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an idea for this section....

Discussion in 'Bidding & Estimating' started by trqjnky, Oct 14, 2011.

  1. trqjnky

    trqjnky Senior Member
    Messages: 620

    ok, i get tired of reading through all the "how much do i charge for this lot" and "how long will it take to push" threads from people that dont have a clue. im all for helping people that have an idea but just want a second opinion.

    sooo maybe we pick a couple random properties, maybe one open lot, one apartment complex, and a restaurant lot, post pics and a quick and dirty how to description. guide people how to figure size, an idea of time, i dont think a price is even possible due to area. but i think it would at least give newbs something to compare to? and cut down on the 5 threads a day of people asking others to bid their properties for them.:help::dizzy:
     
  2. trqjnky

    trqjnky Senior Member
    Messages: 620

    kind of like this...

    NOW KEEP IN MIND I DID THIS IN ALL OF 2 MINUTES, SO ITS NOT RIGHT, IM JUST GIVING AN EXAMPLE.

    say the dimensions are 500x500 equals 250,000 square feet. 5.7 acres, a truck can do an acre in an hour on average. depending on light poles and things in the way, figure that out on your own. so about 5-6 hrs for the lot.

    figure out your price. multiply by the hour, and thats your bid.

    [​IMG]
     
  3. buckwheat_la

    buckwheat_la 2000 Club Member
    Messages: 2,254

    Maybe, but unless Donovan stickies it, it will just get lost with the rest, and people won't bother doing a search. The other day there was a guy on here that couldn't even be bothered to work out a sq footage, and even when he was told how to do it with his provided picture (by using lenghts of the parking stalls) he still couldn't be bothered.
     
  4. swtiih

    swtiih PlowSite.com Addict
    Messages: 1,179

    and he seemed to get testy that we would even ask him to do that
     
  5. wizardsr

    wizardsr PlowSite.com Addict
    Messages: 1,557

    Not a bad idea, but we'll never get rid of the pricing questions. People don't want to do the work or help themselves any more. In our entitlement society, they expect everything handed to them on a silver platter, and bidding snow work seems to be no different.
     
  6. Remstar

    Remstar Member
    Messages: 44

    Pricing is like opinions; you can have 2 separate, totally different results but both are correct. Pricing is always this:
    labor+materials+overhead+profit=cost

    No one but no one call tell you how long it will take complete your job. No one knows your operating costs. No one knows your pricing matrix from your suppliers. No one knows what your profit needs are. No one knows how much you travel for sales calls, material runs or unexpected trips.

    Do you see the point? Fill out the contractor equation and you have your own answer...every time.
    L+M+O+P=C

    Pricing, Estimating & SUCCESS

    One of the most challenging aspects of running a contracting business is estimating jobs. For someone with little experience, estimating can be a rather scary endeavor (it can also be scary for someone with tons of experience). After all, the accuracy of the estimate will have a huge impact on the contractor’s success.

    This, I believe, is the primary reason we see so many questions asking what to charge for a job. But such questions are misdirected, because what I (or anyone else) would charge is completely irrelevant and doesn’t address the real issues.

    The price of a job is comprised of 4 basic components: labor costs, material costs, overhead, and profit. Estimating is the process of identifying the labor and material costs. We add our overhead and profit to those costs to obtain our price.

    Overhead—advertising, rent, insurance, utilities, phone, owner’s salary, etc.— is completely unique to each company. Without knowing these numbers, it is impossible to properly price a job.

    Profit goals are also unique to each company. Again, without knowing the specific profit goals for a company, it is impossible to properly price a job.

    Consequently, any attempt to answer a pricing question in the absence of these two key numbers is essentially meaningless. More to the point, pricing questions ignore the fact that a large percentage (often more than 50%) of the job’s price should be comprised of overhead and profit. (My suspicion is that those who pose such questions don’t know their overhead, and mistake gross profit for net profit. But that’s a different issue.)

    As I said, estimating is the process of identifying the labor and material costs for the job. Labor costs are determined by the type of work being performed, the production rates of the company’s workers (the time required to perform each task), and pay rates. As with overhead and profit, these numbers will be unique to each company. Material costs are determined by the type of materials required, the quantity required, and their purchase price.

    For example, let us say that a snow removal company knows that his plows can cleara certain style of lot in 30 minutes. He looks at a job that has 10 of these lots. He knows that his truck can clear these lots in 5 hours. He can also calculate the materials required by the gas consumption of the truck he will use. The contractor can now determine what his costs will be for the job. By adding his overhead and profit to these costs he will have his price for this job.

    While the above example is simple and uses a very basic materials list, the same principle applies to every contracting job—large or small, simple or complex—regardless of trade.

    What should I charge for X? really means: what is the total of my labor costs, material costs, overhead, and profit? And the answer to that question requires a substantial amount of additional information. Providing an answer without that information is simply a guess.

    Accurately pricing a job is not rocket science, but it shouldn’t be based on conjecture, blind guesses, or another company’s numbers either. Certainly accurate estimating takes effort, but owning a successful business isn’t easy. Asking what to charge for a job is asking for a short cut, but there are no short cuts to success.

    Such questions about prices for a job are inappropriate, because they ignore the many factors that determine the price. Providing a price in response to such questions is also inappropriate, for the same reasons.

    It is a documented fact that 90% of small businesses fail within 5 years. Of those that make it 5 years, another 90% will fail within the next five years. Which means, 99% of small businesses fail within 10 years. One of the primary reasons for failure is not charging enough. Contractors are as guilty of this as anyone.

    There seems to be no shortage of hacks willing to work for dirt cheap prices. Nor does there seem to be a shortage of replacements when they inevitably fail. One of the most effective means for avoiding failure is to know your numbers. Asking what to charge for a job is simply an admission that you don’t know your numbers.

    I hasten to add that there is nothing wrong or inappropriate with asking how to price a job. But how to price is different from what price to give. Learning the process is a good thing. Looking for an easy way out isn’t.

    Driving a plow is a skill. Pricing a job is a business skill. A skilled plower does not necessarily make a good businessman, because different skills are required. The owner of a contracting company does not necessarily need to have trade skills, but it is imperative that he have business skills if he is to succeed. The longer you wait to obtain those skills, the closer you move to joining those 99%.

    These are not written by me, but shared in the hopes they can benifit others
     
    Last edited: Oct 17, 2011
  7. CS-LAWNSERVICE

    CS-LAWNSERVICE Member
    Messages: 79

    Well Said Remstar
    My biggest issue when bidding my first commercial property was fuel consumption ( not knowing how many gallons an hour for plowing) but that was my own fault for never tracking it .Lesson learned from last years mistake

     
  8. ryde307

    ryde307 PlowSite Veteran
    Messages: 3,143

    To the OP I think your idea is a good one. Will this stay up no I doubt it. I would say most agree its impossible to price a lot on the internet for someone 10 states away but there are some helpful things besides just saying know your numbers. Although that would be Number 1.
    Some other things to consider using the picture you posted or for any site:
    - what are the business hours
    - will there be cars when I am there
    -Where does the snow go? if it all goes to one corner its alot differnt than just put it somewhere
    -is there daytime plowing
    -sidewalks?
    - do the walks get shoveled when the snow event is over or ongoing
    - in a big event salt at the end or everytime you are there

    Some other variables that can affect peoples pricing
    - is the site go exposure for your company
    -what are the payement terms if its 15 days or 60 or 90 it affects price
    -how close is it to sites you already do?
    - do you have equipment for this or do you need to get more?
    - will you sub it or do it yourself
    - how long is the contract term 1 year? 3 years? 5? this can affect prices

    So I may not be able to give you a price but that is a quick list of some things to take into account to help with the bidding process.
    Something else to go with that is can you sell yourself?
    There is much more to it than putting number on paper and dropping them off.
    Does your comapny have a reputation? Are you a start up? do you have references?
    Do you do anything unique? Everyone thinks they are the best plower on the planet but can you sell this to someone? How can you prove it?

    What I am getting at is numbers are part of the game but to be successful you have to be able to or have someone be able to sell your company. It is no differnt than the guy selling shamwows if you can convince someone how much better your product or service is than the numbers now come up second and dont matter as much.
     
  9. buckwheat_la

    buckwheat_la 2000 Club Member
    Messages: 2,254

    I wonder if donovan would do a sticky about rules to follow in posting for help with quotes. Things like equipment available, sq footage, type of business, etc