Stick to your landscaping bid or pass?

When you are out and about giving new landscaping estimates to customers, when should you stick with your bid price and when should you pass the job on to someone else? This is a great topic and it was brought up on the Gopher Lawn Care Business Forum by our friend Tom. He wrote “I have a question regarding a mulch quote. I went to home of someone getting several quotes on a mulch job yesterday. I was told the industry standard for quoting is about $100.00 per yard. The mulch job was for 9 yards of mulch (he also wants all his beds edged). Given my costs of $24 per yard plus delivery plus an extra worker. $290.20 mulch plus delivery then the extra worker $135. Total cost $425.20.

Landscaping bid

Landscaping bid

I told him $900 he said no way, I was way to high he had gotton a quote for $600. I said well I would go with that person. I cannot afford to make $175.00 for a day of working. I didn’t give him my costs. Then he said how about $700 I told him I would get back to him. I don’t know if he really has some quotes for a lower price or he is just B.S.ing me. I guess my question is do you stick to your guns and pass on this job or try to negoiate the price?”

I think first off, you are way ahead of the game because you know your costs. Most business owners don’t and they just shoot from the hip when it comes to creating a bid. There are going to be jobs that you will be on within a range of what YOU need to make. Some of the jobs you will get because of your ‘economies of scale’, you can do something faster, better, stronger, cheaper than a competitor.

There will be other jobs that you just won’t be able to compete on because the competitor will have the advantage. On top of all that, there are plenty of people who will do jobs at break even or even at a loss and not know it until much later.

This is how I would weigh it. Can you make the job profitable? If you are saying “you cannot afford to make $175.00 for a day of working” then don’t do the job, it’s not going to work out for your benefit.

If however you are free that day and can get him to a price where you can get the profit you need to operate, then do it. Not every job will be a good fit for you and for the customer.

When you say “I think $100 per yard is the industry standard,” knowing this is helpful information to compare your costs but there will be times when you can’t operate at the industry standard. Your expenses may be too high or you are not set up to profit on certain specific services.

Say for instance you ask me to make you a bottle of Coke. And you tell me the industry standard is $1.00 and you won’t pay more than that.

Well, I am going to have to spend time trying to come up with a formula that tastes like coke. Then I am going to have to figure out how to form a bottle that looks like Coke’s. Then I am going to have to figure out how to put the label on it to look like Coke’s and when it’s all said and done I will probably spend $50,000 to $100,000 grand on trying to make one bottle of Coke to sell to you. I just don’t have an infrastructure set up to compete.

The same can hold true with mulch. There are companies out there that show up in a big truck and have a long hose and can just blow mulch right where it needs to be and can charge a fraction of what a lawn care business owner would need to charge to manually do the job.

Is this customer bs’ing? Who knows. I think you need to stick with the price that covers your expenses and brings you the profit % you need to operate or there is no point in doing it. You could be doing another job that gets you what you need.

Tom replied “thanks a lot that really helps. The down side to me in this business is doing mulch. The guy I used to work for said use $100.00 as a rule of thumb when you calculate the job. At the end of the day when your dead beat, the $600.00 dollars you made makes it all worth while. I don’t want to be the guy that’s priced so high I am screwing my customers. But I am not about to make minimum wage on a job either. I pay my part time help very well $15 and they really are great to work with. This guy just made it out like I was price gouging the hell out of him. I said look go with the other guys if your looking for a cheap price. I’m not the cheapest but I’m not the most expensive either. I am getting about 30% of the mulch quotes that I give out. The ones I get are from people who don’t get other quotes. So I want to be fair but I also need to make a living as well.”

Another forum member suggested a way to play around with the bid. He said “Do the take away sales pitch on him. Say with out edging your beds we can do it for X amount, don’t back down on a sale, he wants the work done, you have him in the position to raise the price since he said will you do it for $700, tell him $800 or where ever you think you need to be to be profitable. A little negotiation never hurt anyone!”

Consider these suggestions the next time you are on a job site and find yourself negotiating a bid price.

GopherHaul 36 video - Overcoming lawn care business owner newbie syndrome.

GopherHaul 36 Podcast - Overcoming lawn care business owner newbie syndrome.

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