 1 year. maybe if they would spend the extra money on somebody who does good work then they wouldnt be firing people every year. this pisses me off. it really does.

[slingshot]

why would you bid on a job and do more than the other guys are going to do. the commercial sites we do and bid on you get a bid sheet and everybody bids on the same exact thing .it doesent matter if you are going to do more because it isnt in the spec sheets. if you keep doing it that way you will never get any accounts.

[Barkleymut]

10 apps in NY? You only have a growing season from April - Oct. I can't see how you could talk a customer into any more than 6 apps. Are you going to apply fungicides? If so that is a big expense that others are probably eliminating. And the reason they fire a guy every year is because they can. If they find someone $30K less than you can you blame them for going with that guy? Then that guy sees he's not making enough so he starts to do crappy work then they hire a new guy next year because the last guy did crappy work.

[thelawnguy]

". i think that i am offering a lot of services that the others are not. "

You should only include in the bid the services requested to ensure an even bidding field. You can always upsell later.

Its great you can pay your guys 10-14 per hour but it will be tough to compete against a co with immigrant labor of questionable legality working for half those wages.

fair? Probably not but thats the reality.

[John from OH]

Lawnboy, You have asked for advice and everyone has given you their views on your bid. You have been in business one year, the rest of us our probably have a bit more experience in bidding. I just an account I've had for 29 years. (The lady went into a rest home and the property was sold). Just because you think you can command high prices, doesn't mean you will sell at those prices. We've all been there. Listen to what is said. You have yet to give us an square footage to attempt to justify your bid. If 11 other bidders are $30,000 less than you, someone is off in their bid, and its not all 11 of them. This tells me you probably haven't measured the property. I see where you say 2 people can mow this in 1 to 1 1/2 days. Thats a big variable. Measuring and tracking your production is the only way to stay consistent in your bidding. 16 to 24 hours for mowing at $1500 a crack is a bit high at $62.50 to $93.75 per hour without knowing what equipment your running. We all pay the expenses that you do and possibly more. I'd love to have your insurance payment. I also doubt that you have 10 employees after being in business 1 year. Take your time growing your company, there is so much more to the green industry than being the best at cutting the grass and other technical skills. Running a green industry business is just that. You run a BUSINESS that happens to provide mowing and etc. as services. Learn from the knowledge at this site, there are no short cuts in setting up systems that allow your company to measure jobs, track hours, and recoup your costs and make the profit that allows you to sustain a business. I'm not trying to knock you, I recognize myself in your posts. I'm trying to get you to think about and learn how to project your costs so that you can get these bids.

[lawnboy82]

10 apps:
1- WIN treatment
1- liming
1- fall feeding
2- insect treatments
1- disease control
1- broadleaf weed killer
1- weed n' feed
1- turf builder
1- crabgrass pre-m
that is what i put down for fert.
it will take about a pallet or two per app. depending on what i apply. 2 guys will take (1) 10 hour day, maybe 8. per app. so if i do 10 apps then that is like 2400 in labor. maybe more. i gotta post all properties. it is a lot of red tape with fertilization. then what else? i am gonna spend like 15,000 on the actual fertilizer. so right there between just putting it down and the fertilizer is about 20,000 then i have other costs. i am not making all that much really. maybe 10,000. but if some lady's doggets sick then i get sued. then what else? um... i dont know what you guys pay your workers, but around here most guys wont go out for less than 100 a day. if they are day laborers. 10 dollars an hour. maybe buy them lunch every now and again. my guy gets 14 dollars an hour and is not legal just w/c though. the big guys around here i think pay 10 an hour. 1 real big guy starts people off at 8 dollars an hour plus 401K / health / retirement / etc. so you guys must find some real hungry guys out there cause i would love to find some guys for 6 - 8 dollars an hour that are not gonna need a lot of training. that is what my guys get and most others get. that cheap i dont know how you are doing it. maybe my overhead is too high? but i dont know.

[cantoo]

Did someone say square footage??

[thelawnguy]

lawnboy

You are missing the point.

Do you have any idea how many square feet of turf you have to cover? "it will take about a pallet or two per app. depending on what i apply. 2 guys will take (1) 10 hour day, maybe 8" means you dont.

Go buy a measuring wheel and measure this property this weekend.

Your list of apps shows many combo apps.

"my guy gets 14 dollars an hour and is not legal just w/c though." w/c will mean jack if this guy gets hurt and isnt on the books, unless your in-laws are also your insurance agent.

You seem bright enough to ask questions just be bright enough to read the answers and at least consider the advice given or next time we see your face will be with a frown on it at a bankrupcy auction as your ZTR sells for 3 cents on the dollar.

[HOMER]

W/C is based on hours logged for the year isn't it? How then is the guy not legal?

Might have been a good post after all!

I had a guy call me the other day and said he would work for min wage. I think some folks on here try to make their employees rich vs. themselves. It'll be a cold day in Miami before I pay somebody that much.

Find cheaper help and reduce you bid. If I paid somebody that much I would be on the lake and he would be updating me on an hourly basis.

[Esby]

Anyword one the square footage yet? One of your buddies that you have been in contact has to have a measuring wheel. Lets just remember, as the others have said, bid on what is to be bid on according to the Bid Specifications given by the property manager. With this large of a property there has to be a precise description of what is to be done and how often. What equipment are you running, this has an effect on the bid price. Find out the sqaure footage and I'll work you a bid on what I think that it should cost for everything. But lets remember, we all need to know what THEY want from their maintenance service provider. They being the person(s) in charge of offering the bidding.

[mdb landscaping]

what a heated discussion. lower the bid

[charrod]

Well, I'm new to the industry, but I can offer two cents on one comment here because I've lived in both places. The cost of labor in Westchester County, NY is one of the highest in the nation and the cost of labor in the "Heart of Dixie" is one of the lowest - legal or illegal!

[Fantasy Lawns]

Bill "nailed it" .....
BID the Amount of Work They Desire ........Follow the Bid Sheet ....You Will NOT be able to Compete when Other's are Bidding according to the Service they are ASKING for ....Even if You feel Your Quality of Work will be Better .....that's Great .....But believe Me it won't win Contracts ....unless they Ask for the "Disney Look" ...

I'm NOT saying to cut corners in Quality & if the work they desire is below your Standards .....than walk
Later down the road ....you will develop a working relationship with the PM ...and then perhaps you may suggest better quality service at a price ....but if you want to get in the Door .... you have followed the Bid Outline to the letter ....

[kris]

one other thing that I find curious is the comment about the time spent to edge the beds ,"that have never been done"
It is obvious to me that this place does not pay for a quaility job .Bid on exactly what is called for...measure (if you don't now..start(just my opinion)) start keeping track of all your production times...it helps alot in future bidding...you have places that you do now...you know how long they take you...go measure them up...rate the property from fast to slow(fast are the wide open flat ,easy ones)...how many meters per hour are you doing?
This will give you a starting point...
I have never had much luck with the condos myself...they almost always go for lowest bidder...Keep your head up and onward to the next project...good luck in 2001