Originally Posted by Steve
Not every lawn care business owners gets a chance to see a previous bid on a commercial property and then use it to create their bid. When they get a chance to get their hands on such information, it is great. However I was wondering, what is your advice as to how to reverse the bid and try to work backwards once you have a total figure?
How do you figure out if you can truly meet or beat a bid price when you hear the total price another lawn care business was charging?
Well, in my case I knew a girl in the office who had access to some of the numbers. Bidding on a bigger property, most of the time the company that was there before me will be a bigger company. More employees, more trucks, more equipment, MORE BILLS!!! In my case I am already a full time firefighter. I do not need to go out and make a million dollars spending every waking moment cutting grass. My business plan is simple. Stay small and only maintain a few very good accounts.
When I saw the number for the yearly/monthly maintenance I was able to easily come down from $4300/month to $3900/month. $3900/month split two ways and broken up to go back into the company isn't horrible. Especially when we have the time to be there and focus our attention on them. Again, we already have full time jobs so all of this is extra.
The pine straw bid was simple... the manager let me know how much pine straw it takes to cover the property. 1500 bales twice a year. All I had to do was find the best price for good 9inch slash and double it. Then I added $750 labor fee and ran the numbers to see what that would all equal per bale. It only came out to like $5.80/bale installed. The average around here is around $7/bale installed. I can hire 10 guys @ $10/hr to do this for me and still make close to double what I put in.
The gutter bid was the same... 2 times a year for 29 units each time. I determined the pitch of the roofs and how easily or difficult it would be to get on top of them. They have a fairly flat pitch so we can easily get on them with the blowers and blow them out in a day or two. We actually made $6,000 between the 2 of us in our first month just doing residential gutter/fall cleanup jobs. The manager again told us what the last company charged. It was $3500 each time. We are bidding $3000. We can have that job done in no more than 2 days. It's an easy $3000 and this way they feel they are saving money by giving us a chance.
The only issue now is trying to get the color change bid finished up. It's only for 5 beds around the office. Not a huge deal. Just trying to price spring plants is kind of hard right now. Especially since they have no idea what they want. We don't know what the other company charged for the color change so we are having to do a lot of work to try and figure out how to actually price it. Meeting with a local nursery in the morning for advice.
Basically this has been a huge learning process. It is our first commercial bid and the property isn't exactly small. Even if it doesn't work out I am gaining confidence and knowledge and learning how to be more effective and more marketable thru this process.
I think my partner and I are lucky because we don't HAVE to get the work. If it isn't going to benefit us then we won't even entertain the thought of wasting our time. We can afford to pick and choose who we want to approach for work since we are already employed. If someone wants us to do it cheaper than we want then we simply say sorry, have a nice day and move on. We have built a pretty decent little residential list by operating this way. All of the customers want all of the extras and they don't mind paying for them. We just stick with the demographic that doesn't want to worry about doing things them self. They just want to pay someone to do it all for them.