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Can this be right?

Discussion in 'Landscape Architecture and Design' started by John Deere, Feb 28, 2001.

  1. John Deere

    John Deere LawnSite Member
    Messages: 128

    Okay, just some background first. I have been in the landscaping business for 7 years and own my own company w/ 8-10 employees. In other words we stay busy. I have always estimated my jobs by an hourly rate for labor. I came across a new way to estimate and it doesn't seem right so I want your opinions.
    EXAMPLE: My Cost ( All 2 gallon )
    Plant List - 11-Crimson Pigmy Barberry $12.50 ea.
    12-Goldmound Spiraea $10.00 ea.
    12-Fountain Grass $15.00 ea.
    11-Prince of Wales Juniper $12.00 ea.
    1 -Red Bud (Tree)$45.00
    2 -Blue Spruce (Tree)$99.00
    So here is how I was told to do this. Take the cost of the plants X 1.5 to get my mark up on cost. No problem, that makes sense. Here is what gets me. Then I take that cost X 2.5 for my labor. So for example, the Barberry would be $18.75 ea. which would be a total of $206.25. Then 2.5 X the $206.50 to figure my cost for labor which is $515.00. Now if any of you are making $515 to plant 11 Barberry shrubs PLEASE tell me where you are at and who your clients are because I want in!!! Tell me if that way out of line or am I maybe missing something. The only thing I can think of is that maybe that also includes your cost for making the bed and laying down the mulch and installing the edging as well. So I would love to hear from all of you on your bidding procedures. Thanks!!!
  2. KirbysLawn

    KirbysLawn Millenium Member
    Messages: 3,485

    I get $343.00 for 11, looks like what you've been doing is working, I would stick with that! That formula wouldn't fly here and this is a good market.
  3. thelawnguy

    thelawnguy LawnSite Silver Member
    Messages: 2,411

    What size barberry? 1 gal pot or 3 ft b&b?

    When I think that a two gallon Alberta spruce may cost more than a 2 1/2 cal street tree but take less time to dig and plant, this type of pricing is not the best.

    I know the avg times to dig various size holes and price accordingly depending on size of the plant. Flats are the same, you figure x minutes per flat of whatever.
  4. jkinchla

    jkinchla LawnSite Member
    from MA
    Messages: 74

    Yeah, don't change a thing from what you did in the past. The "new" tachnique you found is inaccurate and lazy estimating. Like you said, figure your labor per plant - that is the most accurate way to bid work. Using some kind of multiplier is inaccurate because plants that take the same amount of time to plant can have different costs, therefore you could be over-or-underestimating the labor end.
  5. GroundKprs

    GroundKprs LawnSite Bronze Member
    Messages: 1,969

    JD, you have the right way to make a profit on each job. Anyone who uses the COST X ?.?? formula is just doing it the lazy way. He probably makes a profit overall, but loses money on some, and overchages on others. In time, this type of pricing leads you away from the ones you can overcharge on, and to more of the losing jobs. These are the operators who are doing great business for years then suddenly disappear in the dust of bankruptcy.
  6. John Deere

    John Deere LawnSite Member
    Messages: 128

    Thanks all! I was pretty sure I wasn't going crazy, but with all of this snow here in NE I thought maybe I was. Anyways, I couldn't agree more on the x method of estimating. It really is inaccurate. However do we all agree that figuring your MAN hours into a job for a bid is the best way to cover your labor costs?
  7. GroundKprs

    GroundKprs LawnSite Bronze Member
    Messages: 1,969

    Labor man hours + materials is the only way to do it if you care about making a decent living consistently.

    [Edited by GroundKprs on 03-02-2001 at 04:12 AM]
  8. Lanelle

    Lanelle LawnSite Bronze Member
    Messages: 1,361

    Another factor to remember when pricing is that a warranty on the plant material is a cost factor. So if you are offering a one-year replacement warranty, you need to charge something above your labor and profit for that. Also the overhead that you have should drive the amount of mark-up that you are using. Sometimes you can check your price to see if you are 'in the ballpark' by multiplying the plant wholesale cost by a factor such as 2.5, 2.0 or even 3.0 depending on the type of work and market you're in.
    Also, when figuring your labor, are you using your own historical data or an estimating guide? You can worry about how hard the soil is, how long its going to take your best crew to do the work compared to your slowest crew and a host of other variables. I'm trying to point out that even using a more detailed method does not always ensure profit and could waste so much time that being profitable would be impossible. Analyze the way you do it. Have your CPA help you determine overhead costs if necessary. Set up your price system so that you can comfortably and quickly reach a salable price and then use it to sell lots of work.

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