Guido
09-29-2001, 02:38 AM
Well this one has been argued from both ways, laughed at and praised, but I’ll do it anyway for the serious bidder. I’m a big “numbers” guy so like usual, I’ll get into this as deep as I can, but you need to use your discretion to see how far you need to take this.
For an estimate that will be high enough for you to make your desired profit or more, but low enough to get the bid, you should aim to be as accurate as possible. To do that you need to pinpoint your costs as best as you can (overhead and direct costs on that job). You also need to know how long certain tasks can be completed in man-hours. This is really pretty easy. I’ll go into how to complete some time trails here in a bit.
Now, I know you guys are saying, ha ha ha! I don’t need to measure or know my production times. I just look at the property from my truck and tell you how much I’ll do it for. Now, I know you get a feel for after a while, and your right, you should be able to walk a property and give a good estimate after checking it all out. BUT…what happens when you move up in your business and you have to send an employee out to start estimating or pricing mowing contracts? Can he eyeball the property and give an accurate enough estimate. Is this a skill you can easily teach someone? I don’t think so, and I for one would not risk it. But that’s just me. This is the main reason to start all your “systems” in your business while your small, because as you grow, it will be harder and harder to track things like this. If you start it now, as you grow you’ll only have to tweak it every now and then.
There are other good reasons to accurately measure and record data from properties you estimate. What happens when Mrs. Smith calls you up and wants added to your application program? You have to go measure the yard now and then work up your bid. If you had a sketch of the property and all the measurements you needed already in her file, you can work up the estimate at your desk in 5 minutes. Same goes with snow removal, mulching beds, etc, etc. This is especially helpful for commercial properties that you plan on bidding every year. So, Joe Schmoe’s lawn Co. won it this year, but you can save all your measurements and can have your bid ready to the owner on the drop of a dime when Joe Schmoe is no where to be found. I suggest keeping a file with all this info on every customer you go out to bid a job for. It’s not a lot of work, but you will soon build a huge mailing list and have the info to go out and bid any of those jobs again without all the trouble.
What should you be measuring and how? I suggest a measuring wheel no matter what others say about their pacing and how accurate it is. For one, I think you look much more professional walking the property off with a measuring wheel than pacing around like your hunting buried treasure. Besides that, I can bet its much more accurate than pacing it off. You can find measuring wheels for under $100 at most landscape supply houses. They can also be found at popular catalog stores and online at Grainger, Northern Tools, etc. Now, once you have the measuring wheel, you should go out to the property and make a little sketch. Practice on your own property on a lazy weekend. Sketch out the property line, the house, the flowerbeds, gardens, driveways and walks, and anything else you believe to be of importance. If you plan on ever doing snow removal there, mark out good places that are clear to stack snow. Mark any large obstructions, valve covers, etc in the paved area too. Now, make your measurements to fill in all those areas. You should know how many square feet of pavement, lawn, mulch, and decorative stone there is on this property. On the turf areas, you should know how many sq. ft. can be done with your rider, with you walk behind, and how many need to be done with the push mower. Make notes of what kind of ground cover is in the beds (i.e. brick dust, white rocks, dark mulch, etc). Now, go around and measure all the areas to be trimmed. I know your getting tired of measuring stuff by now, but trust me its worth it. Keep a good record of all this info, including all of the customer’s information.
So, you want to know how measuring is going to help you bid out this mowing contract? Easy! You have to conduct some time trials with your equipment. Hopefully you have the time and a place to do this. I’ll assume you do. Lets say you have 3 mowers: a 60” ZTR, a 48” walk behind, and a 22” push mower. Break up an area into 3 sections. Measure them out and note the square footage. Cut each area with a different mower and time yourself. A stopwatch might be a good idea. Say you did 200 Square feet with the ZTR in 4 minutes (just an example). That breaks down to 50 Sq Ft a minute. Of course it will vary some, but as long as you keep this in mind, it will help you out. Do the same with your other mowers, and keep notes of this in a binder. Do the same with the trimmers. Do it once along beds and foundations, and once along chain link fence. Get your averages and keep track of them all. And this doesn’t only pertain to mowing. You can track your time estimates for any task you perform on any job, and have it for next time to help you accurately bid a similar job.
Once you have all your time trials, sit down with your estimate again. You should be able to get pretty close to how long it will take you to mow X sq. ft. of grass, trim X linear feet of grass, and blow of X sq. ft. of paved area. Take that number and multiply it by your hourly rate, what you pay yourself or your helper, etc. Next add in the appropriate equipment costs for the time your running the machines like I showed you in my last little article. That will be your direct job cost. Now add in your indirect overhead cost for the time you spend at this job (don’t forget travel time) and whatever percentage profits you feel comfortable adding in. And don’t forget to take a little bit to pass onto Uncle Sam every quarter!!
Man Hour Cost
+
Direct job costs (cost to run your equipment)
+
Indirect overhead (i.e. phone bill, electric, marketing costs, etc)
+
% Profit
+
Applicable Taxes
Total Price. I suggest rounding up to the nearest $5. (i.e. $22 would be $25, $27 would be $30, etc, etc.)
This method should keep you on the right track if you add in some common sense with it. It will keep you from bidding too low and not making a profit, and at the same time keep you from bidding so high that you don’t get the job. Now, the common sense part I was talking about: If you have 10,000 sq. ft. to mow at once place and it takes X minutes to mow, don’t think for a minute it will take you the same to mow 10,000 sq. ft. at another place that’s basically the side of a mountain!! You still have to pay very close attention to site conditions and adjust your price accordingly. The same goes for what type of customer. Get what your market will bear. If you figure it up this way, and you can do the whole lawn for $20 and walk away happy with a good profit but you know the average minimum in your area is $30 and the “old landscaper” was getting $35, push for $30 at least. That $10 is all profit and you can get it no problem! This way of estimating is to help you figure out how to cover your butt first off, and make the profit you want to. Many times, the market will be much higher, so shoot for it. This is basically just giving you your bottom line, rock bottom price that you will still profit from.
Hope this helps!
For an estimate that will be high enough for you to make your desired profit or more, but low enough to get the bid, you should aim to be as accurate as possible. To do that you need to pinpoint your costs as best as you can (overhead and direct costs on that job). You also need to know how long certain tasks can be completed in man-hours. This is really pretty easy. I’ll go into how to complete some time trails here in a bit.
Now, I know you guys are saying, ha ha ha! I don’t need to measure or know my production times. I just look at the property from my truck and tell you how much I’ll do it for. Now, I know you get a feel for after a while, and your right, you should be able to walk a property and give a good estimate after checking it all out. BUT…what happens when you move up in your business and you have to send an employee out to start estimating or pricing mowing contracts? Can he eyeball the property and give an accurate enough estimate. Is this a skill you can easily teach someone? I don’t think so, and I for one would not risk it. But that’s just me. This is the main reason to start all your “systems” in your business while your small, because as you grow, it will be harder and harder to track things like this. If you start it now, as you grow you’ll only have to tweak it every now and then.
There are other good reasons to accurately measure and record data from properties you estimate. What happens when Mrs. Smith calls you up and wants added to your application program? You have to go measure the yard now and then work up your bid. If you had a sketch of the property and all the measurements you needed already in her file, you can work up the estimate at your desk in 5 minutes. Same goes with snow removal, mulching beds, etc, etc. This is especially helpful for commercial properties that you plan on bidding every year. So, Joe Schmoe’s lawn Co. won it this year, but you can save all your measurements and can have your bid ready to the owner on the drop of a dime when Joe Schmoe is no where to be found. I suggest keeping a file with all this info on every customer you go out to bid a job for. It’s not a lot of work, but you will soon build a huge mailing list and have the info to go out and bid any of those jobs again without all the trouble.
What should you be measuring and how? I suggest a measuring wheel no matter what others say about their pacing and how accurate it is. For one, I think you look much more professional walking the property off with a measuring wheel than pacing around like your hunting buried treasure. Besides that, I can bet its much more accurate than pacing it off. You can find measuring wheels for under $100 at most landscape supply houses. They can also be found at popular catalog stores and online at Grainger, Northern Tools, etc. Now, once you have the measuring wheel, you should go out to the property and make a little sketch. Practice on your own property on a lazy weekend. Sketch out the property line, the house, the flowerbeds, gardens, driveways and walks, and anything else you believe to be of importance. If you plan on ever doing snow removal there, mark out good places that are clear to stack snow. Mark any large obstructions, valve covers, etc in the paved area too. Now, make your measurements to fill in all those areas. You should know how many square feet of pavement, lawn, mulch, and decorative stone there is on this property. On the turf areas, you should know how many sq. ft. can be done with your rider, with you walk behind, and how many need to be done with the push mower. Make notes of what kind of ground cover is in the beds (i.e. brick dust, white rocks, dark mulch, etc). Now, go around and measure all the areas to be trimmed. I know your getting tired of measuring stuff by now, but trust me its worth it. Keep a good record of all this info, including all of the customer’s information.
So, you want to know how measuring is going to help you bid out this mowing contract? Easy! You have to conduct some time trials with your equipment. Hopefully you have the time and a place to do this. I’ll assume you do. Lets say you have 3 mowers: a 60” ZTR, a 48” walk behind, and a 22” push mower. Break up an area into 3 sections. Measure them out and note the square footage. Cut each area with a different mower and time yourself. A stopwatch might be a good idea. Say you did 200 Square feet with the ZTR in 4 minutes (just an example). That breaks down to 50 Sq Ft a minute. Of course it will vary some, but as long as you keep this in mind, it will help you out. Do the same with your other mowers, and keep notes of this in a binder. Do the same with the trimmers. Do it once along beds and foundations, and once along chain link fence. Get your averages and keep track of them all. And this doesn’t only pertain to mowing. You can track your time estimates for any task you perform on any job, and have it for next time to help you accurately bid a similar job.
Once you have all your time trials, sit down with your estimate again. You should be able to get pretty close to how long it will take you to mow X sq. ft. of grass, trim X linear feet of grass, and blow of X sq. ft. of paved area. Take that number and multiply it by your hourly rate, what you pay yourself or your helper, etc. Next add in the appropriate equipment costs for the time your running the machines like I showed you in my last little article. That will be your direct job cost. Now add in your indirect overhead cost for the time you spend at this job (don’t forget travel time) and whatever percentage profits you feel comfortable adding in. And don’t forget to take a little bit to pass onto Uncle Sam every quarter!!
Man Hour Cost
+
Direct job costs (cost to run your equipment)
+
Indirect overhead (i.e. phone bill, electric, marketing costs, etc)
+
% Profit
+
Applicable Taxes
Total Price. I suggest rounding up to the nearest $5. (i.e. $22 would be $25, $27 would be $30, etc, etc.)
This method should keep you on the right track if you add in some common sense with it. It will keep you from bidding too low and not making a profit, and at the same time keep you from bidding so high that you don’t get the job. Now, the common sense part I was talking about: If you have 10,000 sq. ft. to mow at once place and it takes X minutes to mow, don’t think for a minute it will take you the same to mow 10,000 sq. ft. at another place that’s basically the side of a mountain!! You still have to pay very close attention to site conditions and adjust your price accordingly. The same goes for what type of customer. Get what your market will bear. If you figure it up this way, and you can do the whole lawn for $20 and walk away happy with a good profit but you know the average minimum in your area is $30 and the “old landscaper” was getting $35, push for $30 at least. That $10 is all profit and you can get it no problem! This way of estimating is to help you figure out how to cover your butt first off, and make the profit you want to. Many times, the market will be much higher, so shoot for it. This is basically just giving you your bottom line, rock bottom price that you will still profit from.
Hope this helps!