Issue link: http://read.dmtmag.com/i/54292
how to Cost a Job for a Winning Bid BY KEN WYSOCKY WHY: One of the toughest tasks in landscap- ing is estimating jobs for bids. "It's one of the biggest challenges for small business- es," says Tony Bass, landscaper-turned-consultant and co-author of The E-Myth Landscape Contractor: Why Most Landscape Companies Don't Work and What to Do About It (prodigybusinessbooks.com). Statistics show that out of every fi ve jobs, a typical contractor loses money on one, breaks even on one, makes about the expected profi t on two and hits a fi nan- cial home run on one. "So if you do 50 jobs a year, that's 10 bad jobs a year," he explains. "If you can take those 10 bad jobs and replace them with good jobs, you'll double your profi t." Here's how you do it. 1 Develop an accurate general operating budget. Profi table estimating begins with an accurate blueprint of how much it costs annually to operate your company. Review expenditures from previous years and/or use bud- get software to produce an accurate spending picture. 2 Account for overhead recovery. Determine how much to mark up costs of services to recover overhead costs (administrative, fuel, etc.) and make a profi t. "If you don't recoup overhead costs, there's not even $1 of profi t in a job," Bass says. Most smaller businesses underestimate overhead costs. 5 Develop a plan. 3 18 TOTAL LANDSCAPE CARE / February 2012 After listening closely to and writing down what a client wants, create a step-by-step plan and speci- fi cations for the project. Consult with vendors, subcontractors, equipment suppliers and employees to get ideas about the best way to do the job. Later, this plan and job specifi cations/measurements become a blueprint for your employees. HOW TO: