Landscaping estimates can be a little tricky as landscaping isn’t like most other service industries when it comes to pricing. Prices can sometimes drastically vary from one job to the next. Then to make matters worse, landscape jobs can become more involved and complex then what you originally thought and costs begin to add up while profits are lost.
If you are going to learn how to accurately price a landscaping job, you need to consider what type of property it is, the size of the crew that will be working at the property, required materials, customers’ special requests followed by market expectations that are constantly changing.
How to put an accurate price on landscaping jobs
1.) Scope of Work:
You can’t give a customer a fair price on a landscape job if you don’t have a full understanding of how much work needs to be done as well as the landscaping supplies in Southlake Texas that you will need. Visit the worksite and talk with your customer in person and be sure to keep track of every job detail.
During this initial stage of acquiring a new customer for your business, you should be asking yourself things like what is the job location, how big is the property, is there any safety hazards or accessibility issues. Continue to take it all in and ask yourself more questions like what services are you providing, is there any special requests from the client and what materials will you be needing to complete the job?
2.) Estimate the Cost of Labor:
All of that information you gathered from the first step is applied here to determine how long the job should take. Multiply the amount of time you think the job should take by the number of people who are going to work at this property.
Determine hourly labor cost: The hourly labor cost per employee is the amount that their hourly wage is but don’t forget to factor in extra for taxes, worker’s compensation and any other employee-related expenses. This percentage will vary but 20% is about average to at least get you in the ballpark of an exact answer. Now that you know what your hourly labor cost is, multiply that labor hours by what your labor cost is to get a total labor cost for the job.
3.) Estimate total material costs:
Finding out what materials will be needed for the job is an important part of the pricing that you quote your customer because landscaping supplies in Southlake Texas can add up quickly depending on how much of each material will be needed to complete the job.
Make a list of materials that you will need as well as the quantity of each material and tally it all up to get a total. Some common materials needed in landscaping include:
- Landscaping rock
- Lawn Turf
With every job, the materials list will vary and so will the amounts of each material depending on the size of the property that you are working on and the work that your client is expecting.
4.) Fees and overhead costs:
Anything that is needed for you to run your business that is an expense and isn’t directly connected to a specific job is what your overhead costs are. You may be renting some office space, telephone and internet bills, insurance premiums and paying for local advertisements are all considered your overhead costs for your business to be in business in the first place.
When you are out at a customer’s property, these things need to be taken into consideration when you do an estimate for a customer. So how do you figure out how much you need to recover for overhead costs for every job?
- Calculate the total amount that you will need for overhead costs per week.
- Add up how many labor hours were worked during a week.
- Next, divide the overhead costs for the week into the hours for an hourly overhead cost. Whatever your hourly overhead cost turns out to be is how much you need to add to the estimated total for your customer.
- Multiply however much your hourly overhead costs are by the number of labor hours you estimated at the beginning of the job to get the total amount for the overhead costs for the entire job.
5.) Total Cost:
Now you will need to know what the job is going to cost for everything. Add up your labor cost, material costs and overhead fees and you get the total for what the job will cost you to do.
6.) Determine your profit margin: Once you have the total cost figured out, add a markup percentage of your choosing to make the profit you desire. For most residential jobs, a 15 to 20% profit margin is most common whereas commercial jobs have an average of 10 to 15% for commercial jobs.