# Residential vs. Commercial



## Mike4D5 (Jul 22, 2010)

First off, this is NOT a pricing question. I know better. :hang:

I have a friend (NOT me, honest--I only cut my own grass!) who only does residential lawns. Someone is offering him a chance to bid on a large commercial job of a dozen or so places to cut. He told me he can price residential lawns no problem, but has never priced commercial, so I thought I would ask this question: Is there a different pricing strategy for commercial as opposed to residential? :tt2:

Remember, I am NOT talking dollars and _sense_, only strategy. What equipment he has, I don't know. I'm sure he has at least one pair of scissors. :cheesygri

I thought I would throw this out in case there might be someone else with the same question.

Thanks.

Edit: He does have a 19 foot trailer with commercial mowers and a few ride-ons and about 45 residential customers.


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## JKBARR127 (Jan 13, 2010)

JUST A STAB IN THE DARK
i worked w a landscaper for a few yrs in high school plowing and snow removal in the winter time. i think for most commercial jobs u need a higher amount of insurance. i would think it would make sense to bid based on time required and detail. just my 2. might be totaly off.


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## Mike4D5 (Jul 22, 2010)

JKBARR127 said:


> JUST A STAB IN THE DARK
> i worked w a landscaper for a few yrs in high school plowing and snow removal in the winter time. * i think for most commercial jobs u need a higher amount of insurance*. i would think it would make sense to bid based on time required and detail. just my 2. might be totaly off.



Yeah, I asked him that already. He says he has 3 mill. I also suggested he ask some guys who do commercial work on what the premium rate is. I know it's different with everybody based on overhead and what you think your time is worth, but a ballpark figure is good to know if you're way out in left field.

Thanks JK :thumbsup:


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## Sar-Con (Jun 23, 2010)

I think you will run into problems when your business practice revolves around "taking as much money as possible from the commercial guy? (aka client)"


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## Electric_Light (Nov 25, 2007)

Sar-Con said:


> I think you will run into problems when your business practice revolves around "taking as much money as possible from the commercial guy? (aka client)"


He's invited to bid. If the client obtains 3 bids and his price was so high its out of question, it'll be tossed in the trash in 3 seconds.


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## Mike4D5 (Jul 22, 2010)

Sorry guys, that wasn't meant to be taken serious. Only a crook would do that.


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## Framer53 (Feb 23, 2008)

Electric_Light said:


> He's invited to bid. If the client obtains 3 bids and his price was so high its out of question, it'll be tossed in the trash in 3 seconds.


Might I suggest that instead of looking for pricing help, which is actually what he is doing, he figures out his time and burden and come up with his own bid. 

That is the way business people work. A person does not worry about his competition charges, he works out what he needs and a fair profit to continue in business.

I have found that commercial bids tend to be tighter than residential. That means he will have to be sharp and work his numbers correctly to make money.


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## Mike4D5 (Jul 22, 2010)

Framer53 said:


> Might I suggest that instead of looking for pricing help, which is actually what he is doing, *he figures out his time and burden and come up with his own bid. *
> 
> That is the way business people work. A person does not worry about his competition charges, he works out what he needs and a fair profit to continue in business.
> 
> I have found that *commercial bids tend to be tighter than residential*. That means he will have to be sharp and work his numbers correctly to make money.



Thanks Framer, I did speak to him about his overhead and "time and burden" already. My question is only based on strategy. I have three small commercial places I do work at and I price them the same as residential. Although I have given some home owners a break, I'm less likely to do that with the commercial jobs. I suggested he price it the same. If his pricing is reasonable, then it should accommodate both res. and comm., shouldn't it? I would think residential takes more time than commercial: Smaller lots, more gardens/less grass, etc.


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## Electric_Light (Nov 25, 2007)

The client creating the RFQ will define scope of work and get at least three bids for a contract landscape work that size if they know what they're doing. They might ask for references and if all the bids they receive are reasonably close together, he might get chosen, but if it's far above the next lowest, not a chance.


Good advise on figuring out your overhead. Even if the profit is close to zero, in this economy, that's better than not having any job since it'll keep you from going into the red from fixed cost.


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## Electric_Light (Nov 25, 2007)

You probably know this already, but I figured I'd say it anyways. Don't submit a bid/quote you'll regret and put an expiry date on it.

If they accept what you submit, it's a binding contract. You don't get to change minds about prices within the scope of work defined even if your cost of work is higher than expected. 

You can beg to be let out of contract and if they agree, you're no longer under obligations, but it'll sure make you look bad.


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## mudpad (Dec 26, 2008)

Just make sure you got your WC in place if you are more than a "sole proprietor" which I assume you are if you have 45 lawns to mow. 

Putting a time limit on proposal acceptance is good advice, also, contract should have time limit, usually annual renewal, so your not stuck if fuel prices double (again)

Also, a good strategy is to throw in a little something extra (mulch once a year, roundup around headwalls/ rip rap) That way your proposal will get a second look even if you aren't low bidder.


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