Accurate Landscaping Estimates: The Key to a Profitable Business

Hear are the 6 factors that you should include in all of your landscaping, lawn care, snow plowing or any service estimate:

1. Your hourly rate: this includes wages and benefits for labor, including your own time
2. Your material costs: for example, what is the price per yard for mulch, cost per bag of halite or per pallet of sod
3. Your equipment costs: how much does it cost to rent the equipment you are using on a particular job site?
4. Your travel expenses: how much does it cost in gas (and time) to travel to and from the job site?
5. Service fees and overhead: this includes the project specific costs of disposal, haul-away, insurance and a variety of other expenses.
6. Service areas: this is a key ingredient in the scope of work, and in how long it will take to service the site. This is so important we will handle it in a separate section.

You can get more detailed than this, but if you take into account these five steps you are in the top 1% of landscaping companies. Let’s look at each of these in detail:

There are two ways to set your hourly rate:

• Top down where you calculate how much money you want to make at the end of the year, how many hours you want to work, then back out how much an hour of your time is worth.
• Bottoms up - you look at the costs of the wages and benefits of your team, and then you add a margin on top.

For lawn care, pest control and landscaping companies, we recommend the second approach, it is easier to calculate and it will likely get you a figure that is more realistic in a competitive market.

To calculate your hourly rate, start by looking at the costs of labor in your region or what you pay your employees. We recommend that you take a conservative approach and assume that everyone is a full time employee, and that you are offering basic benefits. Check out Duranta’s guide to the cost of labor and benefits in different regions {chart}.

Next, divide the hourly cost by a typical 40 hour work week. This gives you your average hourly cost.

Hourly rate = (Labor salary + benefits) / (2,000) + your markup

We recommend that you get your pricing from a reliable vendor which has a wide selection of products, and online pricing. A firm like Lowe’s has a professional portal which is free to sign up for, and gives you benefits such as advantageous pricing, support and efficient pickups.

When calculating your material costs, it is important to convert the price at which you buy materials, into how you will actually install the materials on site. For example, if you buy gravel in cubic yards or by the ton, you will want to know what the cost is per square foot at a certain depth level. Duranta’s inbuilt estimator can do this for you with no extra work on your part.

The cost of your equipment per installation is one of the most often neglected factors when creating an estimate. A lot of landscaping business owners ask: "I already own the equipment, how exactly do I calculate its cost for just one job?”

The easiest way is to estimate how much it would cost to rent that equipment, then divide that price in half. So if you are using a gas powered zero-turn mower for a job, call your local Home Depot or similar agency and find out the daily rate, divide that by 8 hours for a typical day, then divide it by half again. This is because renting usually costs twice as much as owning the equipment.

Equipment cost per hour = (Daily rental rate / 8) / 2

What is the cost of gas, and the cost of your time to travel to and from the job site? What about to an from your supplier? A rough estimate here is fine, but make sure to convert your cost into an hourly rate.

Take your overhead, which includes factors like:

• Office Expenses: Rent, utilities, internet, phone, office supplies.
• Insurance: General liability, vehicle insurance, property insurance.
• Marketing and Advertising: Website, flyers, online ads.
• Licenses and Permits: Annual renewals, specific project permits.
• Professional Services: Accountant, legal fees.

To make things simple, we recommend that you add up all of these annual costs, then divide it by the number of employees you have, and by the number of hours they work per year. This converts your annual overhead cost into an hourly rate. This will be crucial when you allocate a portion of it to each project.

How can you combine all of these costs (labor, materials, travel, equipment, etc.) into a simple to use calculation? That is where Production Rates come into play. Production rates convert the work that needs to be done into an hourly rate. You can have production rate for landscaping services, for equipment costs, even for material costs. Here is an example of production rates for different landscaping services:

• Lawn mowing: 15,000 square feet / hour (21” electric mower)
• For commercial landscaping, use 110,000 square feet / hour (96” zero turn mower)
• Mulch installation: 2 Cubic Yards / Hour (manual)
• Aeration: 10,000 square feet / hour (walk behind aerator)
• Paver Installation and Compaction: 40 square feet / hour
• Sod installation: 90 minutes / 500 square foot pallet

So to calculate the total cost of a hardscaping or landscaping service, you need to do the following:

• Job cost = [Amount of material needed * Price of Material ] + [Area to be serviced production rate for service labor rate] + [Equipment cost per hour equipment production rate] + [Travel costs / hour x time] + [Overhead per hour x area to be service x production rate for service] + markup

As you can see from the formula above, and from just your experience as a landscaper, the area you are servicing is crucial for coming up with an accurate estimate. Most landscaping companies choose one of the following ways to get the service area:

1. Travel to the job site and take careful measurements
2. Use an online measurement tools like Google Maps
3. Get a digital takeoff

A digital takeoff quantifies aerial map measurements: you can obtain square feet, linear feet of different parts of a property. Duranta uses AI to create accurate digital takeoffs in just a few seconds with one click ordering.

Now that your groundwork is solid, let's build the estimate. This systematic approach ensures nothing is overlooked, leading to a transparent, justifiable price.

Don't look at the job as one monolithic project. Deconstruct it into its smallest, most definable components. This is like assembling a complex puzzle one piece at a time.

For a patio installation, this might include:

• Demolition and removal of old patio
• Site preparation and grading
• Base material delivery and spreading
• Compaction
• Paver laying
• Edge restraint installation
• Joint sand application
• Cleanup

Each task becomes a mini-project with its own labor, material, and equipment needs.

This is where your experience truly shines. For each task, estimate the time it will take for your crew to complete it. Be realistic, even slightly conservative, especially if it's a task you haven't done frequently or if conditions are challenging.

• Consider Crew Size and Efficiency: How many people will be working on this task? What's their skill level? A highly experienced crew might complete a task faster than a newer team.
• Factor in Setup and Cleanup: Don't just account for the "doing" time. Include time for tool setup, breaks, daily cleanup, and end-of-project cleanup.
• Use Historical Data: If you've tracked previous jobs, refer to those records. How long did it take to lay 100 sq ft of pavers on a similar site last year? What about your production rates for other services?
• Calculate Total Labor Cost: Multiply the estimated hours for each task by your fully burdened hourly labor rate. Sum these up for the total project labor cost.

Go back to your detailed breakdown from the site visit. List every single material required for each task.

• Quantify Everything: How many cubic yards of soil, bags of mulch, square feet of sod, number of plants, gallons of sealant, bags of concrete mix?
• Get Current Prices: Material costs fluctuate. Get current quotes from your suppliers or a vendor like Lowe’s.
• Account for Waste and Extras: Always add a small percentage (e.g., 5-10%) for waste, breakage, or minor unforeseen needs. It’s better to have a small surplus than to halt work because you’re short.
• Include Delivery Fees and Taxes: These add up quickly and are often forgotten.
• Sum It Up: Add all material costs together for your total project material cost.

This is where many businesses falter. It's easy to overlook these "hidden" costs.

• Equipment Allocation: If you rent equipment, factor in the exact rental cost for the project duration. If you own the equipment, you need to allocate a portion of its daily/hourly operating cost (fuel, maintenance, depreciation) to the job. Develop an hourly rate for your major equipment pieces based on your historical costs.
• Overhead Allocation: Remember your total annual overhead? Divide that by the total number of productive hours (or jobs) you expect to complete in a year to get an hourly (or per-job) overhead recovery rate. Then, apply this rate to the estimated labor hours for the project. For example, if your annual overhead is $50,000 and you expect 6,000 productive labor hours (from 3 workers) , your overhead rate is $8.3/hour. If a job takes 40 labor hours, you'd add $320 to cover overhead.

Now that you have your total direct costs (labor, materials, equipment) and your allocated overhead, you have your "cost of goods sold" for this particular project. This is your break-even point.

To this total, apply your desired profit margin percentage. If your total costs are $5,000 and you want a 20% profit margin, you'd calculate: $5,000 / (1 - 0.20) = $6,250. Alternatively, you could do $5,000 * 1.25 (to get a 20% markup on cost) which also gives you $6250. Be consistent in your calculation method.

In practice we see between 50% and 100% markups on labor, and 20% - 35% on materials.

This final number is your proposed price to the client.

Read about different types of margins in Duranta: How not to mis-price jobs

A professionally presented estimate instills confidence and reinforces your credibility.

• Clarity and Detail: Clearly itemize tasks, materials, and a general scope of work. Avoid jargon.
• Breakdown (Optional): Some clients appreciate a general breakdown of costs (e.g., "Labor: X, Materials: Y, Equipment: Z"). Others prefer a single lump sum. Gauge your client.
• Terms and Conditions: Include payment schedule, warranty information, cancellation policy, and a clause for unforeseen conditions or scope changes.
• Visuals: Incorporate photos, sketches, or even design renderings if applicable.
• Timeliness: Deliver your estimate promptly. A delayed estimate can signal disorganization or lack of interest.
• Call to Action: Make it clear how the client can accept the proposal and what the next steps are.

Read more about compelling proposals: 3 tips for proposals that close

If everything above seems like a lot of work, rest assured there is an easier way to do all of this. Duranta’s landscaping estimating software makes it dead simple to create accurate estimates. Here is how it works:

1. One time input of your labor rates, material costs, and production rates in the database
2. Use AIdan, Duranta’s AI model to automatically create a digital takeoff of the site.
3. At that point all that you have to do is select an AI segment, or use our drawing tools to identify the serviceable area. Duranta will do the rest of the work and will include all of your materials, your pricing, your equipment and all other charges.

Duranta also has templates that you can use so that accurate estimating can be done in minutes without even going on-site.

Mastering landscaping estimates is not just about crunching numbers; it's about mastering your business. It's about respecting your time, valuing your expertise, and ensuring every project contributes positively to your financial health. By meticulously understanding your costs, clearly defining your scope, and strategically pricing your services, you're building a foundation for sustainable growth and a truly rewarding career in landscaping.

So, approach each estimate not as a chore, but as an opportunity to demonstrate your professionalism, secure your profitability, and cultivate a thriving business that will stand the test of time. Your success quite literally begins with your estimate.