Do you show profit as a bid item?

Discussion in 'Landscape Architecture and Design' started by terracare, Apr 6, 2005.

  1. terracare

    terracare LawnSite Senior Member
    Messages: 353

    Hey everyone,

    This has been a topic of discussion at some recent seminars that I've attended. We have been showing profit as a bid item on each one of our estimates given to our customers and it has been working wonderfully! I have found that most people appreciate the honesty and straightforwardness, and definitely thought that I was pocketing a lot more money than I really am.

    Keep in mind, if you are considering pricing your jobs like this, make sure you have all your ducks in a row. You need to know absolutely ALL of your costs of doing business to price jobs out this way. I'm sure there are still a few dollars floating around somewhere that I'm ignorant of, but it is important to hit on 99.9% of them.

    I don't know, what do you guys think?

  2. sheshovel

    sheshovel LawnSite Fanatic
    Messages: 5,112

    I don't think it is necessary to inform my customers of the profit I make on the jobs.But I do show labor
    charges on my bills and estimates.Is that what you mean??
  3. GreenQuest Lawn

    GreenQuest Lawn LawnSite Senior Member
    Messages: 822

    I think its the dumbest thing I ever heard.

    I do not want the customer to know how much profit I make, seems it would just end up as one more thing they could argue.

    will never be in my contracts.
  4. Mudmower

    Mudmower LawnSite Member
    Messages: 102

    I will show them my profit margin right after they show me last years tax return................... :dizzy:

    Why on EARTH would you want to do this????? How does it help YOUR bottom line??? Something (work, labor, etc) is only worth what ever someone else is willing to pay.

    I hope you show a HANDSOME profit, because if not, you are leaving money on the table. Money they are willing to spend, but you are not willing to take. If they balk at your original estimate, then start the negotiation.

    Bad Idea Me thinks................................

  5. kootoomootoo

    kootoomootoo LawnSite Platinum Member
    Messages: 4,369

    Does GM show profit on each car they sell at the dealership....?
    Hell do they show labor hours?

    Its 10 grand..this is what you get, this is the size, this is the quantity,
    this is the design etc .....nothing more nothing less...if you are selling labor thats your way but I am selling a commodity called landscaping. They want it .....this is how much it costs.
  6. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,872

    I agree with the others - I don't see any reason to do this.

    That being said, I am fairly certain that if I did employee this method of bidding, I'd probably still land just as many bids as I usually do. Most of my clients come from word of mouth or from our website, and they are already very impressed with our company. When we talk, I give off the impression of being a knowledgeable professional and from there it's easy. I've usually already landed the job (mentally) before I ever give the customer my bid sheet.

    Regardless, I still don't see any reason to give detailed bids at all. I don't break down my bids into materials, labor, profit, anything. I have a very nice, professional bid sheet that describes what we'd do and a total price. That's it. Simple. I don't think anything more is really necessary.
  7. sheshovel

    sheshovel LawnSite Fanatic
    Messages: 5,112

    I tried that at first .Then I kept getting questions like"How much of this is your labor?"
    "What's it gonna cost me for materials alone?"
    "How much would it be without the split rail fence"
    "How much without the Drip system?
    "What if we try to get this amount lower by useing less plants?
    "How much if I do some of the labor involved like doing the clean-up and picking up the mulch in my truck myself?"
    That's why I break it down to materials and Labor.
  8. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,872

    I guess we're just in different markets or pitching to a different class of clientele or something.

    I get those questions occasionally. But not too often. Probably less than 5 or 10% of the bids I give, do I get a question like that. And when I do get those questions occasionally, I know the answers (because on MY copy of the bid, I worked out all those things) and so I answer immediately like this;

    "What's it gonna cost me for materials alone?"
    I'm figuring $750.00 in materials.

    "How much without the Drip system?
    It would save you about $600 to just irrigate the lawn, and not do the drip system for the plants.

    "What if we try to get this amount lower by useing less plants?"
    That's certainly an option. I am willing to work with you guys according to your budget. If you want to stay inside a certain budget for plants, I can probably accomodate that. We have two choices; reduce the SIZE of the plant materials or reduce the AMOUNT of plant materials. I'd probably recommend reducing the size. You'll have to wait longer for a mature landscape, but you'll still get it all done in one shot.

  9. sheshovel

    sheshovel LawnSite Fanatic
    Messages: 5,112

    Gottcha Jim.Sounds good
  10. Lawnworks

    Lawnworks LawnSite Fanatic
    from usa
    Messages: 5,407

    I break it down to materials,labor, etc. Labor is far from profit. But I try to itemize so the customer can modfy the plan.

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