The process of building water features has become steadily easier for contractors. Pumps are more powerful and more efficient than ever, filters are easier to install and maintain, kits of every size and flavor abound and the backyard oasis that our clients dream of these days always includes a fountain, stream or pond. However, as easy as it may have become, many contractors still hesitate to dip their toes in the water (sorry) because they’re not sure what to charge, and for good reason. Estimating Water Features is a tricky subject.
Anyone already in the business knows what works for them, or they’d be out of business. It took them time and hard experience to learn how, so why share that with newcomer competitors? And who is to say what works for some folks over here will work for other folks over there? Well, newbie or old hand, the biggest problem we all share is underestimating. Lowball bids aren’t good for anybody, not even the customer. The low bidder is either inexperienced, desperate for work, or has no overhead (and we all know what that means). In order to complete an underbid job, corners will be cut, or quality compromised, or profit sacrificed, or all three!
This is not a recipe for quality, long-lasting, low maintenance water features that generate positive feedback and referrals for years to come, and that affects all of us, because that ugly “volcano with stairs” at the gas station is a black eye for the whole industry. We can’t build quality water features, maintain insurance and licensing, pay good employees and stay in business unless we charge enough. So, at the risk of igniting controversy, here’s a simple way to make sure we can do the right job for our clients.
First, figure the overhead…
The first cost to consider when estimating anything is your overhead, because that’s what it costs you to start the truck in the morning. If you aren’t making this minimum every day, you might as well stay in bed. MBAs will tell you that over-head really includes three types of expenses – fixed, direct and indirect – but the distinctions don’t really matter here. For the purpose of estimating jobs, just include costs that aren’t labor or materials, such as:
Insurance – business, vehicle, equipment, real estate, medical
Purchases/Rent – vehicle and equipment purchases/leases, yard/office, equipment rentals
Maintenance – vehicles, tools, equipment, yard/office upkeep
Operating Costs – utilities, office/shop consumables, gas etc., licensing fees
Marketing – advertising, stationary, website, promotions
These costs are often rolled into the ‘Labor and Materials’ formula as a simple factor, but they can be so variable that it can be helpful to break them out separately, then add them back in. A $1.00 bump per gallon of gasoline or hike in insurance can really eat into margins if not compensated for immediately. Moreover, regular monitoring can prompt efficiencies and costs reductions that put money directly back into your pocket. You probably already know them, but if you haven’t totaled them lately, it might be an eye-opener. Divide total monthly costs by 20 working days in a month. Expect costs of around $150 per day and up. With more than one crew, the total overhead can be split between them, as long as it gets covered.
Then, estimate labor charge…
The time it takes to complete a job is dependant on external factors – experience, efficiency, suppliers, weather – but you know or will quickly find out how long it takes to finish a job. It costs about 40% more than what employees are paid just to cover taxes and unemployment insurance, and the customer has to pay the hidden costs of estimating, scheduling, organizing, supervising, administrating, billing, and so forth. A labor charge of 2 to 3 times the raw hourly salary covers expenses and provides a fair profit for landscaping projects. If the average hourly wage for the crew is $16 per man hour, the labor charge might be $32 to $48 per hour, PLUS the overhead for that crew.
Example 1 – A single three-man crew has to cover a daily overhead of $192, and their average hourly wage is ($11 + $17 + $26)/3 = $18 per man/hour. 2-3 times the average hourly wage gives a base labor charge of $36-$54. Add an additional $8 per man/hour to cover overhead and average labor charges might be in the range of $42-$62 per man/hour.
Example 2 – With two two-man crews earning an average wage of $16 per man/hour and a daily overhead of $320, each crew has to bring in an additional $160 per day, or $10 per man/hour to cover the overhead, so labor charges might be in the range of $42-$58 per man/hour.
Don’t forget the materials…
Materials should be charged up the same way for the same reasons. Homeowners don’t know where to go to find the most appropriate or finest quality stone or equipment, don’t have the experience to select the best choices for the project, cannot purchase the materials for the same amount as the contractor, can’t pick up bulk materials without paying for delivery, or place them on site where and when needed. Materials should typically be charged at 2–3 times the wholesale cost to cover that skilled labor. See the blue box for useful information and conversions.
Overhead plus labor plus materials plus?
Here’s the tricky part. Even if you charge 2–3 times for your labor, and add your overhead, and 2–3 times your materials, you may not be charging enough for that water feature. Let’s take three representative projects and look at the time they took to complete and the material costs for each.
Project 1 – Overflowing Vase, with basin, 750gph pump, plumbing, 100 lbs. gravel
1 man, 1 hour @ $45 plus $350 materials x 2.5 = $970
Project 2 – Boulder Pond, with liner, skimmer, falls, 3200gph pump, 4 tons boulder & gravel (w/o plants, bridge) 3 men 1.5 days @ $50 + $1500 materials x 2.5 = $6,150
Project 3 – Disappearing Stream, with liner, matrix boxes, pump vault, 6000gph pump, 4 tons Moss Rock, plants 3 men 1.25 days @ $60 + $1700 materials x 2.5 = $5,810
Could you charge more than just ‘Labor and Materials’ for these jobs? Why? Is there a difference between water features and other landscape construction projects? I have to argue that there is. Estimating water features is essentially different than pricing a sod job, a patio, a wall, or any job that’s priced by the foot or the yard (or even the gallon, for that matter), in the same way that an oil painting is valued differently from wallpaper. A fine painting isn’t sold by the square inch because it’s not a question of quantity; it’s all about the artistry of the work. The same holds for water features. In contrast to planting, flatwork, even wall work, water features can present:
• greater challenges due to their greater complexity and difficulty
• greater opportunities for creativity because of their inherent
• greater potential for damage and thus greater liability
• greater potential profits for your greater artistry
Should you be charging more for the ‘Artistry Factor’?
Years ago during a landscaping boom on Long Island I learned an important lesson in perceived value. We had been booking pond projects much faster than we could complete them, and as the backlog started approaching 3 months, my boss told me to “weed out the lookers.” He had me add 20% to the proven ‘Labor and Materials’ estimates that had always worked well for us, and that we knew were already a little higher than the average for our area – and our closing rate jumped from 65% to over 90%! Once on the jobs, the cushion allowed the kind of meticulous attention to detail that was difficult when margins were tight, so customer satisfaction also went up, and so did referrals. We had established a positive feedback loop:
Our clients felt our work must be worth more because we charged more, and we were able to devote the time to the artistry that justified their perception.
This ‘Artistry Factor’ is exactly what makes water features so desirable, so much more rewarding, and potentially more profitable than other landscaping projects. Works of art are worth more than good craftsmanship. We price our works accordingly.
Good Luck with your Artistry! I leave you with this thought:
Great art picks up where nature ends. ~Marc Chagall
Please comment! Post your feedback at www.pondtrademag.com or feel free to contact me firstname.lastname@example.org
Some Useful Information
1 Ton of wallstone will build a wall 1´ x 1´ x 25´ long
1 cubic foot of dense stone or concrete weighs about 145 lbs
1 cubic yard of gravel ≈2700 lbs or about 100lbs/cubic foot
Pond Volume = Length x Width x Average Depth x 7.5 = Gallons
2.31 Feet of Head Height = 1 pound per square inch of pressure
For best results use tubing 1 to 2 sizes larger than pump discharge
An 18˝ vertical step down into pond will keep out wading predators
100 gallons per inch makes a sheet of water over a sharp edge