Bid calculations

emr

Cheesehead Treehouser
Joined
Nov 5, 2006
Messages
2,193
Location
Neenah, Wisconsin
There was a little discussion about bidding jobs that came about in the thread I posted about getting a loader. I've been meaning to start this thread since then but have been busy until now.

When I bid jobs, I look at it and figure out how many hours it's going to take to complete the job and then multiply by the appropriate work rate. We have a rate for stump grinding, travel for outside of our normal service area, consulting, general labor, etc. I asked about possibly raising our rates to cover the added expense of having the loader on the job and several people said to keep the bid of the job the same but I will get it done faster because of the loader, thus making more per hour. That will work for now since I am used to bidding jobs without having a loader but what happens when I start reducing the hours needed because of the loader? Then the job bid will go down and I'll make less per hour because I'm more efficient..... That probably made no sense at all.... I guess I am wondering how you all bid jobs. Do you just look at a tree and say that's a $500 tree in this market so that's what I'll bid? We are still trying to figure out how to adjust our prices, if we're even going to. It's too early for us to know how the loader will change our productivity.

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I think you may be over thinking or complicating it too much. Figure out your monthly overhead, how much you want to pocket and bid accordingly? I know some folks who have different rates based on what equipment they use on a job and or other costs. One rate makes more sense to me, if you don't use your loader it's still a part of your overhead.

To answer your question, I itemize and price everything individual, then think of the job as a whole, how long, offer a discount on the total from all the itemized numbers. For pricing I go off an hourly goal that is constant.

Edit, it's an old dilema, new equipment makes you faster- raise your hourly target.
 
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  • #3
We've always bid this way.... It's how we were taught at our old job. It makes sense because it's the only way we know. However, we have definitely made changes to fit our needs. I am open to new methods and that's why I started this thread.

I am on our program committee for the Wisconsin Arborist Association and have a conference coming up that is going to have a round table discussion hitting on this topic as well. It's interesting to see how others run their businesses. I wonder how open and honest the discussion will be at the conference since there will be companies present who bid against each other. I'm sure people don't want to give away too much info there.

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Bid the way of having different rates? I don't think my little head could manage. One rate is enough for me, but we do not have much equipment to pay for or keep busy, just our hands and ropes:)

And yes, I even have a hard time being open on forums because I know that some of my competitors look at these threads.
 
Agreed, so many lurkers.... registered and unregistered. I think some folks look and don't see much action because they cannot see all of the posts and just move along.
 
:thumbup:

Without the forums I may still be dragging brush and greasing my old bosses chipper:lol:
 
Back when I was a NAA member they did an interesting bidding lab. I always consider sales and bid the hardest part of my job.Try charging an extra $600.00 / Hr. for the loader
 
Raise hourly rate in relation to time savings. If by hand you could do 1 pine in a day complete for $1500. Now you can do it for $1200 in a half day with the machine. Now you are keeping you rates competitive but bringing in day total of $2400.
I had a local guy tell me once that he used to do $1000 a day for a crew rate, but with a bigger chipper and loader he could knock out 3 pines instead of 1 and still make a $1000. I told him he was a moron. Why invest in equipment and not see any return other than speed and undercutting the market heavily.
 
If you bid a job for 6 hours.....what about the employee that works 8 hours that day? Do you look for a 2 hour job to fill in?
 
If at all possible, yes, or move into the next scheduled job if feasible.
Often, I will bring my crew back to my place to help out on a project here on the property. Some dropped trees, fencing, maintenance.........
 
The crane...

With the crane you do 3 to 5 times as many partys a day.

Even moar, if you plan your shit.

No shit.

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  • #19
Lucky for us, we don't have employees so we don't have to factor that in. It's just me and my partner and we get paid the same every week regardless of how much work we get done. It keeps another cost constant for us.

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I bid by chunks of a day or whole days etc. but it is based off of an hourly rate somewhat.
 
I am realizing how cheap my market is willing to go.

and at the same time realizing how much I need to make a month.

I feel like if you give them an hourly price....they count hours...if you give half day and day rate, not as apt to balk.
 
I can't stand working hourly, like you said they're counting and making sure you keep working while the clock is running.

We've more or less given up on chasing removal work, for several reasons, one being the race to the bottom on pricing. Luckily, our market can support us doing 90% or more pruning work.

Edit, maybe I'm hyper paranoid but this is the stuff I don't want my competition reading.... they need to keep focusing on removals for my plan to work.....:lol:
 
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  • #24
I should clarify.... I don't give the customer our rate. I only use that to calculate the bid for the job I give them. They get charged the quoted price no matter how long it takes us to complete the work. The only exception is for previous customers who just tell us to come out and do the work. We just charge them for the time that we are there.

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Just figure it manually, and bid it, tracking hours. See what your manual-hourly prediction turns into for loader-assisted hours. Divide it out. See how that seems to convert.
 
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