65 acres/3 year contract/1 idiot

Discussion in 'Sports Field Management' started by Bob E G, Nov 19, 2008.

  1. All_Toro_4ME

    All_Toro_4ME LawnSite Bronze Member
    Posts: 1,578

    looks like 53717 is Madison, WI
     
  2. W.L.M.

    W.L.M. LawnSite Senior Member
    Posts: 525

    I just landed a 3 year commercial and I used 3%, I explained to them materials and fuel go up and I needed to add inflation for that purpose, to sell it to them I told them that the average inflation for everything is 4-7%.
     
  3. Doster's L & L

    Doster's L & L LawnSite Senior Member
    Posts: 616

    I wouldn't get too excited about it if i were you. I agree with foreplease. There is a sports complex the same size as you are talking about near by. It looks really smooth and appears to be real easy mowing, but when you get that mower on the field, it jars ya to death! Plus, this kind of job draws lawn guys from all around to bid on it. You can bet they're not going to pick anything other than the low bidder. When the above mentioned field was up for bid 2 years ago, they wanted it cut 32 times per year. The winning bid was $15000 or so. Well have fun mowing that property for a whopping gross income of $9 per hour Buddy!

    Bid this property if you want to, but if you screw up and win the bid, I'd think twice before signing the dotted line.

    Here's an idea... chum the waters and see what surfaces. What I mean is, bid it for 100,000 or more in anticipation of NOT winning the bid. Generally, they'll let everyone know who won the bid and what the bid went for. Sometimes they'll have a print out of what each bidder priced it at. They do this in hopes that the winning bid will get smaller and smaller as the years progress.
     
  4. johnnybravo8802

    johnnybravo8802 LawnSite Silver Member
    from Ga.
    Posts: 2,313

    You know, I'm not even sure how to bid on a job and make a large profit anymore. It seems that if you get competitive enough to win a bid, you have to give yourself very little cushion. If I really added up all of my costs and charged the $60/hr/man, I'd never get a job. In fact, my question is:On large jobs, are you guys charging $60/hr/man or is that more on the smaller jobs? If you have three men and charge that, you're talking $180/hr. which is astronomical if it takes a whole day to mow a property. I don't think anyone would pay that. I just don't know. I just looked at a Wal-Mart that will probably take three men 5 hours to do but at $60/hr., the price looked huge. Even at $30/hr., that seemed high-$1575/month.
     
  5. clcare2

    clcare2 LawnSite Member
    from indiana
    Posts: 224

    I watched a meijer go for $ 3.75 an acre during a reverse auction last year. Something like 6 acres of turf.
     
  6. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Posts: 7,563

    Herein lies the problem with those who have little or no experience bidding large jobs, actually going out and bidding at all.

    Back in the day, when gas was 94 cents a gallon, ZTRs did not exist and the 48 belt drive was considered a quick machine in comparison to the "Locke" that old timers used,

    The going rate nearly country wide was $40/acre.

    as a 16 year old kid mowing lawns, a "normal" three acre property took a crew comprised of 2 each 48 inch scag belt drives and a 21" push mower for trim(back in the day it was common to use the 21" for most of what we use a weed whacker for today, the trimmers back then werent quite as powerful or advanced and many companies didnt even have them yet)

    Now, the crew leaders back then got paid about $8-$10 and the other guys were running around $6-7 per hour.

    That three man crew was in and out of that three acre property in about an hour and half.

    1.5 times 3 is 4.5 man hours. 3 acres at $40 per acre is $120 bucks.
    The operational costs for a crew back then ran about $17 per man hour so it cost the company owner $76.50 to make $120 so a profit of $43.50. it was typical to get about 8 lawns per day in with a crew like that so a company owner could expect to make just shy of $350 per day, per crew of profit.
    This was pretty much the "going rate" back in the day.

    Now take that SAME lawn today, but now you have ZTRs and modern trimmers.
    ONE guy with a ztr can mow 8 of those a day EASY with the right gear.

    Lets say two guys mow 10 of those for ease of math and make the equation comparible.
    You pay those guys what? $14 per man hour? it COSTS you about $30 an hour just to run a crew.
    TWO guys in and out of a three acre property at $120 per visit is 1.5 man hours (45 minutes total time there) is $80 per man hour.
    The company grosses $1200 per day for a two man crew. They are billing out at $80 per man hour,

    But here's the catch, 3 acre homeowners were paying $120 per lawn cut back in 1988!
    So why can't they pay the same 20 YEARS later??

    That property costs you (1.5 *30) $45 to cut compared to the old man $76.50 (chock that up to technological advances that allow improved efficeiency) so you go home with $75 from that lawn instead of the old man back inthe 80s who got $47.50

    Heres where the problem came in. New guys,never having bid a lawn before, having no idea what they were doing went out and bought a ZTR and became a landscaper, they figured they could do the job faster and better than it had been done in the past (which is true with the equipment avaialble today) and so becaue they can do it faster, thought they should charge less!

    So alot of guys are runnign around with more equipment and more costs and charging $40 perhour instead of acre!
    Heck with the cost ofequipment these days and the going wage you have to pay your guys it COSTS $30 per man hour. So for every hour spent you the owner bring home $10 per hour.

    Hmmm I think they pay that at walmart for a shift supervisor.

    Here's a tip, STOP bidding lawns at per hour, unless every time you go there you charge them a different price (i.e week one you were there it took 2 hours so $80 and week three it took 3 hours because of rain so $120)

    Bid by the sqaure foot.
    Find out your production rates for equipment (ie 48 rider cuts 48,000 sq ft per hour or whatever) that will give you an amount per sq ft.

    Then accurately measure the property.

    But always remember never fall below $40 per acre or you might as well work at walmart.
     
  7. gorrell

    gorrell LawnSite Senior Member
    Posts: 536

    This is a contract I'd salivate over. I have 3 8' or larger Ransomes/Jacobsen machines which would make mincemeat of this property in less than 4 hours. If no trimming was involved, I'd bid it at $600/cut and make money hand over fist. $600 x 32 cuts is $19,200/ year. I guarantee I'd make money, but some would probably under bid me, but that's the lawn business...........Lynn
     
  8. cod8825

    cod8825 LawnSite Senior Member
    Posts: 501

    Bob:

    Hoolie stated it about best. We have the Parks and rec division of a very large city in the KC Metro are. It has 65 properties and close to 225 acres of moving in it some very small some are close to 30 acres. First almost exclusively municipalities always go with the lowest bidder. Second you can't bid this like commercial because you will be so far and above everybody else you won't even be looked at. You have to bid by the time spent on a job and quote accordingly. The biggest reason that government contracts are so popular is that one there big and two they always pay on time.
     
  9. nosparkplugs

    nosparkplugs LawnSite Gold Member
    Posts: 3,445

    I have yet to get a signed 3 year contract for any commercial account:nono::laugh:, I only can "assume" or get a verbal conformation now that I will keep my loyal customers. This economy is flat out cut throat, accounts that we once overlooked I am considering bidding on. Here in Memphis it is a customer market you have 5 LCO bidding on every job. We can thank the media for education folks on good lowballing techniques, and this season it an't getting any better:nono:
     
  10. mattfromNY

    mattfromNY LawnSite Bronze Member
    Posts: 1,581

    Boob,
    Yes, you really ARE an idiot.
    But your posts are funny. I think you have too much free time, you really should seek help.
     

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