# quoting formula



## surfsk869 (May 15, 2007)

is there a set formula you guys use to come up with prices for tree removal. ie a certain price per each inch in diameter teh tree is, or something along those lines. thanks in advance


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## surfsk869 (May 15, 2007)

sarcasm = not helpful... but i appreciate the feeble attempt to brighten someone's day


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## treesquirrel (May 15, 2007)

*No formula but.....*

Most of my jobs I will quote based on the time I think it will take to get it done. I'll add fixed amounts per day for hauling and chipping if it is included in the scope of work based on number of trips to the dump and number of days we will have the chipper on site if requested. 

But essentially I estimate the time and multiply by my rate which I will not divuldge here.


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## Gate Keeper (May 24, 2007)

Removals range from $200 - $10,000


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## pbtree (May 25, 2007)

But sometimes sarcasm is fun!  

I figure what my time is worth - the more time the more the bid. If clean up in involved, I add the time and the fixed costs associated with that. :chainsawguy:


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## Timberhauler (May 25, 2007)

I figure the total amount of time spent on the job from start to finish..or at least as close as accurate as I can be.This would include travel and hauling time...If use all four of my guys on the job,a chipper and a skid loader I like to get $250 per hour..It goes down from there...Two guys and a chipper.150 an hour..On the average I try and get 200 an hour...It has taken me a while to get my time estimate accurate.


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## Husky137 (May 25, 2007)

Its pretty basic. you have to know what your rate needs to be to make the money you want and cover expenses, whether it be a daily rate or an hourly one and then multiply by how long you think the jon will take. It will take some time to get good at knowing how long a job will take.

Or you can do it treeco's way and remove all of the guesswork.


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## Ekka (May 25, 2007)

surfsk869 said:


> is there a set formula you guys use to come up with prices for tree removal.



I know that there's many companies large and small that use this outstanding, innovative and pioneering system.



It has been calibrated through years of knowledge.



It assesses the skills of key players such as climbers for the tree at hand.




It is highly calculative of the machinery you possess.



It is even astutely accurate on hired equipment such as cranes, factoring in travel time isn't a dilemma with this clever system.



It is client focused, giving maximum bang for the buck.



It goes like this ......



"We'll beat any written bid". :hmm3grin2orange:


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## ASD (May 25, 2007)

Ekka said:


> I know that there's many companies large and small that use this outstanding, innovative and pioneering system.
> 
> 
> 
> ...


 BUT THAT TAKES ALL THE FUN OUT OF IT:biggrinbounce2:


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## ASD (May 25, 2007)

Husky137 said:


> Its pretty basic. you have to know what your rate needs to be to make the money you want and cover expenses, whether it be a daily rate or an hourly one and then multiply by how long you think the jon will take. It will take some time to get good at knowing how long a job will take.
> 
> Or you can do it treeco's way and remove all of the guesswork.



this is a good start but u also have to know what your computation would charge and what the market will bare as u do not want to leave to many $$ on the table!!! it all depends on the toys u have and how good u are with them ! most tree co's have about the same hr rate for labor so it comes down to how much faster your toys make you! if the co's u compete with will take all day to remove a tree and charge $1500 and u can do it in 4hr biggrinbounce2: ) u bid it at $1450 not $750


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## ponderosatree (May 25, 2007)

surfsk869 said:


> is there a set formula you guys use to come up with prices for tree removal. ie a certain price per each inch in diameter teh tree is, or something along those lines. thanks in advance



Figure out how much it costs to run your company (payroll, insurance costs, rent, equipment, etc.) and based on that figure out how much it costs you per hour to run you company. Then add your profit margin on top of that. If you have trouble figuring that out then get a bookkeeper and for godsakes DON'T co-mingle your personal and business purchases. Have one bank account for business and one credit card for business. 

If it costs you, say, $50,000 a month to run your company, average month has 22 weekdays/working days in it. That's $2273 per day or $284 per hour. I would add about 10% to 25% on top of that for profit/buffer so a max of about $350 an hour.

The most important thing is knowing how long it will take you to complete a job. Only experience will help you with that.


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## Gate Keeper (May 25, 2007)

*All kidding aside*

You bid a job for what its worth to you and your company, like everyone has been saying. But the trick of it is to bid it the way, like say you were doing the removal yourself, you would price it so that when you got up at 5:30 6 am in the morning, you would be smiling.


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## 03treegrunt11 (Jul 3, 2007)

TreeCo said:


> I take the height in inches and multiply it by the weight in pounds and then divide by 7,500.
> 
> If I don't like the results I just take a wild ass guess.



I usually base my estimates on the time I think it'll take plus fuel, dumping, and insurance......but, I think I'm going to try out TreeCo's method.....:notrolls2:


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## rfwoodvt (Jul 4, 2007)

Clearly ours is an industry that involves mostly time and cost of equipment operation. There are some materials but for the most part that can easily be figured.

We have been using a chart that helps us approximate the time. Sometimes the final numbers looks right...Yeah the chart says that Pinus strobus will take 5 hours from take down to final shovel of needles into the truck. Sometimes it says 3 hours but we all know from past experience that that particular tree in NFW will be finished in less than 9.

It comes down to finding a hard formula to get you in the ball park and then personal experience to fine tune it.

Once you know what your time is then you can apply your hourly rate.

We all have a rate that we would _like_ to get, a rate that we _think_ we need to get and then there is a third rate, based on your business plan and analysis that you absolutely _must_ get.

It is that third rate that you really need to hone in on, figure out and deviate as little as possible from. TCIA has a neat little booklet on how to figure it out. (from personal experience it that particular book is confusing and a nightmare. But once you figure it out it is priceless information.)

This all should be broken down in to man-hours

Then, if this nightmare is not enough, you need to determine whether the market will handle your rate. We have found that given our season, our expenses, payroll and profit needs required that we charge $XYZ per man hour.

We knew from past experience that we could sell nearly all our bids at 66% of the $XYZ rate and less than half the bids at 75% of the $XYZ rate and less than 10% of the bids at the $XYZ rate.

How did we find this out? over the years, before analysis we tried it all and kept track of what worked. 

Your hourly rate will sell the right percentage of bids if it matches the need of your 
market: The BruteForce&Ingnorance Lot clearing market only pays so much. The FinesseEstatePruning market tends to pay more.
Client Demographicseople making $20k per year and living on rented property have a lower price threshold. People making $200k per year have a higher one. Retirees hang on to thier money tightly, Up-and-Comers more likely to invest in your work
Local Economy: No money coming in, less money going out

Since the rate we _MUST_ get was outside what our market would handle, we had to review our rate calculations to adjust it downward. This included cutting budgets, refinancing and postponing capital expenditures. Your personal company situation _WILL BE DIFFERENT_

You may find that you have to make your company a little more lean and trim. On the other hand, you may find that your MUST HAVE rate is so low that you can sell everything you bid. If that is the case then you can market yourself as the lowest price around and sell even more! Then again, you might find that your MUST have is too low for the market and need to up it(with incresed profits  ) to stay just under the market and still sell as the low price!

So now, you have your estimated time, in man hours, which should include your dumping times and multiply that by your man-hour rate (the third one) Add your dumping, permit, rental and other fees and BINGO you have your bid.

Since the man-hour rate is calculated based on your costs, payroll and profit needs you can also know how flexible you can be + or - on that rate (usually fairly tight) Your bids will be more consistent across the board.

No more Mrs Smith saying "well you did Mr. Jones tree for $300 less than mine yet his was half the size of mine and his was harder to get to!"

Also in coming up with your man-hour rate you will discover how many man hours you need to sell to meet expenses (break even) It will also tell you how many man-hours you will need to schedule and pay your people for.

I suspect that you will find that as much as you try to lock in a firm formula, it will only get you there part way. Granted it will be a good foundation to work from, but your expertise as an estimator will play a huge role and out of necessity will need to improve every day.

For the longest time we have been bidding larger jobs by the tree and losing jobs because it just seemed to be adding up to too much. 

Now we are finding that if we bid using a day rate (based on rate #3) for the larger jobs (meaning we cover daily expenses, payroll and owners payroll for the day) We are now selling more larger jobs

Anyhow, long winded reply but hopefully helpful.

If you want I can post a copy of the "bidding grid" we use that you can play with. Just let me know if you want to see it.


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## 03treegrunt11 (Jul 4, 2007)

Rick,

I'd like to check out the grid. Thanks


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## treesurgeon (Jul 7, 2007)

*price formula*

i like to start with, "how much u got"
and then when that does not work,
depending on the job and what we are doing, i set up prices for bucket work, climbing, groundies, chipping crew. each person on the job is expected to produce a certain amount of work. every job title is priced and its multiplied by man-hours.
example, 
bucket work=150 hr.
climber =100 hour
ground worker=60 hr.
chipping crew= 75hr per person min.2, if we are only chipping.
if you break down what you are charging now and figure your prices, in the future you should be able to estimate better based on the job and how much time it takes.


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## Mitchell (Aug 13, 2007)

*grid*

Hey Rick

If your still thinking of posting the bidding grid that would be of interest to myself. 
Thanks
scott


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## rfwoodvt (Aug 14, 2007)

Sorry 'bout that Scott...here it is:

Basically we bid 3 parts to our jobs, arbo, brush disposal and wood disposal.

We use the grid to figure how many minutes for each part then decide what is concurrent work (like chipping some during the arbo work) and group that together.

We try to include chipping/handling in the arbo category and the actual disposal costs in thier categories.

Sometimes loading can also be done concurrent with the climbing/takedown so you need to consider that too.

Basically we use this as a tool, not a die hard formula or anything.

Hope it helps!


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## Mitchell (Aug 14, 2007)

*looks like it is well thought out*

THanks Rick

I will try to use it. As I am only two years into the bidding game I need a few objective crutches. I tend to walk up and within a few seconds I get a number in my head. Needless to say I have been way off a few times early on. I like your idea of tracking the data for reference or training an estimater down the road.
Cheers
Scott


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## outdoor images (Aug 27, 2007)

surfsk869 said:


> is there a set formula you guys use to come up with prices for tree removal. ie a certain price per each inch in diameter teh tree is, or something along those lines. thanks in advance



no real science just what the market wil stand but i try to base it on what my crew can do in an hour and then try to see how long it will take them to do it and if i rent a piece of eqwipment to do it faster will it justify the cost ive been burnt a couple of times but just suck it up and do it learn for next time


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## Michael Savage (Jul 10, 2009)

Let me start by saying I have been operating for several years in a role where this was 99% of my focus.

In my experience there is no way a fixed formula is going to deliver consistent results, there are many factors involved, the first being able to read the client. Are they tyre kickers? only care about the cheapest price ? Are they educated and know the difference and want a quality service/product delivered?

The second is inescapable, you *must* have extensive practical experience in the task you are attempting to estimate, you need to be able to anticipate likley outcomes, potential problems and methods that will or should be employed to complete the task at hand and allow for each of those variables, you then need to have an intimate understanding of your staffs operational capacity and allow for that also, for example crew B. might be able to do the job in 3 hours while crew A. might do it in 4.5 hrs.

The third is a working knowledge of baseline figures for your company, ie. what does it cost us to have the required staff and equipment on site for the duration of the job and the time it will take to get there, you then must incorporate a margin of profit, while considering the risk involved in the task at hand, exposure to risk will always be reflected in the price, there are some other considerations depending on the size of the company, that being your (the estimator) costs (veichle, stationary, mobile, web,fuel and your wage) and admin at the office (who will likley spend a certian amount of time preparing the associated paperwork with logging the job, booking the job and sending invoices and any other company overheads (if you are successful).

The fourth is the site itself, no 2 sites are alike and each represents unique challenges, and so the management of the site and the way debris generated in the course of the job will be handled must be taken into consideration as well as any special requirements be that laying protective matting to protect turf grass or similar site requirements.

How will your competitors undertake the work ? and how do you anticipate they will charge for their services ? do they compete on price or quality ?

So as you can see its a very complex process that involves numerous factors not all of witch are mentioned here that must be considered in determining your bid for the work..

So essentially there is no substitute for experience, people skills and an ability to consider all the factors involved in making your decision and determining a suitable costing for the work at hand. 



Timberhauler said:


> I figure the total amount of time spent on the job from start to finish..or at least as close as accurate as I can be.This would include travel and hauling time...If use all four of my guys on the job,a chipper and a skid loader I like to get $250 per hour..It goes down from there...Two guys and a chipper.150 an hour..On the average I try and get 200 an hour...It has taken me a while to get my time estimate accurate.



Sounds like your on the trolley mate, if you have the experience in doing the work behind you, its just a matter of finding your feet and coming to understand the background costs and work within those figures.



ponderosatree said:


> Figure out how much it costs to run your company (payroll, insurance costs, rent, equipment, etc.) and based on that figure out how much it costs you per hour to run you company. Then add your profit margin on top of that. If you have trouble figuring that out then get a bookkeeper and for godsakes DON'T co-mingle your personal and business purchases. Have one bank account for business and one credit card for business.
> 
> If it costs you, say, $50,000 a month to run your company, average month has 22 weekdays/working days in it. That's $2273 per day or $284 per hour. I would add about 10% to 25% on top of that for profit/buffer so a max of about $350 an hour.
> 
> The most important thing is knowing how long it will take you to complete a job. Only experience will help you with that.



Being able to accurately predict the time is of paramount importance and nothing will bring you undone faster than an inability to correctly allocate a time window for a particular task or job, with some margin for variance, and while still being competitive in the market.

-Mike


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