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Another Commercial Contract thread (Numbers Inside)

Discussion in 'Business Operations' started by Southern Pride, Mar 5, 2011.

  1. Southern Pride

    Southern Pride LawnSite Bronze Member
    from Memphis
    Posts: 1,382

    So I post up an ad on craigslist the other day and get a call from the head of these run down apartment complex that wants an estimate (somewhat elderly lady)

    Keep in mind as I walked the property with her she mentioned she would like to pay $700/month for cuts which is for 3 cuts a month because she wants it done every 10 days. So I went to the property assessors website and totalled the numbers of square footage and acreage. You guys tell me what you think

    Total Square footage: 251,175
    Total Acreage: 5.75

    AND she's wanting to pay $230.33 a cut. and I can't see doing it for less than $373.75.

    This includes edging/trimming

    These lowball numbers for commercial propertys across the country are amazing. I'll submit my bid anyway I guess.
     
  2. lukemelo216

    lukemelo216 LawnSite Bronze Member
    from ...
    Posts: 1,267

    final number really is based on amount of trimming and edging and things like that. It could be a 5 acre site, with only 15 minutes of trimming, or have 1 hour of trimming.

    the biggest problem is your really not set up ideally to be taking on these accounts, with a 48" stander if that s what your using. I would recommend at least 1 52" to 60" ztr. with a 56" ztr I could probably come in around $260/cut, which my cost on that is $175, so making 50% profit, which is ideal. The problem is, that most jobs right now arent selling at full price. You can still make profit, just not as much, ive been bidding at around 25-35% profit, so that would be 220-235, which would put me right where i need to be.

    Also remember too, that those property assesment sites, take the total land for the entire place, building mulch beds everything. You need to actually measure that on google earth, your actual cutting area, might only be 225k which will help lower your cost too.

    Are you selling this on man hours, or whats your method for determining your bid?
     
  3. Southern Pride

    Southern Pride LawnSite Bronze Member
    from Memphis
    Posts: 1,382

    I charge roughy $65/acre including any trimming but I have a friend with big equipment im looking to split that account with. Good point about the google maps thing. I may not worry with this property though because I know she's just going to pick the tom, dick, and harry company that will do it the cheapest, cuz like I said it's a shizhole. Probably in all honesty it would be more of a headache than anything. It would be a good account to fill the early week for me as wed,thurs,fri are dedicated to good paying customers, my resi's.
     
  4. you said the key word "Craigslist".
     
  5. lukemelo216

    lukemelo216 LawnSite Bronze Member
    from ...
    Posts: 1,267

    its a good account, but they are setting there budget. Thats why I never go with an acre price, because theres simply way to many variables. You could have an acre of lots of turning, trees, trimming, etc, which would take 1.5 hours, and another site, thats wide open, with minimal trimming that only takes 40 minutes. Why should both those lots be the same? I sell man hours. I know how much i can cover in a hour with a dedicated piece of equipment. Multiply it by my hourly cost of business and then add in my profit. That first one I would get 45 or 50$ for it. Yes some people are going to be able to get 60/hour, but were bidding around 45-55/hour on these accounts and we are still making 25-45% profit.
     
  6. kilgoja

    kilgoja LawnSite Senior Member
    Posts: 944

    haha right on...craigslist should be called craplist...i see what you're getting at but people just will not pay what it's worth on bigger properties...for example you can cut 10 yards that are 1/2 acre each (5 acres) and make $500...but if you go cut a 5 acre place they aren't gonna pay you $500 per cut...they may pay you half that if you're lucky which is what this lady is doing
     
  7. kilgoja

    kilgoja LawnSite Senior Member
    Posts: 944

    i would offer $350 a cut and say $1000 a month...that would be reasonable and actually a highly discounted rate compared to the normal rate but they think that is an outrageous price...i did my parents yard that is 2 1/2 acres and it takes 2 1/2 hrs just to cut...and another 45min to trim it all....so this property would be at least double that making it an all day job for a one person crew taking about 7-7 1/2hrs and they wanna pay you $230.33 a cut?...or you can go cut seven 1/2 acre yards in the same amount of time and make $350....but it is harder to get 7 customers rather than just one...it's a toss up...i'd go $250 a cut at the very least...but i'd shoot more for $300 a cut
     
    Last edited: Mar 5, 2011
  8. Southern Pride

    Southern Pride LawnSite Bronze Member
    from Memphis
    Posts: 1,382

    Yeah guys sorry I'm not more precise. Wish I was. I can estimate residentials perfect all day long but looking at huge masses of land is something new to me (even though I've been in landscaping since I was 11) I've always done residentials and I know commercial has gone to hell so I don't even know that I want to get into it ya know.
     
  9. lukemelo216

    lukemelo216 LawnSite Bronze Member
    from ...
    Posts: 1,267

    yup thats the biggest thing, is that when estimating larger amounts of land, you generally need to lower your price. Plus, when your doing more open land with less turning, your production actually goes up. On an average lawn residential or commercial, with a normal amount of turning, etc. I use the rate of about 50k per hour with a 52" ztr, when I get into wideopen multi-acre properties, like schools or sometimes even apartments and such I will bump that up to sometimes even 60k per hour because you dont have to turn as much.
     
  10. New2TheGreenIndustry

    New2TheGreenIndustry LawnSite Senior Member
    from GA
    Posts: 843

    I would say pass when I heard "every ten days". Talk about a scheduling nightmare.
     

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