[naturaljosh]

I'm setting up my pricing system. Is there a 'standard' out there for estimating the cost of labor vs the cost of materials. I realise as I do more jobs I'll get a better handle on what that ratio is for me, I just need a place to start.
thanks,
josh

[Fine Edge]

Everyone's labor rate is different, just as yours will be in a new start up.
I could go on and on but to make it quick, I'll just tell you "NO".
There is no standard.
Plus, I have no idea exactly what you do.

[PSUscaper]

Yes, going about pricing your work like this is a 'standard' way for landscapers to go bankrupt.

[Stonehenge]

You may be going about this a bit backwards, Josh. There is no predetermined ratio you should start from. Sure, the numbers for your labor and materials could later be truned into a ratio, but using that as a starting point could be disastrous.

You use a ratio for a company that is extremely streamlined and efficient, and you'll land lots of work, but you'll lose your shirt because you'll be nowhere near that productivity.

Use some ratio from a slow but very established company and you'll never win a single bid (unless you have sales skills that are off the charts).

If you don't know how long it takes you to do stuff - go out and do it, then measure it. Use your own yard, a neighbor's yard, relatives' yards. Get a handle on the labor costs to do the job. Then go from there.

[Cochran]

I never use a ratio, I always price out my jobs in both labor and materials--the ratio tends to differ based on what job we're performing.

What Stonehenge says about "doing it" to determine how long it takes--that's an excellent bit of information. When we are interested in testing a new area for company expansion we usually have a client interested in the area we're looking at. I'll contact the client to let them know what we're doing and ask them if we can do the job for them and charge for hours and materials. I ONLY use existing clients that I have a good working relationship with and trust--and usually the hourly cost is lower than what it would be on a typical bid, but I feel like they're giving us an opportunity to look at expansion and they've given generously to our company in the past and the "first time" may not be perfect.

We've had very good success with this method since the client will usually let others know what we do, but doesn't mention their "discount" since they know they were getting the "guinea pig" deal and can't do that for everybody.

[naturaljosh]

Thanks guys, yeah I've been using the 'do and learn' method mostly. I was just curious if there was a better way. Looks like I'll stick with what I'm doing for now, 'till I get the hang of it. Thanks again.

[PSUscaper]

Once again, I think this post leads us at this forum to really start giving direction to people.

We need to work on some sort of page that has nothing but reading materials list on it. When a post like this happens, we can just respond with "go to this page, read all the material, and then come back with questions"

Human nature is amazing. I can't count the number of times I've seen guys spend hours, days, months researching the price of a truck before they buy it so that they get the 'right one' and save a 'few' thousand dollars......and yet, in the meanwhile, they won't spend a couple hours a day reading a book that may save enough money to pay for any truck they want when they are finished just flipping through a few pages.

Why do you want to 'stick with what your doin' now'......maybe your losing money now? Maybe you could be making a lot more money now? There may not be time 'to get the hang of it' left?

I think being here is a great start, because just posting is a sign that you are interested. You opened the cover to that book, now you need to read the pages (though I always like to thumb through and look at the pictures, but they don't help much anymore?)

Instead of asking 'what do others do', figure out what it is 'you' want to do. That is the start.

Again, this has to be part of the new generation. Perhaps ,before the tech age we live in now , when we wanted to get answers to a question, we had to think about where to get the answers. I mean, as I remember, I would have to first think about where the answer might be, which might be the library. Then I had to go to the library, but first, I had to figure out who was taking me to the library! Then, I had to figure out and remember what the hek the dewey decimal system! Then I had to search through those stacks of old, stinky books. Then, I had to finagle with the librarian because I had no money and a book from 5th grade was overdue by 12 years! And so on, and so on.

These days, people are just getting use to 'I have a question, I'll log on to the net and get the answer!" I know I am one of the number one offenders!

The bottom line is getting an answer is not the important part. The important part is how did you arive at that answer. This seems to be a dying thought process these days.

[Stonehenge]

I agree that the web has become a fast-food style distributor of information. At the same time, the premise of this site was to do the kinds of things we're doing in this thread.

I have an idea for a page on pricing, but honestly, the length of time it will take me to write it (and include all the things that should be included in it) is keeping me from writing it. Maybe something for the Wiki.

[mdvaden]

As I was entering data to my computer from my checkbook today, this topic crossed my mind.

The variables are too great.

In Portland, a size of Japanese maple that costs $100 there, is near $180 in Medford, Oregon.

A tree like that only takes 15 minutes to plant in one type of soil, and an hour in another.

In most cases, my materials exceed labor, but not if pruning is involved where materials are almost nil.

It seems like its best to take the one at a time and calculate.

Maintenance seems closer to a formula, but even then, every yard is different. One yard may have no trees, but another has a lot of trees and increases the labor need in Autumn.

[start2finish]

does anyone read lawn&landscape magazine. this issue has an artice on 4 ways to estimate a maintainance price. I found it interesting, we do no maintainance but it was still interesting.

as for the question, there are some people who have the fantasy that double your material and that's the bid.
it is all production.
I look at things as being about selling time on our schedule.
whatever job it may be I find how long it will take us to complete.
how many of our resources it will require.
how much cash will it occupy.
payment terms are considered with a few commercial clients (slower pay, costs them a little more).
and so on.

I know you are looking for a magic solution. I have a partner that has been involved in the business for 3 of the 7.5 years I have been in business and I have yet to teach him what little I know.

sometimes it is an educated guess.
sometimes the market plays a huge role in pricing.
what month is it.
December is the cheapest time for us to work. It is slow then and it eases the labor burden.

remember, you are doing this to make money. make sure you do