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lost bid on wall contract... am wrong on my pricing???

Discussion in 'Landscape Architecture and Design' started by swing blade, Feb 22, 2005.

  1. swing blade

    swing blade LawnSite Member
    Posts: 123

    Hi guys,

    a while back i posted a thread in regards to a retaining wall contract i was bidding on. I listed the run-down on all materials, my costs for these materails,labor and so on and so forth. When you all replied back you stated that I was way underbidding the job. Most of you seemed to be saying I should be bidding between 8k - 10k Well I took your advice and bid the wall at 9250.00 I have since been in touch with the customer several times and we have altered the design slightly to lower the cost some. ( we did away with the capstone, and changed to a different style of block) Today i got a call from the customer stating that they think the bid is still too high and that they are now calling in someone else to look at the yard and quote the wall.
    The final plan called for a 42" high wall 50' long using oversived aultwall block, and then we were backfilling behind the wall with approx 40 cu yds of fill and topsoil, and then laying sod on top.
    What I am worried about is if I am now pricing too high. Or is it that this customer wants a cheap wall and not a quality one? :confused:
  2. mbella

    mbella LawnSite Bronze Member
    Posts: 1,284

    Milo, if I give five estimates, three of the five tell me I'm too expensive. That's the way it is. You're not going to get every one. If you do, you're probably underbidding. The key is to know your numbers. You need to know what it costs you to operate your business. You also need to know how much time it takes your crew to reasonably complete each task on a given job so that your hours are in line. The more you understand your numbers and your crew's ability to produce work, the more confidence you will have in your estimates.
  3. kris

    kris LawnSite Bronze Member
    from nowhere
    Posts: 1,579

    That is why I hate when guys ask for quotes ...how the hell do we know what it takes to run YOUR business .... you might be happy taking a foremans salary ...you might have an office in the home...wife doing your books...able to store a few materials and one truck in the back of your house ... your fine with getting 10% over that salary for your overhead.

    I don't remember the thread...put up a link so we can look it over. Chances are you were to low and you ran into a cheapskate that expects something for nothing.
  4. zedosix

    zedosix LawnSite Silver Member
    Posts: 2,635

    I just did a couple of quick calculations and even using a fairly pricey ret. wall stone, I would love to get $9,250 for that job. Especially in American currency. Unless the site was difficult to access or something.

  5. swing blade

    swing blade LawnSite Member
    Posts: 123

    sorry about not posting a link to the origional thread. Kris, I do understand your point regarding the differences with each lco's overhead, and as mbella stated, I'm not going to land every contract. I know that and understand that. i just want to be sure that I am not pricing myself right out of business. i have worked for several large companies, however due to the way they were setup, i never saw the pricing for the materials and i never saw what the customer was paying. i just did the install work. Now that i am trying to build up a compay of my own I KNOW that i am behind the learning curve for estimating and bidding jobs. I will be taking classes on estimating in college, but they were not offered at the present time. Until I can take them and learn the pricing and ways to bid the jobs, I thought, who better to ask than a forum of other landscapers, designers, and professionals who have extensieve knowledge within this aera of business. I accept the fact that i am learning, and I accept the constructive critisim as i know it will benifit me by learning from all of you. so, getting back to the point, Kris, thank you for your response. I agree with you on the overhead issue, and i apologize for not posting a link to the origional thread. here it is : http://www.lawnsite.com/showthread.php?t=92412
    mbella, thank you for your input, I have gotten responses from you and kris both on numerous issues and they have always proven to be useful.

    zedosix: to answer your question, YES the customers yard is about as confining as it could be. there is a 30' pine that takes up the entire front yard, there is no room for the dump truck to back into the property to dump the fill dirt so he is putting it over the sidewalk and in one of the parallel parking spaces along either side of the street. the neighbor next door has marked his property line with paint so that we know exactly where we are not allowed to go, which leaves me with about 5 or 6 feet on the side of the house to work in, and the backyard is an absolute mess with improper drain lines running every which way, buried cables from the utility companies criss-cross everywhere, and there is also a septic tank to avoid. so yes it is one of those properties that are about impossible to work in. so i bid it higher to accomidate the extra labor time to complete the job, and honestly a lot of it is the cost of delivery fees in my area.
  6. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    send me a full financial disclosure of your business...........your overhead.....maybe some profit and loss statements, balance sheets, and tax returns........then i may be able to help you out with what you need to charge....

    excuse me while i cut and paste this response to 100 more threads
  7. newleaflandscape

    newleaflandscape LawnSite Senior Member
    Posts: 348

    Did it ever occur to you that the customer might tell you they are shopping around just to get you to lower your price. I have had many customers call me and say that they found someone to do something cheaper. And after I tell them my price is still the same they end up having me do it anyways. Stick to your guns. If you give in and lower your price they will tell all your friends you are negotiable. Again like everyone else said, You will never be succesfull in any business if you charge what you think everyone else is charging. Its always good to know going rates, but you should never base your prices on them. Good luck
  8. AGLA

    AGLA LawnSite Bronze Member
    Posts: 1,742

    It is like any other free market thing. There are two sides to the equation. Like any equation, boths sides have to be equal or it is an incorrect math problem rather than an equation.

    You are one side of the equation. You have to cover your overhead to break even, you have to cover your base salary as part of that, and you have to make a profit on top of that. The only thing that is flexible to you is how much profit to add the rest are constants in your side of the price equation.

    The customer is the other side of the equation. The only fixed constant on his side of the equation is when part of the project is a "must do" like to meet a bylaw or protect something of high value that will fail if the project is not done. Most of his side of the equation is exactly how much he values having the job done.

    When one side equals the other side you have a true balanced equation and a sale.

    That is where the other variable comes in. Unless you are the only person the customer is dealing with, the customer's sense of how much to value the job is influenced by all the other people presenting different numbers than yours. That may influence him into believing that you are over priced or a bargain because his sense of value is altered.

    You can and should be going further than just having pricing in your equation. If you can demonstrate some other added value that goes only with hiring you, it makes him value you more than just the pricing. That can be showing a very impressive portfolio of built work that makes him feel much more comfortable paying you more than the next guy who can not demonstrate that as clearly. It can be that you are very well known and talked about highly all over town. It could be that you demonstrate a very trustable personality and an honesty that this guy might value. It could be that you can be there next week instead of two months from now. Maybe you have a bigger crew or are more organized and can finish the job faster.

    Remember that anyone else bidding against you can have any of those traits that I mentioned above and can beat you at getting the job while still charging more than you. Whenever two landscapers are bidding on the same project, it is never an apples to apples comparison even if they work from the same plan.

    In the end you have that one variable to settle the difference between you and the customer in order to make that equation balance. That is your profit margin. This is where you become just like the customer. That is for you to decide how much profit is small enough to walk away from the job. The less work you have the more important it is to get the job at a lower profit. Only you know where that is. None of us do.

    How much you value getting the job = How much the customer values having YOU do the job

    Unless that is equal, one of you walks from the deal.
  9. kris

    kris LawnSite Bronze Member
    from nowhere
    Posts: 1,579

    Milo I apologize. My post was a tad rude.

    I think I took it a little personal the day I read it....Like, feeling that I was part of you losing work.
    I stand by the part in the original thread that said I felt you were low on man-hours.
  10. crawdad

    crawdad LawnSite Bronze Member
    Posts: 1,939

    That was funny, the first time I read it. :waving:

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