I've Underbid!

[corycc]

I screwed up pretty bad. I under bid two next door residential accounts. I estimated 28 on each when it should have been around 32 or 33 for each. No surprise, I got the job. What do I do? There is no contract and I have just started. Can I tell them I screwed up? I know it is just five bucks but I could be somewhere else making that five bucks then losing it there! What do I do? Has this ever happened to you? What did you do?

[AVRECON]

1st mistake you made is the odd numbers. If I think a lawn is worth 30 I shoot 35 at them. Never bid at 37.50 crap, round off to the nearest 5 bucks, and usually upward of 5.

[gogetter]

Is there a chance for more work from these accounts, like mulching, trimming, etc.?
If so, try to make it up there. Since they already have you, they are likely to use you for that stuff even if you're a little high rather then trying to find someone else to do that stuff for them.

[corycc]

Those few bucks can make a difference. By bidding 32 or 33 I am making enough off the job, and if I had rounded off to 35, I probably wouldn't have got the job, the next guy would have. I am not desperate for jobs but I don't need to rip people off either.

No there is no chance for other work beside what I am already doing. They are ratty lawns and I would like to raise the price or drop them. Can I do this ethically?

[Edited by corycc on 04-28-2001 at 12:14 AM]

[David Gretzmier]

I love odd numbers myself. rounding only makes it easier for us. when I bid chemical service, it is .6 cents a square foot no matter what. Rounding would many times make me lose a bid. I go up on lawns $ 2.50 a year up to 100 bucks or so and go up 3-5 after that per year. people rarely fire over these small increases, yet I have heard from lot of folks on this forum who routinely get fired ove a 5 buck price increse.

Getting to the point- try to upsell mulch, leaves, annuals, aerating( you can rent)fertilizing, dethatching, seeding, pruning, even putting in some 12 volt lights. once people trust you they typically will hire you to do more. we do mowing ,beds, irrigation and chemical weed control on a much smaller customer base than if we did mowing only. dave

[Currier]

"I am not desperate for jobs but I don't need to rip people off either."

Lose that line of thinking or this underbidding stuff will nail you. I think it helps to remember that you shouldn't get every bid. There is no trick to getting every bid...just do it dirt cheap! The trick is getting the right accounts for the right amount and holding strong to the idea of making a profit. Why do you think that charging a price that allows you to make money without killing yourself is ripping people off? Sounds like you like to punish yourself. Been there, Done that. Now I make a profit.

[Fantasy Lawns]

That's not a real serious screw-up .....the 2 jobs are together that's $56 instead of $64-66 ....BUT you must be saving 15 min per event just being together .... if no contract cut em' for a month or two ..... let em' see the service than get a contract at a rate you can live with ....good luck ;->

[gogetter]

Originally posted by corycc
They are ratty lawns and I would like to raise the price or drop them. Can I do this ethically?


The only other thing I can suggest is if you haven't already cut the lawn, then cut it once and go to them and explain that it took you longer then you had expected. Tell them that you're price was an "estimate". Explain that if they'd like you to continue, you would need to raise the price a few bucks. If they choose not to continue using your services, then get paid for the cut, apologize for the mix up, thank them for thier time, and move on.
It seems to me to be a better way then just dropping them before you've even started.

[leeslawncare]

well guys , from what i have found is the round an odd # are for the birds...If wally mart an the Home Cheapo can do I can too..(an i do better service than they do LOL)

[kris]

I cannot imagine dropping two customers for the sake of 5 dollars. (mind you that's 5 USA dollars .lol )If they are "ratty lawns" then there must be a chance for extra bucks to improve down the road. I could be wrong and this is only my humble opinion... we do not do any small res.. mostly commercial so this is not really my field but I think I could make up that 5 somehow and if not this year then maybe years down the road....be friendly, hang in there and see the year out. good luck in 2001

[KD'sLawns]

In my opinion, I would cut them for a few times and see how they go. If you look at from a time and money stand point, I think you will be alright. Time, the lawns are relatively close to yours. Money, the way that gas prices are increasing. Sure you could get two more jobs that would pay 5 bucks more each but by the time you spend the money on gas driving to them and home you are at least losing the five bucks and the time. You could tell them after you mow once that due to the increase in gasoline prices, you are increasing all of your accounts to offset the difference.

[Michael Fronczak]

I underbid last year on a small commercial, alot worse than you did. I stuck it out for the year, this year I corrected the pricing, they dropped me, it happens. Everyone makes mistakes once in a while, somtimes their in your favor, do you complain?, I don't. Somtimes the mistakes mean you make $ 100/man hr, other times.....well. Every contractor makes mistakes, deal with it for season, then correct it.

[Roger]

I don't hear anybody talking about those they overbid, that is, they got the job, and it took less time than they expected. I guess the concern only goes one way....?

I am a small operator, but still have some on the plus side, and others on the negative side. Sometimes I get real concerned about the range of $/hr I'm seeing. Yes, I've raised a few this year, but still have some that should be raised more. It would be great to take them all and reprice them so that they were consistent. Or, maybe they shouldn't be consistent...?

From the lack of comments made here, apparently most of you feel that your customers are consistently priced. Is that right? If not, how did you get them priced consistently?

When I started out a few years ago, I was horrible at making estimates. Now, I'm much better, but still have some of those "oldies" hanging around.

[kris]

roger... same situation here...I make mistakes from time to time and when I do I have to live with it...like you said , not much being said about the overpriced ones... I have some of those ...so I guess it all evens out...I am getting better though.

[HOMER]

The once overpriced will eventually fall into the even category or the losing category. If you have some good ones then your blessed, you have time but with prices and lowballers time is running out. The underpriced ones are the ones I took when I started but don't have the heart to raise the price, most are older folks...........don't ya just love charity!

[turfquip]

Corycc,

If they are ratty lawns, that suggests the customer MAY not be as concerned about receiving a quality job as you are in delivering one.

Look for ways to bust them out quick. Cut corners on trimming, etc. In other words, force profitability by adapting the quality of your work to the price.

Ed

[jeffyr]

If you cut corners your reputation could bear the brunt of it. I wouldn't want to be known as the guy that doesn't do a good job.

As others said, explain to them that your initial estimate was too low and it takes more time than expected. If they don't want to spend the extra, either offer to meet them in the middle this year, or wish them luck with a cheaper service. I try to explain that there is a right way and a wrong way--cutting corners is the wrong way in my opinion.

jeffyr

[thelawnguy]

turfquip Ed hit the nail square.

If you guys want to let your egos rule the roost then you will have to content yourselves with whining about lowballers when in reality the other LCO is just giving the customer what they want (and pay for).

Would you mulch edge build retaining walls regrade 12 acres of lawn etc for the price of a cut just because you want it to "look good?" Might seem like an exaggeration but you see where Im heading here...

[corycc]

By the condition of their lawn I can tell that these people don't care a whole lot and probably aren't going to even notice what a good job I am or am not doing. They just want it cut so they don't get reported. I don't like cutting corners but I don't think they will really care. It will still look great from their point of veiw whithout me spending so much time on all hte details. It does worry me a bit because this yard is next to another one that is done by some other LCO that is doing a good job but for $$. Also this yard was previously cut by another LCO but the owner's dropped them real fast when I told them I would do it for what was probably half! LOL

On most of my yards I would love to be compared to other LCO's but hopefully not this one.

[jjfehr]

corycc
On one hand these folks could be good for you if you can cut corners to make a profit (like a lowballer). On the other hand, these ratty lawns could haunt you in the long run, especially if you cut corners! Imagine when your competition that cuts the neighbors takes a picture of your rig out front, and you cutting the ratty lawn, and he next door with his rig cutting the nicer lawn! How is that going to project your image when he pulls out that photo to someone that you have both bid on? My suggestion would be to tell these people that your reputation is on the line, if they don't let you do some "repair" to the lawn, that you will drop them! I think that they will realize what you are talking about and either want the lawn taken care of properly, or fire you out of embarrasment! If you could get them to pay you to improve their lawn, this could be a great tool for you. You could take before and afters of the job that you have done, and market the more profitable add-ons to other ratty lawns in need of your service!
Bottom line is this:
If they don't let you properly maintain there property, cut them loose, no account, especialy an underbid one, is worth you reputation!!!!!!! Possibly sell this account to a scrub, to ensure that he never gets his business off the ground!