Doing the actual commercial mowing is infinitely easier than making commercial mowing bids. However, this article should give you some help in navigating the turbulent bidding seas, so you can actually win a few bids in the future.
Commercial mowing bids must please the customer and you
One without the other is not a successful commercial mowing bid. The customer must be satisfied and you, the business owner making the bid, must be satisfied. A win-win situation is what you are looking for. If the customer is happy, if you are happy, the results will lead to more success in the future.
We can help you with this article, and we invite you to call us for more information. We are Keith’s Tractor Mowing in Fort Worth, Texas, and we’re willing to bet what we have to tell you about bidding will be beneficial.
Bidding for acreage mowing jobs
The tendency for most commercial mowers just starting out in this business is to under-bid in an attempt to win a contract by low-balling the competition and, in some cases, it is certainly possible to do that, but at the same time there is no profit margin when the job is completed. The customer is quite happy but you have made no money at all.
If you have been in this lot mowing/land clearing business for awhile, you already have a pretty clear idea of what the competition charges. Bids are usually made by computing the approximate amount of time you believe it will take to do the job, and multiplying that time by a set rate. It is the hourly rate where you will find great fluctuation among commercial mowers. It can be anywhere from $25 to $50 per hour, depending upon where you are located and the amount of competition in that area.
That hourly rate must cover the amount of time you spend on the job PLUS the amount of depreciation on your equipment PLUS the cost of your liability insurance PLUS any other incidental costs i.e. gasoline to drive to the site plus fuel for your tractor.
Our suggestion . . .
Let’s look at a reasonable, realistic example. You are bidding on a fifty-acre commercial site. You compute that it will take you four hours to mow the fifty acres. You multiply four hours times your hourly rate of $25 and you bid $100 for that job. Competitive bids come in at $225 and $300, so you win the bid.
Word spreads around the community that your company is significantly less-expensive than any other, so now you have five more jobs at the same rate. After a few months you start to realize that your profit margin is shrinking because of incidental costs. You raise your rates and start losing bids.
Welcome to the world of under-bidding. Eventually it will rise up and bite you in the posterior.
Bid intelligently! Cover ALL of your costs. You may over-bid and lose some bids, and that is all right. Eventually the quality of your work will be the determining factor in winning bids, so concentrate of quality of work and good customer service. Remember we back our work with a $1,000,000 general liability insurance policy.
The Bible of commercial mowing according to Keith’s Tractor Mowing. Give us a call!