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Southernlawnman99
01-11-2009, 10:47 PM
How do you guys estimate your landscape jobs? Just on the plants,mulch,rocks,dirt,that type of thing. I have been giving estimates like this. On the plants 50% of retail cost & I get a 20% discount. On the mulch & dirt I double my cost. Haven't done rocks yet. Is this a good formula? Also, I always ask, what s your budget? But they seem reluctant to tell me. They just want me to give them a price. But I can't go plant by plant right? Should I tell them It's 50% of the cost of the plants for delivery & instillation?






Southern Curb Appeal LLC

White Gardens
01-12-2009, 01:41 AM
Ah, many of times this has been discussed.

The thing that fits into my formula is that you have to consider market value for the cost of the whole project in your area.

I try mark up as much as possible, but then sometimes my final price looks way to large with the labor added in.

Take for example rock. Sure, with cheap river rock I have no problems doubling the price. But sometimes I get into some high priced stuff that wouldn't fly charging 300 dollars a load.(2 tons on my truck)

Same goes with finding rare plants other than the ordinary nursery stock.

All in all, I figure my costs for a project, and I need to at least be double my costs to come out OK in the end, and this includes labor. Most of the time I push for my costs to be 35% of the final bill.

Isobel
01-12-2009, 04:16 PM
with plants I'm usually 75-100% markup on shrubs, and 50-75% on perennials. rock is somewhere between 50-75%, and sometimes 100% if its the good stuff.

The key, for me, is to keep in mind what the average retail price is in the area.

I use to ask budget considerations from my clients as well, but most were reluctant to give their upper limit out. Instead I tell them that I can design something that is extravagant, or something simple, and that the difference is the price. Usually they open up a little bit at that point and tell me what they were thinking.
For the clients who don't tell me what they are thinking--and there's not alot of these--i come up with 2 or 3 options ranging in price from low to high, and they can choose.

JNyz
01-12-2009, 06:48 PM
If you just go three times all your material costs you will show a nice profit at the end of the day. I do some sub contracting work for a 10 million dollar full maintenance landcsaping contractor and they use a formula to figure out the price of a installation bid. After using the formula on my bids it came out to 2.75 times my material costs but they get a little bigger discount at the wholesale nursery. So I would say just go 3 times your material costs.

paradise32258
01-12-2009, 06:56 PM
i do the same as jnyz i try to go 3 times , but like the others also said sometimes you look at the final price and its slightly to high, i discount it a little bit and write the discount of on my taxes.. but i dont discount much.. thats your profits ..

Lite4
01-12-2009, 10:35 PM
Unfortunately you can't just use the same formula for all clients. First you need to know your clients "demographicly". Some clients will have no problem with paying a markup of 200%, while public works and some large commercial bids will have to be cut a little closer to the bone as you will be bidding against many other constractors.
As far as avoiding customer sticker shock. I figuired out a long time ago, the best way to "ease" them into the price is to simply start with only the very basics on the bid. Sprinklers, sod, fine grade, and mulch. Everything else is broken down as an option on a seperate part of the bid. The initial number they look at will be far lower than expected sometimes. Then they can pick from the line items on the bid addendum, "Oh you would like to have that new patio we talked about, ok, here it is broken down seperately in the options portion of the bid. We will simply add that into the total". By doing this you are phsychologicaly giving the homeowner full control in the decision making process. They don't feel like they are put in a box by a "do-it-all now" high estimate. 9 times out of 10 you will not scare them and you will walk away with a signed contract. You may not do everything at once, but you will retain them for the future additions and earn their trust in the process. They won't perceive it as you "pushing" the whole project on them when you enable them to retain the power of decision. Try it, I guarantee you will be pleased with the results.

Southernlawnman99
01-12-2009, 11:32 PM
This sounds like a good idea. I'm going to try this. The next estimate I do I will give the basic price & up sell from there. Thank you.

JNyz
01-13-2009, 07:36 AM
Unfortunately you can't just use the same formula for all clients. First you need to know your clients "demographicly". Some clients will have no problem with paying a markup of 200%, while public works and some large commercial bids will have to be cut a little closer to the bone as you will be bidding against many other constractors.
As far as avoiding customer sticker shock. I figuired out a long time ago, the best way to "ease" them into the price is to simply start with only the very basics on the bid. Sprinklers, sod, fine grade, and mulch. Everything else is broken down as an option on a seperate part of the bid. The initial number they look at will be far lower than expected sometimes. Then they can pick from the line items on the bid addendum, "Oh you would like to have that new patio we talked about, ok, here it is broken down seperately in the options portion of the bid. We will simply add that into the total". By doing this you are phsychologicaly giving the homeowner full control in the decision making process. They don't feel like they are put in a box by a "do-it-all now" high estimate. 9 times out of 10 you will not scare them and you will walk away with a signed contract. You may not do everything at once, but you will retain them for the future additions and earn their trust in the process. They won't perceive it as you "pushing" the whole project on them when you enable them to retain the power of decision. Try it, I guarantee you will be pleased with the results.

This might work with some companies that can deal with profit swings. My company can not and we are use to the same profit margin on each contract.

We believe go in with three times material cost and sell the job. Tell the client why your work will be better then other contractors, show them other contractors jobs look like a year or two later, and quality referals. Believe me you will get the jobs you want and a very good profit at the end. Don't be afraid to bid high, you will be much more happier going to the bank.

Lite4
01-13-2009, 11:10 AM
This might work with some companies that can deal with profit swings. My company can not and we are use to the same profit margin on each contract.

We believe go in with three times material cost and sell the job. Tell the client why your work will be better then other contractors, show them other contractors jobs look like a year or two later, and quality referals. Believe me you will get the jobs you want and a very good profit at the end. Don't be afraid to bid high, you will be much more happier going to the bank.

No problem, just stick with what you know on the residential side of things. Things are much different on the commercial side though because keeping your bid structure the same as residential won't get you many jobs with the cost cutting, competetive nature of things on that side. The GCs are only concerned about who will give them the prescribed product for the lowest cost regardless of sustained quality. That is just the way it is on that side of things. Stick to what you know and what you are good at. You know your business model better than I do and you know what you have to make on each job. I have found most companies in my area usually have a specialty niche. Some guys go after the commercial projects exclusively while others simply stay away all together and focus on the high end residential sector. I have found high end res remodels yield a nice profit if you can get to the right clients. Good luck this year with your biz.

White Gardens
01-13-2009, 11:47 AM
Unfortunately you can't just use the same formula for all clients. First you need to know your clients "demographicly". Some clients will have no problem with paying a markup of 200%, while public works and some large commercial bids will have to be cut a little closer to the bone as you will be bidding against many other constractors.
As far as avoiding customer sticker shock. I figuired out a long time ago, the best way to "ease" them into the price is to simply start with only the very basics on the bid. Sprinklers, sod, fine grade, and mulch. Everything else is broken down as an option on a seperate part of the bid. The initial number they look at will be far lower than expected sometimes. Then they can pick from the line items on the bid addendum, "Oh you would like to have that new patio we talked about, ok, here it is broken down seperately in the options portion of the bid. We will simply add that into the total". By doing this you are phsychologicaly giving the homeowner full control in the decision making process. They don't feel like they are put in a box by a "do-it-all now" high estimate. 9 times out of 10 you will not scare them and you will walk away with a signed contract. You may not do everything at once, but you will retain them for the future additions and earn their trust in the process. They won't perceive it as you "pushing" the whole project on them when you enable them to retain the power of decision. Try it, I guarantee you will be pleased with the results.


This is the concept I've been working with. I've got around a dozen customers who I'll probably be doing continual work for hopefully the next couple of years. A $1000 here, $5000 there, and I've got a little security in knowing I have clients to fall back on, and they can better afford to do work over time.

CALandscapes
01-14-2009, 12:55 AM
Tim, good advice...

A resi client is going to be far more concerned with your approach, references, etc. than a gc.

I'd elaborate, but I think you said everything that I would....

AGLA
01-14-2009, 08:27 AM
The best way is to keep records of materials used, equipment used, and man hours spent on each aspect of a job including down time and time spent on the project away from the site for each part of the job. Then when the job is over, you back out the expenses and determine where and how much money you made in each part. Compare that to what your profit margin should be and determine if you priced it correctly. Use that information to better price a similar job the next time.

You also have to compare it to what is an acceptable charge to be competitive. Sometimes the reality is that you find efficiency, or lack thereof, is the problem and you have to increase your production ability to be competitive.

You never really know unless you collect the data and analyze it.

Lite4
01-14-2009, 01:10 PM
The best way is to keep records of materials used, equipment used, and man hours spent on each aspect of a job including down time and time spent on the project away from the site for each part of the job. Then when the job is over, you back out the expenses and determine where and how much money you made in each part. Compare that to what your profit margin should be and determine if you priced it correctly. Use that information to better price a similar job the next time.

You also have to compare it to what is an acceptable charge to be competitive. Sometimes the reality is that you find efficiency, or lack thereof, is the problem and you have to increase your production ability to be competitive.

You never really know unless you collect the data and analyze it.


Absolutely right on. Every company should perform this operation to get a handle on overhead and actual job expenses. You will find your profits are directly proportional to the quality of people that you employ.

paradise32258
01-15-2009, 11:32 AM
that seems to be one of the hardest parts for me here in florida to find people that are willing to put in a full days labor and not milk it every chance they get..

AGLA
01-15-2009, 11:19 PM
It is good to strive for great help, but you also need to deal with your present reality whatever that may be. You can't price for what your help SHOULD be able to do, but what it actually does.

Good people managers can get a lot out of some pretty marginal employees. We have all seen them, but very few of us are really very good at it. Most of us have a hard time understanding that the performance of our help is more often limited by our own ability to manage them than anything else.

LB1234
01-22-2009, 10:42 AM
I can't beleive that I'm reading such things as "whatever the material costs times 'X'."

Does anyone actually know what they need to charge to break-even?

Scenario....

I have two customers that live next to one another. Each wants a tree. One wants a pin oak and the other wants a jap. maple. The oak costs $100 and the maple costs 250. According to some they would charge 200 and 500, respectively.

Think about it. Does this actualy make any sense whatsoever?

paradise32258
01-22-2009, 03:26 PM
well i think that you should always know your break even point , but it sounds as if your not going to make much money on the oak. hahaha after you find you b.e.p. = materials and labor. in your scenario your better off installing them both the same day and make some money.

JNyz
01-22-2009, 09:25 PM
I can't beleive that I'm reading such things as "whatever the material costs times 'X'."

Does anyone actually know what they need to charge to break-even?

Scenario....

I have two customers that live next to one another. Each wants a tree. One wants a pin oak and the other wants a jap. maple. The oak costs $100 and the maple costs 250. According to some they would charge 200 and 500, respectively.

Think about it. Does this actualy make any sense whatsoever?

What works for some may not work for all.

For me a 100.00 oak would be a very small easy to handle tree. A 2 1/2 inch caliper oak would cost me 250.00 and I would charge 750.00 for about 2.5 hours of total work, drive time included. Five hundred bucks gross labor is not bad for two men. Now going back to the 100.00 oak it would take be about 2 total hours and gross labor would be 200.00. Still not bad for 2 hours but I would up sell the client. The maple the same as the oak.

Yes it makes sense to me and my bottom line. If you have a larger gross profit congratulations you are doing better then some of us.
The times factor is a very cost efficient way to come up with a proposal. How do you do it?

allinearth
01-22-2009, 11:32 PM
Unfortunately you can't just use the same formula for all clients. First you need to know your clients "demographicly". Some clients will have no problem with paying a markup of 200%, while public works and some large commercial bids will have to be cut a little closer to the bone as you will be bidding against many other constractors.
As far as avoiding customer sticker shock. I figuired out a long time ago, the best way to "ease" them into the price is to simply start with only the very basics on the bid. Sprinklers, sod, fine grade, and mulch. Everything else is broken down as an option on a seperate part of the bid. The initial number they look at will be far lower than expected sometimes. Then they can pick from the line items on the bid addendum, "Oh you would like to have that new patio we talked about, ok, here it is broken down seperately in the options portion of the bid. We will simply add that into the total". By doing this you are phsychologicaly giving the homeowner full control in the decision making process. They don't feel like they are put in a box by a "do-it-all now" high estimate. 9 times out of 10 you will not scare them and you will walk away with a signed contract. You may not do everything at once, but you will retain them for the future additions and earn their trust in the process. They won't perceive it as you "pushing" the whole project on them when you enable them to retain the power of decision. Try it, I guarantee you will be pleased with the results.

This is a great method that I usually use successfully. Most clients will go for the add ons when they can see what each will cost. Also gives them an out if they have budget constraints. The options allows us to get over the sticker shock and sets up future projects.

Fiano Landscapes
01-23-2009, 12:25 PM
Our estimating process seem to be a little different than most. I hear everyone just throwing numbers, and percentages around. It just doesn't seem like a very good business quality. If all your going off of is percentages how many of you actually know what portion of the job is direct cost, overhead, or profit while your sitting negotiating a project. I designed a spreadsheet that all of this is broken down. Our indirect costs (overhead) is figured into every man hour of work. Our direct costs of the project are in a list formated for quan, rate, total. All of these do have a slight handling markup on them. The only markup for a direct cost that is seperate is plant material. Obviously the reason for this is due to warranty purposes. These total are at the bottom of the page totaled up. So i can see how much each category is. This is a overview of what all of the funds that I collect for this project are going. Then after all of that is totaled up I then proceed with adding my portion of the profit to the project. I use to just wing it, and realized how much money was getting left on the table after each job. The key to the whole thing is that you must be comfident enough to get a budget for the project form the customer. They are wanting you to give them a quote when they don.t know how much they want to spend. Come On! Start giving numbers $50k, $10k, $100k. See what their response is. I also don't do they backward sale. Start high it always seem better for the customer coming down in price. If you start low you could then also be leaving lots of money on the table.

JNyz
01-23-2009, 12:41 PM
Formulas are great and will show direct and indirect cost. I used one myself but found out the three times material cost is not much different, only 1-2% plus or minus. And I can get back to the client very quickly with a proposal using a times factor.

Lite4
01-23-2009, 03:18 PM
I created a very effective spreadsheet that allows me to really dial in my true costs and profits on all my landscape jobs. It was very effective for me when I was landscaping. If anyone wants a copy of it to try, PM me. It is formatted in Excell, so you will need to have that to use it.

Lawnut101
02-15-2009, 05:47 PM
I think another thing that comes into play is the method in how the people found you. If it was because of a referral, then I think you can charge a little more, and still have a job because they know you do good work. Now, if somebody sees your truck driving around, or sees your advertisement somewhere, chances are they are getting bids from others too. If you want the job, then you may have to bid a little lower. For example, last year I had mulch installation job, where we had to put some fill in as well. I quoted her my normal price for installing mulch, but knocked down the price for top soil. Instead of charging $45/yd for soil (I get it for $15/yd) I charged her I think about $20-$25 for installing that. Sure I probably only broke even on that part, but I made a good profit off of the mulch. And I was bidding against others for this job. So my point is, for a newer guy like myself, sometimes you have to charge a little less for certain things to stay busy. Just don't cut yourself short. There is a difference there.