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Old 03-05-2008, 10:02 AM
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Charge by T&M or square footage?

We've been doing some hardscaping over the past years, but as we grow we're looking to do much more. How does everyone else charge? I've heard either charge by square foot (price of square foot depends on product obviously) and I've also heard that charging by the square foot is wrong. Anybody have any opinions on the matter?
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Old 03-05-2008, 10:24 AM
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If you charge by square foot you probably will be getting the small jobs and complicated ones and loose the larger ones and easy.

We prefer charging by time and materials, based on our overhead.
It takes some serious time to figure out your real overhead and then you still have to take into account small things like paint, string, glue, fuel, diamond blade wear, etc.
With this system in place we've able to land bigger jobs and make our target profit.
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Old 03-05-2008, 12:28 PM
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There is nothing wrong with actually submitting the bid per square foot or unit cost- you'll see a lot of municipal or state jobs etc. that require this. But you should always evaluate each project individually based upon your own numbers and job factors to arrive at each project's "per sq ft cost".

As you estimate more and more of these you'll be somewhat surprised to see the wide range of sf costs you come up with. I have found hardscaping projects to have the widest range of numbers of any of the services we provide.
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Old 03-05-2008, 07:47 PM
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Well put Rick.

No matter what you do, it is usually easier to sell a job by giving a flat fee price. People get scared about open ended hourly rates. That is especially true if they tried to do some work themselves and were really slow at it. The more uncertainty you can take away from the prospects mind, the easier it is to get them to commit.

You can price things out to get at that number by estimating hours and material costs, or by analyzing how much you should have charged on a similar job and dividing it up to get a square foot price and then using that to build your flat price.

One observation that I have made over the years is that small companies seem to think there is more profit in flat rate pricing while bigger companies like to transition into time and material charges to make their real money. I think it is a result of better contract writing and very good disection of bid documents to take advantage of short comings. The smaller companies tend to eat the unexpected where bigger companies tend to capitalize on it.
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Old 03-05-2008, 10:16 PM
Acorn
 
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greenstone is an unknown quantity at this point
definitely agree with aztlanlc. figure your overhead and direct costs per job. we've done many ver small complicated jobs that were well over $20 sq ft and also very large straightforward jobs of 15 000 sf ft for $4 per sq. Every situation is different.
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Old 03-07-2008, 09:06 AM
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All good advice. Consider this... you do a small patio, 300 sf, for what amounts to $18/ ft. Then you get a call for a 15,000 sf job, and use the same sf number. There had better be a lot of access and soils satbility issues to justify a total cost of $270,000!!

I prepare all jobs in the same manner, considering production projections, materials and equipment costs, overhead, etc. My contract lists a lump sum total, with a breakdown for what the sf pricing is for that job. I list the sf number because I know my competitors are using sf numbers, so it makes a cost comparison easier for the customer when bid evaluations take place. I also list, in detail, what the customer is getting for their money. It makes the document longer than one page in most cases, but they usaully have few or no questions for me once read. It is all spelled out clearly and plainly.

Knowing your overhead costs and formulating them into your bids is essential to your business success. I recently turned away a request for a side walk replacement ( 25 sf) because there was NO WAY I could do it and even break even and keep the costs affordable for the homeowner.

Last edited by PaverDrew; 03-07-2008 at 09:07 AM.. Reason: content
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Old 03-07-2008, 09:58 AM
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All Excellent advice! The actual installation of hardscaping is a real pleasure to me, but the contracts are...well they just seem lacking. Softscaping is much easier. We really try to go the extra mile with anything we do, so that will help us. I appreciate it!
It's nice to have several people say the same thing. Thanks guys!
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