Discussion in 'Landscape Lighting' started by NightScenes, Jul 29, 2008.

  1. NightScenes

    NightScenes LawnSite Silver Member
    Male, from Kingsland, Texas
    Messages: 2,214

    Ok, so I see threads on here all the time talking about pricing out jobs and I have never once seen anyone mention insurance as a cost of doing business. I carry $3 mil in general liability and I also carry workers comp. The cost for this alone is over $1200 a month. Do the rest of you carry all of this insurance? If so, don't you pass this on in your pricing?
  2. INTEGRA Bespoke Lighting

    INTEGRA Bespoke Lighting LawnSite Platinum Member
    Messages: 4,102

    Paul, we are fully insured, like you.

    All of my soft costs are passed along in each day of work on a site. Your cost of doing business should be factored into your operations.

    Take all of your soft costs for the last year. I mean all of them: Phone, Insurance, Rent, Marketing, Safety Gear, everything except labour, materials and trucks. Now you have a number to work with. Say it is 100,000.00 bucks.

    Now figure out how many days you were open for business last year. Call it 250 days.

    Now divide your total soft costs by the number of days open. $100K / 250 = $400 per day. This is what it cost you to open your door for business.

    So if you are on an installation that takes 5 days. You should be factoring in your cost of operations into the quote. 5 days x $400 = $2000.00 Start your quote with this. then add the job specific costs.

    If you are not doing this, then it is you who is paying for the operation expenses of your business. Many small business owners do not know of this or do not practise it. Then they are surprised at the end of the year to see how small their NET profit is.

    Hope this helps.
  3. AI Inc

    AI Inc LawnSite Fanatic
    Messages: 27,061

    You may want to shop around a little Mine is $8k annualy for comp , GL and 3 trucks, 2 with full coverage.
    $4k less then I was paying last yr after putting iot out to bid this past winter.
  4. NightScenes

    NightScenes LawnSite Silver Member
    Male, from Kingsland, Texas
    Messages: 2,214

    My comp is around 8k but I also have the liabilty. I didn't even include the insurance for the three trucks and a trailer. Then there's the insurance for my office and storage space...
  5. AI Inc

    AI Inc LawnSite Fanatic
    Messages: 27,061

    How much payroll is that on?
  6. NightScenes

    NightScenes LawnSite Silver Member
    Male, from Kingsland, Texas
    Messages: 2,214

    About $250k I think. I don't have it in front of me right now.
  7. AI Inc

    AI Inc LawnSite Fanatic
    Messages: 27,061

    ok, that does sound right in line.
  8. S&MLL

    S&MLL LawnSite Senior Member
    Messages: 751

    2 mil general liability-Workman's comp-2 trucks 1 with full coverage. Somewhere around 950 a month. Although payroll not as high as you Night scenes.
  9. Chris J

    Chris J LawnSite Silver Member
    Messages: 2,843

    So how does one show these costs on the estimate? Do you have a line item called "cost of operations", another for materials, and another for labor? I try to factor in all of the costs associated with doing business, but my proposals are in the most simplistic form. Only the number of fixtures/transformers along with the wire footage and any boring necessary then a total cost. I'd very much like to see a sample bid to get some ideas for changing my forms.
  10. JeffY

    JeffY LawnSite Senior Member
    Messages: 324

    What we do is take what material we would use, then charge a percentage of "overhead recovery" which is what it would take to run the business. Since we have various operations of maintainence, irrigation, landscape, and hardscape, each one has their own overhead recovery percentage. Then we find our labor and how long it would take. Labor should be cost of the hire plus all other thing associated with that such as insurance. We also have an overhead recovery percentage on labor. Then we factor in the overhead recovery on equipment used. This method is part of the Vander Koi method that my boss employs. It works well for us because of its multiple recovery percentages. It took a long time to find out the percentages, but once we were comfortable with our percentages, we stuck with it.

    One key thing is, we don't show the client itemized costs in our proposal and instead the total cost. We have noticed that some clients are going to ask why they are charged this much for an item when they can get it cheaper somewhere else. So we just give them two figures, one for the deposit and one for the total cost of the installation.

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