lbtcadmin
10-31-2008, 05:31 PM
Start up a Lawn Care Service Business ..
To Successfully Compete in The Lawn Business
You Must Master Job Estimating and Bidding
Hit or miss bidding is out of the question ...
Hit or miss bidding is out of the question because virtually every customer looks for, and usually takes, the absolute lowest price. There less room for error in setting a price that not only covers cost, but also provides an adequate profit. Easier said than done because the entire process must take into account numerous variables of cost in an industry where "time is money" is an understatement.
Of course the lazy way out is to totally ignore the cost of doing business, and focus instead on price. The reasoning is that if the price is right, you'll be awarded the job inspite of your costs. This is the same as saying that you have very little control over price and that price is decided in the market place. That may be true but the real reason you want to know cost is not so much that price is solely determined from costs but that cost is your "command center" of control. If you don't know cost you have no reference point of control. Without cost knowledge you actually give up control and don't know for certain on any completed project what the profit was, and in some cases may be uncertain if indeed costs were covered.
With job cost knowledge you can know if you have efficient costs (can't be done cheaper or faster) and that's about as good as it gets. Using your efficient costs as a starting point you can then develop prices. You might want to come up with three price levels for the very same job.* Base Price, Realistic Price, and Premium Price. For any one bidding event do the mental "gymnastics" of trying them on for size price wise to see which you'd like to go with. Sometimes a contractor may find himself "hungy" for work and at other times booked so far in advance that a lower price is not needed to generate work. Nevertheless, bidding and pricing is the single most important thing you'll do because it is the "future" of where your business is going. Today's bids are tomorrows' customers and the real "make up" of your company. Your company is the customers, you, employees, and assets necessary to deliver your services.
Determining job cost is the starting point to intelligent bidding and estimating. And, mastering the skills of estimating is the best defense to help ensure that the work is not over or underbid. Plenty of jobs are lost because of high bids where an acceptable profits could have been made with a lower price tag if the contractor had only known at the time. By the same token, plenty of jobs are won based on low price, too low in fact, making it a miserable experience having done the work. Priced just right is where you want to be but of course this doesn't guarantee you the work, just that if you do get it, there's a chance at profits.
Nilsson's job estimating and bidding system is in widespread use by landscape contractors, lawn & grounds maintenance companies, mowers, tree care operators, for preparing landscape estimates, maintenance costs, grounds maintenance bids, and irrigation contractrors for installation and service work. Nilsson's job estimating system are also used by snow & ice managers, Park and Recreation Grounds Maintenance Departments, and Golf Course Superintendents.
The Job Estimating System enables you to understand the scope of the lawn maintenance or landscape work and how many hours the total job will take from using The Labor Time Data Handbook - one of four books included with the system. You'll have a wide range of work bid specifications language to choose from to word your contracts and proposals and write professionally worded maintenance & landscape job bid estimate specifications. You''ll learn how to bid on a wide variety of grounds maintenance and landscape install projects, and get tips and pointers on how to reach and to sell grounds maintenance and landscape installs to commercial & residential customers , what to charge for the work estimates based on average work times as given in the Labor Time Data Handbook which shows the amount of time it will take to complete hundreds of grounds maintenance job tasks and landscape installation work, and also mowing, lawn care, lawn fertilizing, landscaping, snow plowing, lawn irrigation systems, planting grass, shrub beds, maintaining and planting trees, and hundreds of grounds maintenance tasks in general.
Labor costs are the biggest expense in lawn and landscape work and labor hours need to be controlled. You need to know how long the work will take, and can't accurately bid the job, or assign the right number of employees without "job time information". The Labor Time Data Handbook serves as a valuable reference to use for job estimating and bidding that gives you the job time information needed to complete bids and estimates. Use the average times found in the handbook for developing lawn services and landscape project costs as well as your bid price. Later, use these same labor times to plan the work, assign crews to carry out the work, and to monitor labor inputs into the job. Know at all stages of job completion where you stand as to bid estimate labor hours and actual time to confirm that job completion goals are being met.
Main Reasons why lawn and landscape work bids get rejected by customers during the job bidding process ...
1. Unrealistic view of the scope of the work ... you guessed at the time required.
2. Your costs really are what you say they are (but) compared to the competition your costs are (too high) to be competitive.
3. Workers don't perform efficiently and you bid the jobs based on that inefficiency, end up forecasting excessive hours, inflated price.
4. Your view of market conditions are unrealistic, you never checked what the competition charges.
5. You never kept records or measurement data for similar jobs and are guessing as to work task times, you always play it safe on bids, too many hours are "packed into" the price.
6. Your market is saturated with competition to the point where the close ratios are extremely low.
7. You never viewed your prices as to keeping them as low as possible and "affordable" to the customer base ... based on the theory that you would monitor the "best production method" to keep labor times down, prices low as well ... instead you price based on your cost, which may be unrealistic based on "real" but "slow" methods. Customers can't "afford" your production methods.
For more information on starting a lawn care service business visit www.nilssonbooks.com (http://www.nilssonbooks.com/)
Phil Nilsson
Special Book Discounts (http://nilssonbooks.com/discounts_and_deals.htm)
FREE JOB PRICING GUIDELINES (http://nilssonbooks.com/free_job_guidelines.htm)
http://hispaniclawnforum.com/banners/jobestpakbanpn.gif (http://nilssonbooks.com/job_estimating_package.htm)
http://hispaniclawnforum.com/banners/coms_banner_d.gif (http://nilssonbooks.com/coms_package.htm)
http://hispaniclawnforum.com/banners/nilsson_assoc_banner_b.gif (http://nilssonbooks.com/)
To Successfully Compete in The Lawn Business
You Must Master Job Estimating and Bidding
Hit or miss bidding is out of the question ...
Hit or miss bidding is out of the question because virtually every customer looks for, and usually takes, the absolute lowest price. There less room for error in setting a price that not only covers cost, but also provides an adequate profit. Easier said than done because the entire process must take into account numerous variables of cost in an industry where "time is money" is an understatement.
Of course the lazy way out is to totally ignore the cost of doing business, and focus instead on price. The reasoning is that if the price is right, you'll be awarded the job inspite of your costs. This is the same as saying that you have very little control over price and that price is decided in the market place. That may be true but the real reason you want to know cost is not so much that price is solely determined from costs but that cost is your "command center" of control. If you don't know cost you have no reference point of control. Without cost knowledge you actually give up control and don't know for certain on any completed project what the profit was, and in some cases may be uncertain if indeed costs were covered.
With job cost knowledge you can know if you have efficient costs (can't be done cheaper or faster) and that's about as good as it gets. Using your efficient costs as a starting point you can then develop prices. You might want to come up with three price levels for the very same job.* Base Price, Realistic Price, and Premium Price. For any one bidding event do the mental "gymnastics" of trying them on for size price wise to see which you'd like to go with. Sometimes a contractor may find himself "hungy" for work and at other times booked so far in advance that a lower price is not needed to generate work. Nevertheless, bidding and pricing is the single most important thing you'll do because it is the "future" of where your business is going. Today's bids are tomorrows' customers and the real "make up" of your company. Your company is the customers, you, employees, and assets necessary to deliver your services.
Determining job cost is the starting point to intelligent bidding and estimating. And, mastering the skills of estimating is the best defense to help ensure that the work is not over or underbid. Plenty of jobs are lost because of high bids where an acceptable profits could have been made with a lower price tag if the contractor had only known at the time. By the same token, plenty of jobs are won based on low price, too low in fact, making it a miserable experience having done the work. Priced just right is where you want to be but of course this doesn't guarantee you the work, just that if you do get it, there's a chance at profits.
Nilsson's job estimating and bidding system is in widespread use by landscape contractors, lawn & grounds maintenance companies, mowers, tree care operators, for preparing landscape estimates, maintenance costs, grounds maintenance bids, and irrigation contractrors for installation and service work. Nilsson's job estimating system are also used by snow & ice managers, Park and Recreation Grounds Maintenance Departments, and Golf Course Superintendents.
The Job Estimating System enables you to understand the scope of the lawn maintenance or landscape work and how many hours the total job will take from using The Labor Time Data Handbook - one of four books included with the system. You'll have a wide range of work bid specifications language to choose from to word your contracts and proposals and write professionally worded maintenance & landscape job bid estimate specifications. You''ll learn how to bid on a wide variety of grounds maintenance and landscape install projects, and get tips and pointers on how to reach and to sell grounds maintenance and landscape installs to commercial & residential customers , what to charge for the work estimates based on average work times as given in the Labor Time Data Handbook which shows the amount of time it will take to complete hundreds of grounds maintenance job tasks and landscape installation work, and also mowing, lawn care, lawn fertilizing, landscaping, snow plowing, lawn irrigation systems, planting grass, shrub beds, maintaining and planting trees, and hundreds of grounds maintenance tasks in general.
Labor costs are the biggest expense in lawn and landscape work and labor hours need to be controlled. You need to know how long the work will take, and can't accurately bid the job, or assign the right number of employees without "job time information". The Labor Time Data Handbook serves as a valuable reference to use for job estimating and bidding that gives you the job time information needed to complete bids and estimates. Use the average times found in the handbook for developing lawn services and landscape project costs as well as your bid price. Later, use these same labor times to plan the work, assign crews to carry out the work, and to monitor labor inputs into the job. Know at all stages of job completion where you stand as to bid estimate labor hours and actual time to confirm that job completion goals are being met.
Main Reasons why lawn and landscape work bids get rejected by customers during the job bidding process ...
1. Unrealistic view of the scope of the work ... you guessed at the time required.
2. Your costs really are what you say they are (but) compared to the competition your costs are (too high) to be competitive.
3. Workers don't perform efficiently and you bid the jobs based on that inefficiency, end up forecasting excessive hours, inflated price.
4. Your view of market conditions are unrealistic, you never checked what the competition charges.
5. You never kept records or measurement data for similar jobs and are guessing as to work task times, you always play it safe on bids, too many hours are "packed into" the price.
6. Your market is saturated with competition to the point where the close ratios are extremely low.
7. You never viewed your prices as to keeping them as low as possible and "affordable" to the customer base ... based on the theory that you would monitor the "best production method" to keep labor times down, prices low as well ... instead you price based on your cost, which may be unrealistic based on "real" but "slow" methods. Customers can't "afford" your production methods.
For more information on starting a lawn care service business visit www.nilssonbooks.com (http://www.nilssonbooks.com/)
Phil Nilsson
Special Book Discounts (http://nilssonbooks.com/discounts_and_deals.htm)
FREE JOB PRICING GUIDELINES (http://nilssonbooks.com/free_job_guidelines.htm)
http://hispaniclawnforum.com/banners/jobestpakbanpn.gif (http://nilssonbooks.com/job_estimating_package.htm)
http://hispaniclawnforum.com/banners/coms_banner_d.gif (http://nilssonbooks.com/coms_package.htm)
http://hispaniclawnforum.com/banners/nilsson_assoc_banner_b.gif (http://nilssonbooks.com/)