Multiple/Large Apartment bid

Discussion in 'Lawn Mowing' started by krrp1212, Jul 27, 2011.

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  1. lukemelo216

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

    the way your figuring out your hourly rate is not right. You cant say 9$/hr for helpers then $32 for me and my dad. You need to add up your total costs as a whole, multiply it by 4 (weeks/month) then divide it by the number of hours your working (320, 8 guys 40/week) then thats your break even rate. Then multiply that by your profit, and come up with an hourly rate for one person. That hourly rate includes, projected wages for employess, insurance (gl, auto, wc), rent (shop, office: even if your running from home it should be taken into account), cell phones, landlines, repair budget, fuel budget, equipment, tools etc. So if your nut is $15/hr and you want to make 50% profit you would charge $22.50/hr. I would not put down a bid that says $150.00 per hour simply becasue management will see that and fall out of their chair. Even if you put down 8 guys working.

    That brings me to my next point. If you have 8 guys working, you will be much more profitable and productive if you split things up. You run a crew of 3 and your dad runs a crew of 3. Seperate properties and all. Its been proven time and time again that the less people on a crew the more productive they are. If you have a really big job, then both crews can meet together and start, and get a jump on it then leave and head to the next job. Thats what I would do at least.

    As far as price thats on you. Nut X Profit=bid. I play around with my profit margins usually. I try to gain anywhere from 30-50% profit on any job. On something like this probably in the range of like 35% or so just because of the volume.

    I am not trying to sound discouraging, but it does sound like your in a little over your head personally, if your asking for help on this stuff. I know your getting advice but thats just my opinion. I would tread lightly though on it simply becasue it has been changed 3xs in the last 4 years. Lastly, most likely if you do get it from the sounds of it youll have it 1 maybe 2 years and then it will be gone to the next low bidder. First year your set to make 6 digits. Ill go on the generous side and say 150k for the year, you add in that 300k accoutn that puts you up to 500k (figure more work added too) you lose that account in a year or 2 and your down to 200k again thats a 60% loss in your business which could be the end for you.
     
  2. vencops

    vencops LawnSite Bronze Member
    from NC
    Posts: 1,537

    Just remember, you're not arguing with me. You're arguing with simple math.

    If you and your dad constitute 128MH's/wk (64X2)...and you bill that out at $38/MH, what does that number look like - beside your professed cost of labor of $127K (based on 32cuts/yr)? I'll give you a hint. You're in the hole for +/- $30K, and you haven't paid the 1st employee.

    Can you not see why you should put down your shovel?
     
  3. krrp1212

    krrp1212 LawnSite Member
    Posts: 37

     
  4. lukemelo216

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

    Yes I do agree with effeciency. How did you develop those numbers for the bid itself?

    We run tests durng the season periodically with timers and such to determine that actualy production of our team. I will go out and have them start mowing and I time them, and I know the distances of stuff so I can gauge it. Do that a few times to determine the rate we can work at. And you have to do it at an average property. Not a small tight one, and not large open becasue that throws off your numbers. And we do this for everything! Every different size ztr, wb, push, trimmer, edger, etc.

    We know our numbers. We know our operations costs, and we know how to bid. When you have those things down then you will succeed.

    Like I said before you cant figure out your total hourly rate by just adding each guys hourly rate together, and 20$ in there for fuel like you did. Thats a set up for failure.

    You need to figure out your true hourly rate, as i described in my preceeding post. Then bid.
     
  5. GrassGuerilla

    GrassGuerilla LawnSite Bronze Member
    Posts: 1,437

    I fail to see how you have estimated production without knowing what equipment your crew will be using. Not to mention how well your crew can really produce with it. I've screwed up bids with known variables and a proven track record.

    I hope to hear from you next year, with a big fat margin. But it sounds dangerously thin. As a solo 100k annual profit sounds like a four maybe five man operation. There are far more knowledgeable people on here, hope they can help you.
    Posted via Mobile Device
     
  6. topsites

    topsites LawnSite Fanatic
    Posts: 21,654

    Sometimes, when things go this way...
    Step outside, clean yourself off, regather your bearings, come back inside and start all over fresh?
     
    Last edited: Jul 27, 2011
  7. Glenn Lawn Care

    Glenn Lawn Care LawnSite Silver Member
    Posts: 2,647

    There is nothing wrong with expanding a business over a period of time... but blowing up in one day like what your trying really isnt a good business decision. What if you can not commint to everything you said and then you are s.o.l. I.M.O. Sounds like you are money hungry and thats a bad thing when putting a bid together that large. Good Luck Guy!
     
  8. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

  9. ndols2

    ndols2 LawnSite Member
    Posts: 88

    if this company has changed hands 3 times in 4years. its a sure bet they will drop you too. there is no loyalty with places like this, as you can see. when it comes to pricing, sure it seems low to me.( I charge more per man hr) put if you think you can profit, I say go for it. I would just not count on a re-sign next year, so don't buy more then you can pay for if they don't. I stay away from apartments, and some HOA's because they seem to have such turn over. they tend to complain about every thing, and what to go for the cheapest bid they can find.
     

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