Landscaping is a $102 billion industry. That’s great news for you, but it also means that there’s plenty of competition for every job.
The first step to landing any new job is nailing your estimate.
If your quote is too high, you’ll lose business to cheaper competitors.
If it’s too low, you’ll leave money on the table. Low prices may make some customers wonder what’s wrong with your services, too.
How do you strike the right balance?
We’re here to help.
In this post, we’ll go over the best way to estimate a landscaping job so that you can land more projects and make more money.
How to Estimate a Landscaping Job
A good landscaping estimate is:
- Attractive for customers – you want to price your services so that your customers feel like they’re getting plenty of value for their money.
- Profitable for you – when you factor in all of your material, time, and labor costs, jobs should be worth the time you spend on them.
- Competitive – you don’t want your prices to be too much higher or lower than other landscapers in your area who provide services of similar quality.
Finding the right balance can be tricky.
You might need to do some research to learn how your competitors price projects. It’s smart to do that at the beginning of each season to make sure your estimates are current.
While every job is different, you can use the same formula to calculate an estimate each time.
Here’s how to create a landscaping estimate step by step:
1. Meet your potential customer on-site
For the most accurate estimates, you and your client should both walk through the work area together.
This gives you a chance to ask specific questions about what they want you to do.
It’s also a great opportunity for you to point out areas where the client would benefit from an extra service. For example, you might notice that some low-maintenance plants in front of the house could improve curb appeal and make the yard more inviting.
Your first look helps you create a better estimate and allows you to start building a trust-based relationship with your prospective client.
Make a good first impression by asking questions like:
- What made you decide to call a landscaper?
- What features are most important to you?
- How much time do you spend outside in this area?
- Do you have any concerns that I can help address?
Try to understand both the job details and the reasons that the property owner wants to get this work done.
Most landscapers are more focused on the work than they are on the client. Taking the time to understand your customer gives you a competitive edge.
For instance, you might find out that a client on a tight budget wants to landscape their front yard to make the house easier to sell.
You can use that information to recommend services that have the most impact for the lowest cost. The homeowner is then more likely to choose you over a landscaper who gives a generic estimate because you listened to them and understood their needs.
2. Estimate the time and labor cost
To be able to provide an estimate, you’ll need to figure out and factor in how long a project will take.
A great way to do this is by looking at previous jobs. See how many subcontractors or workers you used on these jobs and how many hours projects took to complete.
If you’re just starting out or don’t have a good handle on this, consider using GPS time tracking for your landscape and lawn care technicians.
That way, you can see what they’re doing, when they’re working, and how long it takes them to complete a job. Using this data, estimate an hourly wage for your subcontractors and add around 20 percent to account for payroll taxes.
Remember to consider how much work is needed to ready the land for your project. You may need an extra day or two if you’re removing old landscaping, for example.
Make sure you account for this and any other unforeseen issues by padding your time estimate a bit.
3. List your expenses
Once you determine how long a project is going to take and account for labor, look at your expenses. For most projects, these can be broken down into materials and overhead.
Materials should include any and all items you’ll need for the job. That might include things like:
- Lawn seed
- Gravel boulders
- Trees and plants
- Patio pavers
Don’t overlook the little things like lawn treatments or sprays that you use over time. Even if a product lasts for dozens of jobs, it’s still an expense you have to cover.
Once you have an exhaustive list of everything you’ll need, figure out how much it all costs you.
Make sure to factor in your markup if you intend to make a profit on the materials you use. For example, you might make a small profit on any plants you get from the nursery because sourcing the plants is an extra service.
It’s easier to forget about overhead costs. These expenses are just the cost of doing business.
Overhead includes things like:
- Marketing for your company
- Office utilities
- Software subscriptions
- Vehicle insurance
- Membership dues to professional organizations
To make sure your jobs are profitable enough that you can pay all your bills and still come out ahead, add up everything that you pay each month. Divide that amount by the number of jobs you usually complete every month.
That’s how much you need to cover on top of your material and labor costs.
Make sure you’re charging enough that you can handle your overhead and still make a profit.
4. Add your markup
The last step for creating your landscaping estimate is to add your markup. Industry standards say to charge about 15 to 20 percent on residential jobs and 10 to 15 percent on commercial landscaping jobs.
This should give you a general ballpark for creating a bid.
You can increase your margins by doing better quality work than your competitors or offering a service that’s hard to find in your area.
Make sure you research what other landscapers in your area charge. Local factors like climate and competition sometimes affect the average cost of landscaping, and you want your final price to be competitive.
Example of a landscaping estimate
Since you’re in the landscaping business and not an accountant, here’s a simple formula you can use to create quotes. Simply remove our numbers and plug in your own.
The break even point X 1.2 = your estimate.
Say your materials cost $3,000, labor costs $2,500, and your fixed costs amount to $1,500. That’s $7,000 in total cost. So, your break-even point would be $7,000. However, you want to make a profit, so remember to add around 20 percent markup to this number. This brings your estimate to a total of $8,400.
What about charging by the hour?
Our estimates are based on charging by the project. While you can charge by the hour, we don’t recommend it.
Charging by the hour penalizes you if you finish the job early. That can cost you your profit margin because your overhead and material costs don’t change.
Keep in mind that every project has unforeseen issues that can affect the timeline.
If you charge by the hour and you go over the estimated number of hours, even if it’s not your fault, it could result in a very upset customer. They may accuse you of dragging out a job to earn more.
Even if all goes as planned, charging an hourly rate makes a lot of customers uncomfortable. They wonder if you could have finished sooner, and they’ll watch for signs that your team is working slower than they should.
That leads to payment disputes, negative reviews, complaints, and potentially even lawsuits. Charging by the project is much more fair for both you and your client.
Always refine your process
The landscaping estimate process should be fluid. Learn from your mistakes and then further refine your quote for the next job.
One of the hardest parts of an estimate is figuring out how long a project will take. If you use a time tracking system like Hubstaff, you can look back at the data and make better estimates. Use your timesheet data or your geofencing solution to get better at estimating time.
Keep track of your estimates year to year. At the end of each year, sit down and analyze your estimates to see if you could have done a better job at estimating costs for each particular project.
Perfecting your estimating process will help you boost profits and result in happier clients.
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