Creating an Estimate Process... That Yields Profit!

Hey everyone, my name is Mike Andes. 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 into the show though, a big thank you to today's sponsor. If you haven't already got to go check them out, it's get jobber.com im.

Andys that's my last name. A N D e s that's getjobber.com im andy 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 budgeted 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 going to need to make sure they have the GPS coordinates and where to go. And using Jobber you can get there fast, efficiently and save. 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, a lot of, we've 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 going to do a webinar this Saturday. It's gonna be in the evening, so, you know, 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 like 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 would 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, 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 starting 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, but 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, OK, we're going to go on the 75th percentile of those, of those dots and that's going to be our new pricing matrix. And that's how we did it. So that was for the mowing side, for the landscaping side. You know, that's. You can't. 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 do, you know, run a spreadsheet. How 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 like, okay, when I am hitting budgeted hours and I am, you know, everything goes smoothly, what's my profit margin? You know, 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 for. 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 gonna 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 out 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 like the nearest $10 on like a big job, on like 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 you, what your profit margin's gonna be. So 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. Like 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 augustalawncareservices.com just go to our pricing. We're very public about it, what we charge. The reason is because we, we charge standardized prices. We don't make them up. And so if I go do a job for one or do an estimate for one customer, and then 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 going to do business with us anyways. But then you're also going to 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 standardized pricing, if you don't have standardized pricing and you share your numbers, you're going to 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 $4,500 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, if you don't have a pro for making those estimates, it's gonna 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, 4,500, like, what's wrong? 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 is like negative five. One time, it's 30, one time, it's 10 one time, it's like 80%. One time. You're losing money. Like, 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 and 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 to you, Ryan, because 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? Okay, 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 the 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?