Need help with a estimate!

I just gave a bid today and I was told it was to high. The job I would be doing is Laying sod down in a 76ft x 18ft space it would take 3 pallets of sod. We would have clear out ivory that is on the ground (aprrox 10ft x 5ft space). Then we will lay down topsoil and till the ground before laying the sod down. We are putting in mulch in three different areas. The first area is 55 cubic feet. We will also planting three plants ,tilling, laying topsoil, doing a brick border around the area that is going to have mulch in it (APPROX 78FT around) We also cut down 2 small stumps. The second one we will be doing the same exact thing except no planting. It is 28 cubic feet and the border will be 47 ft around. The third is going to be the same thing but no border or planting and we will have to clean leaves out and pull a small tree out. The space is approxmately 35 cubic feet that mulch will be laid. We will trim hedges (10 mins time frame). After that we have to cut ivory back away from the back side of the house (40 minutes time frame) and lay mulch on a 10ft x 2ft path. We will be picking up more leaves and cutting ivory That will take about hour and a half to do. On all of this I bid 3650.00 to do the whole thing. I'm new at all of this so I need a little guidance. I have people telling my bid was to high and some saying it was to low. Any help I would appreciate it. Thanks

[Steve]

Lawn care business tips

On all of this I bid 3650.00 to do the whole thing. I'm new at all of this so I need a little guidance. I have people telling my bid was to high and some saying it was to low. Welcome to our forum. How long did you figure it would take you to complete the job? How did you present the bid to the customer? In person? Leaving an estimate in the mail or ???? How did you respond to the customer when they said it was too high?

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I fiqured it would take two days. I would have 4 workers. I told the customer over the phone how much everything would cost for the job. The customer had told me to send them a contract with everything in detail we are doing for them and they will get back with me.The customer didn't tell me it was to high of a bid but friends of theirs had called me and said it was too high of a bid. Do you think this was to high of a bid?

[Little's]

It doesnt necessarily sound too high, I mean 4 or 5 guys for 2 days is quite a lot of money depending what you are paying them. Plus the price of your materials. That doesnt leave a lot of money for profit. I would say the bid was probably fair, maybe a bit on the low side. Remember there are a lot of cheap people out there, dont let them decide how you bid.

[Steve]

Ok so ultimately this job comes out to $57 per man hour.

$3650.00 / (2 days * 4 men * 8 hours) = $57 per man hour.

Now it seems to me from what you said, this was set up for the customer to basically shop the job around.

I would have 4 workers. I told the customer over the phone how much everything would cost for the job. The customer had told me to send them a contract with everything in detail we are doing for them and they will get back with me.The customer didn't tell me it was to high of a bid but friends of theirs had called me and said it was too high of a bid.

From previous posts on the forum, we have talked about the importance of presenting a potential customer a bid in person. Because ultimately it's the only way to really sell the project.

You can walk the customer around the property and present these mental images of what you will be creating. When you do this, you are not only selling the presentation and the project but you are selling yourself as well. Selling yourself becomes the most important part because it is YOU that makes YOU different from your competitors. If you can build a connection or bond with that customer, you will get the job.

If after you present the bid to them, they kind of flinch, you need to know your numbers and how much you need to make per hour. Then you can see if you have wiggle room to either lower the price or maybe offer less services at that same price. Feeling out the customer gives you a better chance to seal the deal.

It is difficult to build a relationship with a potential customer simply over the phone.

It's like trying to get a new girl friend. She has to be wooed into going out with you on your first date. You have to sell yourself. If you simply call her and say wanna go out, there is a higher chance of failure.

Does this help?

The day I came out to the property. Me and the customer walked around the property and I showed and told them the scope of worked to be done. Then the next day I contacted them with a qoute/contract.
So I should of went back out there the second time and closed the deal in person is what your saying. Which would of been a whole lot better because I would of seen the face reaction.
The customer contacted me today and said that she wants me to break down everything in catergory. When I sent the quote I sent here the scope of work that is going to be done and the flate rate price for the job. All the bids I have done in the past I have done it this way and got most of the jobs. I have never priced nothing in category. What is the best way to handle this situation. I dont want to go through all this work if I'm just be used for a shop around price. I got other bids that are due in for the city and bigger projects than this. What would you do in this situation?

[Steve]

The customer contacted me today and said that she wants me to break down everything in catergory.

What does that mean? She wanted to break it down into categories? Do you mean like labor, fuel, plant costs etc? How did you break it down and present it to them?

I attached the qoute I sent the customer for you to look at. thank-you.

Steve,

Also when she sent me the reply email all she said was this Is it possible to break down each category for her? And that is all she said in the email. I called and left a message but have not heard back yet from them.
Hey I appreciate your help on this and good advice. Hey thanks again.
**-End Quote**-

[Steve]

Here is my view on this. First off, I think you are doing great. If I can add anything here that will help, then that is fantastic.

As a consumer, all I want to know is what you are going to be doing and what it will cost me. I don't want to hear a price break down into categories. To me that comes off a bit screwy. It's like the customer is looking to compare each specific element of your bid with each specific element of another lawn care business's bid. This customer was probably going to be a problem and I would base that on how they acted.

From your bid

Because we had the pleasure of doing business with you before, we have a special offer to express how much we’d like to serve you again: If you confirm this estimate within 5 days of the date on this letter, we’ll give you a discount of 10% on the job. It will bring your total to $3556.02.

To me, this $395 discount you offered is your wiggle room money. I would keep this on stand by. If after you talk with the client in person and you tell them all about what you are doing and what it will cost, if the customer kinda cringes and says they will have to think about it, you can follow up with 'ok what can we do to get this started today?' If I work hard on this project I can probably finish it up a little quicker and save you $200. Would that help get this project started? And then if they still don't know or they want to talk with their wife, you could follow up with, 'I can understand that. How about if I just go and knock off 10% if we sign this thing right now and get started. It's going to leave me with little profit but you are a hard bargainer.'

Then you opened yourself up to two steps of leeway. You made it look like he really bargained you down and he will feel like he got a great deal. That's something he can tell his wife about. You want to make an offer that he will want to impulsively jump on.

If you leave it in a letter, like this

If you confirm this estimate within 5 days of the date on this letter, we’ll give you a discount of 10% on the job.

you are basically telling the customer that you will come down 10% on the project for them doing really nothing and they don't feel they negotiated you down. You want to make them work for it.

Also with this comment at the bottom of your bid.

P.S. If you would like to discuss items in this quote, or if you need any additional information, please call me personally at.

It shouldn't be up to them to call you. You should call them and talk to them with a follow up call to see if they have any further questions. But ideally you don't even want to get to this point. You want to get the deal signed when you present the bid in person.

I would think, with residential customers you really want to try and get the job signed up right then and there because you are talking to the decision maker. With commercial, you might not have that opportunity and may have to do more follow ups. In that case you want to show them you are there to serve them and the follow up calls show the customer you are going to be attentive to their needs.

What's your thoughts on that?