Why is an Accurate Estimate so Important?

Today’s market is as competitively priced as ever in the history of doing business in the landscape industry. Your estimating process needs to be consistent and easily practiced. It must also ensure that job performance meets the job’s specifications and the customer’s expectations.

An accurate estimate is critical to arriving at your most competitive service price. The root cause of most pricing problems starts with an estimating problem. If your estimate isn’t accurate your pricing will suffer. Too low you lose money, too high you lose opportunity!

Click below to watch our 2-minute video to get learn these key takeaways:

  • Understand how powerful an accurate estimate can be at reaching the right price
  • Determine if you need to work on improving your estimating program

Take a Good Look:

Take a very close look at your current way of estimating and ask yourselves the following:

  1. Are you “winging it” because you don’t have the time to do it right?
  2. Are you inconsistent with pricing, and not in the “ballpark” with the competition?
  3. Is your pricing regularly 15% higher, on average, than the good competition?
  4. Are your close (sales) ratios lower than a 20% capture rate?
  5. Do you have a cross-check system to assure you have the most accurate estimate of what it will take to do the job including manpower, equipment, and materials?
  6. Do you use measured production rates? Have you recently performed time studies to verify the accuracy of these rates?
  7. Do you rely on just one person for all job estimates?

Action Steps:

After answering these questions do you believe it’s time for your organization to perform an estimating program tune-up?

Consider These 3 Options:
  1. Tune-up your estimating process to account for more accurate direct costs.
  2. Build an Estimating Format. Build a simple excel spreadsheet that includes production rates and breaks down the main elements of job tasks i.e., mowing, edging, detail, pruning, irrigations checks, travel time, etc. Assign time needed to complete each.
  3. Buy an estimating program and tweak it to your needs.

Remember that having the ability to quickly and accurately estimate a job is a powerful tool to compete in today’s market. If the estimate is not right the price will not be right. 

Have an accurate estimating process in place and take the time to do it right.

 

Ed Laflamme LIC

Ed Laflamme LIC

started his own business from scratch, built it up, sold it and then wrote a book about how he did it. So, he’s been there. He understands your frustrations, worries and concerns. Some of you may want to buy companies, while others may want to sell the one you own. You need expert assessment and guidance before you can move forward. Ed has experience in this area. He is recognized as a CLP: Certified Landscape Professional. Read Ed's full bio.