There’s a lot that can affect the profitability of any small business, so it’s vital that owners control what they can. One way landscape and lawn care business owners can achieve a better bottom line is by generating accurate bids and estimates, particularly for larger jobs. Creating good-quality commercial landscaping cost estimates that allow you to be competitive is a multi-step process, but unfortunately, many landscape business owners “guesstimate” rather than accurately estimate. Here, we’ll take a look at some of the important considerations you need to make to prepare bids that’ll put you in the “green.”
Accurate and complete job estimates start by having frank conversations with clients about their goals, their worries, and their budgets, among other considerations. You’ll likely have these discussions while visiting their property to take measurements and understand the scope of the work. As you learn more about your prospective client’s needs and wishes, you’ll begin to factor in job specifics that may include:
Before generating any commercial landscaping costs, you’ll need to familiarize yourself with the details of the job, and spending time with your client on their property will allow you to do that.
Profit can only come after you take into account your overhead, yet unfortunately, many landscape business owners underestimate it. This can be incredibly costly in the short and long runs, so it’s imperative that business owners factor in ongoing expenses like rent, insurance, marketing, repairs and maintenance, gas, and more when generating bids and estimates.
According to Green Industry Pros, a minimum of 20% of a landscape professional’s total sales go toward overhead costs. A good formula for figuring them out is to add up weekly overhead costs and divide that by the number of hours you work per week, on average. Add that figure to the cost of a job, based on the estimated number of hours you think the project’s going to take, to include overhead costs as part of your bid.
Obviously, business owners also need to account for the cost of the materials they’ll need to complete a job, as well as receive price quotes from any subcontractors they might need, folding those costs into the bid.
If you’re heading a team of workers, your estimate will naturally need to factor in their hourly wage, including payroll taxes, typically about 18%. You’ll also want to add your markup to the job. A markup is the money you pay yourself to do the work and is applied on top of the total cost of the project. According to Lawn & Landscape, a good rule of thumb is to charge at least a 15% -20% markup on residential jobs and a 10% -15% markup on commercial work. Your markup is your assurance that you’ll see a profit, so it’s important to figure it in.
Adding up all the costs we’ve just outlined, plus your markup will give you the price you’ll quote your customer for the job. These days, there is some very robust technology and software that allows landscape professionals to create accurate quotes and understand the average cost of commercial landscaping maintenance. Partnering with an established brand like U.S. Lawns can get you access to technology right away that you can use to pinpoint costs and alleviate the stress of generating comprehensive estimates. Our technology, Attentive AI, is a robust estimating tool and is just one of the many resources you’ll have as a U.S. Lawns franchisee to see growth and stay competitive.
Partnering with U.S. Lawns will mean access to our deep industry experience, so reach out today!
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