Your Estimate is Over Customer's Budget

Discussion in 'Landscape Architecture and Design' started by JimLewis, Jan 19, 2007.

  1. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,872

    Ok, so we've debated the topic of whether to ask for a budget first or not. And many here have said it's always best to ask for a budget at the first meeting. Still, many others here say they never ask for a budget. They just give estimates for the work the customer asked for.

    I suppose this question is more for those who are in that latter camp - where you don't ask the customer for a budget.

    My question is this; what do you do when you give a bid for a landscape installation and then you get this, "Wow. This all sounds great. We're very impressed with everything. It seems like your company does great work, and we're impressed with your references and how thorough your design and estimate is. But here's the deal. Your total bid came to $22,000. But all we have to work with is $18,000. Is there any way we can make this happen for $18,000?"

    Before you answer - let's assume that doing the job in phases isn't an option. Let's also assume that cutting out a certain part of the project (e.g. lighting) isn't really an option either - there aren't really any "optional" aspects to this job.

    How do you overcome this obstacle and still get the job?
  2. EA Quinn

    EA Quinn LawnSite Senior Member
    Messages: 393

    in that case, we normally tell people to let us do the entire job. We already have all the equipment there. If we do it in phases it will cost the customer more because we have to bring all the equipment back to the site etc. etc. We usually just tell them to pay us the 18,000 now and when they get the rest of the money the following year to send it in. It has worked great for us in the past. Just make sure you have them sign the contract with the specific terms:)
  3. AGLA

    AGLA LawnSite Bronze Member
    Messages: 1,776

    It happens and here is what we do. We have a pricing system that is hard numbers based on our costs and experience, so we do not inflate prices which would then make it possible to trim the fat from. The price is for doing the exact work that is described on the plan and in the proposal. We can certain reduce the size of some of the plants, or reduce the number of plants in some areas, or reduce some other amenities to bring the job within the budget. What we have done is to design and price the landscape that we discussed and to use our experience and abilities to make that as nice as we can. We always make it a point to deliver the best plan for our clients with the understanding that they may want to reduce it to keep within budget, but that we don't want to deliver a lesser design.

    That does two things right off the bat. The first is that it does not degrade your integrity by making it seem like you guestimate jobs based on the neighborhood or what cars are in the garage. The second is that it keeps you off of the very slippery slope of negotiating your profit. Nine times out of ten, they are just pressing for soft spots to reduce the price. When they don't find one and the design is everything that they really want, they find a way to pay for it very quickly. When you bring someone through the design process, they seldom want to hire someone else to build it. The rate of design jobs that turn into installations is extremely high - better than 90%. Our design prices will turn away tire kickers, leaving only viable prospects to continue. The type of design work is more involved than a quick foundation planting sketch, also.
  4. MarcSmith

    MarcSmith LawnSite Fanatic
    Messages: 7,157

    I woudl bid in it phases....explaining that yes the final cost wil be higher. Another option would be bid it with smaller plant material. The design is still the same, but your "instant impact" would be somwhat less.
  5. mrusk

    mrusk LawnSite Gold Member
    Messages: 3,260

    How can eliminating lighting not be a option? If you can't eliminate things from the proposal how can you bring the cost down 4k??

    I'd eliminate lights, go with smaller plants, go from tumbled paver to no tumbled, maybe make the patio alittle smaller, make the bed smaller. There is alot of ways. But it is impossible to make it cheaper unless the customer is willing to give up something.

    The customer could just be playing hard ball with you!!!

  6. Team-Green L&L

    Team-Green L&L LawnSite Bronze Member
    Messages: 1,775

    This is a good question Jim. I can't tell you how often this situation comes up when you don't have a budget up front. I just don't see how you can make a suitable proposal without a budget. I think I'll call a custom home builder (we are custom builders of a different trade) and tell them, "I want a new home. I don't have a budget, but if you would draw me a blueprint of whatever you think I should live in it would be great!" Would I get a shack or a mansion, and can I blame the builder if he gets mad at me for drawing up blueprints blind?
  7. Team-Green L&L

    Team-Green L&L LawnSite Bronze Member
    Messages: 1,775

    Oops, repost by accident. Sorry.
  8. tjsquickcuts

    tjsquickcuts LawnSite Senior Member
    from Atlanta
    Messages: 943

    I always inflate my Bids, that way I have a little something to work with so that I can close the deal. I usually add a extra 15% to all of my Bids, that way if I hit a bump in the road, I have room to trim.....I have been very successful with this.....This also helps closed the deal, because if I have a customer that wants to think it over, I usually offer to give them a 15% discount if I can earn their business TODAY, not tomorrow, and not next week! Most customer will shop your bid around so this way I sorta make them make a impulse decision. Impulse spenders are the best, because they will spend first without much hesitation. On a $25k job, that gives the customer about $3700 discount. Giving a customer something is always a good way to sweet'n the deal. As far as asking for a budget, its good and bad. If you ask for a budget, then you sorta limit yourself because most people really dont know the true cost of a Pro install Landscape. I never ask for a budget, but during the second meeting I have a slide show on MSPowerpoint that I show them and I tell them what each project round about cost was so therefore it plants the seed. You can tell by a persons body language if you are out of their league or not.....and I have learned that people are always going to try and negotiate. Now for those they want it, but don't have $25k, my bank will finance the project as long as the customer meets a few requirements.....and this is actually better for me because I get paid up front, and the bank gives pretty good rates.....But I will never back off my original price, no matter what....and usually offer to refer them to another Landscape Co that might be able to give them a better price, but might not provide the same level of service and craftsmanship....
  9. cleancutccl

    cleancutccl LawnSite Senior Member
    Messages: 698

    this is the exact reason that I always ask for a budget, and I always shoot a quick overpriced guess of what the job will cost that way the customer is not blown out of the water when the actual estimate comes in. When I give the guesstimate I also tell the customer that it is a guess and probably on the high side.
  10. Team-Green L&L

    Team-Green L&L LawnSite Bronze Member
    Messages: 1,775

    I think this thread is getting off-track. Jim is asking how (the people who DON'T ask for budgets) pick up when the customer is sticker-shocked. I may have gotten it off-track, but let's get back on board before we ruin this thread.

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