Create an Estimating System... That Makes Profit!

Hey everyone, my name is Mike and today you're listening to Landscape Business Course. And today we are going to be doing Q and A. I put a post out and we're going to be talking about estimating efficiencies and the questions that came in on the landscape business course Facebook group. We're going to address those today. Before we get to today's show though, a big thank you to today's sponsor. If you haven't already, you got to go check them out. It's get jobber.com im.

Andes that's my last name. A N D e s that's getjober.com im andes and get a discount in your first six months of using the software. Now why would you want to get Jobber? One of the best things about their software in my opinion is for a smaller business that needs help with the scheduling and for their routing. So for example, I was with a gentleman the other day and basically, basically he keeps track of how long it takes at every single job so he can track what his budget hours are and his.

Profit per hour and all that sort of thing. I'm glad he's knowing his numbers and figuring those numbers out, but he was doing it on paper with a pencil in his truck. And so one of the beautiful things about Get Jobber is that basically when you get the job, you can punch in on the job, track your time and at the end of the day have your spreadsheet of all the jobs you did, how long you spent at each one, as well as when you click that you're done on a job, you can click simply the next job and it'll GPS route you right to the next one. Which maybe not is a big deal for you, who knows all your jobs and all your customers. But when you start hiring people, you're gonna need to make sure they have the GPS coordinates and where to go. And using Jobber you can get there fast, efficiently and save money. So check it out today. Go to getjobber.com im andys today. Alright, so we're gonna go ahead and jump right into this and I'm gonna answer like maybe four or five of these questions. I haven't seen any of them, but they all seem pretty big. So there might be some better context, a little deeper context that we get into today. But last announcement is if you are interested in Augusta lawn Care franchise. A lot of emails have been coming in. We, we screened some of those. I've been calling a lot of you, we've been screening those down and we're looking for those 10 franchisees. There's still spots available. They're not all taken up. Some of you have been asking. We've got lots and lots of calls. I'm on calls pretty much all day, every day right now screening people. And so if you are interested and you just want some more information and you're not really ready for a phone call one on one yet. We're gonna do a webinar this Saturday. It's gonna be in the evening, so do your thing on Saturday. But Saturday evening we're gonna have a webinar and that webinar is going to be for anyone that is interested in potentially owning an Augusta lawn care franchise. We're gonna just talk about everything that you want to talk about. We're gonna have a live webinar so you can ask questions. I'm gonna answer some of the basics of the franchise. So definitely, if you're interested in that, just go to landscapebusinesscourse.com that URL right there. And then in the tabs you're gonna see webinar. Just click on that webinar link and then sign up very simply. So you gotta register. Just go to landscapebusinesscourse.com, go to the tab up top. It'll have courses and conference. Click webinar. And that will allow you to sign up for this Saturday evening. This coming Saturday.

You'Re gonna have the webinar. It's gonna be great. We'll probably do like 30 to 40 minutes, but it just depends on how many questions you might have. I'll answer every single question you have about the franchise, talk about it. I'll explain on some charts why a franchise is a great model to have, what Augusta's all about and the numbers behind it all. So that'll be a lot of fun if you're interested at all. I'd really encourage you to hop on that live webinar on Saturday. So let's go ahead and jump into this. Again, these questions come from landscape Business course Facebook group. The first question comes from T. Ryan Griffin. He says, what steps should you take to come up with standardized pricing for estimates? Do you just calculate past jobs of pay versus square foot and then develop a pricing structure from that? Okay, so a couple different things. I'm going to assume, T. Ryan, that you're talking about standardizing pricing for mowing. So that's exactly basically what we did when we needed to come up with our first rate matrix for square footage of lawns and for mowing and for lawn Care is we took an Excel spreadsheet. Basically, we did on one side, we did square footage of the lawn after measuring them all. And then on the bottom, we did the price, and we just saw the chart and we saw kind of like the median, the average of where the plotted graph was going. And then we figured that, okay, we're gonna go on the 75th percentile of those dots, and that's gonna be our new pricing matrix. And that's how we did it. So that was for the mowing side. For the landscaping side.

It'S a little more difficult because you have cost of materials in there, you have bigger equipment, there's more overhead, there's project management, there's estimators involved. So it's a little bit harder just to run a spreadsheet. What you're going to want to do is measure your profitability on all your landscaping jobs and track the hours that you spent, the materials you used. And eventually, over time, you're going to start to see, okay, when I am hitting budgeted hours, and I am, everything goes smoothly, what's my profit margin? If that is a good number, maybe that's the dollar man, the man hour rate you should be using. And you start playing with your man hour rate, and then you start playing with your markup on materials, and you start playing with your estimate fee and things like that in order to get to the percentage of profitability that you need on a consistent basis. And then that's when you standardize that hourly rate. That's when you standardize the markup on plants and materials, and then you go from there. It's very, very simple to be able to accurately predict your profit margin once you start nailing these numbers down. Estimating is not rocket science in this landscaping industry. Once you can basically look at a bed and be like, oh, that's going to take five hours. If you have a pretty good concept and can get in within 10% of budgeted hours, you should be able to consistently be pumping up a consistent profit margin on all your jobs. And so when people come to me, they're like, hey, that job you got, what do you think you're gonna make on that? I can almost tell them down to the nearest $10 on a big job. On a thousand dollar job, I can tell them down to the nearest $10 what we would make on it. Because our budgeted hours, we're just gonna knock them dead center. And with paid by performance, guys are gonna be closer to that too. You know your material costs, you know exactly your markup on those materials. And you know what your profit margin.

I think that by having a system in place to standardize your prices, and once you standardize your prices too, the beautiful thing about it is you don't mind sharing your numbers. I don't mind sharing how much we charge for mowing per square foot. It's on our website, it's public domain. You can go check it out on AugustaLawCareServices.com, just go to our pricing. We're very public about it. What we charge. The reason is because we charge standardized prices. We don't make them up. And so if I go do a job or do an estimate for one customer and the next job is a very identical job, the numbers are gonna be the same. I'm not pulling them out of a hat. And so I don't mind sharing that with the public because, number one, if people think it's too expensive, they're just a tire kicker anyways. They're gonna waste the estimator's time. They are now not going to call for an estimate. Great. They weren't gonna do business with us anyways. But then you're also gonna get the people that are like, wow, they develop a trusting relationship with this landscaping company because they share the numbers, they're open, they're honest, they're not trying to hide anything. So there's a win. Win. If you have. If you don't have standardized pricing and you share your numbers, you're gonna get in trouble. Like, if you do not have a very good system for estimating that's just buttoned down and you can explain every single dollar to a customer and not be ashamed of your numbers. If you can't do that, sharing your numbers publicly is not a good idea because you're gonna get one customer that looks at a project and all of a sudden, like last weekend, if you were on the group, you saw me post pictures of a couple jobs we did last week. And on there we put the price of the job, we put a paver patio in. It costed 45 do or whatever it was. We did. What was else last week? Oh, it was a paver, a pathway and some stepping stones and flower beds. And we put the budget like exactly what was spent for that job. That's fine and that's great. And it develops trust. That's all really good. But if you don't have a system and if you don't have a procedure for making those estimates, it's going to come back to bite you. When you go two weeks later to someone else's house and it's seven, eight thousand dollars and they're looking at like, this is almost the same job as what you installed on your website. And it was saying 4500, like what's WR? So you gotta have a system. You gotta have a system that predictably produces a solid profit margin. That is the fundamental of your business. I would much rather take predictability over hit and miss. Even if my hit and miss averages at, say, 25% margin, I would much rather take a consistent 20% margin. Just that every single job is 20% than one that's like one time, it's 50% one time, it's like negative five one time, it's 30 one time, it's 10, one time, it's like 80%, you're losing money. I do not want that fluctuation because you can't consistently build the business. You can't have consistent cash flow. I'd much rather have a slightly lower profit margin, but one that's predictable, steady, stable, and I know my profitability the day I sell the job. And so that would be one of the biggest benefits of having a system in place.

For your estimates. So I'm gonna go ahead and like your comment, your comment and question there, T. Ryan. Cause that was a good question. So Mark Hanson has a long question here. It looks like there's three different questions. Let me just kind of read through it and we'll see what's up. Mark Hanson asks, how did you get your office staff, owner and estimators all on the same page for estimating, sending estimates and process after the customer accepted them? Okay, so this is definitely three different questions. So first question, how did you get your office staff, owner and estimators all on the same page for estimating, sending estimates and process after the customer accepted them? So I want to make sure I answer your question correctly, Mark, because you're asking about the process after the customer accepts the estimate. How did I get everyone on the same page for estimating? Okay, so.

Oh, I see. You do kind of keep clarifying. Do you put man hours on your estimate or a total for line item without a man hour indication?

Okay, so then there's a second question. Okay, so first question is basically about how do we systematize the estimating and keep get everyone on the same page for the office staff, the owner and the estimators to make sure that after the job's accepted, everyone's on the same page? And do we put man hours on our Estimate. So we do not put the number of man hours on our estimate for the customer to see. If they want to see the breakdown, we'll give it to them. We have nothing to hide, but we don't want to confuse them. And so we just want to give us one solid number that has all the labor, has all the materials baked into it. If they want the breakdown, we'll give it to them, but we do not give the number of budgeted hours. The reason for that is because I want the guys to be able to go out and beat those budgeted hours and make a little more money. I want them to be able to have that number that they're constantly thinking about throughout a big project. If it's 150 hours, I want them to be thinking at 30 hours, like, okay, are we about 1/5 of the way ahead of schedule or behind schedule? So definitely the crew is seeing budget hours. Like, it's all over the place on there. It's everywhere. But we don't actually put it on the estimate for big projects. How do you get. So Mark continues writing, how do you get your employees to listen to process? You've been trying to teach them on all properties, Stuff like trim areas mowers can't reach, trim weeds in driveway, mow in hard to reach places that the mower will fit, go over your work to make sure it is complete, et cetera. So this kind of goes back to your first question mark about getting everyone on the same page for the estimator, the office staff, the owner, et cetera. So now as myself, I'm not doing the estimates. I have someone that's doing the estimates. I have office staff performing, creating the estimates, sending them the customer, getting work, change orders, getting stuff on the schedule, doing the project management, that's all out. I'm not involved anymore. But when I was, because you talk about the owner, the owner, the estimator, the office app, everyone on the same page. Basically we incrementally just kept working on the system. We always have had a system for creating an estimate and we've just always tweaked it and played with it and changed it until now. It's better that I'm not at Augusta and they just run with the system that we have in place instead of me always trying to fix it and make it better. So that's where it's got to now. But basically we all had to buy into the fact that, number one, the customer is the most important thing. Like the customer experience rules. All I every few months Have a pep talk with our whole team about the customer experience and talk about Whole Foods versus Walmart and just that whole dynamic. And so I talk to them a lot about that and so they know, they're very clear. The customer is always number one. Every decision we make at our company is how it's going to affect the customer. So when it comes to the estimate process, getting them set up on the schedule, getting the estimate performed, sending it in an email, formatting it, sending a video, all of that stuff, always asking the question, how does this help the customer? That's the unifying point for our crew in this field, the office staff, the estimators, anyone can offer their opinion and try to make the business better. If it's going to make the customer experience better. Like I want to hear those things. I'm listening. We're trying to change it, we're trying to evolve it, we're trying to make it better. And if their common theme of change and the reason they want to see something change is for the customer sake, that's our unifying force. That's the thing we can all agree on that if the customer is benefited by this change or by this system, we're going to implement it. And so that's the unifying point that we all agree on. We might not agree with individuals or individuals like preferences or things that they think about, ways they see a business, whatever, maybe they don't agree with the way I see business, but we all are unified on one fact and that is the customer experience is the most important thing. And so when we have changes, we have disagreements, it's always about what's the customer experience, is it better and should we implement that change? So in terms of how do I get the employees to listen to the process? I think a big part is getting buy in. How do you get buy in? Number one, you gotta lead by example, you gotta do it yourself. Number two, you want them to be involved in the developing of that process. So try not to be the one that tells them that this is the process. Try to be the one that incorporates, listen to their ideas, molds the system based upon their feedback. They're out in the field, they have a lot of really good insight that you can learn from as the owner who might not be involved on all the projects, the estimator, whoever you are in the company, you might not be hands on with everyone every day out in the field. And so they're gonna have great perspective, they're gonna have great ideas if you, and actually even if they're horrible ideas. At least you listen, address them, tell them why it might not work so that they feel engaged, they feel a part of the process. They don't feel a victim of the process, they feel part of the process. And the best way to do that is get their feedback and allow them to buy in by giving feedback to the system and helping you develop the system instead of you just telling them how it's gonna roll. David Henderson asks what's the best way to ensure the staff are completing, say, a landscaping job, know exactly what to do at a job without making a plan drawing for each job? Many of my jobs would be small, so wouldn't justify making a plan. I am finding that since I priced the job and viewed it initially, I then need to be there to show the guys what needs to be completed, which can be very time consuming. So David, we use a bunch of technology now to prevent that from happening. We're very clear to Augusta on the system that it goes from the office that sets up the estimate to the estimator to the project manager and that's it. There should be no office coming back in or estimator having to go back and clarify things. So we use technology to facilitate that. So we use Facebook, WhatsApp and different channels of communication. Some people use Slack to get videos, get text messages, send pictures quickly. Your CRM will really help with this to just make sure that you don't have to keep coming back to a job. That being said, David, it looks like based upon your question, that you are the estimator and you're feeling like you have to constantly be managing the job still. So again, you're gonna have to train.

Your project managers to be able to look at your estimate and know what you want and then either send them a video, have pictures, or create better estimates that reflect exact step by step. So for example, on your estimate, do it chronologically. Don't be like install paver patio using jointing sand and Edge Pro. Why not start like install paver patio. Step one is going to be excavate base down to 4 inches, install a certain type of gravel, compact it and then install screen sand and install your edging and specify the type of edging and the type of sand and the type of paver and then the dimensions of the patio and then what type of jointing sand and then how it's going to be finished and the cleanup process. You're gonna put the soil build the job out in your mind as the estimator and as you're doing that you're also getting materials and hours, but you're also building the job out for a project manager who's gonna follow that sequence. So the way you do your estimates chronologically is really important, and then communicating that to the crew is really important. Either A, an initial job visit where you do show up in person and you do walk them to their job as they're looking at the estimate, so that way they can look at the estimate later on when you're not there, or B, you do videos and pictures to make sure that they have that information before they even go there. Our estimators do not go back to the project. It goes from the estimator who sends video and pictures and project notes and estimate to the project manager who then takes the job to completion, does a walkthrough, and we don't ever have the estimator come back to the job site. That's the goal, and 99% of the time it works.

I want to make sure I answer that question.

Yeah. So in terms of a plan, for us, we don't make job plans. The estimate is the plan. That's the job notes the guys get. So when I'm making, or anyone, estimators making an estimate, they're not just thinking about what those notes are going to be to the client. We're thinking about what notes need to be said to the crew. And so that means literally giving a verbal line by line, step by step of how that job's going to roll out. Because that's the estimate, but it's also the exact same verb. We use the exact same thing. Like our job plan is our estimate. We give them the estimate. That's our job plan. That literally just gets copy and pasted. And any of the project managers could take that estimate and do the whole job. Keegan McGinnis asks for large jobs, say, 20k plus. Do you agree with giving a free rough estimate and charging a fee for a written quote? I've heard of companies in my area charging $100 for a proper quote and taking them off the bill if they go with them. I assume that weeds out people that aren't fully interested and end up wasting quite a bit of our management time. So, Keegan is a great question, and I'm gonna kind of give you the range of ideas on charging for estimates. Number one, I do not like to charge for estimates up front because it does reduce the amount of people that, you know, your deal flow, your lead flow. The one way that I have seen people be successful at charging up Front like, hey, the minute someone calls, yep, that's gonna cost you $50. And doing what you say, where they just apply it to the job. The one way I've work is when someone has so much business coming in and they just want to stay smaller and they're not trying to grow their business. They do that to just, like you said, keep the tire kickers out, weed down. Just the people who are really serious that got a personal recommendation or have done business with you before and are going to be 90% close ratio. That's the one time that I've seen it really work. And you can actually make money in your estimates because you're charging for them all. And if they don't get accepted, you get money. So that's a beautiful thing. But for most of us who are actually trying to scale our businesses, grow the businesses, that's not something you want to be doing. You're willing to waste a little bit of time because you have more time than you do. You're trying to scale. It's gonna take. I've always said growth sucks cash. And so it's gonna take some waste in terms of you driving around doing estimates, giving free estimates away if you wanna scale faster. So there's a balance, though, I think, too. Augusta's just starting to.

We aren't trying to grow massive anymore. We're not trying to grow 40% a year. We're focusing on the franchising. So now we're starting to charge for estimates. And so you can do that in a wide variety of ways. You can charge it before, like up front. You can charge it, like towards the job. You can charge it where you just bake it into the estimate itself and they don't even see it. You still say you do free estimates, but it's baked into the price of the estimate. So there's a variety of ways to do that, and it all depends on your level of how fast you want the business to grow and how many leads you want coming in. If you have a ton of leads coming in, it's a great way to put.

A mute or like, kind of slow down the trickle of leads. Spring rush wouldn't be a bad idea to charge estimate fees and up front and like you said, put them towards the job because you're only then gonna get the people annoying you when there's 50 other people calling you. Only the people that are actually serious about doing business with your company and aren't going and getting five other bids and just gonna take the lowest company. And that's when they start contacting you, just those people. So I really like the idea for two different sets of people. Number one, companies that have figured out that they don't want to grow anymore. They just want to stay at the existing customer base, existing amount of revenue, but make it more efficient, more profitable by charging for the estimates, increases their profit, their close ratio and estimates dramatically. That's the first group. Second group is for people that need to put a mute or slow down the leads, throttle the leads back during the sprint. And so during that time they'll charge up front for the estimates just to slow down new growth and just to make sure that they're getting all the customers that are loyal, that have got personal recommendations, word of mouth recommendations and are going to go with them no matter what. And so that's what I've seen at work as well. Quinn asks, can you explain your estimating systems, what notes, measurements, etc. The estimator takes to ensure job is properly quoted and the format he records it in. So it is understandable for the office. In the office, is there a program or system they use like step by step process on how they are to take an estimator's notes and change it to a quote. So Quinn, this is something like in terms of the step by step and what program we use. We use service autopilot, like at the conference when we have more time. This is something we can walk through and actually show you the process. We did a little bit of it last year. We're gonna get better set up this year where we actually show you the whole process.

So I can't really go through step by step. That would take a little bit of time because it's a system. Like I said, we worked on it for a long time, but essentially we try to dumb everything down. And some people don't like that terminology because they want it to be hard to be a landscaper or hard to be an estimator.

It does not need to be difficult to be an estimator. You need good communication skills and you need to have worked in the field long enough to be able to have a pretty good approximation on how long certain tasks are gonna. It's not rocket science. And so for us it's like hours, materials, and that's gonna be all they need. The office needs to make an estimate. So they need the number of hours, they need the materials on the job, they'll make the estimate and they have a standardized pricing sheet that they're gonna need to use and pump that through that format into an estimate. So what notes or measurements do we take? Obviously we need square footages, we need amount of yardages, things like that. So the estimator needs to make it really easy for the office by doing number one.

Solid hour amount like this is exactly how long it's take. It's gonna take 72 hours. What that means is it's gonna take three days or, sorry, four days for two guys. And on the fifth day it's gonna take one guy, right, 72 hours. So four days at eight hours per day, that's 64 hours. On the fifth day, it's gonna be one guy for eight hours. That estimator should know that down to within a few percentage points of how long it's go number of hours, then materials. If he needs to do a measurement with a measuring wheel or whatever, go for it. Just make sure you get the number of yards of material, the number of square footage of pavers. And they don't need to go call and ask what the price is. All they need to do is get the square footage. All they need to do is get the yardage. And the office has a list of what a yard of bark costs, what a square foot of pavers cost. And they have all the pricing. So the estimator makes it simple. They can get estimates out fast because they just are thinking in terms of materials and hours. The office is just taking those things and translating them into dollars and cents based upon our hourly rate and then what we charge for markup and materials.

Kevin, last question. This will be the last question for today. Kevin Fairburn asks, what program or system are you using to keep estimates in order and book them out? So. So a few things. Service autopilot is what we use for our CRM. I've said that before. However, in order to keep track of booking them out, we use team up. So the reason we like team up is we're not a big fan of the calendar on service autopilot. It's just once you start adding in jobs, it just gets really muddled up really fast. So we wanted something super simple that doesn't have anything to do with the CRM. It's just completely visual for the office. And we have a separate screen that, that the office keeps just the team Up's calendar on. So you can just. It's free team up. Just it's on phones, it's on website. So what's nice about it is you can just sync it syncs across. Everyone can utilize it and view it or edit it and so it's called Team up, and we use that on the screen to view from a visual standpoint how far we're booked out from a visual standpoint where we can fit jobs in. So from the office manager's perspective, where do we have the next spot available? Can we fit a smaller job in between? All of that's very visual. So it's very much like blocks. So they're able to see like, okay, there's four people at this job, three people at this job, two people at this job, and then there's four mowing crews. And so that means we have three people left. And that means, okay, we have three people left starting the 17th. Okay. And it's gonna take 72 hours. So it's gonna take the 17th, 18th, 19th, 20th, and then one guy on the 21st. So, like, that's the way that they're looking at it. It's very visual. The Team up app, so I would say service autopilot is where we do a lot of it. But the visual aspect for our calendar, project management, scheduling jobs far into the future is what we use as team up. So hopefully that helps a little bit. So hopefully some of these questions help you guys develop systems for your estimating. It's not like our systems are perfect. They're the ones that we are teaching for Augusta Lawn Care for all the franchisees. And so, you know, if this is something that's interesting to you, how we do things, this is what we teach at when you come here for initial franchise training. And so if you have any questions about the franchise, Augusta Lawn Care, just go to landscapebusinesscourse.com webinar or not webinar. Sorry, that will not take you to the right place. Landscapebusinesscourse.com Just click the tab that says webinar. Sign up for. It's this Saturday. If you missed that, feel free to always go on augustalawncareservices.com franchise and just book a call with me for 30 minutes. We can talk together. See, see if it's something that's gonna be good for you, answer any of your questions, and just see if it's something that you're going to be able to grow and thrive in. And really, I see the franchise as being like a catalyst, which in a chemical reaction, a catalyst is just something that speeds up the rate of reaction. And that's how I see the franchise for the franchisees is like, I believe that most people starting these franchises could do it themselves. It might take them 5, 10 years to get to where they wanted to be. I'm hoping that within two, three years we get them to that place and we get them to a higher profit margin and they don't have to figure things out by themselves. They have the systems in, they have the estimating systems, they have the website, they have the marketing systems in place to just make that business what they want it to be faster than what they could have done by themselves. So I'd really love to see on the webinar again landscapebusinesscourse.com just click the webinar tab at the top and sign up for that. It's this Saturday. It'll be live webinar. I can answer any of your questions and then if you're after that or even if you are watching this after Saturday, this coming Saturday you can always just go to Augusta lawncare services.com franchise guys and book a call with me. So thank you everyone. I really appreciate you listening and we'll see you next time.