Official reports indicate that the landscape services industry in the U.S. had a market value of USD$114.6 billion in August 2021. You can expect the figures in other countries across the globe to be equally high. If you’re already in the landscaping business and perhaps aren’t getting the decent profits as you ought to, the issue might be on how you quote for your landscaping jobs. (1)
Landscaping isn’t as straightforward as quoting for other jobs. This is because it has widely varying dynamics that you must take into account and calculate carefully in order to make a profit. In this article, you’ll learn how to master quoting for landscaping jobs:
1. Invest in smart business management software
In a world where every aspect of a business is going digital, it isn’t logical to have a manual approach to quoting for your landscaping jobs. Computing your charges on paper is unnecessarily time-consuming, open to human error, and laborious.
Likewise, using generic software like word processors and spreadsheets may not be proving an effective use of time, as you’ll have to feed the formulae for each job from scratch every time. In summary, it uses a lot of your precious time that could be much better spent on generating more business for the company.
The best approach to quoting for landscaping jobs is to get software specifically designed for landscaping businesses, like the one developed by Jobber. This technology makes it easy to produce professional quotes, which in turn can be transferred into invoices for faster payments. This will have the effect of portraying you as a serious entrepreneur who means business.
As a quote might be one of the first items you present to a customer, it gives them an outstanding first impression that makes them want to do business with you. Indeed, research indicates that first impressions influence 59% of consumers to label a brand as their favorite. (2)
To get you started in creating well-designed professional quotes, take advantage of using this free landscaping quote template. This makes your quoting process even easier as the layout is already done for you, hence you only have to fill in your company-specific details. It can later be turned into an invoice.
2. Conduct a reconnaissance survey
It’s not enough for the client to describe the scope of work, and then you estimate the service fees. It could be catastrophic on your part if you underestimate it. You can incur great losses, which hurts the financial health of your business. Thus, it’s important for you to visit the client’s site and assess the extent of work you’re required to do.
The reconnaissance survey also helps you in the following ways:
- You’ll be able to interact with the client one-on-one and create an emotional bond, which may influence their decision to purchase your services. This fact is backed by research, which reveals that positive emotions toward a brand have a more significant influence on customers’ purchase decisions than trust and other judgments. (3)
- You get to know the precise location, which is essential for calculating transport costs for your crew.
- You get to identify constraints that may impede your performance. For instance, a poor state of the roads between your offices and the client’s place may mean more travel time and less time doing the actual work.
- You’re able to give recommendations on the best materials to use for a given job, given that not all clients are knowledgeable enough to specify the appropriate materials.
3. Calculate labor costs and time
As of October 2021, the average wage for landscapers in the U.S. is about USD$17.02 per hour. This is 44% below the national average hourly wage of USD$29.81. But even so, the bottom earners take home around USD$11.16 per hour while the top earners bag USD$25.95 hourly. (4)
With these figures in mind, you can settle on decent pay for your team members. Then, multiply the hourly rate by the labor hours to get the total labor cost. To get the labor hours, you need to multiply the time the job will take by the total number of workers handling the job.
For instance, if you have a team of seven workers and they take 100 hours to complete a given landscaping job, the total labor hour is 700 hours. And, if you decide to charge USD$15 per hour, the total labor cost will be USD$10,500.
4. Determine material costs
On top of labor costs, you’ll have to purchase a variety of materials for the landscaping job. Here are some of the most common landscaping materials:
- Lawn turf
- Paving blocks
- Cement
- Fertilizer
- Floodlights
- Boulders
- Timber
Remember that the exact quantity and type of materials you use vary significantly from job to job, hence you have to be very thorough when making your estimates. It’ll also help if you purchase in bulk. Doing so may help you get discounts. Remember to get these materials from reliable suppliers so the quality of your work isn’t compromised.
5. Consider your overhead costs
Aside from labor and material costs, you also have to meet the following overhead fees:
- Advertising costs
- Legal fees
- Telephone bills
- Internet bills
- Government taxes
- Insurance costs
- Salary for office staff, such as accountants
- Office rent
The money for covering these items all comes from the landscaping jobs you do so it is imperative that you charge the right amount to sustain business operations and success.
6. Determine the profit margin
The average profit margin for residential landscaping jobs is 15% to 20 % and 10% to 15% for commercial landscaping jobs. But even so, there are landscapers who’ve mastered their art and are able to charge 50% profit margins. Still, there are those operating at a profit margin of 10% for all jobs. (5) Working out your pricing strategy is important in knowing where your business is positioned within the market.
With that said, you now understand that the profit margin you set depends solely on the popularity of your brand and the quality of work you do. If you’ve got many years of experience, with a sizable customer base, you deliver exceptional quality, and your company is a household name in your locality, you can’t shy from setting higher-profit margins.
But if you’re just getting started in the business, you’d want to have a lower profit margin lest you drive away from most customers as they perceive your services are overpriced.
7. Calculate the final price
Your final selling price should be (Labor Cost + Material Cost + Overhead Costs) x markup. If your profit margin is 20%, then the markup is 1.20. This is the figure you present to your customer for consideration.
Conclusion
With such a detailed account of how to quote for landscaping jobs, you should now be ready to prepare quotes. Most importantly, present the quote to your customer in a well-designed document, as it’ll speak volumes of your professionality. Once you win loyal customers, the next challenge is how to maintain them and get them to speak favorably of your services to others.
Reference
- “Landscaping Services in the U.S. – Market Size 2002–2027”
- “Consumers: Brand Loyalty Shaped From the First Impression”
- “How Emotions Influence What We Buy”
- “Landscaper salary”
- “How Landscapers Can Actually Double their Profit Margins”
