How much of your bid is profit?

Discussion in 'Landscape Lighting' started by pete scalia, Oct 18, 2007.

  1. pete scalia

    pete scalia LawnSite Senior Member
    Messages: 960

    Every have a prospect ask you this question?
  2. bmwsmity

    bmwsmity LawnSite Senior Member
    Male, from Ohio
    Messages: 276

    Nope. I'd tell them 0% if they asked that. :laugh:
  3. Eden Lights

    Eden Lights LawnSite Senior Member
    Messages: 805

    No, not yet
  4. irrig8r

    irrig8r LawnSite Platinum Member
    Messages: 4,553

    I'd tell em: "Enough to keep me in business and ensure that you'll always get the best service I can possibly provide."
  5. pete scalia

    pete scalia LawnSite Senior Member
    Messages: 960

    That's what I was asked today by e-mail. I said no way to determine profit until project is over and I do not disclose that information. First time I can ever remember being asked.
  6. Chilehead

    Chilehead LawnSite Bronze Member
    Male, from Stockbridge, GA
    Messages: 1,969

    When asked that question I kindly reply,"I don't reveal that number to anyone. Thank you for understanding."
  7. INTEGRA Bespoke Lighting

    INTEGRA Bespoke Lighting LawnSite Platinum Member
    Messages: 4,102

    There is Profit and then there is Profit. I have never been directly asked this by a client before but I have had many who want to know about the financial state and security of my business. So I do know how to handle this....With INTEGRITY.

    Too many might be tempted to talk about the Gross profit from the one job in question. To talk on this point with anyone would be fool hardy. You may however be positioned well to talk about your Net profit. (most of my clients come from business and financial services sector... they like to talk about money.... and they like to understand the financial health of your organization before committing to major contracts)

    Your net profit is what you earn after ALL of your expenses have been deducted. Too few small business owners have a handle on what their net profit really is. Many would be surprised at the number if they took the time to figure this out and express it as a percentage of revenue.

    One good exercise is to take your last years books and add up all the soft costs (phone, insurance, truck, tools, advertising, safety gear, etc etc) for the entire year. Then figure out how many days you were open for business. Now divide the number of days open for business into your total gross soft costs. This gives you your cost of operation per day... essentially what it costs you to open the door every morning. Now you have a powerful tool.....

    Lets say your cost of operations is $200 per day. (I wish) Open your quotes with a line item which accounts for the number of days you will spend on the job. 3 day job x $200 cost of operation = $600. Now you know you have covered your costs of operation no matter what. Continue on with your standard system quote....

    This little tool can greatly help your business succeed over the long haul and ensure that your % of net profit at the end of the year increases to a sustainable point.
  8. JoeyD

    JoeyD LawnSite Silver Member
    Messages: 2,933

    I owuld tell them that I do not make a penny. I donate everything i make to my wife.
  9. Ron Marston

    Ron Marston LawnSite Member
    from Maine
    Messages: 31

    any common person would know that any bissness needs a profit i would have told him to ask mcd's about ther profit on ther fake .5cent bergers lol
  10. klkanders

    klkanders LawnSite Senior Member
    from Midwest
    Messages: 849

    Joey, I do hope you get a weekly allowance? :laugh:
    Better start saving up for the AOLP conference!

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