LC/DBM provides landscape contractors with Educational, Imaginative and Practical information about their business, their employees, their machines and their projects.
Issue link: https://landscapecontractor.epubxp.com/i/73007
Hardscapes (Continued from page 14) 0!6%23s-!3/.29s",/#+3s2/#+3 Top Left: Bids placed without consideration of overhead costs are effectively set at break-even levels, with little margin for error. Overhead should be a line item on every estimate, and include all operating costs, like materials and labor; auto and liability insurance; office supplies and travel expenses. Cost-effective contractors should develop customized spreadsheets to keep track of operations costs for accurate estimating. Top Right: Advance work on a large residential or commercial project should include planning for transportation and movement of hardscape materials. Project areas must be checked thoroughly before starting base material installation, since once work begins, chances to correct existing problems are lost. Hardscapers should make absolutely sure the installation area has been properly compacted, up to and including asking for compaction reports from the general contractor. of the sales price or project revenue. Overhead should be one of THOSE LINE ITEMS 'OOD ESTIMATING IS NOT hGUESS TIMATING v ! GOOD ESTIMATE IS BUILT FROM THE BOTTOM UP NOT BY GUESSING OR USING A PRICE BASED ON ASSUMPTIONS OR HEARSAY FROM OTHER BIDDERS ON the project. !NOTHER THING TO REMEMBER IS THAT THE MONEY YOU EARN IS REVENUE NOT PROFIT 0ROFIT IS EQUITY BUILDING IN THE COMPANY AND WILL BE NECESSARY WHEN APPLYING FOR A LOAN FOR NEW EQUIPMENT OR VEHICLES 7HEN THE MAN AT THE BANK ASKS TO SEE YOUR FINANCIAL STATE- MENTS PARTICULARLY YOUR BALANCE SHEET HAVING CASH ON HAND WILL GO A LONG WAY n MAYBE ALL THE WAY n TOWARD APPROVAL OF THAT LOAN The Cost of Doing Business -ANY CONTRACTORS BELIEVE THE BEST WAY TO IMPROVE PROFIT MAR- GINS IS TO REDUCE OVERHEAD SINCE IT S THE LARGEST AND MOST GLARING COST "UT THIS CAN BE DANGEROUS AND LEAD TO DIMINISHING RETURNS SINCE OVERHEAD IS REALLY JUST ANOTHER NAME FOR THE COST OF RUNNING a business. 4HE MOST STRAIGHTFORWARD WAY TO MOVE THE BOTTOM LINE IS TO RAISE Bottom Left: External conditions like weather and terrain should be included in project planning. Projects in the mountains can bring ever- changing weather conditions, along with terrain factors that make it difficult to move materials. These factors should be addressed in the estimating process. 16 LC DBM PRICES BUT THAT IS NOT ALWAYS THE MOST PRACTICAL !NOTHER OPTION IS TO TAKE A HARD LOOK AT THE COSTS OF GOODS AND SERVICES POSSIBLY REDUCING THOSE DOLLARS SPENT ∨ MOST CONTRACTORS THIS STARTS WITH THE COST OF LABOR 0ERCENTAGES VARY BUT USUALLY FALL BETWEEN AND PERCENT AND IT IS WORTH CHECKING TO SEE HOW YOUR COMPANY COMPARES LC DBM