First LARGE proposal - any help is appreciated!!

[Duekster]

Originally Posted by ag2112

Thanks for the advice, I'm not bent on wooing people to my price, I just have a feeling that the company currently doing it is fairly low due to networking.

I think one reason I also am low is because thus entire season I have had no payments on truck or equipment, however I'm upgrading and getting a new trailer and budge equip so I need to take that into account.

I realize there's no magic formula for cost, I just wanted to put out feelers and see what others did for bigger jobs.
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Truck Trailer and EQ typically run about $12~15 per hour depending on the truck. Again take the cost, inflation, maintenance, cost over 5 years and get an hourly rate then add insurance and fuel. You are not bidding based on this EQ but based on what the next truck and maintenance rig will cost you.

Now if you get 3 guys, say each of you want 15.00 hour... You need around $20.00 but if you want to save for winter vacation, health care retirement and such uniforms, and safety shoes.... Go to $22.00

Lets say you have a storage shed, cell phones, gas and stuff that is 1500.00 month. Or 9.40 an hour but you also have 12 month but work 9. Now you are at 12.5 per hour.

I could not imagine a finished AC for anything less than 50. Tractor ROW mowing or field mowing maybe as low as $20.00 but not finish mowing with line trimming and blowing.


labor 22.00 X 3 = $66.00
Truck 15.00
Misc 12.50
= 93

Now you have to figure down time to maintenance mowers and EQ

Just 10% as a fudge factor for lost time, belts grease, small tools , bad debt.


93+9.3 = 103

103/3 = $ 34.3 MH

You can see your MH rate should go up with 2 people....

Only you can break out your cost... but this is a fair way to do it.

I do account for mower size but only to a point... clearly you can not bid as if you are using a 21 mower. I say the best bet is to consider 48 to 52 Inche mowers. If you have a bigger mower (72"), you should not go down because that mower is idle more thus has a higher hourly rate when it is used.

While your gut may tell you that you can not get full boat on your cost.... then you have to make a judgement call on taking it.

[Duekster]

Originally Posted by ryde307

Keith has a good point.
With any bid you can have numbers from 35-100 acre. Neither will be wrong.

What you have to do is sit down and find YOUR cost or doing business. You don't even need exact numbers but get something close and calculate an hourly rate based on this.
Then figure out your production time and do the math.

There is alot of pricing info out there to help with industry standards or benchmark prices but if you use these to price everything you could end up out of business quickly.

The other problem is location. I am in MN we have an average of 25 mowings a season. Someone in Florida may mow 45 times a season. Not sure never lived there. My point is if we both have similar overhead:
truck 20,000
trailer 5000
2 mowers 10000
hand tools 1000
our equip costs are 36000
Now add all the small misc
now add your office your storage location
office overhead and so on
lets say we are equal to this point it comes out to 45000 a year.

Now I have to break this down into billable working hours.
Lets say we both work 40hrs a week. But I work 25 The Florida guy works 45.
40hrs x 25 weeks=1000 hrs compared to 40hrs x 45weeks=1800hrs

Now take 45000/1000hrs equals $45 hr compared to 45000/1800hrs=$25hr
Now lets say you can mow 1 acre an hr for easy math.
I need to make $45hr to cover my equipment and office overhead Florida LCO needs to make $25.
Now add in labor and fuel this should be close to equal.
Now add profit.
Now you will have something to start with in terms of what you need to charge per hour or per acre or however you break it down.

This is a long rambling post sorry for that. I also left out alot of variable like winter and other hours for equipment to work but wanted to keep it semi easy to follow.

This will give you a starting point on how much YOU should charge.
Disclaimer: These are just random numbers I used.

Pretty much agree. Break out OH and recover it in your work season.
Break out EQ
Then labor
then add and average for MH cost.

I break out EQ down to hourly regardless. I do not look at run time hours, I assume 5 years on it as that is the tax basis but say their maintenance cost would go up to keep it running 5 years.

[jackal]

Originally Posted by ag2112

Where are the sales, you mean CL or dealers, and I see your in MO, where do you buy from?

Deaalers have demos. Low Hrs and full warranty.

Craigs List Homeowners selling machines they really didn't need or are upgrading.

Other commercial mowers trading up.

[ELS Landscape]

Originally Posted by Efficiency

You NEVER want to have an account that is worth more than 10% of your business. NEVER.

I am not sure I agree with this statement.
It does put you at risk but I would not back down from a large job just because it would double my income.

It just means I need to bank some profits and chase more big jobs.

The first job I landed in 2005 is still my largest job. I have spent 7 years making it a smaller part of my revenue.