Pricing

Fltreeguy said:
How does everyone bid each job? Do you have a amount per hour you want to make and bid accordingly? Do you add expenses on top of it, like equipment rental etc? Just trying to see what others do.

Also, out of 10 estimates what’s the realistic average amount you expect to get?
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I've heard that ideal closing is under 50%.
Depends on the customers. Longterm customers don't always need a bid, or already know they want to quality and predictability of a provider they've used, and the bid has always been in line with their expectations.


New customers, competing against everyone on the open market for an easy removal, its more likely to be the low-bid. Don't want to be the low bid, ideally,



You will only get $500 for a $500 tree. If you want to make $400 profit, and have to rent a chipper for $300, you don't get to charge $1200.

You get to charge $500, unless someone bid $300. Then stay home, and work on marketing for better customers, read tree biology and pruning books, learn better biz practices/ accounting/ liability issues/ employment practices, etc.
 
Stephen Moore said:
I aim for 1600 a day with bucket, chipper, 1 ton chip truck, and 3 man crew
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What's the worker's comp like in your area? Doin some math on hourly just for crew sounds super low to me. Previous boss with three employees paid 20k per year 6 yrs ago just for WC. Aplologies if that is prying, just curious, and disregard if so.
 
Serf Life said:
What's the worker's comp like in your area? Doin some math on hourly just for crew sounds super low to me. Previous boss with three employees paid 20k per year 6 yrs ago just for WC. Aplologies if that is prying, just curious, and disregard if so.
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For us we started at 12 percent for WCB but I think we are down to 8 now do to a clean track record
 
I also add in something to offset the cost of additional contractors GL insurance coverage I'm required to maintain to obtain licensure as a pesticide applicator in my state, as well as licensing and other related costs. There are lots of things to consider, so that you don't end up paying to work.
 
Stephen Moore said:
So to be clear, that’s 8 dollars for every hundred paid to each employee. Better be factoring all that shit together and also your expected profit per man.
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That's dirt, dirt cheap. Some people pay over 40% of payroll, I've read.

I pay by the hour, so it's closer to 20-25% of their wages.

Machines have no WC, or make bad judgments!!
 
southsoundtree said:
That's dirt, dirt cheap. Some people pay over 40% of payroll, I've read.

I pay by the hour, so it's closer to 20-25% of their wages.

Machines have no WC, or make bad judgments!!
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What’s your rate? Twice now they have said I’ve been a good boy with no historical claims, so I get a little discount. Funny thing they keep sneaking the rates up, so I pay more every year.

Think I’m paying just over $5 an hour
 
southsoundtree said:
That's dirt, dirt cheap. Some people pay over 40% of payroll, I've read.

I pay by the hour, so it's closer to 20-25% of their wages.

Machines have no WC, or make bad judgments!!
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Right! Some do pay a ton in WCB coverage. I believe we started like everyone at 18 percent if I remember correctly? That figure goes up if you have an incident, and down over time if you do not. As luck, or just paying attention to detail, would have it our business is claim free for 15 years straight! Not so much as a sliver or any infractions due to bad safety practices. We have had spot checks by WCB and have passed without fail.
I encourage all tree people to have a similar attitude toward safety so we all go home at the day’s end. Plus it saves a ton of money!
 
southsoundtree said:
That's dirt, dirt cheap. Some people pay over 40% of payroll, I've read.

I pay by the hour, so it's closer to 20-25% of their wages.

Machines have no WC, or make bad judgments!!
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But to be fair, I am in Canada- I don’t have a clue what the rate is in the USA. Or even how the system functions there.
 
Stephen Moore said:
But to be fair, I am in Canada- I don’t have a clue what the rate is in the USA. Or even how the system functions there.
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Around here, in Southeast Pennsylvania, if you don’t have an excellent history already, you’re stuck starting with the state fund, which starts you out at 36%. It’s not cheap, to say the least!
 
Reach said:
Around here, in Southeast Pennsylvania, if you don’t have an excellent history already, you’re stuck starting with the state fund, which starts you out at 36%. It’s not cheap, to say the least!
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Or if your payroll is too low (one employee) you have to use the state fund...at 36%. I think you need to have 100,000 dollar payroll.

We finally put myself and my wife on payroll so it was high enough to be able to shop for other providers. I'm not sure what we are paying percentage wise now. We originally switched to Amerisafe (a Tcia partnership company...that a few bigger tree companies use in my area), but they turned out to be actually more expensive that the state fund. Plus they demanded a 7000 dollar deposit that they hold till you leave them (which we did 3 months ago...and still waiting for a refund of it). We did have a slightly high mod due to an employee injury.

Thankfully our high mod is over now too.
 
That ISA page strikes me as legal hooey. Feel free to abide by it, but in doing so you’re letting a bureaucrat dictate your market so they can release them selfs of any legal responsibility to who knows what. It’s full disclosure. Unless you’re conspiring with your competition, you’re free to discuss your hourly rate or business expenses. It would behoove us all to discuss all such rates in order to maintain a proper free market. But we’re socially programmed to keep secrets. Being forced to keep secrets by red tape or legalease is not a free market. Keeping secrets because you want to is totally different. All this is public info in a publicly traded company. Might not be easy to look into but it’s there, somewhere. Open source and full disclosure is not and should never be illegal. Leave it up to an oligarch to tell you otherwise and they damn sure will.

Stand up and be counted.


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Just skimmed it, but I bet this is in response to the ISA getting legal pressure due to pushing that ISA members or certification holders are only allowed to work within certain municipalities or the such.
 
Fltreeguy said:
How does everyone bid each job? Do you have a amount per hour you want to make and bid accordingly? Do you add expenses on top of it, like equipment rental etc? Just trying to see what others do.

Also, out of 10 estimates what’s the realistic average amount you expect to get?
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Here's a link for somethings that need to be considered when pricing a job. file:///C:/Users/MIS/Downloads/p0118-0120.pdf

Biding any job is always a learning experiences and it takes time to learn how many factors can influence the cost. There are many business resources out there that will help you to understand your operating cost and profit. Even IRS has publications on starting up a small business.

Just enjoy the process, learn from every job that you do, and try to do them a little better every time you put your hand to them.
 
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