Underbidding

[TDunk]

Treemandan, thats what these Evening warriors dont realize, when you go full legit......you better bank for the slow times!!!


LXT..............

That's why i'm not full time yet. That's the main benefit of being in a family owned buisness (my father has owned his own garage since '98) It seems to work out that when we get slow at the garage i have a bunch of tree work lined up to get busy on. So rather than another employee working half days and loosing money, i'll take off and do my trees so he can keep a full paycheck. That way the garage (my dad) isn't loosing money by halving us stand around doing nothing all day, and everyone is still getting full pay. Plus i'm making more money doing the tree work and it's always nice to have a break in the routine.

 

[2FatGuys]

Nah... I'm all but "mild mannered" in my Monday - Thursday "Liability Protection"role and don't climb at night except for fun (recreational) or critical storm damage work. Friday - Sunday is my part-time-monkey "Super Trimmer" time.

 

[teamtree]

state bid

bid for the state went out last month.....

385 trees/dropped in the right of way/no clean up (half in the 4-8" range) (3 in the 21"-48" range) (everything else in the 9-20" range)

state is doing traffic control
bridge contractor is doing clean up
all trees have to be cut by April 1



results: 19K, 12K, 10K, 5K & 3K

is someone underbidding or just extremely efficient.

 

[Bermie]

Keeping costs down is not 'underbidding' or 'lowballing' it is an accurate reflection of what it will cost to do the work based on the time, manpower and equipment needed! How you set up your business depends on many different factors, some unique to certain areas.

My base rate is $800 per day for me and a groundie. I go from there adding on the extras as needed.
I have all the necessary equipment for climbing, rigging and groundwork...
I have no large equipment of my own, I do not use it often enough to justify the initial outlay or ongoing costs, so therefore I do not have the overheads and issues with buying, maintaining and paying off equipment I do not use every week. So I do not have to build it into any cost of my doing business.

When I need large equipment I call my collegues who have it...bucket truck, dump truck, crane truck, chipper...Their rates are then added into my estimates and off we go.

The tree work I use them for is a fraction of their day to day business, but nice for them to fill in time slots, they use me for climbing/tree work that they get asked to do...win/win!

I am as qualified and professional as my competition, but I do not carry the equipment overheads...so in bid situations I can end up cheaper, sometimes I don't... I charge the same rate for a climber that they do...and it doesn't matter if thats in a bucket or on a rope, but the hire of the bucket will add to the overall cost...

 

[treemandan]

Allow me to speculate even more as a guy who has been around and seen what is out there.
The whole deal is that no matter what you do for a living you had better be able to compete in your market. If that is not obvious then you are blind.
Yes, when a guy who just is a part time warrior can do the job for less or a real tree service just sucks it looks bad for us. I say us but I don't know if that is true. Why? Because we are not all on the same level, if we were we would not be talking about this.
It is not uncommon for a real tree service owner to throw a low price to keep the guys and his company working. Also he might add something like" why did it take you so long? I didn't put that much on it." It is a struggle for all.
Some have said that 50% off all people are looking for the lowest price. I think that that percentage is higher more like 99.9%, especially when it comes to a new customer or for a highly competive market.
If you go around telling people that you cost more because you are better I have to say" better than what and who?" . Don't get me wrong I understand what a good tree service should be making a day but that is our problem; ain't it?
As far as what a good service should be making and what they usually do is this- for a 3 guys and the truck and chipper 1400.00 to 1700.00. If I based my rate on what I really should be making it would be around a million dollars a day, no joke. Anyone who works in this field as an employee at a profficient level doing actuall tree work should be making 40 to 60 G a year. Even the groundies. Now tell me I am wrong. Oh yeah, don't forget the bennies, A good amount of my bids are way to high but I am trying to set the standard while keeping my calender full AND doing a job cheap for someone who has little money and resource(can't help it, I'm a sucker).
Now what is happening today is that all the employees of older established companies are quitting to start thier own gigs. Why? I think because of all the crap they put up with for 30 g a year. Some do well but fall into the same traps as thier hated ex employer, others have to underbid their ex to get the job, while others are just hacks.
Also, some people hear that there is good money in tree work and go for the motherload only to find, well, the truth.
This is never going to stop, well it will but underbidding tree work is going to be last thing on our minds when it does.
Now sometimes "we" underbid each other at the professional level and that is healthy, so they say, but it is only by a 100 bucks or so. 100 bucks is a 100 bucks, find a guy who says different. Big differences in bids from real services is a fluke but does happen. Got to go, kids are hollering

 

[TDunk]

bid for the state went out last month.....

385 trees/dropped in the right of way/no clean up (half in the 4-8" range) (3 in the 21"-48" range) (everything else in the 9-20" range)

state is doing traffic control
bridge contractor is doing clean up
all trees have to be cut by April 1



results: 19K, 12K, 10K, 5K & 3K

is someone underbidding or just extremely efficient.

:jawdrop:

 

[TDunk]

Allow me to speculate even more as a guy who has been around and seen what is out there.
The whole deal is that no matter what you do for a living you had better be able to compete in your market. If that is not obvious then you are blind.
Yes, when a guy who just is a part time warrior can do the job for less or a real tree service just sucks it looks bad for us. I say us but I don't know if that is true. Why? Because we are not all on the same level, if we were we would not be talking about this.
It is not uncommon for a real tree service owner to throw a low price to keep the guys and his company working. Also he might add something like" why did it take you so long? I didn't put that much on it." It is a struggle for all.
Some have said that 50% off all people are looking for the lowest price. I think that that percentage is higher more like 99.9%, especially when it comes to a new customer or for a highly competive market.
If you go around telling people that you cost more because you are better I have to say" better than what and who?" . Don't get me wrong I understand what a good tree service should be making a day but that is our problem; ain't it?
As far as what a good service should be making and what they usually do is this- for a 3 guys and the truck and chipper 1400.00 to 1700.00. If I based my rate on what I really should be making it would be around a million dollars a day, no joke. Anyone who works in this field as an employee at a profficient level doing actuall tree work should be making 40 to 60 G a year. Even the groundies. Now tell me I am wrong. Oh yeah, don't forget the bennies, A good amount of my bids are way to high but I am trying to set the standard while keeping my calender full AND doing a job cheap for someone who has little money and resource(can't help it, I'm a sucker).
Now what is happening today is that all the employees of older established companies are quitting to start thier own gigs. Why? I think because of all the crap they put up with for 30 g a year. Some do well but fall into the same traps as thier hated ex employer, others have to underbid their ex to get the job, while others are just hacks.
Also, some people hear that there is good money in tree work and go for the motherload only to find, well, the truth.
This is never going to stop, well it will but underbidding tree work is going to be last thing on our minds when it does.
Now sometimes "we" underbid each other at the professional level and that is healthy, so they say, but it is only by a 100 bucks or so. 100 bucks is a 100 bucks, find a guy who says different. Big differences in bids from real services is a fluke but does happen. Got to go, kids are hollering

Excellent post i must say. When i put my bids up against other "reputable" company's, they are usually within a 10% to 20% (MAX) difference. Sometimes i'm the highest, sometimes the lowest, but were all in the same ballpark. I have no prob. loosing a bid to another company if the diff. is only 10%-20%. It's when i loose a bid to someone with a 50%-60% diff. in price. That's what erks me. I don't have near the overhead that alot of company's do. I have a dump truck, chipper,rope,climbing gear etc. and just bought a bucket truck. Granted, i don't really NEAD a bucket truck, but it was a SMOKIN deal and there are times when i could do the work faster/safer. Plus, i'm the only Co. in the area right now with an operating bucket truck. What i'm getting at is that even though i'm a "super Trimmer"/weekend worrior i have a fair amount of overhead to deal with. So the assumption that part-timers underbid/lowball isn't ALWAYS correct. But alot of times it is true.

 

[pdqdl]

My two cents worth

I don't really find that the part time guys are much competition. They get the cheap work, and that leaves the better paying jobs that require insurance, worker's comp, etc for companies like mine.

When a customer asks me to lower my bid to meet another's quote, I explain to them that I never lower a bid. "If I lower my price, then I am admitting that I was willing to take more than I should for the job. I gave a good quote to begin with, and I am sticking to it."

If a customer just wants to talk me down, than I can agree to do that: "What part of a good job do you want me to leave out?" Sometimes, it actually works out with a lower price, and less work done!

 

[tree MDS]

Excellent post i must say. When i put my bids up against other "reputable" company's, they are usually within a 10% to 20% (MAX) difference. Sometimes i'm the highest, sometimes the lowest, but were all in the same ballpark. I have no prob. loosing a bid to another company if the diff. is only 10%-20%. It's when i loose a bid to someone with a 50%-60% diff. in price. That's what erks me. I don't have near the overhead that alot of company's do. I have a dump truck, chipper,rope,climbing gear etc. and just bought a bucket truck. Granted, i don't really NEAD a bucket truck, but it was a SMOKIN deal and there are times when i could do the work faster/safer. Plus, i'm the only Co. in the area right now with an operating bucket truck. What i'm getting at is that even though i'm a "super Trimmer"/weekend worrior i have a fair amount of overhead to deal with. So the assumption that part-timers underbid/lowball isn't ALWAYS correct. But alot of times it is true.

Sounds like you are bidding properly to me, good luck

 

[kennertree]

I don't worry too much about getting underbid. When I go look at a tree for a customer I get the objectives and try to do what is best for the tree while meeting their needs. When they tell me so and so was cheaper, why are you that much higher? I tell them so and so is not giving a bid for the same services I'm doing. They are giving a bid to lion's tail your tree or a pruning practice that is not benificial to them or their tree. They usually see the difference.

 

[treemandan]

I don't really find that the part time guys are much competition. They get the cheap work, and that leaves the better paying jobs that require insurance, worker's comp, etc for companies like mine.

When a customer asks me to lower my bid to meet another's quote, I explain to them that I never lower a bid. "If I lower my price, then I am admitting that I was willing to take more than I should for the job. I gave a good quote to begin with, and I am sticking to it."

If a customer just wants to talk me down, than I can agree to do that: "What part of a good job do you want me to leave out?" Sometimes, it actually works out with a lower price, and less work done!

Sometimes those part time guys will be your comp and you can refer to the " how did you all start ?" thread.

But , Yes, you are on target, if you are doing it right.
Why is my price more you say? I can leave the topsoil to fill the holes at the shop. Next thing you know they got the other guy to bring it for less.

 

[Slvrmple72]

I don't really find that the part time guys are much competition. They get the cheap work, and that leaves the better paying jobs that require insurance, worker's comp, etc for companies like mine.

When a customer asks me to lower my bid to meet another's quote, I explain to them that I never lower a bid. "If I lower my price, then I am admitting that I was willing to take more than I should for the job. I gave a good quote to begin with, and I am sticking to it."

If a customer just wants to talk me down, than I can agree to do that: "What part of a good job do you want me to leave out?" Sometimes, it actually works out with a lower price, and less work done!

I hear you there! Gotta love dropping the tree and walking with a nice fee and none of the a$$breaking cleanup! Almost as good is that call a few weeks later..." We didnt realize you would leave us with this much work. Can you come back out to clean up the rest? His brother said he would take all the stuff out there but after he got all the big pieces( think: firewood vulture) he hasn't been back. An estimate? We already paid you to cut the tree down and there isn't that much left just a (jumbled) pile of branches ( tossed down the ravine in the back and complained about by the owner of that property). "

 

[Slvrmple72]

Oh Yeah! I forgot the most obvious thing we have not touched on in this thread that much: Salesmanship
How well do you sell your customer on the services you provide? How good are you at reading your customers? Their reactions, questions, and the like? Do you just leave a quote in the mailbox and go or do you try to establish a rapport?

On a related note: How many of you are growing your business or keeping it only as a part time tree monkey super weekend/evening funtime trimmer venture?

 

[Blakesmaster]

I hear you there! Gotta love dropping the tree and walking with a nice fee and none of the a$$breaking cleanup!

I love doing no-hauls because it's all technical, fun, use my brain stuff. No drag-drag carry-carry. My only issue is that the neighbors see a messy yard and think, "I'm not gonna call that guy. Look at the mess!" *sigh*

 

[treemandan]

Oh Yeah! I forgot the most obvious thing we have not touched on in this thread that much: Salesmanship
How well do you sell your customer on the services you provide? How good are you at reading your customers? Their reactions, questions, and the like? Do you just leave a quote in the mailbox and go or do you try to establish a rapport?

On a related note: How many of you are growing your business or keeping it only as a part time tree monkey super weekend/evening funtime trimmer venture?

I mentioned something but it is obvious that we are professional . And sometimes they clean it up very nicely themselves which is why I make sure I can do it the way they want, if what they want is not to outlandish. I call it the hack and slash service. It is actually possible for a mortal( not a tree guy) to use a saw and load a truck and take it away, not common, but possible.
I have a few estimates tomorrow, one of which will entail running a bush mower through some over grown brambles, one is to remove all the overgrown trees and shrubs on the property and one is pruning some topiaries. Do you think the first 2 people are going to care if I am 'arborist of the year'. I don't think so either.
I know what I can get away with so I will try my best to give a price that will make them say do it. Of course I can't pay them to work for them but...

 

[treemandan]

I love doing no-hauls because it's all technical, fun, use my brain stuff. No drag-drag carry-carry. My only issue is that the neighbors see a messy yard and think, "I'm not gonna call that guy. Look at the mess!" *sigh*

I used to pick up little cash jobs with an ad in the penny pincher that said " have saw will travel". You bet I was seeking a certain,uhm, clientel. I also have a half page in color in the books.

 

[treeclimber jul]

Around where I live, there are a LOT of hacks cut everything off and leave stubs. Also they show up drunk sometimes I am trying to build customer relations and a name of quality, word of mouth is the way to go I think.

Looking professional is very important as well

 

[ropensaddle]

Around where I live, there are a LOT of hacks cut everything off and leave stubs. Also they show up drunk sometimes I am trying to build customer relations and a name of quality, word of mouth is the way to go I think.

Looking professional is very important as well

Important to good clients yes, but I have seen even the best clients in these economic times, searching for cheap or illegal labor!

 

[TDunk]

Around where I live, there are a LOT of hacks cut everything off and leave stubs. Also they show up drunk sometimes I am trying to build customer relations and a name of quality, word of mouth is the way to go I think.

Looking professional is very important as well

Word of mouth is the best seller. An add in the local paper, signs on the side of the truck, maybe even a small billboard. But the one thing that makes a company look more proffesional/advertises is shirts with your name/logo on it. I know it sounds corny but it's true. On thing that Slvrmple72 said that makes a good point is salesmanship. Reading the HO's facial expressions and how they act. When you go to give an estimate, your litterally try to sell them your services and convince them what is the right way to do the job, and what you can offer them over anybody else.

 

[lxt]

Important to good clients yes, but I have seen even the best clients in these economic times, searching for cheap or illegal labor!

YES INDEED!!! this is kinda what im talking about when I say "super trimmer" or "weekend warrior" Its one thing if you have had a type of formal training or apprenticed with a skilled tree trimmer/company.

But if you`re the guy working at lowes home/garden section handing out make shift biz cards(which entail more than tree work) & never done anything but work off a ladder then load your s-10 up with the brush along with the lawn mower trailer you bought from your other employer then you`re a pile of "dung"

In my area I honestly cant stand & wont help these kinda services at all, its bad enough every lawn service/landscaper thinks just because he works outside & does ornamental trimming he can do the larger trees (same technique just bigger tree)................Wrong Poncho!! uhh, you need a whole different assortment of gear!!!! the stihl hedge trimmers arent gonna work up there!!

Not to mention.....how many newbies come here asking for climbing gear advice & just how to do it questions? If they want to start a biz work for someone else first, find out whats involved......the way most of us have done it!!!!! these are the startup little hack biz`s we all despise!!

so if you`re an architect, mechanic, baker or candlestick maker & have never had formal training in this field (videos dont count ) & you`re gonna start yer own tree cuddin outfit.......you will be considered a HACK & due to the fact you have no idea how to trim/remove you also have no idea how to bid..........and therefore you are an under bidding hack!!!!

I know guys who did tree work for 5-10yrs & went on to other jobs, these guys are just doing it to make up the difference in wages....this I understand!, but someone just diving into the tree biz with no idea of what is what............these are the idiots ruining the trade for the rest of us!!


LXT................