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Bidding A Job.

 
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Old 06-17-2016, 03:56 PM   #1
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Bidding A Job.


Just joined the forum today. My business partner and I disagree about bidding a job. Looking for insight from other professionals. I did a search on the whole site about pricing and one of the first posts that comes up says "posts about pricing are not allowed", so I then searched for rules and couldn't find any. I don't want to break the rules my first post, but would really like to talk to other landscapers about what they do, in general, for pricing their jobs.

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Old 06-17-2016, 04:48 PM   #2
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Re: Bidding A Job.


We like to talk about "how" to arrive at a price for a job, but it's not allowed to ask "how much"?

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Old 06-17-2016, 05:24 PM   #3
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Re: Bidding A Job.


I think I can do that. My partner wants to double the cost of the materials. I don't think it is that simple. We are trying to bid a mulitpart job, one part would be mulching a playground area. The customer is interested in rubber mulch which is vastly more expensive than wood mulch, I figure labor would be the same. In general principles, how does one go about their pricing?

I have been in the landscaping business for 8 years, but always working for others who do all of the front end stuff. Now I am out on my own and trying to figure out the business end of things. Any tips and/or resources would be appreciated.

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Old 06-17-2016, 05:58 PM   #4
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Re: Bidding A Job.


Doubling the material costs is seldom the way to go. Not saying it can't work, but what happens when you have a very labor-intensive job with little in the way of materials? All of a sudden you have to up your labor rate considerably to make the same profit.

Generally best to take a modest markup on materials and set your labor rate so that you make out either way.
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Old 06-17-2016, 06:17 PM   #5
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Re: Bidding A Job.


Mark up and Profit by Stone.

The LMOP thread here on Contractor talk.

But a very simple starting point:

1. How many man hours will it take to complete the job?
2. How much will sub contractors, materials and any tool rental cost?
3. Operating costs (Do a rough take on what your annual operating costs will be. This is your insurance, trucks and equipment, shop rent, phones, Internet, accountant, bank fees, and about a million other things).
4. Profit. Add 10 to 50 percent depending the job, trade, greed....

For Example:
1. 40 man hours. Let's say you charge $50 an hour. So $2000.
2. Materials eg of $3000. Plus mark up as you see fit to pay for your time and hassle in getting the materials. 10% here as a fun example. Could be 50.
3.$15000 a year overhead. Divide this by the number of days you think you can/will have work. Let's say 100 in your first year. I like to guess a low number of working days since it means that you may cover 90% of your overhead in the first 100 working days of the year. Meaning your next 50-100 days are generating a far greater amount of profit.

That makes your daily operating costs $150.

4. 10% profit.

We have:
1. $2000 Labour
2. $3300 Materials
3. $450 Overhead
4. $545 Profit (yes this is just quick 10% for those CT folks...I know I know)

= $6325

Last edited by CPMKW; 06-17-2016 at 06:21 PM.
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Old 06-17-2016, 09:02 PM   #6
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Re: Bidding A Job.


That is a very good example. Simplified and easy to follow.
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Old 06-17-2016, 10:02 PM   #7
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Re: Bidding A Job.


Some were in between is the happy ground. Your liability goes up when your material price goes up. You need to charge more for jobs with increased liability.
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Old 06-17-2016, 11:19 PM   #8
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Re: Bidding A Job.


You need to price different materials differently. If they just wanted bark dust or pine needles, that is a basic commodity. Not much room to mark up. Maybe 10 to 15 percent if you have good customers, though in reality, you should still be striving to mark it up the same.

Rubber mulch is an upgrade. There is a premium for upgrading. For instance, 20 to 40 percent depending on your market.

However, I don't do landscaping, so I have no real clue. I suppose if I had a customer who wanted a basic vinyl siding panel, I would mark it up the same as if it were a premium panel. I make more on the premium panel because it costs more in the first place. Also, if they are popping for a premium panel, they most likely would be interested in options for add-ons and details where I also make more money.

If they are dropping a bunch more money for rubber mulch, they would probably like a premium border, maybe some benches, etc. Only you know what the job entails.

If I needed the work, I would mark the basic panel up a bit less, but my labor would stay the same, or very close, it costs money to operate. As you can see, lots of factors and we don't know your customer or their finances/budget.
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Old 10-12-2016, 11:23 AM   #9
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Re: Bidding A Job.


hi.
lead estimator for 10+ yrs here.

A quik and dirty way (Read: full of risk of losing your arse) is to do 2x, 3x materials. If anything, and if labor intensive like someone said above, 4x matls is the only ratio i'd use to sleep well at night.

otherwise.....do thorough takeoffs on everything & markup each category.
Labor = by 2.5x
materials = by 15 - 25% (or more, maybe yours are successful clients and in a high end neighborhood, that is for you to determine)
Subs, Equipment, Deliveries: 10-15%
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Old 02-22-2017, 07:59 PM   #10
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Re: Bidding A Job.


Agreed with CPMKW and VinylHanger. I don't see any problem with adding more markup to premium materials, and you can always adjust your profit margin by how badly you need the additional work.
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Old 02-22-2017, 08:29 PM   #11
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Re: Bidding A Job.


The best way I always thought about going with things like this is think of what you want to earn hourly per worker, add in the cost of materials, and if you have a distance to drive add the gas costs in too. That is the simplest way to charge someone for general labor without being overly complex. You can also buy materials in bulk and charge the single price to make more similar to what shops do.
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Old 02-20-2018, 09:57 PM   #12
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Re: Bidding A Job.


I want to make at least $1000 per day in my pocket after everything. Thatís how I bid it, so I end up with $1000 everyday after everything else is taken care of. Simple.
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Old 02-21-2018, 09:31 AM   #13
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Re: Bidding A Job.


Quote:
Originally Posted by benzbuggie View Post
I want to make at least $1000 per day in my pocket after everything. Thatís how I bid it, so I end up with $1000 everyday after everything else is taken care of. Simple.
Love it. Simple.

$300,000 grand a year income. Simple.


Ha ha.

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Old 02-21-2018, 10:05 AM   #14
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Re: Bidding A Job.


Thatís literally what I do and it works just fine for me. I donít work in January or February so itís not quite 300k. Are you not making close to that or something? If your not you should change it up
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Old 02-21-2018, 10:09 AM   #15
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Re: Bidding A Job.


Whatís even more hilarious than me making a minimum of $1000/day is I have absolutely no overhead, thatís right, 0
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Old 02-21-2018, 10:24 AM   #16
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Re: Bidding A Job.


Quote:
Originally Posted by benzbuggie View Post
Whatís even more hilarious than me making a minimum of $1000/day is I have absolutely no overhead, thatís right, 0
Nobody has 0 overhead. You work naked? No work clothes? Footwear? You only work with your bare hands? No tools whatsoever? Give me a break.

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Old 02-21-2018, 11:33 AM   #17
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Re: Bidding A Job.


You do when you have all subs. So to answer your question, no tools, no uniforms, nothing.. everything is provided by the sub
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Old 02-21-2018, 11:39 AM   #18
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Re: Bidding A Job.


And tools are not considered overhead. Overhead is something that is a reoccurring expense to run a business. Clothes are not over head either. Read a dictionary
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Old 02-21-2018, 12:41 PM   #19
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Re: Bidding A Job.


A phone and a phone bill is as close to zero overhead as you can get. Good on you.


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Old 02-22-2018, 01:41 AM   #20
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Re: Bidding A Job.


Quote:
Originally Posted by benzbuggie View Post
Whatís even more hilarious than me making a minimum of $1000/day is I have absolutely no overhead, thatís right, 0


That's a bold statement.

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