Developer Discounts???

Discussion in 'Landscape Architecture and Design' started by Jonesy, Aug 1, 2004.

  1. Jonesy

    Jonesy LawnSite Member
    Posts: 3

    I have been doing landscaping for a long and I know how to bill for single customer/comm/res. big small it does not matter. I am however in a great position. I started cutting for a small builder this year and he just bought his first development. I just did some landscaping at the opening of the development. It is going to have 60 houses on it and I have told him that I would be interested in the landscaping of the houses. It will be simple stuff like a couple boxwoods or so. My question is how do I need to come up with a price for him? How much should I take off for having so many? In the past there was a set price from him and the homeowner can add whatever they want at their expense and that will continue. I just feel I need to lower soething somewhere because of the quantity.
     
  2. Turf Medic

    Turf Medic LawnSite Bronze Member
    Posts: 1,073

    If you do decide to discount, make sure you have an agreement to do all of the houses. If you plan your pricing to include doing all of the houses and he sells the development, or gets a better offer from another landscaper, you get screwed, due to the fact you discounted from the start. If I was going to offer a discount, (and I'm not saying you need to give a discount) I would give the discount by doing the last 2 or 3 at no charge, but I would be getting full price up until then. Your butt is covered and it keeps him honest :D.
     
  3. landscapingpoolguy

    landscapingpoolguy LawnSite Senior Member
    Posts: 819

    Why install a builder landscape? Why not have him build into the price of the home an option for the house to have a real landscape that the purchaser will will feel is an added value to the property....I can not stand when builders approach me as a landscaper looking for simple spec house designs that will be torn out a year or two after the house is purchased....i would come up with a few designs for each house maybe two or three designs per model of house then let the purchaser make a the selection....this can easily be seen as an added value to the home and teh home owner.

    Chuck
     
  4. muddstopper

    muddstopper LawnSite Silver Member
    Posts: 2,342

    I think discounts should be based on the reasonable amount of business that the developer throws your way. I dont do landscape installs and most of my development costumers are people that are wanting seeding done. Sometimes lawns and sometimes just roadbanks. I have a method that works for me and it depends on the amount of seeding to be done at each site. I have a basic persqft price I go by that pretty well coverers me on a per tank basis. I give the developer a discount per tank load as long as they agree to give me all of the seeding jobs. If they dont agree, they dont get the discount, I might still give the discount if the job is big enough to warrant it. That gives the deveoper reason to consider me for their next seeding job. On jobs that require more than one tank, I have three different size hydroseeders, I have a per acre price, I figure the number of tank loads it will take and give the developer that per tank discount. For large acreage jobs, which is almost always a developer anyways, I am usually bidding against another hydroseeder operator and I place my bid based on my costs, factoring in availablility of water and time to do the job as well as the cost of materials. Some I win, some I lose and others dont get done because the developer is to cheap. A lot of the times I am lower in price than other operators but it is because I can put three machines on site and accomplish the job in less time and require less man hours to do it. Three people, three trucks= one person to keep the slurries mixed and one to drive and one to spray. Makes pretty fast seeding as it is almost a continuous operation. A lot on giving discounts is knowing the general contractor. Things like how much work have they done in the past will help you decide if you want to offer discounts to get in good with them. Knowing something about their past will also give you an ideal about how well they pay, (or if they pay). Dont see any reason to give a discount to someone that doesnt pay on time. With someone just starting out developing properties it might be best to check on their cash flows. Developers are bad to want something now, even if they cant pay for it. They always figure that they can pay you whenever the property sells. After all, your time and money doesnt mean squat to them.
     
  5. AGLA

    AGLA LawnSite Bronze Member
    Posts: 1,749

    A discount should be based upon one thing. That is your overhead expense. If you are working more efficiently then you can shave a little off. If not, you are shooting yourself in the foot.

    There are lots of ways of being more efficient. It can be because they are very similar and they don't have to be constantly designed. It can be that you can keep your equipment there and continually work without travel time and resetting. You could be able to buy and store plants in bulk.

    Another form of being more efficient is simply that you can move more product than you could otherwise which increases your financial efficiency.

    The last thing you want to do is discount work that does not have a higher profit margin than your regular work.

    By the way, this subject comes up a lot on many landscape message boards. Builders like to entice smaller growing companies into discounting with the promise of much more work. They often milk you for a while and then copy what you did with their own cheap labor.

    Another risk is that once you start, your eggs are largely in one basket. When problems arise or deals get broken, it is hard to "fire" the builder. For example, if you have three houses going and the builder says he is short in making a scheduled payment to you and he says that it is all set once the house is closed on and he needs you to finish the other ones... and he'll have all of the money next week. Do you cut and run losing the whole development? Do you basically finance him to complete the job and hope he pays? It is a much tougher question when you are in that position than when you are just thinking about it.
     
  6. Mdirrigation

    Mdirrigation LawnSite Silver Member
    Posts: 2,772

    Builders and developers love to work off your money , paying 60 to 90 days, calling you telling you that the job needs to be done tomorrow , complaining about quality but rushing you to finish, Asking for better pricing , and complaining they arent making money while the house prices are constantly rising. I have a rule with builders , cash before work , paid in full.
     
  7. brentsawyer

    brentsawyer LawnSite Senior Member
    Posts: 663

    Usually on something like that you will be doing a few houses at a time every now and then. There are two great things about doing builders homes once you start and the like your work. First, no meeting time. Usually they trust me enough so that they tell me what needs to be done and I do the rest and no discussing this and that plant here. Second, no sod to deal with. Cleanup is a snap since you don't usually have to worry about dirt in the grass since threre is none. There are of course the downsides which everyone else talks about but your question was discussing discounts and I guess that If you figure out your per plant price it is a discount but as far as overall time, then no it is not a discount and most of the time it is some of the best money that can be made as long as you stick with tolerant materials that won't habe you replacing stuff all the time.
     
  8. landscapingpoolguy

    landscapingpoolguy LawnSite Senior Member
    Posts: 819

    for get the discounts tell them you give your best price the first time and thats that. Builders are cheap and sneaky they will penny pinch everything

    Chuck
     
  9. D Felix

    D Felix LawnSite Bronze Member
    Posts: 1,898

    Developers will screw you over without a second thought. All they are concerned about is THEIR bottom line, not yours.

    If you decide to work for them, get a GOOD contract, and have your lawyer look it over. As a matter of fact, have him/her write it up.

    Not all developers will screw you over, but most will. Trust me on that. We were screwed over last year, and now see that particular development for what it really is......


    Dan
     
  10. Jonesy

    Jonesy LawnSite Member
    Posts: 3

    Thanks for all the advice... I think the developer is pretty truthful but I am still careful and cover my butt. We have kind of grown together over the past 4 years. We talk on a normal basis even in the winter months and we do lunch every so often but I still draw up contracts.............Thanks again!
     

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