View Full Version : how do i fix this
02-13-2004, 09:53 PM
Ok I have a question. For the past few years i have mowed a couple yards and done odd jobs and usually people just payed me what they thought enough. Well this year i have my drivers liscense and i decided to actually go and look for work and try to have more accounts. Well i go to a ladys house and ask her if she needs any yard work etc. She said that we (me and my partner) could mulch but we needed to give her a price. Well all the mulching jobs i have done haven't been very substantial so me and my partner had to think about this. He had worked with bigger landscapers and thought he knew how mulch we would need so we came up with a figure of about 120$. This includes tilling and weeding beds first. He figured three scoops of mulch at 17$ a peice for the whole yard which equals 51$. As we worked we found three scoops wasn't enough. So we decided well cut 17$ out of profit we will learn from that mistake...well it also needed another scoop which totaled al mulch close to 90$. that left about 30$ dollars profit. We feel screwed because we worked after school 2 days until dark and all saturday morning and made ten dollars apeice. (We split profits three ways one way to me one way to my partner and one way to a bank account for gas, repairs etc. I know it is bad buissness to go back and change a price and you will probably never get this ccustomers buissness again...so this time we took this yard as a big learning experience. So know that i have learned from that i want to know what is the best formula for mulch? I have thought of a couple of other formulas. One was instead of giving a set price you tell them that you will 30$ a scoop which covers the cost of mulch plus labor for that scoop. Another way I thought of is you give them a labor estimate and then tell them x amount for labor plus the cost of mulch. I was looking for input on the best way to do this. We are just starting as a big buissness and we took this one as a learning experince and another good thing came out of it...great advertisement because the yard was on a major street in our town. Thanks in advance for any input.
02-13-2004, 10:03 PM
till you get better at estimating how much you will need, i would measure it. dont worry, its part of learning the business, everyone screws up bids. One day it will be funny.
02-13-2004, 10:16 PM
Try this http://upstatemulch.com/material_calculator.htm
Add what you figure it will take you in time * what you want per hour (say 35 per hour) and add what it will take you in mulch. say 1 yard is 17 bucks and it takes you an hour that is 52 bucks. this material calculator will actually make you money since if you have plants they take up room that mulch would have.
02-13-2004, 10:20 PM
Great learning experience, huh? I've found that these kinds of lessons you can't learn from a book and you'll remember them the rest of your life.
Enough about that - As you just learned before you can give anyone a price you have to know your costs otherwise how will you ever know what to charge. As far as the mulch is concerned it sounds like you missed the estimation of how much material was required.
In the future you can use this quick formula if the depth of the mulch is 3 inches: Square feet/100=cubic yards. It's not exact but real close. If your customer wants a different depth of mulch use this formula to calculate cubic yards: length in feet X width in feet X depth in feet/27. After you know your costs add your overhead (fixed and variable costs) and multiply the result by your profit margin to get the minimum price to charge the customer.
The very best educational course I ever took was an accounting course. It taught me more about running a business than all other things combined.
By the way how many cubic yards are there in a "scoop"?
Hope this helps.
02-14-2004, 01:12 AM
Put one down for experience! Don't ever go back on your word, it's bad business sure enough.
02-14-2004, 08:00 AM
Lawnman_scott is right. We've all messed up on bids and you have the right attitude about your mistake. You're trying to learn from it.
Another formula for cubic yards is: length in ft X width in ft X depth in inches/324.
The more experience you get the better you'll get at correctly pricing your jobs.
02-14-2004, 09:05 AM
Jeff-You are doing this work for one reason-to make money. You did not make money on this job. I would go to the home owner explain the situation and leave it up to them. Say somthing like "I am just starting out I made a mistake in materials and though this was the price I quoted the job is worth.......I will chalk it up as a learning experience". That will leave the ball in their court if they are decent people they will at least give you somthing extra. Its not like you are begging them you are informing them. Humble yourself and try not to do it again-You can learn lessons without losing money.Good luck-Harry
Originally posted by jeffh1988
We feel screwed because we worked after school 2 days until dark and all saturday morning and made ten dollars apeice. (We split profits three ways one way to me one way to my partner and one way to a bank account for gas, repairs etc.
Ok ..you've learned one lesson. What else? How about ..you didn't make anything. Until you have paid all your OVH for the year you haven't made a cent. A lot of us wont make a nickle profit until the last couple months of the season.
02-14-2004, 09:34 AM
Dont feel to bad about underbidding. Im sure we have all done it at one time or another. I sure know I have.
First off be carefull what your supply yard is giving you. $17 should be for one full yard of bark. A lot of supply centers use 1/2 yard buckets on their loaders. So one scoop would only be 1/2 a yard. $17 for a 1/2 yard is a horrible price. You have to be very careful with supply yards. If they dont think you know what you are doing they will rob you blind. Its always best to develop a working relationship with a company, and then stick with the one you trust. But that takes time.
As for price. I charge $100 per yard installed. I dont think $30 per yard will cover you. Remember, you are not tax exempt, so you are paying sales tax on that $17, plus your time to pick it up and deliver it. For you to be making any type of serious money mulching you really need to charge at least $50 to $70 a yard. You also want to make a little money off the mulch itself. Plus remember if you are charging a good rate, you are also covering your but in case you screwed up in calculations.
02-14-2004, 10:43 AM
You should charge between $60 and $80 per yard installed depending on distance it needs to be moved price to include edgeing beds,weed control. good luck
02-14-2004, 10:59 AM
Tough break on that one. You will learn as time goes on, but don't feel bad we once did a mulch job that I severely underestimated. We bid to install 50 yards on an enbankment. We ended up using 80!!!!!!!!! My guys put it down too thick... How do you recoup that loss. I almost kicked my foremans a$$, but now I laugh at it while driving from my trailer home to the city to beg for money! JK! Live and learn my friend for it will not be your last mistake. Just my .02
02-14-2004, 12:17 PM
Since this house gets a lot of traffic which might lead to future work, maybe you could explain to the homeowner that you made a mistake on the bid, but are not looking for any extra money since it was your mistake. Someone might see the work you did and ask them for your phone # and if you've asked for more money, they might tell them that you "quote one price, but wanted more money when the job was done!" This would certainly ruin any chances for references from these people. On the other hand, being honest with them can work to your advantage. If the realize you underbid, they might give you more money on their own and knowing they got a good deal could work out to give you free advertisement.
02-14-2004, 12:47 PM
I wouldn't go back on my word. If you quoted a price, you stick to your word even if you end up working for free (until the day you are a huge outfit and it would bankrupt you to do so - at which point you'll be an expert at giving estimates). Take it as a learning experience and don't make the same mistake again. This is a wake-up call for you. A chance to crunch some numbers and figure out your expenses and what it takes to make the profit you want. Don't worry, a couple mistakes don't make you a fool, just a hard working American. As others have already said, it has happened to all of us and unfortunately, that's just what it takes to become good at giving estimates.
02-14-2004, 01:24 PM
Originally posted by Lawn Dog2001
Remember, you are not tax exempt, so you are paying sales tax on that $17
If you have a state sales tax number you should be able to file a Resale Certificate with your vendor and not have to pay the sales tax. You would then charge your customer sales tax on the materials and possibly labor depending on the rules in your state. If you are paying the sales tax and your customer is also paying sales tax the state is collecting the tax twice on the materials.
I live and work in Texas and when I purchase any materials, I always issue a resale certificate to keep from having to pay the 8.25% sales tax but when I invoice my customer I charge them the sales tax on all materials (including my markup) and labor.
Here are Facts About Texas Resale Certificates (http://www.window.state.tx.us/taxinfo/taxpubs/tx96_237_003.html#issue10)
Be sure to check with your state taxing authority to verify this information.
02-15-2004, 10:16 PM
Thanks everyone for the input i'm much wiser now. I have another mulching job coming up this week and all the info will come in handy.
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