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View Full Version : Annual markup to a HOA contract......


Green Pastures
06-16-2008, 10:13 PM
I'm bidding a Home Owners Association grounds maintenance package.

I have the numbers down, I know the square footage, I know what my costs are, I know what my first year's bid is going to be......

However the "Board" wants the contract written so that I give them my price for the next three years NOW.

I have no idea what gas and diesel prices are going to be at the end of the month let alone in 09', 10' and 11'.

Sure the easy solution is just to clause in a "fuel surcharge" if fuel should increase past a certain percentage however the "board" also does not want the contract written that way. They want a price for each year in a contract firmly quoted.

My first years price is going to be $2500 a month for 12 consecutive months. How much would you mark up for the second year? And the third?

*trucewhiteflag*

bohiaa
06-16-2008, 10:16 PM
There's Just NO way to perdect the future.....

and I suppose they want a " way out " if there is a drout

fool32696
06-16-2008, 10:18 PM
I'd account for about 4% inflation and guess figure on paying $6 a gallon next year and $8 a gallon the year after that to be safe.

2stroke
06-16-2008, 10:51 PM
I HAVE HEARD 7% was the # to go by.

topsites
06-16-2008, 11:00 PM
I don't get Hoa's, they ask me to submit bids and I do...
But by the time they present me with the 'requirements' it seems as good as over.
You might as well bestow down upon me the privilege of allowing me to work on thine beautiful yard...

Now way I do things, I submit my bid on my terms and have a nice day.
Take it or leave it.
Needless to say, I have never gotten an Hoa bid.
But that's how I play it, I look at these bids like I was playing the lottery, and maybe one day I win.
Because here again, my bid fills their 'have to get three bids' requirement,
my bid is one of those three, whether they approve is another story
but I have done my job.

Now, if you really want this account...
You probably want to talk to someone with experience in that area, and unless you really trust someone at the association that might not be the place to ask, but someone in our line of work or related who has been down this road more than a few times...

Good luck

Green Pastures
06-16-2008, 11:46 PM
hmmm just thinking out loud here...bear with me...

$2500 x 7% = $175

$175 / 40 (cuts) = $4.38

Wow a whole $4.38 per cut more and gas will have increased by 50%.

$4.38 more for 2 guys on 60" mowers for two hours and one guy on string trimmer and a blower for a hour.

$4.38 does not even get me a gallon of diesel fuel.

$4.38 will not run ONE 60" mower for an hour.

$4.38 will not pay an employee for an hour.

God help us.

rmdm94
06-17-2008, 09:49 AM
in the first message you wrote 2500.00 per month so........
2500.00 x 7% =175.00 per month more = 2675.00 per month
175.00 x 12 =2100.00 divided by 40 cuts =52.50 per cut more for the 2nd year
56.17 per cut for the 3rd year= 2731.17 per month
I would do it for that!!!

topsites
06-17-2008, 11:02 AM
in the first message you wrote 2500.00 per month so........
2500.00 x 7% =175.00 per month more = 2675.00 per month
175.00 x 12 =2100.00 divided by 40 cuts =52.50 per cut more for the 2nd year
56.17 per cut for the 3rd year= 2731.17 per month
I would do it for that!!!

It's an entire grounds maintenance package...
thou :p

Tharrell
06-17-2008, 02:41 PM
The total cost of the years indicated is what they'll use to decide which bid to accept. I'm in the process of doing the same thing with the city. They want to know the percentage of increase if any for 5 years. Tony

Happy Frog
06-17-2008, 03:22 PM
Use your increase calculation as usual (+ 7% per year) and include a fuel adjustment clause based on actual fuel cost (@ 2.0 gal. per hour and per ZTR and 1.0 Gal. per hour on blower + trimmer).
Let say gas will cost $2.00 more per gal. in two years. That is $18.00 more per cut, or $60.00 more per month.
I don't see an issue here... Raise your price by $205.00 per month the first year and $235.00 the second year... Let them know that your quote includes a 50% fuel cost increase and that you will charge them less if fuel doesn't increase as much. :drinkup:

Scagguy
06-17-2008, 03:45 PM
hmmm just thinking out loud here...bear with me...

$2500 x 7% = $175

$175 / 40 (cuts) = $4.38

Wow a whole $4.38 per cut more and gas will have increased by 50%.

$4.38 more for 2 guys on 60" mowers for two hours and one guy on string trimmer and a blower for a hour.

$4.38 does not even get me a gallon of diesel fuel.

$4.38 will not run ONE 60" mower for an hour.

$4.38 will not pay an employee for an hour.

God help us.

Hmmm.... your math equation is a little flawed here. It's 175x12=2100~40 cuts = 52.50 per cut difference. That will cover all of the above for an hour and then some.

k911lowe
06-17-2008, 03:51 PM
they don't call them ho's for nothing.100% markup.get everything in writing down to the smallest detail or they will nickel and dime you till you are bald.better yet,don't even get involved with them.

ATL Lawn
06-18-2008, 04:35 PM
fuel sucharges

http://ehoez.com/gasprice2.jpg
You think gas prices are high now? Just wait..

Green Pastures
09-18-2008, 07:45 AM
Hmmm.... your math equation is a little flawed here. It's 175x12=2100~40 cuts = 52.50 per cut difference. That will cover all of the above for an hour and then some.

You're absolutely right.

Thanks...

:o

sa1lng
09-18-2008, 04:02 PM
We provided telecommunication technical services to communities for years and we would use Consumer Price Index (CPI) for multi year contract increases. This hurts when there is no inflation, but helps when things like fuel go nuts.

delphied
09-18-2008, 05:34 PM
How refreshing. A lawn care company actually raising prices instead of lowering. Maybe there is hope?

ed2hess
09-18-2008, 06:35 PM
Make it flat across three years. If this maintenance is a siginificant part of their income they can only raise fees a certain amount each year. If you don't have a way to know what that amount is and you throw in some percent that is higher they would almost for sure reject your bid. They will get new bids every year any way and they always have a lower bid than yours and then you are faced with matching it or get out. This economy can't support gas at a much higher rate so that will stabalize.

delphied
09-18-2008, 07:52 PM
I knew it was coming!

Green Pastures
09-18-2008, 08:58 PM
Hess,

The HOA wanted my proposal for a three year period.

The HOA President told me he EXPECTED my price to go up each year, inflation, raises for employees etc.