03 Dec How to succeed in the paver business by using a pen, pad and calculator
Some end-of-year thoughts on the paver business.
Installing clay pavers means you go get pavers (we’d suggest Pine Hall Brick Company pavers), dig a hole, put in crusher run, put in sand, put in pavers, put in edge restraints, attach it with landscaping spikes, sweep sand across the top and send the customer a bill.
Now, get back in the truck, rinse and repeat.
Not exactly. Being an entrepreneur means that there is more to business than going to work and getting paid. It’s important to set aside a significant amount of effort to work ON your business, as well as IN your business.
Entrepreneur has the answer. https://www.entrepreneur.com/article/279066 Recently, it published a book on how to start a lawn care, landscaping or paver business.
Because many landscapers add in hardscaping as part of their services (which enables them to pursue higher-end residential and commercial projects and thus command a higher profit margin), the suggestions make sense for both landscapers and paver installers.
Even better, if you do have a landscaping OR hardscaping business, approach someone who’s in the business that you aren’t and explore a partnership with them.
Pine Hall Brick Company’s distributors carry a wide variety of supplies and tools that you can use to successfully install walkways and patios, using clay pavers. But the first – and the most important – tools you will need are at Target or Office Depot: A pen, a notebook and a calculator.
Entrepreneur reports that the idea is to figure out what your costs will be and add in a profit. Your costs are anything you pay for, like materials (which you’ve marked up from their wholesale or retail pricing) to labor, (both yours and your subcontractors), the cost of equipment, and your business overhead, which is everything you plan to claim as the cost of doing business, like home office expenses, gasoline, etc.
Your estimate should outline exactly what your services will be, the materials you provide and anything else pertinent to the job. It’s the industry standard to provide this for free to the customer. Once the customer has agreed to it, put it all in writing. This is required in some areas, but best to do no matter what. If the customer asks you to add in extras once you are on the job, you can charge extra. Get the customer to sign off on a work order at the beginning of a job, which protects you legally should a client default.
How much do you want to make?
Landscape professionals recommend that you come up with an hourly rate, both for yourself and for your employees, so you can figure out how much to charge. This isn’t for your customers to see; it’s for your eyes only. It’s a good idea to compare your prices to your competitors. Get family and friends to contact companies in your target market that offer services similar to yours.
Another way is to figure out how much it would cost you to do a certain job and then divide that amount by the number of hours it would take you to complete it. Add in a profit margin and that’s a number you can use.
Or you can figure out how much you would like to earn in a given year. If your goal, for example, is to make $40,000, then you will need to make $3,334 per month. If you want to work 35 hours a week, or 140 hours a month, then you will need to charge $23.81 an hour. Add in your profit margin, as well as your cost of doing business to this hourly figure to come up with the bill you’ll send to your customer.
Perhaps a better question to ‘how much do you want to make?’ is ‘how much do you need to make?’ How much do you need to handle all of your obligations, such as your mortgage, health insurance and other household bills? When you can pay all your bills and have money left over to invest back into the business or set aside in a business account, then you will know you have priced your service appropriately, according to Entrepreneur.
What happens if the phone rings off the hook?
Entrepreneur suggests that if your business takes off, it’s a good idea to look into scheduling software that can help you keep up with the jobs you have agreed to take on; and use Google Maps to plot out your route ahead of time. Make sure to build in travel time. And if it gets too large for you to handle by yourself, it may be time to hire some help like an estimator or general office staff.
Another option is that you could carefully select a team of subcontractors to handle parts of the job you can’t handle. The customer doesn’t have to know that you have hired on a registered herbicide/pesticide applicator, or an electrician to rig outside lighting, or even an experienced, knowledgeable paver installer to put in genuine Pine Hall Brick Company pavers.
Entrepreneur suggests that you take it a step further by giving the subcontractor a T shirt or a baseball cap with your name on it to wear while they’re on the job. The subcontractors will bill you and you should plan to add a mark-up of 15 percent to 25 percent to their bill to send to the customer, to cover your administrative costs.
In the paver business, keep in mind that subcontractors must be carefully chosen, because their work will reflect on your company.