"Professional" LCO's bidding low...

Discussion in 'Lawn Mowing' started by maple city, Sep 6, 2003.

  1. maple city

    maple city LawnSite Senior Member
    Posts: 305

    I am all set yesterday to bid 2 new commercials. I have my hot little bids all typed out ready to go, when we get a little info on the down-low about the current rates of these accounts. I'm floored to find out that on one I'm $75.00 over the current weekly rate and on the other $20.00 over the current. I bid at $30.00/man hour. That's about all you'll get here.

    Both these accounts are serviced by Professional, insured LCO's. The one I'm $75.00 over on would take about 2 1/2 hours. The current LCO is doing them at $20.00/ man hour or less depending on their time.

    It's to the point that every LCO around here is doing this (excet us), and they are driving down the whole market considerably. So I guess the only option is to strive for the residential accounts which around here will bring a better rate.

    I can't use the "you get what you pay for" or the "I am fully insured" arguments, becuase some of these LCO's do great jobs, and all are insured. I heard that one big commercial account in our area was mowed for $500.00/mow 4 years ago, now it's been bid down to $385/mow by these guys trying to low-ball each other.

    Any ideas on what to do (besides work for free)?

    Thanks for letting me complain a little, it's been a rough bidding week here.

    :blob2:
     
  2. Keith

    Keith LawnSite Gold Member
    Posts: 3,977

    2.5 hours x 30/hr = $75

    You are $75 over the other bid? I take it they are doing it for free then :D j/k
     
  3. Phishook

    Phishook LawnSite Bronze Member
    Posts: 1,143

    I knew a guy from Knox that drives up there, he was bragging about a $350/2 hr. job.

    There's money up there.
     
  4. Rustic Goat

    Rustic Goat LawnSite Bronze Member
    Posts: 1,194

    Maple, not really certain I'm understanding your pricing structure either.

    Regardless,
    Bid the way you need to for your business's financial success, some you'll get, some not.
    Let your competition work cheap, what comes around . . . .etc.
     
  5. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    See, that's how it is around here too! I used to try to get Commercial jobs several years back and EVERY FRIGGIN TIME it was like that. I got so frustrated I finally just decided screw it. I can make a real good hourly rate doing residentials. I'll just keep doing that.
     
  6. GLAN

    GLAN Banned
    Posts: 1,647

    This will also depend on what the commercial property actualy is and the visibility profile of the site and what image they want to project. There's all kinds of commercial, some that settle for industrial standards.

    The lowballers never make it. Not with commercial, I don't care what anyone says. Unless they are a large company breaking into new areas and have money backing them. Even then it's all that wise.

    Property owners will not stand for shabby work. The lowballers will only provide marginal work and when confronted they do a song and dance. Those properties usualy go up for bid again.

    They can't price to low on commercial when $2mil liability and workmans comp insurance is required. They can't survive, and the owners will not tolerate poor work for any extended length of time.
     
  7. Runner

    Runner LawnSite Fanatic
    Posts: 13,494

    It's typical. It happens ALL the time around here. I can go to commercials that I did 10 -15 years ago, and they are paying now what they paid me 10 years ago. Sometimes, even less. It's a joke. I've had lco's come and bid for just over half of what I was getting to do a multi-prop. account. Ridiculous. Yes, their work reflected it, but now, after I've talked to them and told them about what I was getting, I believe they raised their rates. The work still is shabby, though. It's a joke. Then, - the owner calls me up and wants me to do all the shrubbery. Last year I did it, and hit him hard for it. I just didn't care, after they ousted me. This year, he didn't even call, and I bet if I go by there, the shrubbery STILL isn't done. These guys are just a "hack and whack" outfit, and their work shows it. I don't even know how this guy makes any money, - everytime I see them, there are always guys standing around the truck doing nothing while others are out working.
     
  8. EvandSeby

    EvandSeby LawnSite Member
    Posts: 147

    Consider the source of your "down low" information. What is their motivation for telling you? Were they put up to it, trying to get you to lower your bid? Have you seen with your own two eyes what this customer was paying before?
     
  9. maple city

    maple city LawnSite Senior Member
    Posts: 305

    I guess I phrased my ranting badly.

    Let's say my bid was for 275.00. The current LCO is doing it at 200.00. That's what I meant. I figure that the current LCO is doing it for $15-$20/man hour depending on their time. There is no way I'm working for that low of a price.

    Doing some other poking around, I've figured out that they are bidding very high on residentials, making it up there.

    I know how much we all like to get a decent commercial account, but the way people are driving down the prices on them, there won't be any good paying commercials here soon.

    What really surprises me is that one the account I really want, it's a really nice non-industrial commercial account. High profile kind of place. The quality of the current mowing is poor. No stripes, no mow pattern at all, lots of missed trimming. I don't know if the account has money problems or why they are settling for such poor quality work. I'm still going to submit a bid, at my own standards. I think I'll include pictures of our work.

    Thanks for letting me get this frustration out!
     
  10. dvmcmrhp52

    dvmcmrhp52 LawnSite Platinum Member
    from Pa.
    Posts: 4,205

    Hmmm.... and all this talk about scrubs ruining the industry.
    It aint the people out to make beer money that I'm worried about.They are NOT my competition! They have no relevance.
    Condo's,apartment complexes,comercials,They are all the lowest common denominator(price) around here.Thats why we don't do them.There is plenty of work for all around here but the attitude is still the same from lco's,Who the hell is this scrub scumbucket moving in on MY turf,When in reality they are cutting each others throats every day for no reason. Sad but true.I personally find it amusing because we WILL survive.
     

Share This Page