I know I've been prone to underbidding. As owner of the business, I'm the last in line for any money, and there never seems to be that much at the end of a job (Out of everything I earn, I seem to keep 25%. 50% goes on labour, and the rest on endless bills). Sometimes it's because I underestimate how much there is to do (Friday, hired in a tractor chipper to chip waste, ..didn't get it done, so now need to hire the tractor for another day..expected to make £ 100 in 1 day, will now lose £50 over 2 days
), a lot of the time it's because I underestimate how much my "helpers" can/will do. If they get fed up, their heads go down and you might as well send them home. I sometimes wonder if I make any money on my labour. If I did the work myself over a longer period, I'm sure I'd make the same amount.
A few things have helped in costing. In the UK, there's a good book on costing, which gives standard times and costs on all sorts of landscaping tasks.
This is it. Perhaps there's a similar book in the US? If you can find a similar activity, you should be able to work out an acceptable time. It's good for putting in tenders, because it's the standard reference that landscape artichokes, surveyors etc. use to put their budgets together, so a quote based on that will see you near the mark. (A mate put in a quote to remove a clump of large trees for a builder. He didn't have a clue, but put in what he thought was a silly amount, £2100. By the time he finished the job, 2 weeks later, he had nothing but the 046 he'd had to buy to get through some of the wood. We checked in the Spons book, and found he should have been quoting >£5000 - and that's what the nearest quote was, the builder later told him..poor Mike worked for 2 weeks just to line that bloke's pocket!)
As far as costing goes, I think of the following, and this seems to follow industry standards:-
Labour: for everyone working, take their hourly wages, including everything like employers' taxes, and increase by 50%. That covers slack time, illness, etc that would normally rob you of your profit. That's what you charge labour out to the customer..don't forget to include yourself as labour.
Overheads: All your annual costs you have to pay regardless, like insurance, phone, general materials, divided by the number of hours you spend on jobs, gives you an hourly indirect overhead rate. (I split these into indirect, which are costs I have to pay regardless of the work type, and direct, which are costs that you only pay for a particular type of work. eg. my tree work overhead covers tipping fees, my planting overhead does not because that job produces no waste. If I didn't do this, I'd be expensive on planting and cheap on trees, so I'd get loads of tree work and make little money. Don't forget to add depreciation.!
Profit: what do you want to put back into the business?
Once you've done that, it's amazing how much you do have to charge. I still feel guilty sometimes about quoting some of these prices, but what I'm left with is still pretty modest. Last year, my tree work charges for two of us for a day were £150. I now know I should have been quoting nearer £230 / day. £150 paid everything apart from my share.
The only problem now is whether the market is there for the correct price. If all the competition are pricing a lot lower, it causes problems. They do around here, because most of them are putting in low prices and turning over a huge amount of work to a very low standard. My future lies in working for bigger companies and local authorities. You have to spend hours and hours preparing paperwork, like risk assessments, safety policies, and more and more things need to be covered by certificates of competence, but the rewards are bigger. You can charge a respectable rate for your work. I'm slowly giving up scrabbling around in people's gardens, because there's next to no money in it. If I want to earn nothing, it would be easier and safer to do that by sitting on my sofa with my feet up!!