Bidding Larger Commercial Contracts

[mowboy]

Dan from Elite Building Services asked the following question:

Quote[/b] ]I currently provide janitorial services for a number of accounts. They have approached me to bid on their lawn care and snow removal. *I have a son who has cut residential lawns for a few years but to bid on larger accounts with snow removal is foreign to me. *Are there formulas I can go by and where can I get your book? *Thanks for helping out a rookie.

You must be doing great work on the inside of the building for your customers to ask you to look after the outside too. Well done!

If your son has been cutting residentials for a few years, he is probably ready to make the leap into larger commercial contracts. They are a different breed than residential but often times well worth getting into. There are guidelines, principles and formulas that can help when pricing these types of jobs (or any jobs really) and these are discussed in my book. Unfortunately, there is really no magic formula that will spit out a reliable number for you though. *http://www.gophergraphics.com/forum/iB_html/non-cgi/emoticons/sad.gif

As for snow removal this is outside of my expertise (we don't get much snow here in Vancouver!). Check out some of the snow plowing/removal forums online... plus I'm sure the good people here may share some insight.

BTW - My book is available at amazon.com, Barnes & Noble and Chapters (Canada). You can also get it at mowboy.com (http://www.mowboy.com/index.php?option=com_content&task=view&id=25&Itemid=38)

Thanks for your question and I hope things work out for you and your son.

Joel

[Steve]

Joel,

One of the things we have seen in the past when LCOs are making the jump from residential to commercial is they tend to underbid themselves.
To overcome this, the lco could consider actually mowing the property for free to get a feel for how long it would take and see what is really involved. I know someone reading this might say, "I am not going to give anything away for free," but the flip side is this. You aren't giving away anything for free, they are giving you an opportunity to learn and grow. If you bid the job and sign a contract for a year and then later find out you underbid, it can really put your business under.
Why put yourself at such a risk, if you can easily take a few hours to learn, experiment and grow.

Just a thought.

[mowboy]

That's a good point TG. It would be tragic to sign a contract and then realize you underbid. A free cut is a small investment. Of course, once you have some experience in commercial you will be able to bid them almost as easily as you do residential. On the other hand, the free cut may also build goodwill in your company so it may be something you want to continue doing with new clients.

Thanks Team Gopher.

[Steve]

More good points. Thanks Mowboy.

Always try to minimize your downside. Take everything step by step and help your business live another day.

The longer you are in business the better educated and prepared you will become to deal with situations that present themselves.

Don't get too excited over anything where you jump and fail to think things through before hand. Sometimes one error can sink the ship.

[kc2006]

I'll add on to this for the person that asked the question.

First thing you always want to do is actually walk the property and don't be in a rush to get in and out of the estimate. I did this once and when I got there I was in for a suprise. I didn't know there was 4 ditches in the front lot that would need trimmed and gone around while mowing. Luckily for me it still took the estimated time that I figured and my price still worked out to what I wanted.

What I do when estimating large properties is I figure out how long it's going to take me. Break it down into smaller sections if you have to. Then I figure my hourly rate or what I want to make from the property and put a price together from that. Alot of times commercial properties are going to be broken up into a few mowing areas, I find it easier to just figure out the time it will take for each and then figure out the total time plus drive time.