After determining the scope of the job, it’s time to break it down into the hours you’ll need to complete it.
This part of pricing becomes easier with experience. The simplest way to calculate the total number of hours is to look at previous, similar jobs you have completed. It may be a bit of educated guesswork to begin with – unless you have a fellow trusted landscaper you can ask for advice – but you will eventually know how many hours a job will roughly take without needing to check.
If you have a team working for you, you can just split the total hours, and the rate you have set for them, between you. If you’re the only person working on the project, you can simply multiply the project hours by your own hourly rate.
Calculate the material costs
Those measurements and lengthy discussions with the client you had in the initial stage will pay dividends now.
Ordering too little can put an entire job on hold, while ordering too much will put you out of pocket if it can’t be used for other work. Taking accurate measurements allows you to order the precise amount of materials needed, and calculate the exact material costs of the job.
All material costs should be totalled into one figure. To avoid any surprise costs or missing supplies, ensure that you include every single material involved in the project, from compost, turf and plants, to cement and gravel and more. Be mindful of other jobs you are working on or have in the pipeline, as bulk material orders will reduce your cost of sale and extend your margin, or even allow you to offer a lower, more attractive price to new clients needing those same materials.
An aspect of material costs that is easy to forget is the impact on your tools and machinery; a small fee to cover wear and tear should be included, which can be listed as operational costs under overheads.
Determine your overhead fees
Often overlooked but vitally important, the overhead fees included in taking on a job can be the difference between a profit and a loss.
Your overhead costs include everything involved with the general running of your business, bar the actual work completed. This can include marketing costs, time spent accounting – or the cost of an accountant – internet bills, workshop/office rent, insurance or legal fees. Essentially, the overhead fees include any costs that aren’t directly related to working a job.
It’s important to factor these overhead costs into the price of a job, as they can quickly drain your profits when ignored. When you have calculated the business overheads, you could consider adding that to your labour rate, so it’s always covered.
Calculate the total cost and add markup percentage for profits