Today, landscaping is a 115 billion dollar industry and is growing rapidly. In order to make it big in this industry, you need to land your estimates perfectly.
Pricing varies drastically across different jobs in landscaping. Accurate and consistent estimates are the key to winning successful bids and earning a highly profitable business in our industry.
Why are estimates so important?
Bid too high, and you risk losing clients to your competitors; bid too low, and you risk losing big and lowering the perceived value of your work. Accurate estimates are the key to winning bids. In order to build accurate estimates, you need to start with precise measurements.
It involves understanding your costs and pricing your services correctly to ensure maximum profits. Estimating your projects without analyzing your costs could lead to little or no profit from that job – or even worse, a loss.
Producing accurate estimates
In order to properly estimate landscaping jobs, you need to have a thorough understanding of the scope of the work being estimated as it relates to the project as a whole.
Visit the site first, preferably with the client present, and have a walk-through of the property. Get a thorough understanding of the property and ask as many questions as you can. What are the services needed, does the client have any special requests, what type of materials are required, etc.
Ensure efficiency by establishing a framework for your site analyses. While surveying a site, answer these questions:
- Who is the owner/client?
- Where is the project location? (Consider proximity to other work – existing or potential.)
- What are the services expected?
- What types of materials will be necessary?
- What kind of equipment will be needed?
- How many crew members will be required?
- Any additional factors to consider? (for example, site complexity, overhead, travel & load, insurance, etc.)
It might seem like a lot to keep track of when you are just getting your feet wet in the industry; but once you develop a framework, the consistency of the process can be carried from one bid to the next. Just check off your boxes and start your take-off.
Breaking down the estimating process
1. Measurement and take-offs
Accurate site measurements are the most crucial part of landscape maintenance and snow removal estimates.
Manual measurements are tedious and time-consuming. Seasoned account managers may boast of giving accurate estimates just by “thumbing” the property during a drive-by, but the most successful landscape companies know that their best estimates start with precise measurements.
Accurate measurements are the key to getting accurate production rates so you can price your jobs right and win more profitable bids.
This quantification analysis is mostly achieved by measuring the area or linear feet of each feature present on the site and calculating the totals for each feature group. A walk-through of the property will help you understand the site conditions before you finalize your takeoff and create your estimate.
There are a few ways to measure an existing property:
- Walking it off with or without a measuring wheel and keeping notes of your data
- Manually drawing polygons on scaled maps with online tools and perhaps keeping notes of your data
- Let Attentive’s AI analyze and measure your sites on current high-definition imagery, package your data neatly, and notify you when it’s ready
2. Production rates
Production rate is the time required to complete a certain task. Do you know exactly how long it takes an average crew member to perform each of your services over a certain area or linear measurement?
Figuring this out will allow you to standardize your production rates by using factors. Factors are standardized numbers that can be multiplied by measurements to determine production rates for each of your services. This allows you to create consistent estimates across your company for each property you or your team member takes off.
Though there are standard industry production rates that can serve as benchmarks, the best way to determine your factors is to figure out how long your employees take to complete each task. Develop a simple production rate chart for manual labor-related tasks like planting flowers or weeding beds.
It’s imperative to know your equipment production rates as well. If standard industry production rates are not available, calculate the hourly rate by each type of equipment your crews will be using, including mowers, edgers, line trimmers, blowers, fertilizer spreaders, aerators, plows, snowblowers, and any other commonly used equipment.
3. Materials and Labor costs
Estimate your material cost by having a catalog of all the materials required for the job, the cost of each material respectively, and the amount needed as determined by your measurements and factors.
In addition to the direct costs that are associated with the materials, some of the additional factors that could affect your costs include availability, freight charges, especially if not local to the project, as well as local and state sales or use taxes. Consider the potential increase in material costs as well.
Estimate your labor cost by finding the number of hours of work required and understanding the cumulative costs of the labor hours. To do this, multiply your factor(s) for each service by their respective feature measurements.
Three elements that influence the costs of labor are the actual hourly wage, the cost of burden (employee benefits and taxes), travel and load time, and costs (if not built into your factors).
When surveying your property take note of any steep hills, obstacles, presence of native versus non‐native plants, or any other feature that may increase the efforts of your crew or require special equipment or specialized crews.
Be sure to also consider any efficiencies that can be gained compared to your production factors – for example, extremely large sites, simple sites, or sites within close proximity to one another.
4. Services & features
Every project will have a variety of services. To ensure a good profit margin, each service should be priced competitively according to its demand and degree of specialization.
Some services will offer higher profit margins while other services may be commoditized low margin services like mowing. It also varies as per the frequency of the service through the year.
5. Seasonal frequency
The time of year can play a role in influencing estimated landscaping costs. It affects the planning for labor, anticipated material price escalation, as well as weather that could potentially delay or interfere with the installation and placement of landscape planting.
6. Factor in overheads & taxes
Overhead costs are all the expenses that a business pays that are not allocated specifically to job costs. These costs may include office, sales, and management staff salaries, depreciation, utilities, business taxes, insurance, rent, truck and equipment rental, fuel costs not included in your factors. Include an overhead allocation or percentage with your job costs.
Finally, determine your desired profit margin and add a corresponding markup percentage to the total cost. Your markup is the dollar amount you add to your cost to arrive at a final, profitable price. Commercial jobs will be priced differently than residential and the material will vary depending on the service required.
Now that we’ve factored in all possible variables to arrive at the correct estimate, it’s time to win the bid. Focus all of your energy and effort on getting the right price — the price that’s right for your company and right for your customer. And make sure you follow up with your client, remain at the top of their mind, and improve your chances of winning the bid.
If you are using Attentive, you can actually get your property takeoffs delivered right to your inbox to help you estimate more accurately and reclaim countless hours that you can now invest in client relationships, site visits, and growing your portfolio instead.
Meanwhile, happy estimating!