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outdoor
10-04-2011, 08:31 PM
We were Bidding on three properties for a hospital there were 4 companies bidding
first bid for year 63,468
second bid 62,225
third bid 60,785
Fourth bid ( 22,455 )
Theres no way this guy can do it for this price.They get mowed 52 weeks out of the year you have to maintain flower beds and trim shrubs.i have seen low balling but damn.:nono:

jsslawncare
10-04-2011, 08:43 PM
4th must have been for on property. Not 3.

JB1
10-04-2011, 08:47 PM
I'll go with the dumber than a rock theory.

RSK Property Maintenance
10-04-2011, 09:47 PM
Maybe he figures he will get in there cheap and go up every year until he's where he wants to be price wise? Idk brickman did the same to me I bid on 3 properties all for the same company and my bid was around 17,500 for the 7 months of mowing and then they came in at 4000....
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cuttin-to-the-Max
10-04-2011, 10:09 PM
This happens all the times i can relate mostly to snow.... The site manager says the budget is 60k... They get the lowest bidder. He goes out and buys new equip. then by the middle of the season The lowest bidder has already blown all of the money he has gotten for the account and is now Payingg the customer to do services.
Thats IF he still shows up!

BPS##
10-04-2011, 10:32 PM
Maybe he figures he will get in there cheap and go up every year until he's where he wants to be price wise? Idk brickman did the same to me I bid on 3 properties all for the same company and my bid was around 17,500 for the 7 months of mowing and then they came in at 4000....
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A lot of companies will do that if they are trying to cut down on the competition.
Happens all the time in the trucking world. 6 months later when they can't perform the shipper now expects to get great customer service for the hack pricing. Same as lawn care.


3 places I picked up for next year the same thing happened.
An out of state company came meddling into our market trying to expand and in order to pick up business they bid low.
They promised the moon with their bargain basement prices but only delivered the south side of the tracks service. No body is happy with them.
My bids were real close to a little over theirs.... I got all 3. I had to be in order to get the work.
As long as I make the customers happy next fall I'll be able to inch my price up.
Sucks to be them and have a worthless service reputation.
I hope they go back where they came from.
They are not needed in this area. For certain when they depress the rates the way they have.

vencops
10-04-2011, 10:45 PM
The client is dumber than the co. bidding if they take that low bid.

knox gsl
10-04-2011, 10:56 PM
I had the same thing this last spring. I bid $9,300 then a $8,800 and a $8,200 and then a $4,700. The $8,800 won the contract as they were also looking at company assets and employee totals.

BPS##
10-04-2011, 11:07 PM
I had the same thing this last spring. I bid $9,300 then a $8,800 and a $8,200 and then a $4,700. The $8,800 won the contract as they were also looking at company assets and employee totals.







So far here they take you at your word.
Good thing, I'm still a growing business and some days the assets are a little low.


If you say you can do some thing, they expect you to do it.

I'm working off my reputation too.
Folks at 2 of the 3 places I landed know me and my work.
They put in a good word for my company at the 3rd place.

Darryl G
10-04-2011, 11:12 PM
Wow, those first 3 are really close. If I were the one procuring services I'd find a reason to throw out that lowest bid. Clearly they don't understand the scope of services if they're that much off the rest...more than 20% is a red flag.

Dr.NewEarth
10-05-2011, 01:47 PM
What I have found, is that once a budget has been lowered it is almost impossible to get the price up substatially in subsequent years. The client will have directed that capital into other areas of his operation.

When I bid, I look at many variables and consider a three to five year plan. I base the price on current market conditions, my break even point, a return on investment and a profit

I have lost cilents many times in the past, when a yearly price was increased by just a few percentage points. If I am realistic about the requirements and the costs in the beginning and the client likes the price then we try and keep it that way for as long as possible

Mark Oomkes
10-05-2011, 04:05 PM
Wow, those first 3 are really close. If I were the one procuring services I'd find a reason to throw out that lowest bid. Clearly they don't understand the scope of services if they're that much off the rest...more than 20% is a red flag.

There's a reason staring you in the face why to throw it out.

Someone is an idiot or only read half the specs. Either way, if they have half a brain, they won't even entertain that price.

douglee25
10-05-2011, 04:37 PM
When I receive a bid for service/equipment, etc at my full time engineering job (non-landscaping related), we will always go back to a low low bidder like this and ask them to recap the scope of work. After review, sometimes we feel they totally missed the scope of work and their bid gets tossed out. Sometimes we keep asking questions and find the bidder really does understand the scope. Depending on how business is in your area, some contractors will actually take a loss on a job in order to keep their crew in business. As odd as it sounds, if business is just slow, laying off a good crew is definitely something you want to avoid. Taking jobs at a loss will more or less let the time pass in hopes that things get better. Obviously a business can't do this forever, but occasionally it does happen. This could be the case in your situation. As an aside, does your company make the contractor sign off to hold up their end of the bargain? We will bring legal into it if they don't.

Doug

knox gsl
10-05-2011, 06:25 PM
So far here they take you at your word.
Good thing, I'm still a growing business and some days the assets are a little low.


If you say you can do some thing, they expect you to do it.

I'm working off my reputation too.
Folks at 2 of the 3 places I landed know me and my work.
They put in a good word for my company at the 3rd place.

They wanted a company that has at least 2 crews but the more the better so that they knew that the property would be serviced every Friday. I was told that after the fact, but I can live with it. It will come up for bid again next spring and I will try again.

JimmyTheGlove
10-06-2011, 01:12 PM
A lot of companies will do that if they are trying to cut down on the competition.
Happens all the time in the trucking world. 6 months later when they can't perform the shipper now expects to get great customer service for the hack pricing. Same as lawn care.


3 places I picked up for next year the same thing happened.
An out of state company came meddling into our market trying to expand and in order to pick up business they bid low.
They promised the moon with their bargain basement prices but only delivered the south side of the tracks service. No body is happy with them.
My bids were real close to a little over theirs.... I got all 3. I had to be in order to get the work.
As long as I make the customers happy next fall I'll be able to inch my price up.
Sucks to be them and have a worthless service reputation.
I hope they go back where they came from.
They are not needed in this area. For certain when they depress the rates the way they have.

I have seen this time and time again. It happens in more industries than we might think. But people wise up and realize that their price really was too good to be true all along and the word gets out and they do end up going back to where they came from.
Reputation is everything and you're right; it does suck to be them.

easy-lift guy
10-09-2011, 08:03 AM
Once I bid on a job for Sarasota County which included the landscaping and maintenance for 1 year. I came in 3rd place but the lowest bid was about $90,000 less than everyone else?, come find out when the bid sent the owner did not proof the total and someone missed Two numbers!, it can happen. An honest mistake, I guess.
easy-lift guy

ringahding
10-09-2011, 08:09 AM
We were Bidding on three properties for a hospital there were 4 companies bidding
first bid for year 63,468
second bid 62,225
third bid 60,785
Fourth bid ( 22,455 )
Theres no way this guy can do it for this price.They get mowed 52 weeks out of the year you have to maintain flower beds and trim shrubs.i have seen low balling but damn.:nono:

4th Bid: Big Company with mad cash-flow? Big Company & Just extra $$/keep employees working? or yeah they have no idea how to give a quote..

David Haggerty
10-09-2011, 08:17 AM
What everyone's saying is true, until you bid against one of the big companies like Brickman. They can deliver at prices you can't live with.
But their weekness is that they're not flexible. You have to be able to provide what they can't. Kind of like ACE hardware right across the street from Loew's.

PROCUT1
10-09-2011, 10:42 AM
Its no mystery. There are not too many people in this business that actually have a system for bidding that is anything other than driving in circles around the property and waiting until a number pops in their head.

Most guys if they were thinking $75,000 and a little birdie told them that the property was going for $25,000 would change their bid to $24,500 without giving a second thought.

Its the new nature of the industry and a new type of customer.

Years ago when I started in commercial work it was hard to get into. You had just a handful of companies that did all the commercial work and commercial jobs just wouldnt take bids from guys off the street.

You had to be qualified. You had to have comparable references. References were extremely important. How does a residential guy get a commercial job if he doesnt have commercial references? He didnt. How did he get commercial references if he couldnt get a commercial job to begin with? He didnt.

It took a while to finally get a commercial job. Then once you did, and if you did a good job, the doors opened.

Customers were different. They just wouldnt even entertain an oddball bid that was 70% cheaper than the established companies. They would give you a pat on the head and tell you to come back when you grew up a little.

Then it started changing. I watched it happen right with my own eyes.

You would see a job and say "Dang, who the heck is that hacking the place up?" Or you would go to a bid meeting and they would tell you they have someone half your price and they would be serious about it.

With the pressure to trim budgets and save money, they started looking at these new contractors in a different light. They realized that there was no way they could do the job and even cover their costs at that price.

But they also realized.....Its just cutting grass. Or even more scary...Its just plowing snow....

What they started realizing is that many of these lowball guys actually would pull off getting the job done. Some were working that cheap to try to "break into the market" and most others just didnt have a clue how to price, whether they would make money or not, and they were just so excited to be able to say they have Walmart or such and such condo complex as a customer that they didnt care.

These guys that should have stuck with residential were so excited to become big boys and the floodgates opened. The established contractors stood there scratching their heads in disbelief that the customers are actually hiring these guys. But it happened.

There were guys who before they even bought their first mower were landing apartment/condo complex jobs.

What happened to when you had to supply an equipment list, and the property manager would actually get in the car and drive to your location to view your operation?

Back in the day if that meant the dirt backyard of your mobile home. You werent getting the job.

With easy availablitily of credit over those years, guys would get these jobs and run out and finance a fleet of new machines, a couple new trucks, new enclosed trailers, and everyone would look at them and go "Wow!! Where did he pop up from?" "Hes doing well" Someone would say "Oh thats Mike, he drove a truck for the garbage company for years, decided to start up this year"


Customers realized that they could get the job done, maybe not AS good as the established guys, but surely good enough to pass and justify saving 50%. All of a sudden there were so many guys banging on their door to do the work, every one a little cheaper than the last guy.

Where multiple year contracts for lawn and snow were standard for 20 years, customers started demanding 1 year contracts. And the established guys were floored. How can you possibly provide commercial snowplowing at a flat set price, not knowing what the conditions will be for only ONE year? All that equipment, all that risk, you have to have a multi year contract to even things out and spread out the risk.

The new guys didnt understand that, or care. They were more than happy to take the job, buy the equipment, and figured "If I do a good job, NEXT year Ill get the job back, and many more"

Until next year, another new guy came in, offering to do it cheaper, and now you had all this equipment, and no job. What do you do? Go out and try to get another job to replace it, bid it just as cheap because you need to get it.

And the cycle kept going.

Customers are thrilled with the money savings and its only important that you pull off the job this year. Which most do. Whether you are in business next year or not doesnt matter to them.

This is not an industry that operates on standard business practices. Its one of the simplest business to get into which means its flooded with guys who are simply winging it. When you have customers that dont care, and 100 guys lined up behind you. Its difficult.

The customer used to be the barrier. They were smart. They put up the walls. They had high standards that you had to meet. They made sure you were qualified.

Once we lost that. The business turned into what it is now.

There are still established smart profitable companies out there no doubt. But they have had to change tactics and how they operate. Its just not like it was 15 years ago

coolluv
10-10-2011, 06:54 AM
A lot of companies will do that if they are trying to cut down on the competition.
Happens all the time in the trucking world. 6 months later when they can't perform the shipper now expects to get great customer service for the hack pricing. Same as lawn care.


3 places I picked up for next year the same thing happened.
An out of state company came meddling into our market trying to expand and in order to pick up business they bid low.
They promised the moon with their bargain basement prices but only delivered the south side of the tracks service. No body is happy with them.
My bids were real close to a little over theirs.... I got all 3. I had to be in order to get the work.
As long as I make the customers happy next fall I'll be able to inch my price up.
Sucks to be them and have a worthless service reputation.
I hope they go back where they came from.
They are not needed in this area. For certain when they depress the rates the way they have.

How did you know what they bid before you submitted your bid?

How will you be able to inch your price up next year?

Are you making any money on this work?

Your counting on raising prices a little next year, but what if you lose the bid to someone else?

You say they are bringing down the prices in your area but your bid was the same or near their bid. Explain that one.

Do you have someone on the inside letting you know beforehand?

Maybe I'm missing something with the whole commercial thing as I'm just a small fry and don't bid on commercial. Bud why bid and work on commercial if the prices are so low?

I used to work for a company and they would lose bids to all the hacks out there looking to make the big time and the owner would say, Hey I'm in this to make money, I don't need the practice!

In other words why work just to work?

They ended up eliminating that part of the business because it was to the point of little or no return on investment.

Dave...

coolluv
10-10-2011, 07:03 AM
Its no mystery. There are not too many people in this business that actually have a system for bidding that is anything other than driving in circles around the property and waiting until a number pops in their head.

Most guys if they were thinking $75,000 and a little birdie told them that the property was going for $25,000 would change their bid to $24,500 without giving a second thought.

Its the new nature of the industry and a new type of customer.

Years ago when I started in commercial work it was hard to get into. You had just a handful of companies that did all the commercial work and commercial jobs just wouldnt take bids from guys off the street.

You had to be qualified. You had to have comparable references. References were extremely important. How does a residential guy get a commercial job if he doesnt have commercial references? He didnt. How did he get commercial references if he couldnt get a commercial job to begin with? He didnt.

It took a while to finally get a commercial job. Then once you did, and if you did a good job, the doors opened.

Customers were different. They just wouldnt even entertain an oddball bid that was 70% cheaper than the established companies. They would give you a pat on the head and tell you to come back when you grew up a little.

Then it started changing. I watched it happen right with my own eyes.

You would see a job and say "Dang, who the heck is that hacking the place up?" Or you would go to a bid meeting and they would tell you they have someone half your price and they would be serious about it.

With the pressure to trim budgets and save money, they started looking at these new contractors in a different light. They realized that there was no way they could do the job and even cover their costs at that price.

But they also realized.....Its just cutting grass. Or even more scary...Its just plowing snow....

What they started realizing is that many of these lowball guys actually would pull off getting the job done. Some were working that cheap to try to "break into the market" and most others just didnt have a clue how to price, whether they would make money or not, and they were just so excited to be able to say they have Walmart or such and such condo complex as a customer that they didnt care.

These guys that should have stuck with residential were so excited to become big boys and the floodgates opened. The established contractors stood there scratching their heads in disbelief that the customers are actually hiring these guys. But it happened.

There were guys who before they even bought their first mower were landing apartment/condo complex jobs.

What happened to when you had to supply an equipment list, and the property manager would actually get in the car and drive to your location to view your operation?

Back in the day if that meant the dirt backyard of your mobile home. You werent getting the job.

With easy availablitily of credit over those years, guys would get these jobs and run out and finance a fleet of new machines, a couple new trucks, new enclosed trailers, and everyone would look at them and go "Wow!! Where did he pop up from?" "Hes doing well" Someone would say "Oh thats Mike, he drove a truck for the garbage company for years, decided to start up this year"


Customers realized that they could get the job done, maybe not AS good as the established guys, but surely good enough to pass and justify saving 50%. All of a sudden there were so many guys banging on their door to do the work, every one a little cheaper than the last guy.

Where multiple year contracts for lawn and snow were standard for 20 years, customers started demanding 1 year contracts. And the established guys were floored. How can you possibly provide commercial snowplowing at a flat set price, not knowing what the conditions will be for only ONE year? All that equipment, all that risk, you have to have a multi year contract to even things out and spread out the risk.

The new guys didnt understand that, or care. They were more than happy to take the job, buy the equipment, and figured "If I do a good job, NEXT year Ill get the job back, and many more"

Until next year, another new guy came in, offering to do it cheaper, and now you had all this equipment, and no job. What do you do? Go out and try to get another job to replace it, bid it just as cheap because you need to get it.

And the cycle kept going.

Customers are thrilled with the money savings and its only important that you pull off the job this year. Which most do. Whether you are in business next year or not doesnt matter to them.

This is not an industry that operates on standard business practices. Its one of the simplest business to get into which means its flooded with guys who are simply winging it. When you have customers that dont care, and 100 guys lined up behind you. Its difficult.

The customer used to be the barrier. They were smart. They put up the walls. They had high standards that you had to meet. They made sure you were qualified.

Once we lost that. The business turned into what it is now.

There are still established smart profitable companies out there no doubt. But they have had to change tactics and how they operate. Its just not like it was 15 years ago


Excellent post and a great explanation that is right on the money.

Its getting the same way in residential. You have companies that would not even do maintenance work before that are now doing it. Hell there is even a fairly large local pest control company near me that I saw with mowing rigs this year, I could not believe it.

Large landscape companies that would never touch residential maintenance are doing it now.

Its a race to the bottom. There's always the new guys that think they can do it cheaper and dominate the market. Then they fail and the next round starts next season. Only problem is the next season its a lot more of them, and the next season even more and on and on.

Look at how many post you see in the starting a lawn business section. I'm tired of my day job and looking to get started.

They have no clue and when you tell them how tough this business is they think your lying to them.

Its Crazy how this business is.

Dave...

David Haggerty
10-10-2011, 09:02 AM
Its just not like it was 15 years ago

Probably not for the companies with crews & employees. It's pretty much the same for the solo operator as it was when I started in 1974.
It's the same for me as it was 15 years ago because I have the same customers.
I avoid the bidding wars from companies that take annual bids. You can spot them from a half mile away because their lawns looke like crap. How can they expect anything else when they take annual bids?

It can't be that much cheaper for them when they have to pay a management employee to manage the lawn service provider. They're all looking for a dependable long term service provider wheather they're aware of it or not. Some believe all LCO's are just scam artists trying to rip them off. It sometimes takes a while to change their attitude.

It's not the economy either. I've seen bad times before. In bad times customers are looking for a better value for their money. Quality work at a fair price. If you can give that, customers will seek you out.

JMHO (just my humble opinion)

Glenn Lawn Care
10-10-2011, 01:16 PM
Well cuz they don't know anything!!

normower
10-12-2011, 07:03 PM
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Total Lawn and Sprinkler
10-18-2011, 12:15 PM
The fourth estimate is to try and price the competition out of the game. This is a sleazy tactic to get the contract in my opinion.

Once the property owner signs with this company there will be many additional charges that will have to be built in to maintain profitability. Hopefully the property owner will learn in the future to go with the best value and not the cheapest price.