Estimating Large Jobs! Whats your trick?

[ROYCE]

So, how do you estimate large jobs with out getting over-whelmed. I have been looking at some large jobs lately and I tend to get overwhelmed. How do you break the work down into digestible size pieces.
Example: Called out to look at 125 red pine trees to be removed. All grouped together, great access for equipment, all can be felled. Most are in the 12-14" stem size, with about a third or so in the 20-24" stem size. Trees are approx. 80 feet tall. This is a lot of work. Cut trees down, haul away all debris. There is a spot on site to dump chips, but wood must be hauled away. No big deal!
How do you put a price on this? I tend to look at it in days. I try and figure out how long it will take me in days. But I have a hard time with that. Is it 4 days or 6 days. Or should I be looking at it on a per tree basis. Figure out how long to cut down one tree, chip it, and then multiply that by 125 or so? Just wondering if any of you know any tricks or techniques that have worked for you in coming up with a price. I hate to be super low and loose my shirt, and I have to be super high and not get the jobs. It is so difficult to get that sweet price point where you feel you can make money, and you still get the job.

 

[Lumberjack]

125 is a big number, but if 2/3 are 14" or so that's not huge, you'll be limited by chipper speed mainly it seems like. If you can blow chips on site (instead of having to haul them), it may be worth hiring in a monster chipper if possible and you have the work load to make time important.


I would look at it in terms of days as well, based on a ballpark average time per tree. Another way I may would look at it is a price per tree based on market value times the number of trees to make sure my first number isn't high or low.

 

[ROYCE]

125 is a big number, but if 2/3 are 14" or so that's not huge, you'll be limited by chipper speed mainly it seems like. If you can blow chips on site (instead of having to haul them), it may be worth hiring in a monster chipper if possible and you have the work load to make time important.


I would look at it in terms of days as well, based on a ballpark average time per tree. Another way I may would look at it is a price per tree based on market value times the number of trees to make sure my first number isn't high or low.

I like the idea of working up a day quote and then cross referencing it with a cost per tree. Comparing them will give me two numbers that will either be really close or really far off. Then I can re-look things over and see where I went wrong. If there close, then I will bid that number.
I have a 15" chipper with a 142HP engine. Also, I might have a market for some of the logs. I can get my log truck right next to all there trees. Pretty easy to just chip the tops to 12" and then load the rest of the tree as logs and haul them away for a little more $$

 

[Lumberjack]

Just because the numbers aren't close doesn't have to mean either is wrong. One is your standard hourly/daily rate, the other is market value. Sometimes our equipment makes us more productive on specific jobs than our hourly rate usually reflects.

 

[flyingsquirrel25]

Royce it sounds like you have got a good idea of how to bid it between what you and lumberjack are talking about. Are you the only person in your company that gives estimates? If not get your other guy to run his numbers on the job too, that way you have 2 sets of numbers to run off.
I think your time killer will be moving the equipment to each tree. Find a way to have a felling site and a processung site move the trees to the chipper/log truck. 3 or 4 guys could really get in a groove and blow it out.
The red pine is worth something up there. We used to sell ours to a log home builder. His specs were specific though.
Sounds like a fun job

 

[ROYCE]

Royce it sounds like you have got a good idea of how to bid it between what you and lumberjack are talking about. Are you the only person in your company that gives estimates? If not get your other guy to run his numbers on the job too, that way you have 2 sets of numbers to run off.
I think your time killer will be moving the equipment to each tree. Find a way to have a felling site and a processung site move the trees to the chipper/log truck. 3 or 4 guys could really get in a groove and blow it out.
The red pine is worth something up there. We used to sell ours to a log home builder. His specs were specific though.
Sounds like a fun job

Unfortunately I am the only one in my company that does the estimates. This particular job will work perfect just the way you described. Fell trees one way and then drag them a very short distance to the log truck and chipper. I think me and my crew, which would consist of three guys, could get this job done in a week. I think that is where I am going to price it. However, I wrote it all up and want to take one more walk around the job site just to be sure. I think getting a second look can give me a fresh take on things.

 

[ROYCE]

Just because the numbers aren't close doesn't have to mean either is wrong. One is your standard hourly/daily rate, the other is market value. Sometimes our equipment makes us more productive on specific jobs than our hourly rate usually reflects.

Good point. I think the market value of this job is one weeks time. I will bid it as that, and if we get it done in 3 or 4 days we will then be rewarded for time saved due to efficiency and equipment.

 

[TheArborMan]

Your equipment will be running more then normal on jobs like this. I usually bid higher then my average day rate when we will be running non stop for a full day. If your normal day of residential tree work is $2400, make it $3000 for clearing. If your falling behind you can start working 10 hour days and keep yourself at $100 per man hour for your 3 man crew. If you think it will take a week, include Saturday in the bid for 6 days.

I have also learned from a old time tree guy some customers are open to a price range. Give them a price range for 5-7 days. Let them know you will charge accordingly for the work at the end of the job, not to exceed the cost of 7 days, if you go over 7 its your fault and you have to cover it. If you finish under 7 days and the customer sees how hard you, the customer will be very happy with you. I have also used the range to sell large crane jobs. I let the customer know it is a high hourly rate and I have to cover myself for 10 hours but I think we can get it done in 8 or 9. If we finish early, which most of the time happens I will take an hour or 2 off the bill. I think this really helps sell big jobs and I have had customers tell me the low side of my price range is higher then some of their quotes and we still get the job. Not saying it happens every time but I think honesty goes a long way.

Jobs like this are normally going to have multiple estimates because of the high price. You won't get all of them just on pure stupidity and massive under bids by the competition. Don't be the guy to get it because of a low bid, then your stuck working your guys and equipment hard trying to make a deadline that probably isn't possible. Sell yourself, your equipment, your crew to the customer and give yourself a better chance to win the bid with the best price not the lowest!

 

[cory]

Excellent responses and nice to see all these good ideas grouped here in one thread.

 

[ROYCE]

Your equipment will be running more then normal on jobs like this. I usually bid higher then my average day rate when we will be running non stop for a full day. If your normal day of residential tree work is $2400, make it $3000 for clearing. If your falling behind you can start working 10 hour days and keep yourself at $100 per man hour for your 3 man crew. If you think it will take a week, include Saturday in the bid for 6 days.

I have also learned from a old time tree guy some customers are open to a price range. Give them a price range for 5-7 days. Let them know you will charge accordingly for the work at the end of the job, not to exceed the cost of 7 days, if you go over 7 its your fault and you have to cover it. If you finish under 7 days and the customer sees how hard you, the customer will be very happy with you. I have also used the range to sell large crane jobs. I let the customer know it is a high hourly rate and I have to cover myself for 10 hours but I think we can get it done in 8 or 9. If we finish early, which most of the time happens I will take an hour or 2 off the bill. I think this really helps sell big jobs and I have had customers tell me the low side of my price range is higher then some of their quotes and we still get the job. Not saying it happens every time but I think honesty goes a long way.

Jobs like this are normally going to have multiple estimates because of the high price. You won't get all of them just on pure stupidity and massive under bids by the competition. Don't be the guy to get it because of a low bid, then your stuck working your guys and equipment hard trying to make a deadline that probably isn't possible. Sell yourself, your equipment, your crew to the customer and give yourself a better chance to win the bid with the best price not the lowest!

Great advice. I did add a little on to my daily bid for more equipment use plus trips with the log truck to the mill. I am hoping to make an extra 2K or so with logs delivered to the mill. This is for a commercial propriety that I have worked for in the past and they were happy with us. We are not aloud to work on Saturdays. So they asked us to bid on this job, if we can get within their budget they will not send it out to bid. However, they are not telling me what that price is. They also showed me another two week job they also want done in the fall. So I want to treat them right to stay on their good side. This could be a real good account for the next few years.

 

[JontreeHI]

Sounds like a good job for a loader and a dumpster. No time spent stripping branches, bucking wood, and broken backs from loading wood.

 

[ROYCE]

Sounds like a good job for a loader and a dumpster. No time spent stripping branches, bucking wood, and broken backs from loading wood.

Well that is one option. We have a good size chipper with a winch, a mini skid loader and a log truck. Not much lifting is being done on this job manually. Also, most of the growth on these red pines are near the top, so drop it, cut it off at the 12" diameter mark( because for 12" and up is a good log for the mill) and chip that top through the chipper. We don't strip the branches off until they get to the chipper, most often they go right through. They are pretty small in diameter on these particular trees.
A dumpster would come in handy for the cleanup of takings and such. Another good idea.

 

[ward]

Great question in this thread. I almost never actually get the really large jobs--and I don't think its because my prices are too high but because the competition underbids the work. I think that there is an inability of most estimators to do exactly what you are trying to do: factor all of your costs and give an accurate quote for large, diverse work. Customer solicits 3 bids on removing 10 White Oaks (lets say): outfit A bids it at $10k; outfit B bids it at $8k; outfit C bids it at $6500. These are reasonable estimates to each estimator. The spread is large, though, isn't it? What would you do as a customer with these large spreads? Thats right: most will go with the lower or middle bid (because they will be saving thousands of dollars). It doesn't matter that outfit A's bid was appropriately priced given the amount of work. The fact remains that B and C underbid the job and they will get it as a result. Large jobs are hard to win in a competitive bidding environment in which your competition is apt to underbid the job because of their own inability to actually calculate the true amount of work. Customer wins.

 

[ROYCE]

Great question in this thread. I almost never actually get the really large jobs--and I don't think its because my prices are too high but because the competition underbids the work. I think that there is an inability of most estimators to do exactly what you are trying to do: factor all of your costs and give an accurate quote for large, diverse work. Customer solicits 3 bids on removing 10 White Oaks (lets say): outfit A bids it at $10k; outfit B bids it at $8k; outfit C bids it at $6500. These are reasonable estimates to each estimator. The spread is large, though, isn't it? What would you do as a customer with these large spreads? Thats right: most will go with the lower or middle bid (because they will be saving thousands of dollars). It doesn't matter that outfit A's bid was appropriately priced given the amount of work. The fact remains that B and C underbid the job and they will get it as a result. Large jobs are hard to win in a competitive bidding environment in which your competition is apt to underbid the job because of their own inability to actually calculate the true amount of work. Customer wins.

Well worded and I couldn't agree more. I often do not get the larger jobs. It's because I refuse to be the lowest bidder and I try and take my time to calculate my costs. "I would rather be an Ideal Fool, than a Working Fool". Like you mentioned many of my competitors will just throw a price out there and see if it sticks. I like to really evaluate the job and make sure that I can get the work done at my price. I hate the feeling you get half way through a job when you realize you are loosing money. Your right though, unless the homeowner know you, or you have some way to really separate yourself from the competition then they are going with the 6500 dollar price. Those companies will be out of business in a few years if they keep that pricing scheme up. I just have to out last them!!

 

[ward]

The difference between you and an estimator who is only a salesman is that you are actually doing the work. It will matter to you if your numbers are way off. You are going to pay the price in your own body and in your bottom line. Large jobs are weird and I just usually assume that a large company is going to lowball it. There are several reasons for this. Large companies do this to themselves in the winter to keep the crews churning. The estimators who work for the large companies are paid on commission of sales: there can be a bias in their calculating of work on account of this. So there are 2 powerful forces driving down the estimates on large jobs: the distorting effect of large companies willing to take work on at a low profit margin (to keep people employed in the lean months) and the salesman/estimator who stands to make huge commissions by shoehorning through large projects that (oops!) run a little tight.

Remember that the work you are doing figuring out how much to quote the work for is work itself. On larger jobs, because there is so much uncertainty and time spent on it, we might consider charging a fee to put the quote together. That might have a sobering effect on a giddy client and let you see their cards.

 

[JontreeHI]

Nice Royce, sounds like you've already got the power to handle a job like this pretty effectively.

 

[ROYCE]

Nice Royce, sounds like you've already got the power to handle a job like this pretty effectively.

I hope so. I have another approved job of 75 or so white pine tree removals. Same things, all flops! I have saved some money to try and add another piece of equipment that will help speed up these bigger jobs. I am just not certain what to buy yet. I want to see how things unfold for me. I was leaning towards a second mini skid, or a tractor with a winch, or who know what else...

 

[Jeff]

some customers are open to a price range

This is for a commercial propriety that I have worked for in the past and they were happy with us

I have had good luck doing what ArborMan suggested with certain customers, and it sounds like this might be one of those customers for you, based on your statement below:

if we can get within their budget they will not send it out to bid.

Explain to them this is a big job, with too many variables to accurately estimate. Therefore, if they require a single price bid, you're going to have to bid high in order to protect yourself. But this is a job you really want, and a customer you wish to keep happy, and as long as you make some profit on it, you're happy and not looking to gouge them. Your 7 day price might still be within their budget! But the fact that you're willing to lower the final bill to the actual time required in order to not gouge them may pay you big dividends down the road. As you know, there is nothing better than a customer that trusts you and will just call you with a job and say "Do it and bill me.", and it sounds as though this customer is approaching that point.

 

[treevet]

Excellent responses and nice to see all these good ideas grouped here in one thread.

Why do you always evaluate responses and not ever give your own? What do you think about this job?

This (dead Red pine) is likely a dirty messy job with twigs breaking all over the place as soon as you begin to dismantle the trees...sticky wood too. Lots of rake up time and much small stuff to deal with. I would be surprised (I have no idea) if the wood is worth much if it is stained with disease.

Do you have to do all the stumps. I have done quite a few of similar jobs and that becomes a major pita if much maneuvering is required. That stuff strings all out with the stumper too. Grindings clean up is a touchy subject sometimes too.

I'd probably bid around $9k for having basically ground work available in my list of work at this time of year when weather can keep you out of the trees sometimes.

PS...you DON'T "explain" to them that you want a couple of grand leeway between your hi and lo bid lol. It just don't work that way in the real world. They will hire someone with a more realistic approach (read smarter) than that and hire them on the spot.



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[cory]

The OP is 'how do you estimate large jobs..' Replies of 'price it by the day and cross reference it with a per tree price to see if they jive' and ' have another guy look also cuz 2 heads are better than one' and give a range (to certain customers who can appreciate the benefits of that approach),' and 'if the custy has more good work down the road for you that can be worth some discount', are all excellent answers to the OP and good useful info to the question we all face. To work out a number on a specific random job, Royce doesn't need me, he's got it.