Avoid getting burned on materials

Prudent planning and "in writing" promises are key.

Avoid getting burned on materials
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I've always said, "You can lose more money with a pencil than with a shovel," especially when it comes to estimating materials. When you're bidding a job, there is a lot of room for error.
Landscapers usually work all day long and go home tired. Then we sit down to work on bids. It is very easy to make a mistake, particularly when it comes to figuring the material needs for a job, so it's important to have a clear view of the project. And unless you have plans—or some form of specs and dimensions—in front of you, having a clear view is extremely difficult.
Really, "materials" covers everything but your labor. Some contractors would even consider labor to be a material, but I define materials as anything you pay for out-of-pocket to complete a job: rock, brick, extra dirt, foliage, the list goes on. If you have to secure it from a supplier, it falls into the materials category (at least it does for me).
I've been burned on estimating and budgeting materials a couple of different ways. In some cases, it's been my mistake. I've probably figured the quantity wrong when I'm working up the bid, likely brought on by a lack of focus or inadequate information to work from. I've learned over the years to retreat to the same quiet location to work on estimates, and I'm now careful to have everything I need in front of me. Once I'm finished with the numbers, I'll leave them alone so I can take a second, fresh look the next day, once I'm rested.
Unfortunately, I've also been burned by suppliers. For example, I've been given a cost for materials early during the estimating process, and then given another price once the materials were delivered. Granted, it was a supplier relatively new to me, but I eventually learned to simply get written quotes for everything from any supplier, especially if it's a new type of material or someone you don't have a strong relationship with.
Material supplier relationships are important. Some will bend over backwards for you, especially if you're good to them. And, yes, that includes paying your bills right away. I have suppliers who will really work with me when I'm in a tight spot, too, because they know I won't beat up on them. I'm not big on beating up on suppliers—we all have extenuating circumstances on a job, and they often involve budget constraints. So I often take care of the supplier on the first go-around with a customer, and then when I get more work I can say, "Let's sharpen our pencils on the next one." The bottom line is this: Get everything in writing, but also know that if you take care of your suppliers, they'll take care of you.
For the times when I've made mistakes in estimating, I've found a relatively easy fix: The easiest way to accurately estimate for and stay within budget on materials is to have an architect's plan to work from. It's pretty hard to walk around with a tape measure and then expect to be exact on what you need to order. Nearly all of the jobs we work on have a plan, even if it's something that I have to sketch down on paper. I've learned that you simply have to have everything in front of you when sitting down to prepare the bid.
And the importance of plans doesn't stop there. I'll show plans and drawings to the customers and have them sign off. I even write on my proposals, "This is according to the agreed plan." It's too easy for a customer to later say, "I thought you were going to do this ...." With signed plans, you have a reference point to go back to.
Once you have plans in place and firm prices from suppliers, it's important to remember that when you're budgeting for materials, you have to factor in waste. For example, doing radius cuts on stone—maybe you can find use for the excess material, maybe you can't. But you have to account for it.
For efficiency's sake, I don't give my customers too many materials options to choose from. I try to really narrow the type of material down when I'm working with the architect at the planning stage. You don't want to waste too much time chasing pricing and reworking bids. Besides, it's too difficult for most customers to make decisions anyway. I think customers rely on me to tell them what will best fit the style of the landscape, neighborhood or house. But I'm always sure to show them a sample before I commit to an order. Usually, that prevents headaches later.
I've been asked about keeping an inventory of on-hand materials. I rarely do. In addition to needing a lot of yard space for storage, I've found that unless you get a real deal, it just doesn't make sense. Materials can become damaged, or some turn up missing. I prefer to order only what I need, when I need it, for a specific job. Hopefully, we don't have anything left over when the project is done.
That's not to say that I'm in on every materials estimate. My foremen can handle pricing-out and budgeting materials, unless it's something out of the ordinary. But they've learned from me. They use plans, find a quiet place to work on estimates, get everything in writing and even put it in writing for the customer. Everything usually works out OK. Our materials orders are accurate, customers are happy and nothing is wasted.
I'd much rather work with a shovel than a pencil. But by the time I pick up the shovel, my materials are already ordered and on their way. And if I'm going to get burned on materials, it's already happened … usually, I can somehow point back to the pencil.
Roger Cook is owner of K&R Tree and Landscape Co. and co-star of television's "This Old House." For this and more columns by Roger Cook, as well as other helpful articles on running your own business, visit www.byob-pro.com.
author: By Roger Cook




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