Question
Sean,  I run my business out of Audubon PA
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Hey Sean,

Thanks for all of the info, you did right a book!!  I have done the hardscaping work on my property and for previous companies I worked.  All of the contractors that I know estimate very differently and seem to be inconsistent.  When I do a landscape design, I am very consistent in that I always provide a detailed proposal to my clients.  I have been dealing many with plants, soil, mulch, sod etc.., but am just starting with stone.  I know stone is not cheap by any means, and I know the jobs take longer to do because the job must be done correctly the first time.  I just wanted to get a base line of how to charge for the hardscaping material?  With plant material, to make any profit you have to a least double the cost of the material or incorporate the cost in the labor.  The machine that I am purchasing will take the place of hiring 4 laborers.  I am in no way ready to start hiring people.  Renting does not work for me, too many slip ups with rental companies.

Thanks

Bud Christmann

PS If you would like to share one of your old proposals that would be great.
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Hello,
I own a small landscaping business, My company is about two years old.  I do landscape design, installation, and property maintenance.  I have done natural hardscaping when I worked at previous companies, and I want to add it this year to my services.  I am currently on my own, no employees, but I am purchasing a mini bobcat track loader to help with heavy material.  I need some insight on how to price hardscaping in general.  The hardscaping I would be doing would be of the informal type (dry stack walls, stone steps, flagstone patios etc..) As far as the material costs goes, how do you usually charge the customer?  If a pallet of stone steppers cost $300, do you charge the customer double that to make any profit?  When I charge for plants I will markup the price a little, does it work the same for hardscaping products?
I plan on adding low voltage lighting as well. I have done it before but never was involved with the pricing.  How would I price low voltage lighting?

Thanks
Bud
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Hello Bud:
I have been there myself; I wish you success in this endeavor.

First I would recommend taking a course in landscape management that offers this type of information. But barring that, a good place to start is "RSMeans Cost Estimating for 2006 or 2007" You can order on line at http://www.rsmeans.com/
Or use the old "three times the cost of materials" (no really, don抰 do this)
Also call your potential competitors (or have a friend do it) and get quotes for a few different types of work, pretend to be a potential client. Ask for line item bids so you can see their numbers. It may seem underhanded but its good business to always know your competition. You may also call some local landscape architects or designers you may now and ask if they have any old proposals from contractors for jobs they designed that they would share with you.

Finally you can rely on local suppliers. Many stone and masonry suppliers are tuned in with their market and know what the norms are. Figure out who your key suppliers are going to be and ask for s 'sit down' to discuss your plans and ask them to share information with you on cost, coverages, etc.

Ok, those are some ideas but if you want to really be a success I would suggest that you get a really good understanding of what is involved in several ways. Try doing some work at your own home or a friends for free or at cost and see how long it takes and how many people. (AND If you can not afford to do this then you probably have no business starting in this area, hardscape often requires you to have large amount of money in the bank to buy materials before the job starts. sorry to be blunt but many hardscapers fail)

Make records of how many sf of wall can be laid or pavers set in a given hour in your soil with your workers.

I once worked for a landscape company that had literally taken a couple of crews and a few days to figure out exactly how many 3 gallon plants, 1 gallon plants, trees, etc. of all different sizes could be planted in a given time period. They figured how long it took for certain equipment to dig holes, and load trucks, they knew it all. This way they came up with a "labor rate" This is a time based number that can change as labor rates change. (you'll see this in RS Means)

After that you have to know what it cost for you to run your business. That is the administrative cost, billing, utilities, admin staff, gas, equipment, etc. that you pay every month regardless of the jobs you get. You need to come up with an hourly overhead rate. Every day, every hour, your business is costing you X to run. That is your overhead rate.

Once you have these two numbers you will be not only ready to price a job but you will truly understand what is involved. All you do now is carefully review the work to determine the hours. For example so many sf of wall equals so many hours of labor. Multiply your labor hours by the cost of your labor. Then you add the time for obtaining and delivering the materials. Now add the overhead for that same amount of time (which should include your time unless you are the primary labor and then there might be some gray area as to where your time should go). Finally add the cost of the materials for that job.

Ok but you are not done. Now add the profit margin (what you want to make, note: are you desperate for work...then lower this number, if your are very busy, raise it!)... typically 20-30%. Finally, many reputable companies add 10% for unexpected costs like weather, rock, labor problems, warranty work, etc. Once you put all this together you should have a pretty good number.

Now my last advice is the most important. When you start this new work area always track everything, and I mean everything for the first year and forever after that if you discipline yourself to do so. Data is everything and if you know how you did on each job to the penny you become better and better at pricing your jobs. Means and old rules of thumb are good to get you stated but there no substitute for good data and really understanding your work.

Ok, I thought that was the last thing I wanted to say but I was wrong. One more very important thing is to really know what you are doing. Hardscape is very different from plants. If you screw up concrete or masonry, you抮e going to loose money fast. Weather is hugely important and you have to be ready for everything. Only do what you really know how to do. If you install a plant wrong and it dies, no big deal, its only 8-12$ to replace but if you build a 5 foot retaining wall and it falls down you got a serious law suit not to mention huge replacement costs.

Equipment is hugely expensive; I would recommend working out a lease or rental agreement for the first year or six months rather than buying unless that is not an option. If you rent regularly they may give you a preferred rate. Renting can be a pain if your supplier isn't good at delivering the machine on time and fixing it or getting you a new one when needed. But the same applies for owning. If it breaks and you own it your day or even your week is shot. If you rent it, just call for another one and they have it to you three hours later because you are preferred customer. If you only rent once in a while it may not come till the next day (at least that has been my experience). The last design build company I worked for owned four machines and rented about four.

Anyway, I think I just wrote a small thesis here so good luck. If you become a big success look me up. If it fails, try again...

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Bud:
Where are you doing business? What city /state?

Answer
Unfortunately your pricing and ours will be very different. I am working in the South were labor comes cheap and work is year round. Your stone is different, it harder, its more difficult to work with and your cost are very different than ours due to weatehr and temperature extremes we dont have. Any of my old proposals would not be good for your work. for example in Tampa pavers go for $4-5 sf residential in Atlanta thay are $6-8 but up by you they are probably over $8/sf. installed becuase of the base you have to install in your area. Footings and sub-bases for things here will be very different for you and thus our sf numbers will be off. Try and get something local.
God Luck


Sean J Murphy, LA,ISA, LEED AP
Please check out my blogs and articles on landscape topics like this on my websites.
http://www.seanjmurphy.com
http://amenityarchitects.com