Commersail Bidding Veres Homer Biding

[Can-Do-It]

My general question is how do other Tree services handle commercial bidding verses home owner pricing.

I was asked to bid a town home complex back during the early summer. Most of what they needed was limbs removed from the town home roof line, windows, and so on. I walked the whole area twice and counted 215 trees that needed attention. Most can be trimmed from the ground and or latter with a pruning pole. I bid the commercial job at 21k a little under of what I would have bid the job for a home owner. My reasoning was shear number of trees verses two or three for a home owner. It's been about 3 months now. there budget money is in and they want me to rebid on part of the job. They also mentioned about getting one other bid. This is the first large commercial job I've bid and I need to get it right. They also mentioned that if I was close to the other bid I would get the job, I helped them determine a budget doller.

Thanks for any and all feed back.

 

[Can-Do-It]

Sorry ...The bid was a little under half of what I would have charged a home owner.

 

[NeTree]

"Commersail Bidding Veres Homer Biding "

Huh?

 

[xander9727]

I may discount a job 15% if there is a large quantity of work but my prices are my prices. I also inflate a job up to 300% if it is small to cover the bid time and drive/setup/dump time.

 

[Stumper]

Can do it, I really hope you spell better on the bids you submit. Volume work gets a small discount. Commercial vs homeowner? No. I don't play class warfare games nor corporate vs. individual. A fair price is fair. Period. I do add a little to apartment complex bids-simply because my terms are payment upon completion and they have a history of agreeing but then starting a 30 day process when I'm done. I add surcharges and late fees too-I don't like being lied to and I am not a bank or other lending institution. When the work is done the payment is MINE.

 

[treeman82]

I am going to second Erik's comment. Then I am going to ask why you would bid a commercial job at 50%> of what you would normally charge a homeowner?

 

[xander9727]

I only give a small discount if I know I'm approaching an unfair margin. By unfair I mean a margin that would exceed the average comparable bid by a noticable or unjustifyable amount. I don't want to be seen as a crook, but I do want to be a successful businessman.

 

[xander9727]

Who wants to bust their butt and not have anything to show for it?

 

[NeTree]

I'd rather go broke at home than go out and work for free.

I forget who said that, but it sure rings true.

 

[trzz]

?

Well, alot of things to consider. Is homeowner easly accessable as commercial? No running between jobs if commercial. This is wasted time. Take out 12 trees + stump grind makes the price of stump grinding decrease. On only one stump 45minutes to pick up equipment 45 m to stump g. 45m home = 2.25 minutes. At a commecial job there are many more to grind reducing setup and putup. Look at it this way. Sam's sells quantity so you get a better deal than buying one roll of toilet paper.

 

[trzz]

I agree with netree. We love what we do, but this is a business not a charity. If the people are destitute and the tree will fall on them/ their house cool give great deal. If the people are doing better than you are in affluent neighborhoods charge. In the end will you retire on your own or on social security. I want to pay cash for new equipment when my old equipment wears out. If I have to go in dept after the old machine wears out I am doing a disservice to my company and myself. Mineas well worked for a decent company so I would have retirement instead of more debt. As a retorical question where are you now and where do you want to be. Have more flexible income or less? This choice lies with us all so choose wisely and charge accordingly.

 

[glens]

I'd heard it as "I can stay home and not make any money".

For commercial work, part of the discount is an incentive to pay quickly.  Maybe knock off a little for consideration of quick access to the next tree (i.e. less travel time overall), and for the bill, make it 2%-10, net-30.  Usually they'll opt for the 2% discount and pay you within the 10 days.

Glen

 

[Curtis James]

Maybe it is because I am still small. I bid by time and material. I offer military and senior discounts and if one should ask me politally, I will try to cut back some, if possible, but what I charge is what I need to keep things going. If I do this for to cheep I will not be able to help the next potential customer. Comercial, residential, even insurance claims. All the same for me.

 

[xander9727]

Make more money=buy more toys=work easier and faster=make more money....

 

[Stumper]

Curtis, I will work with people that look like they haven't got two nickels to rub together but have a NEED for tree work. I even let a very few people pay over time if they ask. If I come up with a bid of $565 and Joe customer comes back with "Will you do it for $500?' The answer is Yes- but we won't rake up as fine." The problem with all the dicount gimmicks is that they imply that people outside the discounted class must subsidize the discount. Fair is Fair! It makes no difference if the cusomer is a multimillionaire or is living on rice and beans because they can't afford anything more. I may choose to short myself for the sake of the poor but , the rich do not deserve gouging and the poor do not deserve discounts. As for the senior thing-What possible difference can the age of the client make to the cost of prodicing or providing anything? Don't be a sheep, be a shepherd. Show people the way back to justice and greatness. Every now and then when someone asks about discounts and I reply that I try to make my prices fair for everyone a light comes on.

 

[NeTree]

When they ask ME about discounts, I simply say "No. I don't overcharge in the first place."

 

[Can-Do-It]

Let me say it another way

Sorry Guys for not being able to respond last night But daughter is working on her Masters and needed the Internet. Should have roadrunner in a week or two.

Sorry Stumper for the spelling. Thought I was using the spell check ....

I need to thank you all for the input. 1) Offering 2%-10

Most of what we do, bid why's, is pure conjecture once we remove operating expense and labor cost. The dollars that are left over is profit. Profit to replace equipment and to compensate us for the sometimes dangers work we do. That profit is the area of conjecture that is hard to pen down.

An example would be a tree hanging over a house. Assume a 2hr. take down and 3hr clean-up. @115 hr = 575. But because of the danger and the liability issue the price always runs starting at 1000.00 and up. The same tree in the middle of the ward 725.00. Same tree different pricing.

The idea of discounting for large commercial jobs, for me at least , is the law of numbers. This job is 215 trees or 236 hrs there about. I figure 3wks, 3 people, labor cost at 3150, gross profit at 18275.25.

But if the commercial job were in individual jobs at 5 trees per job and 3 jobs per week it would take ruffly 14 weeks to complete and gross profit of 21500.

Help me out here. Is my logic wrong. Or am I blowing smoke and don't realize it.

 

[Koa Man]

This job is 215 trees or 236 hrs there about. I figure 3wks, 3 people, labor cost at 3150, gross profit at 18275.25.

Are you figuring 40 hour work weeks per man? That would come to 360 hours, not 236. Your profit margin is very good, even at 360 hours, based on what I computed your man hour cost at $13.35 per man hour.

Like most of the others, I USUALLY charge everyone, rich, poor, old, young, the same price. I will give a little better price for my old time customers, those that have been with me for 10 or more years. All in all, my prices a a little higher than most of the tree services around here, but I sincerely believe I do better work.

 

[John Paul Sanborn]

looks like my reply got lost in the eather,

As far as discounting from residential, one should look at what the added expences are for a client who you visit once every few years and one you will visit several times in one year.

Where are the cost savings, or are you dropping the price just to get work?

can you bill it as you go or is it all due on final completion? Large jobs can cause cashflow problems for micro companies.

do you have a single contact/boss for the job, or are you going to have to listen to several people onm the baord or whatever?

There should not be any hard and fast rule for bidding work, other then you are bale to make expences and show a profit (do you pay yourself beforte profit? some people dont!?!?!?)

What are the benefits to working on this project, is there high visibility for your truck/logo/phone number?

The question you need to ask yoursdelf is what will I be getting from reducing my price and how much I want to do the job.

Sometimes a marginal profit cna work for you in the long run.

 

[trimmmed]

They also mentioned that if I was close to the other bid I would get the job,

This statement means your price is already good and they don't like the other bidder or they just like you better. Hold your ground.