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Bidding by Zones?

Discussion in 'Irrigation' started by jbintexas, Jul 11, 2005.

  1. jbintexas

    jbintexas LawnSite Member
    Posts: 16

    I started a landscape contracting business almost two years ago, and have installed several residential irrigation systems. I do not focus primarily on that area of the business, because it seems so competitive since most consumers think we are all bidding apples to apples, so the lowest price usually wins, even though there are differences in designs. I would however like to do more irrigation installs and I have a couple questions for you veterans of the trenches. I realize that most jobs can probably be bid profitably by the zone method, but everything I have read from consultants who have been in the field, and who have sharp business skills to boot, say that is not the best way to be sure you are truly making the net profit that you desire. For all my contracting, I have been using the method recommended by J. R. Huston in his book "How to Price Landscape and Irrigation Projects". So far as I can tell, I haven't run into any other irrigators who use such a detailed and bottom line system. Most of the guys I have run into talk about price per zone only. In the greater southeast Texas area, it seems like the established companies are charging in the $350 - $450 range, with a few quite a bit lower than that. If any of you in my general area would be so kind as to share with me what kind of pricing you are running into and are using yourself, I would appreciate it. I know we all have to be reasonably competitive, but surely most of want to make enough net to have a good standard of living. If I use efficient methods of installation and can't make some pretty darn good money after considering ALL my costs and overhead, I will look for something more lucrative.
    One more question. After reading the pros and cons re trenching vs. plowing, I am intrigued by the plowing, but wonder how it could work in the hard baked clay soils so prevalent in our area. In the new homesites built up with bank sand, I can see it, but what about the bone hard sites? Any local experience would be enlightening.
    Thanks for reading this too long posting.
  2. bicmudpuppy

    bicmudpuppy LawnSite Silver Member
    Posts: 2,781

    Well, I'm not local by any means, but Kansas clay and Texas clay don't differ by much. A plow does fine in most anything but rock. If it trenches easy, it will plow easier. Now as to bidding, I take a real basic approach. I have a spread sheet setup on the computer. When I go to a site, I walk the site and count heads, not zones. I then outline in my head how many zones those sprinklers are, and how much main/wire the site will require. From those numbers, everything is a multiplier. Rotors, Sprays, Valves/zones, mainline footage. I have a set price for tap and controller. The price for the tap should include the labor. The price for the controller should include one hour to wire that controller and test the system. I balance the mulitplier for heads and valves to include labor and materials. Mainline is a factor of pipe and wire plus a percentage to include fittings. The multipliers can be tweaked, but they give you a base. I actually have a Worksheet A, Worksheet B and Worksheet C. A is the I don't really want to work for this guy. B is standard, and C is things are slow and I'm getting hungry. Sure wish I could bid more B and A pricing :)
  3. jbintexas

    jbintexas LawnSite Member
    Posts: 16

    Thanks, Bryan. Your system of bidding sounds fairly similar to mine. I'm glad to hear that the plow works in dry clay. Are there any of you Texas guys using a plow?
  4. turfman59

    turfman59 LawnSite Senior Member
    Posts: 801

    we just bid a project with a 1 1/2 service were going to be able to run up to 12 rotors spaced at 38-40 ft. spray zones will have up to 20 sprays. I couldnt imagine using a 350- 400 dollar per zone bench mark in this situation.

    and If I had a 40 year old galvinized 1" service and needed 35 foot spacing I couldnt imagine the same bench mark.

    what if a customer only needed one zone because there service was 1 1/4 copper and they could run 12 heads with small nozzles for even precip.

    would that mean you would do the whole system for 350- 400 dollars
  5. jerryrwm

    jerryrwm LawnSite Bronze Member
    Posts: 1,274

    Most contractors that bid by the zone usually only do so on 'typical' residential systems. They find that in their comfort zone. Many run into problems when they have a larger water supply, larger valves and more heads per zone. Many times they will actually figure what the system would run using 1" valves and mainline, and then double that zone price for 11/2" ML and triple it for a 2" ML. I've actually heard that explained that way to me by a couple of contractors! (I wonder how they would have bid on the project that we installed a couple years ago that had 5000' of 6" ML looped and another 6000' of 4" submains)

    I used Huston, and Means Estimating, plus several years of construction data to come up with a worksheet that will allow me to plug in quantities and current pricing, and it will calculate the unit pricing for labor, equipment based on average manhours per task, and then give me a subtotal. Trencher rental is included based on footage per hour. Minimum is what the daily rental is. After all the categories are filled, and a Total is arrived at, then it will add the sales tax, and I can manipulate the desired overhead percentage, as well as the gross profit margin and end up with my Installed Price. (I try not to use the word "bid". It suggests that there is a possibility that one might not get the job. That's always true, but by using the term, "Installed Price" it seems to denote a certainty that I am confident that I got the job already. One of those salesman things - use words that steer the conversation and actions in your direction. I also use, "I am going to install the backflow here, and then the controller in the garage, so we'll need access on Tuesday." rather than say, "we would put the controller in the garage and the backflow here.")

    Just like anything else in business you have to know your costs.

  6. drmiller100

    drmiller100 LawnSite Senior Member
    Posts: 562

    i bid by head.

    i spend time walking around with the homeowner pacing it all out.

    then i spend even more time LISTENING TO THE HOMEOWNER.

    One couple was getting 3 bids. The wife had a flower bed off to one side. I told her i coudl do a drip system so she wouldn't have to water it every day, then told her I'd show her how to plumb it herself so next year when she changed things she could do it herself. Then I told her it was "no extra charge" for the drip. Her husband couldn't complain.

    She liked me.

    I made it so they couldn't compare straight up bids. I bid using "commercial grade stainless steel shaft gear drives."

    the other guys use cheapy plastic sprinklers.

    we're installing it this week.

    people want a reason to hire one person over another.

    price is a crummy reason for the customers you want to have. think about this for a minute.

    give your potential customers 2 good reasons to hire you rather then your competitors.
  7. Rotor-Man

    Rotor-Man LawnSite Member
    Posts: 126

    I also use a spread sheet and plug in all the #'s in my office. Then add in profit margin and any amounts over and beyond for difficulties that I forsee will happen on the installation.Have never used by the zone pricing, and only use by the head pricing for customers that want a zone added onto an existing system, etc. And yes LISTENING is the KEY selling point for me also, many companies in my area see speed of the installation as the most important factor, for me relationship with a new customer leads to more referrals and more work down the road.
  8. turfman59

    turfman59 LawnSite Senior Member
    Posts: 801

    i bid by head.

    i spend time walking around with the homeowner pacing it all out.
    I have no idea how you could consistently bid by the head when there are so many variables besides the heads, what percentage of your projects costs are based on the heads you use.
    My question: if you have a 12 head job is it 1200dollars and a 36 head job is 3600 dollars
  9. bicmudpuppy

    bicmudpuppy LawnSite Silver Member
    Posts: 2,781

    For me, the most inconsistent variable is heads, followed by zones. I make a mental count of rotors and sprays and a rough figure for zones. The other intangible is length of main. These all have constant multipliers for me to get a total. To say a 30 head rotor job is x/rotor and corelate that to a 20 head rotor job being the same per rotor would, in my opinion, leave way to much to chance.
  10. drmiller100

    drmiller100 LawnSite Senior Member
    Posts: 562

    ok. i'm listening, and wanting to learn.

    80 percent of my hookups are to city water, wtih a 1 inch main, 1 inch water meter, in new subdivisions with great flow.

    I charge x dollars for tap, and include wire, controller, double check, permits, etc. in that charge.
    then, i do x dollars per head in addition.

    i add 300 bucks if it is a well, and put in my bid that homeowner is guaranteeing 12 gpm.

    bigger lawns often need more heads. more heads means more pipe. pipe in the grand scheme of things is pretty cheap compared to labor.

    more complex lawns means more heads. most importantly, more heads gives me reasons to explain to homeowner why it is complex.

    how do you do it?

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