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View Full Version : Is this guy a lowballer?


LFD 1249
11-14-2012, 07:49 PM
I'm in my first year of business. I had the oppertunity to bid a large seasonal mowing contract, 32 acres total. Mostly wide open, sports fields and common areas. This being my first year my overhead is low ( in my opinion), $15 an hr to meet costs. I bid this job at $35,000 for the year. Now with that said I got beat by a bid for $13,000. I'm a solo operation. I was going to hire a part- time guy to help with this job. Am I over bidding this much? Now I'm second guessing myself on these other bids I have prepared.

Thanks for the help.
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bdlawncare
11-15-2012, 11:34 PM
Not really qualified to answer this question... But pretty sure
Your gunna need to add some details to get an accurate answer. Cheers n goodluck!
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StrokerTurbo7.3
11-16-2012, 05:00 AM
I would probably do it for about 85k plus fuel expenses.
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Toro 455
11-16-2012, 07:15 AM
You're high by the amount it cost to hire a helper.

ringahding
11-16-2012, 07:27 AM
When bidding or estimating, you must always figure in where your last account is located. In this case, it is right in front of you! 32 acres? You are attempting to put a $$$$ amount on each acre.

Think about the fact that you 32 jobs @ one acre right in front of you. In other words you do not have to load your equipment 32 times for.

So, you must recalculate each acre accounting for the lack of fuel used to trailer, wear & tear on your trailer & truck, etc.

$15/hr? C'mon man, $40 per hour @ the very least needs to be figured in your calculations. At any and every lawn mowing account.

How long do you think it will take you to mow 32 acres? I mean if this is just you and another worker, you could be there for half a week.

LFD 1249
11-16-2012, 01:12 PM
Thanks for the replies. I have a few lawns in this same town. I never really thought about it as 32 different lawns. I'm not saying I charge $15/hr that's just covers my equiptment cost for one mower. I charge an average of $48/hr. but I have a min. of $35. Most of my lawns are anywhere from 2-7 acre. By myself it would take me about 16hrs to mow then another 2 hr to trim the 32 ac. We only average about 28 mows a year in this area. I bid it as follows. If I'm wrong please tell me.

$35000/28= $1250 per service

$1250/32ac. = $39.10 per ac.

$39.10 * 2 ac./ hr = $78.13/hr

Most lco around my area are getting $45-60/hr in my area. Maybe I should change things up alittle to land more jobs? And still make a profit and be able to grow. Thanks again.
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Wayne 55
11-16-2012, 05:29 PM
Your putting together this price with ideal conditions. Not too often does anyone work under ideal conditions! Add a wet spring, or any other weather related problems just to start and delay mowing a couple days and you got to double cut. Add other variables to the equation and you will find yourself cutting your own throat. Sometimes its better to let the business loose a job than loose your business to a job. This is the part of job bids that you will learn from. No one can answer this question truthfully but you.

LFD 1249
11-16-2012, 06:08 PM
Thanks Wayne 55. I'm not really worried about losing this job. But I've got other bids to submit and in just second guessing myself. I agree with you I'm not going to bid on the work just to have it. If I can't make a profit then it's pointless to have the work. I'm going to submit my bids for next year as they are now. And if I get them then great, if not then I will be happy with what I have already.
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Patriot Services
11-16-2012, 06:58 PM
You can't bid acreage as if it were 32 one acre residential yards. There are guys that do commercial acreage for less than 15 dollars per ACRE.
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LFD 1249
11-16-2012, 09:21 PM
I'm going to do a search and see how to figure out bidding acreage. Right now I'm kinda lost. Lol. But for my first year it's to be expected. If you guys know of any threads would you post a link. To where I might find the info on bidding and staying competitive. With that said how can a lco profit at $15 per acre? Do they cover their costs with x amount of acres, once they have their costs the price per acre could go down? I think I know what your saying patriot services. I'm going to run some numbers the way I think your talking about. Thank you.
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Sharps_lawn&landscaping
11-19-2012, 07:54 PM
We mow one larger property with wide open areas. Estimated around 20 acres and it takes two guys almost six hours . It's priced 650 a week if it was bi weekly it would be double.

Sean Adams
11-20-2012, 12:45 PM
A little more detail about the account and specs would be helpful, but in the end, this industry is coming down to price. I know people will disagree, but if push comes to shove and the potential customer sees things as apples to apples, all he/she/they have to go by is price.

sealcutter
11-20-2012, 01:16 PM
I argee with Sean, you have to know your market and that is not yours. I don't even bid properties like this for that reason. I can tell you I am not the cheapest but this last year was record breaker for us.

LFD 1249
11-20-2012, 02:27 PM
Thanks guys! I agree maybe its to early to go after these big jobs. But if nothing else it was a learning experience for me. I think I'm going to stick with what I have already. I'm currently studying for my pesticide license and I'm going to concentrate on growing that side of my business. Maybe year 3 I will try to break into large commercial properties.

Thanks for all of the advice.
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jrs.landscaping
11-20-2012, 08:30 PM
To answer your original question, yes the other company lowballed the bid.

LFD 1249
11-20-2012, 09:48 PM
I hope for the winning bidder that he has things figured out. If not he could have made a big mistake. Never know if he defaults on the contract I may get a call.
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jrs.landscaping
11-21-2012, 07:58 AM
This happened recently to us. Five bidders, 3 were in the ballpark, one was sky high, and the other was around 15k short. Come to find out the owner had gone on vacation and let his foreman bid for him. The owner looked at what he bid on and was less than thrilled and asked to withdraw his bid. It happens, some guys can work with the bid and other guys can't wait to get out of it.

jackal
11-21-2012, 08:30 AM
Commercial jobs around me have been bid down so bad that they are no longer disireable.

I know of one factory, 60 Ac open with no trimming $1200 a week.

LFD 1249
11-21-2012, 04:07 PM
I kinda get the same feeling around here also jackal. I've read alot about "lowballers" on here and even tho my first couple of jobs I was one. It didn't take me long to figure out I screwed up. I was kinda glad for the drought in my area. No more lowballing for me ! If its a break even bid I would rather stay home with the kids. :)
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jackal
11-22-2012, 07:04 AM
That is not really what I consider lowballing. The lcos that mow factories have ins, pay workmans comp, and taxes. The guys that own the company dont do the labor and they make a small profit on their investment. You have to figure out if you can make a worthwhile profit at that rate.

Lowballers are guys that are not paying taxes, have no ins and pay employees in cash. They can do the same jobs that you do for half the money and still make the same profit.

Patriot Services
11-22-2012, 09:13 AM
That is not really what I consider lowballing. The lcos that mow factories have ins, pay workmans comp, and taxes. The guys that own the company dont do the labor and they make a small profit on their investment. You have to figure out if you can make a worthwhile profit at that rate.

Lowballers are guys that are not paying taxes, have no ins and pay employees in cash. They can do the same jobs that you do for half the money and still make the same profit.

I consider that full on scrubbery and criminal.
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Kelly's Landscaping
11-22-2012, 05:53 PM
What you ought to do is stop by the place next year when its being serviced and see how the guy was able to blow your price out of the water. Don't be surprised if they are using 10ft 11ft or even 16 ft mowers.

32vld
11-22-2012, 08:51 PM
I kinda get the same feeling around here also jackal. I've read alot about "lowballers" on here and even tho my first couple of jobs I was one. It didn't take me long to figure out I screwed up. I was kinda glad for the drought in my area. No more lowballing for me ! If its a break even bid I would rather stay home with the kids. :)
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Starting out and not charging enough for the first few jobs because a lack of experience is not being a low baller.

Almost everyone makes a few mistakes starting out in this business.

Will P.C.
11-22-2012, 10:25 PM
What you ought to do is stop by the place next year when its being serviced and see how the guy was able to blow your price out of the water. Don't be surprised if they are using 10ft 11ft or even 16 ft mowers.

This is a good point. Different companies equal different sized fleets. Some companies are just better equipped to handle these large facilities. This means they most often can give a better price while using their large machines as a selling point. If you were a property manager, would you rather use someone with large 16ft mowers, or a guy with 2 54 inch mowers.

I agree that price is most often the biggest factor. However, a property manager needs to believe you will be able to handle 32 acres every week since it is his job to make sure the premises looks good. As a solo guy, what happens when your mower breaks, you get hurt, or your kids need you.
Large jobs are hard on equipment and time consuming. They always take longer than estimated.

Most guys will agree that it costs much more than 15/hr to run a business so you really need to plug in the numbers or talk to a financial adviser.

Successfully bidding large jobs is something that comes with time. There is no magic formula, and not much solid info on what ABCMOWS would charge for a specific property when he is on the other side of the US and has not walked the property.

Maybe you know someone that is in charge of lots land. Ask him what prices the bids came in at and compare it against what you would have asked. This will give you a gauge although far from perfect.
Go up to the property manager and ask him what his decisions were that lead him to pick someone else

Duekster
11-22-2012, 10:38 PM
You have to know your market, your cost and your ability then develop a price model and stick to it. If you are costantly beat do not get to down because there is competition. Hold your own and deliver and you will develop a reputation.

I just won a bid where I was 30% higher but I won on a score card including reputation and quality. It took me 7 years to develop the reputation. Under promise, over deliver and stay confident in your services.

FWI - $15.00 an hour does not truck, mowers, small tools, gas and marine insurance. Then you have labor and buden
Then you have profit.

I too have seen $15.00 an acre but that is for rough cuts on ROWs not parks and sports fields.

944own
11-24-2012, 03:52 PM
Thanks Wayne 55. I'm not really worried about losing this job. But I've got other bids to submit and in just second guessing myself. I agree with you I'm not going to bid on the work just to have it. If I can't make a profit then it's pointless to have the work. I'm going to submit my bids for next year as they are now. And if I get them then great, if not then I will be happy with what I have already.
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This is why you or me never get these jobs. You say it is pointless if you cant make money. The big companies will bid this low just to assure the crews have work. If they can sit in the office and make $50 profit they will do it. You or me want to make good money on this type of job. I work with me and 1 helper and I could never be competitive with the big guys price on this. Think about it, they can profit something regardless how small the profit and the guys get the hours. Its win win for them but for you or me it is BS. This is why I mainly just try to stick to residential. good luck and happy holidays:usflag: