# Estimating



## minuteman tree (Dec 31, 2011)

I'm sure alot of it has to do with experience, but I keep under estimating jobs. Any tips from the vets?


----------



## VA-Sawyer (Dec 31, 2011)

Practice, practice, practice ! Are you off on your time figures or on the cost of doing business ? I learned that I had to add 50% to my time estimates to meet real world numbers. 

Don't let yourself get into the trap of bidding low just to get the job. It can feel like you're doing great getting checks of $400 per day, but if your *total* costs are near that or perhaps higher, then you're really losing ground. Your real profits need to meet your income needs plus growth plus 'disaster' funds.

Rick


----------



## sgreanbeans (Jan 1, 2012)

Under estimating the job or the price.....I guess both then! Yeah, time and experience. I know what I need to operate daily and make a profit, no matter what the job is, a day is a day. The trick is getting the most out of each day, and that's where the experience comes in. Always having a plan of attack, the tools ya need for that job, and good peeps. Clear and precise procedures that do not change from job to job, strategic site/project set up (getting that chipper close and the wood hauler closer!)


----------



## minuteman tree (Jan 1, 2012)

I've been under on both time and cost. I like the idea of adding 50% to the time. I figured out that it takes $70 an hour to cover costs, but I neglected to figure in profit. As far as good help goes, I have my brother in law, and he's pretty much useless. Thanks for the help.


----------



## imagineero (Jan 1, 2012)

If you'd care to post what your gear is (how many saws, chipper, and what sort of work you are doing (climbing, taking down from ground, bucket work, trimming, residential removals) then you can probably get some pretty good advice on what you need to charge per day/hour and how to put good estimates on times. 

It seems that lots of guys in the states are cagey on what they charge, fearing that if they give out info their competitor will underquote them and win the job. I talk with most of the guys in my local and get on well with them, we work together on some jobs, sub out to each other on others and help with chipping/lend out specialised gear sometimes. We compare notes on jobs and try to charge pretty close to each other. This isn't about creating a monopoly, it's about fair 'book' prices for work just like any other trade has. When businesses can charge a fair cost that covers the true cost of running the business then there is a future to the trade, people can get trained and good quality work can get done.

It's bad for all concerned when someone starts charging a lot less. I'm happy to do anything I can to get my competitors to charge similar prices to what I do.

Shaun


----------



## 2treeornot2tree (Jan 1, 2012)

I dont care what others are charging, because there is certain jobs that may take us longer to do then other companys and vis versa. I charged what I need to to make money. This is how I figure out what how to charge for equipment.

New morbark model 15 chipper. $54,000 
Lets say you get 3000 hrs of use out of it. (might be able to get more, but its a good number to start with)= 54,000/3000= $18 per hour
The engine uses 3 gals of diesel a hour. ( give or take) 3 gal x $5.00 ( sure it will be that price soon) gal = $15 per hour fuel
Misc maintance cost (parts, knifes, sharpening knifes) $10 per hour (rough guess)

So this chipper costs you $43.00 to run a hour without making any profit on it. I would charge $55 a hour for the chipper.

When figuring what to charge for employees, you got to remember you have to pay part of there taxes. So I always take there wages x 2 plus whatever your tax contributation amount is plus workers comp. It should be somewhere between $40 and $50 a hour for just a ground guy.


----------



## minuteman tree (Jan 1, 2012)

Most of my work is removals. I'm not an arborist, so I try not to do much trimming. I run 3 saws and rent a chipper when I need it. The chipper runs $125 a day, and I charge $175 to cover fuel, etc. I then have to cover fuel and chains, insurance, and my helper who like I said is pretty useless. Don't ever 
hire family. My hourly rate has been $70, but I think that I need to increase it.


----------



## OCTJ (Jan 1, 2012)

minuteman tree said:


> Most of my work is removals. I'm not an arborist, so I try not to do much trimming. I run 3 saws and rent a chipper when I need it. The chipper runs $125 a day, and I charge $175 to cover fuel, etc. I then have to cover fuel and chains, insurance, and my helper who like I said is pretty useless. Don't ever
> hire family. My hourly rate has been $70, but I think that I need to increase it.



MMT,
What kind of chipper are you renting for $125/day?


----------



## 2treeornot2tree (Jan 1, 2012)

Sounds like it should be $100 a hour. I dont know what your market is there though. If you know some others in the area in your industry, ask them what they are charging. I would double the cost of the rental to make a profit on it also, not just cover cost.


----------



## minuteman tree (Jan 1, 2012)

It's a 6" vermeer and its the cheapest around here I could find. Can't thank you guys enough for helping me out. I really appreciate it.


----------



## Big L (Jan 1, 2012)

Estimating isn't rocket science, simply put, estimating is breaking down a project into the greatest number of parts, pieces, and processes. The greater number of _line items_ reduces the dollar value damage of any inaccuracies. 

Some items commonly overlooked when estimating a job:
*Non-productive labor* - The time it took you to rent, pick-up, tow to the job site, and return to the rental store that chipper. Bs with the homeowner or client. Set up each day at the job site, before the machines start. Time for estimating and sales, as well as the time you spend performing regular business functions.

*Hidden overhead costs* - Wear and tear on equipment, in other words replacement costs when equipment reaches the end of its useful life. Travel to and from the job site. That computer you use to write proposals and invoices. Taxes, taxes, and more taxes ... make sure you cover them all. Permits fees (if required). Police coverage, typically one cop and his cruiser with flashy lights will cost 125-$150/ hr for road closures if required. Small tools, lost, damaged or stolen while on the job (we carry ~3% of labor costs in the mechanical construction trade)

*Productive labor factors* - Crew size, the larger it gets, the more non-productive labor you, as the boss experience. Weather, is there snow on the ground or falling out of the sky? Is it going to be 0°, or 100° when doing the job? Project difficulty, I suspect it takes considerably longer to take down a tree close to a structure or power lines.

The most important consideration imo when estimating, is to know your day to day costs for running the business ... before the fist truck is started, or saw is fired up. Make that a line item!


----------



## sgreanbeans (Jan 1, 2012)

minuteman tree said:


> . As far as good help goes, I have my brother in law, and he's pretty much useless. .



So he is a cost not a benefit. Loosem. FAST. Family, unless a child, never works, they always have the attitude, that because of the relationship, they do not need to bust their a s s like a regular, off the street guy. Have tried it several times, all failed. I have my boys out from time to time (I don't not want them in this business) When they are out, they try and out work me, so they can claim they beat the ol man, I love it! My nephews would move as slow as possible with out being yelled at, at all times.

Agree with doubling your cost for the rental. DO IT!

Look up Direct and Indirect cost and Budgets. Budgets, not that you want to do them on each job, but do them often, to keep a production record, recording how you do on each job. Industry standards: 33% Direct cost, 33% Indirect cost, leaving the rest for you or you and the head shed, if you have one. After it is all said and done, after you have been paid and all cost accounted for, the average industry goal is 9-11% net profit to the company. Not huge numbers unless you are doing huge volume, but steady and stable. I have talked about price sharing with the other Arbs in my area, some interested, some not. With different setups and different styles, it can be hard. Then there are those who have the Cert just for show, and they dont wanna play.


----------



## OCTJ (Jan 1, 2012)

Good post Big L,
Alot of people don't figure these costs in and will never have an accurate time/cost estimate.


----------



## OCTJ (Jan 1, 2012)

MMT,
Great price on the chipper rental but doing mostly removals, you might want to try a 12" chipper.
You will probably find it at least 4 times faster than the smaller one.
You will know the fixed price on the rental and lower your labor hours.


----------



## treeman75 (Jan 1, 2012)

Yes you do have to know your day to day expense but you have to know what the job is going to take. You have to be able to look at a tree job and know how long and difficult its going to be. How hard it is for the tree and the clean up, there are alot of things to consider. A one hour job could range from 150-1000 or more depending on the job and equipment.


----------



## conlan (Jan 2, 2012)

*After 14 years of giving estimates, it is still the hardest part of the profession.*

After 14 years of giving quotes, I still make mistakes. Sometimes too high and sometimes too low; but in the end it all evens out. You should try figuring out the price of a job by breaking down the job into pieces. For example, if a client asked you how much to remove a tree (cut it down close to grade) and dispose of all wood and branches, you should break the components of the job down in your mind first: like- how much to get the tree safely on the ground and leave everything on site; then, how much to get rid of all branches and leave the larger wood from the trunk(s) on site in 12-14 inch rounds; then, how much to dispose of all the wood from the trunks. This may sound silly, but you will encounter clients who will ask you to break down the costs for them, so they can decide whether they can dispose of the material themselves. By breaking down the quote in your mind, you will see what parts of the job are the most difficult and time consuming parts and also what parts require more equipment and labour. This will also be helpfull to you because there will be situations where you may be asked by contractors to come into a job site and just drop trees, buck them up (or not) and leave everyrthing on site for an excavator to load into a bin. You may be asked not to dispose of anything. 

You will soon discover that sometimes getting a large and hazardous tree, with lots of potential targets, safely onto the ground is worth as much money as the disposal of all the wood and branches. Sometimes you can't do the take down without doing the disposal at the same time because everything would be in your way: there would be no room to work or walk around, due to all the branches on the ground. 

After you have broken down the quote into pieces, you can figure out how long each section of the job would take and what it is worth to you. You will soon figure out your "hourly rate". This will be the rate of pay you would like to charge for you and your crew. Some jobs will not require your whole crew, so you will have to adjust your hourly rate accordingly. What I do now is figure out how long the job will take and multiply the time by the hourly rate, which will give me a pretty good idea of what the job is worth. I can then fine tune the quote depending on other variables such as; is this an existing good customer, is the job more dangerous than most (ie. dead tree that needs to be climbed, high voltage wires close by, big glass windows close by, etc.)

You will make lots of mistakes along the way and this will help you learn real fast. But never go back and tell the client you want more money for a job you underbid. That would be like giving the client back the extra money you made because the job went faster than you thought. The whole point of a quotation is to give it your best guess. You will make back any shortfalls on another job you did faster than you thought. 

The most important piece of advise to leave you with is....take your time preparing quotes, because rushing through a quote may mean hours of hard work you may later regret, all because you didn't take a few extra minutes thinking it through.


----------



## imagineero (Jan 2, 2012)

I use a basic quote sheet. It has all the clients details, date I first went there, the species of tree, DBH, height, spread and my best guess of how many cubic metres it would be mulched. That lets me work out how big of a truck/chipper I need, and how much ripping of barrels I'll need to do.

The next section has check boxes for what the tree is over. Straight fell or climbed, and what hazards exist - sheds, over a house, tile/fibro/slate roof (easier to crack), fences, footpaths, power lines, pavers/concrete under the tree, and if I have a limited drop zone (ie. do I need to rope down the spar in chunks). That lets me figure how long it will take me to climb and how much risk there is.

Last section is the access. Number of paces to the street, narrowest point I have to pass through, whether it's on an incline or not, whether there are things that will need protecting or could get scratched (air conditioners, water heaters, fresh paint, sandstone pavers etc). That lets me figure how many crew I'll need.

There are lots of ways to calculate things, some guys add a percentage on each item. For myself I factor each line item in at cost and that add my profit on at the end. Heavy plant like chippers and stump grinders are the only gear that get a profit margin factored in because I view my heavy plant as all being individual businesses. They have to stand or fall on their own, I dont want to be carrying them. So I add up my chipping hours at cost, multiply the number of crew I need by what I'm paying them, then add in about $100/hour for myself on the job. That $100 covers most of my overhead (insurance, workers comp, saws, gear etc). More difficult/technical/risky jobs get charged higher, as much as $200/hour sometimes. 

It sounds complicated but it only takes a couple minutes because each section is mostly check boxes. The boxes give me reminders about things I would otherwise miss maybe. I have a black folder for 'current' quotes, a green folder for 'won and done' and a red folder for 'lost'. Quote stay in the black folder until they move to the red or green one, I make a follow up call about a week later, then depending on the answer (we need a permit, still getting a couple quotes, have to ask my husband etc) make a note on when to call back. If they say they decided to wait a couple months then I make a note to call them back at a specific date and it stays in the black folder. 

On the back of the won jobs I make a few notes about how the job went, any unexpected costs, if i would charge more or less next time. I also make a note of any work that customer might need in future and notes on what I would say if I call them again. Twice a year I go through the book and give them a call. It gets me a lot of work and a lot of referral work. 

It's great to be able to call a customer up and say 'hi Mrs Jones, this is Shaun calling. Just wanted to checkup and see how your Jacaranda is after we pruned those 3 branches coming out over your roof last July. Its gone well for you? Thats great news. Did you remember to fertilise the hedge we pruned? And did it spring back well after fertilising? If you need it pruned again please give me a call, as a repeat customer you get a 10% discount on your next prune'. I send my 'won' customers a text message at christmas. It doesnt cost much. I find most people dont want christmas cards any more.

On the back of the lost jobs I make a note of why I lost the job. Most customers are happy to tell you if your price was too high and by how much. I make a note of that. Sometimes you lose them because they cant get the permit, or for other reasons. Sometimes they didnt have the money and were just checking out the price. In winter you might want to give those customers a call if you're short of work and offer them a better price. I always make a note of each date I call again so I dont call and annoy the crap out of them. I only generally call back once to a lost job. Any more than that would be harassment.

That 'database' ends up being a valuable tool. You can see your hit/miss rate, which jobs you make and lose on, and some reasonably useful data on the trees to sharpen up your future estimating skills. You dont need to get fancy with computers, just a photocopied piece of paper is fine. Looking back, my removals average out to about $100/m3 chip removed. That number jumps up to about $120 for trickier trees, bad access and small trees. it goes down as low as $70 for good access straight fell and chip, Large easy tree and bigger contracts. I also know that I make more profit on medium jobs than on big ones, so I dont chase big jobs much any more. Guys compete too hard for them because the numbers are big. Big for me starts at about 40m3 trees and goes up from there. I make the most money on medium trees meaning 20m3. They are usually easy on gear and me, straightforward and dont have much risk or need a lot of crew. I can fit them in one truck easily. That $100/m3 magic number plus a quick look at all the ticked boxes lets me know very fast whether I'm in the right territory.

Shaun


----------



## derwoodii (Jan 2, 2012)

> I also know that I make more profit on medium jobs than on big ones, so I dont chase big jobs much any more.



Thats so true nice easy $700 smak downs or $400 trims see you done paid and ready for the next one.


----------



## imagineero (Jan 2, 2012)

derwoodii said:


> Thats so true nice easy $700 smak downs or $400 trims see you done paid and ready for the next one.



20m3 easy trees end up being about $1700 over in aus land, not including stump grinding. That's still quite a large tree, well outside the abilities of joe average with a chainsaw looking to make a little extra money, but too small to interest companies with cranes and bucket trucks who start their billing in the $5k range. The 'big' jobs I think aren't worth chasing are the ones that are huge euc's 50m3+, 2 or 3 truckloads of chip and take a team of 6 or 7 guys 2 days to get done, or a crane for a day. Lots of guys are chasing those, my bids come in at around $4800 and guys are chasing them at $3300. We're talking 5' DBH, lots of obstacles and bad access. You can spend a whole day just ripping barrels down to fit in the chipper. How they make any money is beyond me, it's hard on the climber and hard on the gear. A lot of guys lowballing these jobs dont have insurance, and they avoid paying taxes by going bankrupt every couple years and starting the business again in the next cousins name. They often dont pay their workers at all also, they just keep hiring guys continuously on a '2 week unpaid trial' basis. Lot of guys out of work at the moment so no shortage of suckers.

Trimming is an entirely different beast. I find it's hard to make money on trimming. For the work that gets done, it's quite expensive to the customer. Take downs are generally easier for a few reasons... being able to spike isn't such a big factor. It's more that you can plan your takedown sequence and rig it in a way that's easy and simple, whereas with trims you usually have to work around a lot of things. Trims are also usually technically difficult - people dont want to trim branches for fun, usually it's growing over something which is easily broken. Glasshouses, sheds, aviaries, tile/slate roof's. I once trimmed out 3 huge branches that were growing over a tent full of poker machines. The customers refused to leave the tent. One had a baby. That puckered my sphincter just a little.

In aus, only top tier customers are interested in tree health, and only top tier companies can get that work. I've made no attempt to crack that market, I'm a small company. We get some strategic weight reduction work from estate owners, a little from schools, but most of my work is residential and the customers are more concerned about their property than the tree. The first scenario is that type of customer, they have a few usually large branches on big spreading snappy eucalypts with no good high points. That means a fair bit of rigging time, and at least one groundie because usually you'll have to lift the branches over the target. Prices for that sort of work start at about $600, and that may only be for 2 or 3 branches. Whichever way you slice it, it's still half a day's work. 

The second common scenario is the customer who wants the tree gone, couldn't get a permit and hasn't yet quite thought of poisoning it to kill it. They don't give a crap about the tree, and if they cant get it gone they want to cut as much as possible off it. In most council areas that means 10%. Most customers would like to cut 80%. I get quite a few requests to top (illegal) and cut every branch in the middle (also illegal). I don't do either. I try to talk them round to a longer term reduction of maybe 15% (nobody is going to measure) per year over 2 or 3 years. If you do quality work you can get a good outcome for the tree and the client, but again, it's half a days work each time.

Funny enough, the jobs I make the most profit on are 'cut and leave'. It's not high class work by any standards, but you get folks with plenty of time and not much money. They've got a permit, they've got a tree they need down but they recognise it as being beyond their ability to remove. A job like that might be $1600 all in, chipped ground and cleaned up. For some folk that's more than their car cost. I can get those trees safely on the ground and bucked up for $500 a lot of the time, and sometimes there's only a couple hours work and one groundie in it. Getting them to the street, chipping, grinding and cleaning up is a large part of the cost of the job. If I had to do the whole job I would be looking at 3 groundies, chipper and truck, stump grinder, cleanup time etc. I'm quite happy to take on that kind of work. A lot of guys dont want to do palms either, and the cost of disposing of them is high in aus where some areas charge you $250/tonne to dump. They are quick easy jobs for an experienced climber, you can get a medium sized cocos chunked down in about 15 minutes even in a very tight spot, and lots of folks are happy to pay $150-$200 vs $600~$800 removed. It's a nice bit of pocket change on your way home from a bigger job.

Shaun


----------



## TreeAce (Jan 2, 2012)

My biggest problem is I tend to think things are gonna be easier than they will be. I still need to remind myself to add alittle to almost every bid.


----------



## VA-Sawyer (Jan 2, 2012)

Shaun, excellent posts. Well witten.

OP, the question I was trying to get answered was if your bids were off because you didn't have the manhours correct or if you just weren't charging enough per hour. I make a point of getting an estimated number down of the manhours required and then comparing it to the actual time the job took. Getting a good handle on your operating cost per hour can be done in short order. Learning how long each job should take to finish will require years. If you don't compare the estimated to the actual, you won't make muck progress in learning.
Rick


----------



## minuteman tree (Jan 2, 2012)

I've been under I'm both. I think a job will be nice and easy, and it turns into a nightmare. These posts have given me tons of ideas. I am totally revamping the way I estimate. I'm just afraid of over charging. I've contacted several companies in my area to get an idea of their rates, but they wouldn't tell me anything.


----------



## sgreanbeans (Jan 2, 2012)

minuteman tree said:


> I've been under on both time and cost. I like the idea of adding 50% to the time. I figured out that it takes $70 an hour to cover costs, but I neglected to figure in profit. As far as good help goes, I have my brother in law, and he's pretty much useless. Thanks for the help.



LOL, I bet they didn't! Good initiative, bad judgement! Never ask them anything, they may give you a BS answer on purpose and that could be real bad! I have had guys come up to me and ask. I am willing to help, but that info is not getting out, especially to a person that I may be competing with. If someone on here gives you a ball park, that may not work either, as they are from another part of earth. Jeff and Beasty get alot more money out in SoCal than I ever would, just as I think I get more than the guys in the middle south. North east pays better than south east, so on and so forth.
What I have done, to get a idea of what the others are charging, in my area, is have a friend have their tree bid, I did, then they gave me the bids. I gave them $10 a bid, had them price it for pruning and removal. A bit shady............maybe. But I know they have done it to me too! Not that it makes it right, or anything, point being, I believe it may be a common practice
What was comical, she would ask them what was wrong with the tree, OH LORD, LOL!


----------



## imagineero (Jan 2, 2012)

minuteman tree said:


> I've been under I'm both. I think a job will be nice and easy, and it turns into a nightmare. These posts have given me tons of ideas. I am totally revamping the way I estimate. I'm just afraid of over charging. I've contacted several companies in my area to get an idea of their rates, but they wouldn't tell me anything.



Part of the reason why it's so hard is because there is no 'standard rate'. Some trades have blue book figures for specific jobs, say, changing brake pads for example. Tree work is so variable that you cant have that, but it sure would be nice if there was!

Rates vary by region, sure, but they vary a lot even by suburb within a city. I know I charge more in better neighbourhoods. Not because they have more money, but because they usually have nicer/cleaner yards that need more cleanup, and they expect a higher level of service typically. An experienced qualified insured contractor with a crew and equipment is rightfully going to charge more for a job than a beginner climber working after hours slashing it up and putting it in his 6x4 trailer. Everybody has to start somewhere though, and a lot of us started at the bottom! Rates will even vary with the same company depending on how much work they have. I'm lucky enough to own all my own gear and not have any overheads, so I dont have to drop my prices in quiet times as much as the big boys do... but in winter I do work for less.

When I look at a job I generally know what it will cost me, what comparable companies in my area would charge, what a hack would charge, and what a highballer would charge. I also know what i would do it for as a minimum if I was hungry, and what I would like to get for it in an ideal situation. Those numbers can cover a big range... I can look at a tree, know that it will cost me $800 to do for labour and chipping (not including my time), decide that if I was hungry I'd do it for $1200 but I'd really like to make $1600. I know that Joe's fancy tree's would charge $2100 for it, and a lebanese crew up the road would do it for $800. Now it's time to start reading the customer ;-) The service that people choose depends more on their values and concerns than how much money they have a lot of the time.

You sound like you're just starting off, and dont have a lot of gear or experience. Your target market is folks who would like to save a few $. You can't compete against well established companies with lots of gear and good crews. Not on service at least anyway. You can probably target 'cut and leave' jobs and still make good money and learn quite a bit. Advertise in local malls and local papers 'Bob's tree service, fair prices, honest work. Discounts for people who keep firewood on property'. Look at it as an apprenticeship and see if you enjoy it. If you stick at it for 6 months to a year and you still like it, start putting some of your money back into gear. 

Understanding your costs is the first step. Working out what the going rate is for jobs in your area takes a little more time. Deciding how much profit you deserve is an ongoing process. Learning how to sell to customers is a skill that can take a lifetime to learn. 

Shaun


----------



## Huskytree (Jan 2, 2012)

imagineero said:


> You sound like you're just starting off, and dont have a lot of gear or experience. Your target market is folks who would like to save a few $. You can't compete against well established companies with lots of gear and good crews. Not on service at least anyway.
> Shaun



That isn't true at all. I am in pretty close to the OP as far as our businesses and where we are at this time. 

1) size and amount of equipment doesn't always mean better service.

2) I have worked for customers in multi-million $$$$$ houses down to a small cape of a single parent household. 

3) So you can absolutely compete against the big guys.


----------



## minuteman tree (Jan 2, 2012)

I've gotten several jobs because I have been able to respond quicker than some larger companies. I only have a smaller truckamd a rented chipper, but I can still compete with larger operations.


----------



## newsawtooth (Jan 2, 2012)

minuteman tree said:


> The chipper runs $125 a day, and I charge $175 to cover fuel, etc. I then have to cover fuel and chains, insurance, and my helper.



What are the chains for? Something cool that I can't even imagine?


----------



## imagineero (Jan 3, 2012)

Huskytree said:


> That isn't true at all. I am in pretty close to the OP as far as our businesses and where we are at this time.
> 
> 1) size and amount of equipment doesn't always mean better service.
> 
> ...



That post, as well as all of my other posts in this thread, was directed at the OP. 

We may have got some crossed wires with our definition of 'service'. I wasn't meaning service so much in the sense of serving people well, but more in terms of 'services you can offer' and how you can price those services. A company who has a large chip truck, skidders, bucket trucks, large chipper with grapple, and maybe even a small crane can obviously offer those services to customers while a guy with a pickup and a couple saws can not. Yeah, anybody can hire that equipment, but if you don't own it then the hire cost will be large and you are less likely to be familiar with operating all those pieces of equipment and have trained competent staff who can also operate that equipment. 

The post was more directed at what type of services you should offer, and what sort of market you should target to make the most profit for your business at whatever stage of development you are at. If you have lots of staff, and heavy plant, then you should absolutely be targeting different work from the work you would target and services you would offer if you are a sole trader who hires a 6" chipper and gets your cousin to work for you from time to time.

This is meant as no disrespect to sole traders or smaller businesses. It's honest advice, and if you read through the post, and my previous posts, there's good advice there about what services you can offer and make good profit on, rather than trying to compete in areas of the market where you're probably just busting your gut while chasing your tail.

2) Good for you.

3) Absolutely, in the same way that an infant can compete against mike tyson.

Shaun


----------



## VA-Sawyer (Jan 3, 2012)

newsawtooth said:


> What are the chains for? Something cool that I can't even imagine?



Perhaps he does something wild with them, like putting them on his saw.


----------



## waross (Mar 13, 2015)

imagineero said:


> I use a basic quote sheet. It has all the clients details, date I first went there, the species of tree, DBH, height, spread and my best guess of how many cubic metres it would be mulched. That lets me work out how big of a truck/chipper I need, and how much ripping of barrels I'll need to do.
> 
> The next section has check boxes for what the tree is over. Straight fell or climbed, and what hazards exist - sheds, over a house, tile/fibro/slate roof (easier to crack), fences, footpaths, power lines, pavers/concrete under the tree, and if I have a limited drop zone (ie. do I need to rope down the spar in chunks). That lets me figure how long it will take me to climb and how much risk there is.
> 
> ...



Great read Shaun. What are the chances you can share your form or spreadsheet in order to help educate some of us on the details we have probably missed?


----------



## BuckmasterStumpGrinding (Mar 22, 2015)

I don't know who said this but it has been a great philosophy for me. Bid where you get 1/2 of your bids. If you get more than 1/2 raise your prices. If you get less than 1/2 improve your salesmanship. In the summer I bid to get about 1/4 of bids. 

Prices on jobs and cost of jobs are 2 separate thing. The free market sets the price. Figure out your cost of doing business and make money when the market allows you to.


----------



## Chris Francis (Mar 22, 2015)

I was working on this for the homeowner's perspective, and it is not complete, but here it goes...


How much does tree work cost?

People have this question often... for a variety of reasons. An internet search may turn up questionable numbers. I wish there was an easy answer: pruning costs this much, removals cost this much. I will try not to overcomplicate what goes into an estimate for tree work.

It boils down to time, equipment, and risk: a tree in the middle of a field can be removed quickly with little chance of injury or property damage, whereas the same tree over a house can take much longer and obviously the risk of property damage increases. Move that tree into an inaccessible location or saddle it with a structural defect, and the price keeps going up. I have removed $25 trees and $25,000 trees. I realize that helps very little as you are trying to decide if $2,500 is a good deal or bad deal.

Whether you are getting multiple estimates or just comparing one quote to the endless internet opinions, you should be talking apples to apples... or at least pears.

Insurance
Insurance costs money, but an estimate from someone without it should not even be considered. General Liability covers property in the event something goes wrong. Workers compensation covers injuries to workers. Without appropriate insurance, the property owner carries unnecessary risk that is rarely covered by homeowners or other policies. At best, the time and attorney fees are very costly. It is much easier to get a certificate from the agent with coverage types and limits.

Equipment
Professional climbing gear and chainsaws add up quickly. Bucket trucks and aerial lifts are expensive to purchase and maintain. Large equipment is needed to pick up heavy wood. Big trucks are needed to carry the weight. CDL's are required to drive the big trucks. DOT gets involved with commercial drivers licenses and interstate/intrastate commerce. Cranes are sometimes needed and vary greatly in cost. 

Travel Distance
Paying a crew to drive to and from your location adds up. We have less expense in working for our neighbors than someone an hour away. Multiply two hours' pay by the number of people on the crew, now add in all of the associated costs, then add fuel and extra wear on trucks and trailers. You may still be better off paying extra to get the service you desire to travel.

Hauling
There seems to be a myth perpetuated that wood from tree work has great value. Some of it gets used for firewood, some gets chipped for fueling burners, and some logs can be milled; but it all has to be hauled away. A large percentage of tree debris must be hauled to a landfill, where tipping fees are calculated by either weight or volume. 

Acceptable Damage
Various types of removals using different equipment and techniques can result anywhere from zero property damage ranging to significant. If your yard is mostly weeds and bare soil, this may not be a concern. On the other hand, if you value your lawn, your landscape, your trees, your driveway, or anything else, you should be certain your bid includes protection of those items. You should also expect the price to be higher for the extra time, equipment, and risk involved. Some tree people do not have the ability to access or rope out tough trees, so they proceed dangerously and/or cause lots of consequential damage along the way.

Licensing
Your contractor should at minimum have a business license, which is easily obtained by paying a small fee. If you require professional services such as pesticide application, planting, design, or supplemental support systems, there are licensing requirements for those that require testing. 

Arborist Certification
For a tree being removed, the main issue would be damage to surrounding trees through wounding or even compaction. For pruning, you want a Certified Arborist working on your tree(s). Certified Arborists know that trees do not heal, they seal; even one poor cut can be detrimental. Certification takes time and money for the original testing, and additionally for continuing education requirements.

Additional Qualifications
There are many other qualifications and certifications that professionals will seek out. Often the business owner carries the credentials, but employees can and should obtain them as well. 

Training
Even arborists may lack the appropriate level of training for your required task. Experience, training, and continuing education go hand in hand to ensure your tree workers provide the best possible care for your trees. Classes and training takes time and added expense. Expect to pay a little more for a professional crew, but expect better results in safety, production, quality, etc...

Safety
There should be no compromise. There are ANSI standards that plainly spell out required safety training and gear. Wouldn't you feel better knowing the crew on your property was less likely to be injured? Doesn't it make you feel better knowing that workers have the ability to rescue one another and administer first aid? If hardhats and chainsaw protective clothing are not being used, that should be a huge red flag.

Professionalism
All of those clean trucks and uniforms are expensive. So are background checks, drug tests, taxes, and quality employees that show up and do what they are supposed to. Expect those costs to be passed on to the consumer. 

Work Load
If a tree company is slow on work, they will be willing to work for less. This is the simple economic principle of supply and demand. This is common in cooler weather, but not necessarily always. If a tree service is begging for work, that could be a warning sign. Don't be surprised to find a schedule 2 to 3 months out in the spring and summer. 

Overtime/Emergency
We like to take time to relax with our families and friends. If we have to put in extra hours, we want to be compensated for it over and above the normal rate. Also, if the crew members are working more than 40 hours, the law requires us to pay them time and a half. And guess what all is based on payroll? Insurance, workers comp.*, payroll taxes, unemployment, benefits, etc... If you require immediate service, don't be surprised to find the bid a little higher.

* Workers compensation rates are based on payroll, however overtime is figured at the same rate as regular time, therefore not increasing the cost by 1.5, but only 1:1.

Labor
In some industries, minimum wage help can handle at least some of the simple tasks, which keeps prices down. In the tree business, there are highly skilled climbers and equipment operators. Even the grounds crew must undergo extensive training and high risk of injury. High pay translates into higher prices.

Employee Benefits
If you want employees to be treated fairly with vacation, holidays, bonuses, appreciation, etc... that cost is shared by all of the income-producing days. Cheaper services often skimp here or illegally pay employees as subcontractors. If a contractor is "saving" in this department, don't expect quality employees on your job site. They will find an employer that cares about them.

Profit
Profit is not a dirty word. That is the why and the how a business goes through the hassles and jumps through the hoops. No one likes to be taken advantage of, but expect the price to include a reasonable profit so that new equipment can be purchased and the owner can buy groceries.

Size and accessibility
This should be obvious, but larger trees take more resources. Trees in areas difficult to access take longer. Dead and diseased trees are more difficult to work with. I cannot quote your tree over the phone. Price is largely based on the time your job will take to complete.

Clean-up
Removing the debris is one thing, but levels of service vary with the efforts to rake, blow, pressure wash, or whatever is necessary to finish the job and please the customer.

Some Actual Numbers
Most tree services will have a minimum to schedule your job and mobilize the crew. Your simplest crew would be two men: one tree worker/climber and a helper. Hourly rate would not likely be less than $100 per hour, and that does not factor in equipment and hauling. A full day with a two-man crew could easily get into the $1,000 range. Add more qualified help and equipment, and that can easily double, triple, quadruple... If your job is in the peak of the busy season, and it requires a large crane, and it is an emergency, recognize that price can climb rather quickly. Remember that $25,000 tree? We also had $8,000 in crane rental on that job.


----------

