how do i estimate a job

[flattop]

i'm just starting my business. i intend to do commercial work, because i specifically know of a job that's going to take bids this fall for next summer. i'm not counting on getting that work the first year, but i'm going to bid it. but i have no idea how to estimate how many man-hours it takes to mow how much lawn. i'm rough right now, but i'm thinking that when i know what my startup costs will be, i can figure how much revenue i'll need to bring in to make cost. do lawn care companies charge by man-hours, square footage? i figure it's got to be more than just hazarding a guess. any advice?

[Phil Nilsson]

WHAT DO YOU NEED TO BID THE WORK BASED ON COST?
A good understanding of work required, along with good labor time hour standards.

A knowledge for job specifications and job time standards, or experienced times for each phase of the work.

An hourly cost factor for the three areas of cost, including direct costs, indirect costs and overhead costs.

A realistic attitude about profit per hour that can be added to costs in arriving at a total price that the customer can afford, which will stand the test of competitiveness and will turn a profit.

___________________________________________

Roughly speaking ... after you get a sense for how long the jobs will take if it were me ... I would try for a hourly rate of between $35 to $45 TIMES those hours ... if mowing hours - look to do $35 bucks each half hour ... example a 10,000 lawn in a half hour max ... travel time needs to be included ...

Time is what you need to know to bid jobs. Once you have a reasonable time factor then it's a case of knowing your costs per hour and the rate per hour your market will stand (rate X hours = price for fixed basis work)

More on this later ... but do a search using key words .... cost ... contracts ... pricing


Phil

P.S. be careful with time estimates because you have two variables working against or (with each other) ... your hourly rate factor (price) could be too high or too low and your time estimates to do the work could at the same time be too high or too low ... this in turn defeats the bid price and causes distortions ... when this happens you don't know where to look ... was price too low? ... was the work carried out too slow? ... know your times within let's say 90% accuracy then make them happen (time goals) and you'll be okay as long as you don't under price the work.

WOW that was a P.S. ????

[Phil Nilsson]

Like Arnold says .... "I'll be back" ... LOL .... aren't you glad you asked?

here's some more stuff ....

THE THINGS YOU SHOULD KNOW.
Daily production or billable sales "created."
Direct payroll costs for the day.
Direct overhead costs for the day on daily labor.
All other overhead costs for the day, assigned to that one day.
Profit for the day.

This may seem like a lot of trouble to go through to get the key figures, but it is not very time consuming. To do get these answers, all you need is the sales figure and the payroll hours for one day. The rest of the numbers will fall into line by ratio.
We want to know how much sales we did for the day and how much it cost to do those sales. Log all these numbers, run a year-to-date in your logbook, and you'll have a cumulative picture of where you are.

FINDING THE NUMBERS TO USE. The daily payroll part is easy. Figure how many hours your employees worked and the average hourly pay to get the total payroll for that day. Enter this into your logbook. Sales for the day represents what was produced in billable work. If jobs are not billed because they are incomplete or in process, estimate the percentage of completion.

For fixed contracts, spike out known sales values for portions of the work completed such as mowing, pruning, edging and so on.
Direct overhead costs are assumed to follow payroll costs and hours. Get this "hourly figure" by analyzing your financial statement to draw conclusions and come up with an hourly cost on average. Direct overhead costs are costs that happen because you did some work and "engaged" other expenses. When an employee comes to work, certain expense categories follow him or her around during that day - fuel, depreciation on equipment, supplies used, insurance on the vehicle, repairs to equipment and more. Those costs can be visualized as "on the road" costs or "at the job site" costs. All other overhead costs such as rent, utilities, advertising, general overhead and administrative costs can be visualized as "back at the shop" costs.

General overhead expenses are those that are not identified or related to payroll hours. They happen and cost you whether you have business activity or not. Split these out separately and come up with an estimate of the total production hours you expect to have for the entire working season. Yes, as you go along during the year you may have an increase or a decrease to production hours as new work comes in, but it's the best number you have at the time, so work with that number. As more than projected production hours go up, general overhead costs per hour go down, and vice versa.

THE END RESULT. You will know how much sales you had for one day and what those sales cost the company to know what the profit was for the day. You can then figure out how much you have made for the season to that point and compare that number to where you thought you'd be at that point. Isn't that what you want to know?

[GLAN]

If your just starting out. No experience what so ever. Your bidding on commercial.


You will need at minimum $2mil liability insurance. Workmans Comp, Disability. You may have to provide $1mil in vehicle coverage.

You will need business License. Lawn applications? Your going to need a Pesticide Applicators License and a Registered Business.


You sure you want to jump right into commercial work?

[Old Shoe]

Most used methods to estimate. . .

1. Buy a stopwatch.
2. Time every job function you perform (mowing 21,36,48,rider,edging,etc). Time the job functions on multiple properties to develop an average production rate for your crew, your equipment.
3. Determine your billable rate per hour.
4. But a measuring wheel.
5. Measure some of your existing clients, apply your production rates to the properties, multiply by the billable rate. Check your current accuracy.
6. Go measure the property you want to bid and apply production rates and billable rates.

OR. . .
Drive through the property and say, "It looks like a $500.00 property to me.

OR. . .
Find out how much they are currently paying and offer to do it for 20% less.

Your choice.

[GrassMaster]

Hello Old Shoe:

Now why would anybody want to do #'s 1 through 6...

To know exactly how to bid accurately every job? Why?

To be Successful, know exactly what you are bidding on?

I've walked a lot of Lawns & can I tell the Difference between 14,500 sq ft & 17,000 sq. ft. Not Quite, But the wear & tear on my Equipment & Employees can, but they ain't going to say anything to me? If I bid that lawn on the 14.5K Guessing Game & it's Actually 17K, not even will my Bank tell me? Now that's not fair to my Checking account or my Family is it? No Way!

PS: What if I had 85 lawns & they were all between 15K & 20K Sq. Ft. & I was between 1K to 3.5K on everyone of them. What if everyone I bidded on in the future, I over estimated 1K to 3.5K & I live in Orlando, Florida. The Competition is fierce & that little overage Knocked me out of 30 New Lawns a Year?

Maybe Some Indian Dude Should Stand at the Gas Pump & let Him Guess & Charge you what he Feels like He Thinks you put in your Gas tank. Hell let him do it he's a Pro & been doing it 30 Years! He can't be far off? LOL, My Gass Tank & Empty Wallet!

Survey said!

http://www.lawnserviceforum.com/showthread.php?s=&threadid=3830

Use a Measuring Wheel 31 People = 41.33%
Guess at it 44 People = 58.67%
Total: 75 Total Votes 100%

LOL, Maybe you need to be purchasing some expensive carpet & Padding....

Let Mr. Buff the carpet man come over & walk around in circles for about 20 minutes & say yeah, Y'all got about 35 to 40 yards of Carpet & I'm gonna charge ya for 40 yards?

A few Seconds later Mr. Buff is backing out my driveway & Nails my Mail Box... So it wasn't a Total Loss!

The Carpet Doctor comes over & measures, he says you got 36 yards of Carpet, BTW he measures everything. His prices are Higher than Mr. Buff the Mail box nailer, but at least he looked like he knew what he was doing!

The Carpet Dr. gets the Job, not only did he look like a Pro, Yes he's a Redneck but he did measure it & Cyphered it too, he worked like a Pro & he missed Mr. Buffs newly acquired Mailbox, when leaving T00!

I agree with Old Shoe 100%

BTW: If you had 3 different Carpet Pro's come over I bet they will be around the 20% range of having the right number of yards. But it's the thought of them doing it right!

OK, Now that we are Measuring our Properties, lets Time the Jobs & then put our Existing Figures of Time & Space (Measurement) together with what we to get paid per job?

OK, you'll be able to make you a chart of how long it takes to do what? Trim, Edge, Mow with different Mowers & How long to Blow off so many sq.ft of Hard surfaces!

So now you should be able to Bid & get what you think you need an hour to make a living!

Now you just need to figure your Equipment Cost, Employee Cost & Your Other Cost of Doing Business! Then figure it so much per hour....

By now there is no way you can fail, unless you want too! It's your Choice!

Sorry, Everybody I can't afford to guess at something that I can Easily Measure & Figure it to the Penny & Square Foot, because this way I can't go Wrong!

[flattop]

thanks for all the advice....eye-opening.

[edger]

Originally posted by GLAN
If your just starting out. No experience what so ever. Your bidding on commercial.


You will need at minimum $2mil liability insurance. Workmans Comp, Disability. You may have to provide $1mil in vehicle coverage.

You will need business License. Lawn applications? Your going to need a Pesticide Applicators License and a Registered Business.


You sure you want to jump right into commercial work?

This is what i've done my first year out in the green bus and have gotten all of the above and won my first bid of over $23k each year of our two year contract.

Chris

[edger]

And $2mil liability insurance is way over kill. I'm sitting at 250,000 and thats more then enough. As long as i'm not in the middle of town doing work. Which i'm not. In that case then yes you need that much.

Chris