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Discussion in 'Business Operations' started by PROCUT1, Feb 22, 2011.
A little late getting to it, but great post and wonderful thread!
Good thread. Once people do enough...they can pretty much look at a job, figure out some numbers, and have a price in 5 minutes.
If you come up with a price for any commercial over an acre you don't know what you are doing. Can you do it? You might get lucky but I would never bid a commercial without walking the property over
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Procut - good post but you've made the classic mistake of including overhead considerations to evaluate individual accounts. They just don't mix.
it's simple, everyones costs are different therefore nobody else but you can bid a job. factor in that prices vary by region and you REALLY can't come on here asking how much to bid for a job. Great post, without knowing your bottom dollar costs to OPERATE, excluding profit, then you can't even begin to work on reducing costs.
The mistake would be NOT including that.
Just do what everybody else does. Find out what the cheapest company charges then beat them by $10.00 and then to save money put one Man with one ZTR on the job and pray that it all works out in the end.
Procut, you list some very valid points. My approach is very simple: I know my costs, and I know how much profit margin I want to make. I ALWAYS bid based on what my goal for profit margin is. My closing rate as of late has been down, but almost always due to price. Guess what? I don't care. If I only close one out of five, but at a high margin (yes, you would drop your jaw if you knew how high and would likely call me a liar), I win. Most of my clients are ultra high-end who have given me the whole "Treat my property like your own and bill me for whatever it costs" speech. Alot of companies make their money with volume. I make mine with fat margins.....it's just good business! Yeah, baby!
Good approach. There is money to be made with specializing, picking and choosing, and volume. As long as you know what youre getting into.
I do a mix of everything. I do some low margin volume work. But i plan and treat it accordingly. I do high end work and charge accordingly for that.
But in each case the numbers have to work and for them to work you have to know them.
I may have a $350 minimum for line striping. But in the wintertime, to keep a crew working, lets say I have a chain of quick and easy gas stations. 120 of them. Can I figure out a way to do them for $225 a piece? or just stick to my guns?
Those are the things i do in my office.
Now. If I set up an efficient crew. Pay them by the job. Supply them with the most time saving efficient equipment. Use the box truck instead of dragging the 28foot striping trailer, and have them in and out of each one in 30 minutes and set up for them to do 5 a night......
Versus. Dragging a 28 foot trailer, from our yard, to the job, to stripe one gas station, pulling it with a big diesel.
so I guess carrying around a fishbowl with figures ranging from $20 - $35k and picking at random won't cut it anymore.... Seems like that's what I see around here for commercial bids.