What would you price this job (details)?

Discussion in 'Landscape Architecture and Design' started by bigpoppa85, Oct 15, 2013.

  1. bigpoppa85

    bigpoppa85 LawnSite Member
    Posts: 14

    What kind of warranty do you provide? Like a 1 year disease warranty?
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  2. bigpoppa85

    bigpoppa85 LawnSite Member
    Posts: 14

    Also this job includes cutting down and removing a 25 ft very full tree and the delivery and installation of five ~200 pound boulders
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  3. andersman02

    andersman02 LawnSite Senior Member
    Posts: 503

    1 Year Plant warranty. Covers any plant death other than not watering and acts of god. Tough to tell a customer " you didnt water" during hot months though

    A pretty good idea btw is to triple plant costs to find labor, MU + warranty prices. comes out pretty close except for larger plant material (lg Bnb trees and that type of thing)
     
  4. clipfert

    clipfert LawnSite Member
    Posts: 195

    Labor hours way too low.
    Mark up way too high.

    This formula will not work.

    What if you were installing 5 solid gold boulders at 10 million a piece? With your formula your labor if would be 150 million. This example is extreme but you can see what I mean.

    If you gave that proposal to someone broken down with your numbers what are you going to do when they tell you they will supply the material? You take the job and will lose big tine on your $25/hr rate.

    Mark up your materials 20-30%
    Apply your labor rate. This will include your overhead and labor burden.
    Add profit margin to above total.
     
  5. Laurel Leaf

    Laurel Leaf LawnSite Member
    Posts: 33

    I agree with clipfert. That is some really good advice right there. I can see why you do not want to break down the prices for your customers----$ 25 or labor and 3 times mark up on materials?
     
  6. bigpoppa85

    bigpoppa85 LawnSite Member
    Posts: 14

    I agree that the formula isn't great. I'm not following you're formula either. So I apply a mark up on materials, apply a labor rate and THEN add a specified profit margin? Why not just add more on to the Materials mark up and have a higher original labor rate?

    I see your example about the gold boulders. But as I said earlier, I wouldn't break down my formula to clients. If they asked I would even out my numbers to make more sense. The current formula that I mentioned on this thread is just for MY bidding purposes until I get more comfortable with guessing total man hours. In your boulder example, If they asked how much I would bid to install the boulders I obviously wouldn't tell an actual customer $25/hour.

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  7. bigpoppa85

    bigpoppa85 LawnSite Member
    Posts: 14

    Here's what I'm thinking now. Tell me about this potential formula. $50/man hour, and 200% wholesale price (doubling wholesale price).

    I'm on my phone but I think it comes to $7,200 which is fairly close to my original number but more more sense in the formula.
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  8. bigpoppa85

    bigpoppa85 LawnSite Member
    Posts: 14

    Excellent advice here. I knew my formula was nothing but a stop gap until I found a real one.

    What do you all think about this one:

    Materials: 200% of wholesale (double wholesale)
    Labor: $50/ man hour.

    Is that reasonable or do you think it should be more like 175% of materials and $65/man hour?

    In the 200% MU example, I show the bid to come to 7,200. That's fairly close to my original number. In the 175% example the price would be 3062.50+4290=7352 + 400 extras= 7752.50

    Which do you think is more feasible in the long run?
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  9. clipfert

    clipfert LawnSite Member
    Posts: 195

    Neither. Can you tell us what your profit is? Your profit margin is added to the end for one specific reason. Keyword "MARGIN"

    If your not making a profit why do the job?? You are just employing others and working for a wage.
     
  10. bigpoppa85

    bigpoppa85 LawnSite Member
    Posts: 14

    I can tell you my operational profit (money made on this job, including material purchase, labor, gas, rentals, etc) but it won't include overhead (insurance, phone bill, etc etc) because that all gets very complicated applying overall overhead to specific jobs.

    Materials+labor+miscellaneous expenses (gas, rentals, etc) is 3,068. Operational profit margin on this job is in the ballpark of 40-45%.

    I'm new to landscaping, but not new to financial statements. I graduated Magna Cum Laude in Finance and my background is understanding finance. I've never seen a financial statement that adds in a profit margin AFTER. Profit, by definition is revenue-expenses=profit. Therefore profit is what you have left over AFTER subtracting expenses from revenue.

    I can understand if you've tailored a custom formula that works for you, that's cool. All I'm saying is that I haven't seen one done that way, and was hoping you could show me what you mean.
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