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bidding for profit

Discussion in 'Bidding, Estimating and Pricing' started by Blue Ridge LC, Mar 10, 2020.

  1. Blue Ridge LC

    Blue Ridge LC LawnSite Member
    Messages: 9

    Good evening,

    I have done many many hours worth of reading on this forum, as I have decided to expand our business into landscape design and install ( this year is the year in the business plan ) coming from masonry, hardscaping, grading, excavating, water remediation etc.

    My father about 15 years ago sold his landscaping business to my uncle for the reasons I’m going to delve into, I am at a point where I am ready to just entirely scrap this division of the business unless I just focus on high end residential, estates and high end commercial, I find extremely hard to compete with “ companies “ who’s bidding model is “ hourly rate plus materials and a little extra for dump and gas “ any successful business owner knows the “ hourly wage bid “ will not grow your business in-fact you will remain in the field your entire life...15 years ago my fathers hourly wage was 68 dollars an hour per man, after direct and indirect expenses, his overhead formula would put him at a starting profit of 56% ( negotiations would start from that number ) he always told me you charge how the union contractors charge then adjust down a percentage to have the lower bid on union/open shop bids ( he was also a mason by trade ) any successful contractor I know uses these methods as well. I’m going to back track a bit, the hourly rate some of the businesses we bid against are just picking a number everyone else is using and everyone of those businesses is still stuck in the same growing pain stage, I’m not fully sure they under stand 60 per hour leaves no profit on the table after everyone that’s in your pocket gets the cut. I am seeing 80 year old companies sell of equipment reduce insurance, scrap services that ancestors started, for labor woes and every guy with a pick up and a trailer that says “ I own a business “ I get it we all started at the bottom rung, the competition in this industry is going to diminish the potential to be true entrepreneurs and business men/woman. We have all single handily allowed website lead generators, to drill homeowners with then “ expect to pay xx per square “ another pricing module that will kill a business....I wish everyone the best of luck this season and please stick to your prices, stick too pricing for profit, profit is what grows your company, in order to pay yourself, your crews, overheads be direct or indirect, please start pricing accordingly and you won’t have to kill yourself to grow your business !

    PS -I know I just wasted 10 minutes , but I just had to when a potential client tells me I’m 3k higher than someone else, on a 12 ton river rock removal, 6 yard mulch removal, new bed designs, re-defining existing beds, and won’t provide the new install proposal until she decides on materials ( she’s changed stone three times, sizes ,colors , finish etc all matters when stone is concerned ) ( changed arraignments and selections prob 15 times ) and now she wants design money back.
     

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