Your Projects Are Taking Too Long…. And Here’s Why

“The projects are always taking longer than I expected when I submitted pricing”

… seems like every kind of contractor has this sentence at the tip of their tongue when they start to discuss production.  And almost instantly, the conversation turns to the crews, or the people.  But are you looking in the right place?  Is it possible, even likely, that your problems are rooted in the way you sell, design and estimate your projects?  By this we mean:

• Did the sales team clearly identify all the contract requirements?
• Did we have all the information we needed to price the work before we actually priced it?
• Did we identify any missing information – and explain how we’ll handle price changes if they’re required?
• Was the estimate accurate?   Were all the tasks – windshield time, production time, layout time, cleanup time accounted for somewhere in the bid?

When landscape contractors are honest with themselves, the productivity problems start long before your crews lace up their boots.  The reason that we’re over hours, or over budget is because we were under-prepared when we priced the job.  When your projects are not running on budget,you need to look at two questions to discover why…

1. Did your bid cover all of the work required to fulfill the contract?
2. Are your crews following the plan set forth by the estimator – and are they working at the expected production rates?

Most labor issues are related to one or the other, the crew is too slow, or the estimator is too fast….and sometimes it’s a combination of the two.  In any case, you need to find the most common sources of project overruns and remedy them before you start bidding your next project.  It’s more than likely that your problems follow the old 80/20 rule.  80% of the time your crews spend over budget on hours is because of only 20% of the information that your sales team or estimator is missing when they priced and estimated the job.  Identify that 20% of ‘missing information’ and you’ll solve 80% of the reasons you’re consistently taking longer than was estimated.

Cost Over-Runs in Service: Landscape Maintenance and Snow + Ice Control

In the landscape maintenance and snow business, most  labor overruns can be quickly resolved by allowing the crew supervisor to access the contract documents (prices can be removed if preferred) so that they can clearly understand what was included and how much time was allotted for each work area. Contractors often complain about the inefficiency of their crews constantly, but when asked how they set the expectations I rarely hear anybody provide a good answer.  A good answer includes work plans for every service contract that clearly indicate the labor, materials, and equipment planned for each service type and a total of the hours expected for the service.  When the crew supervisor knows what was included in the bid, they can execute accordingly – when you don’t tell them, they guess, and its highly unlikely that they’re guess is going to do the work to the correct standard and achieve the anticipated profit.  They might get one or the other right but not both.  You will almost certainly have a problem – either the customer is under serviced and you lose the contract, or your customer is over serviced and you don’t make any money….sound familiar?

Fix the problem by taking more time before your price the job to analyze site information (you should have a standard process/form for this), fully understand the scope of work and the needs of the client (you’ll need to prompt them with a list of standard questions – they’re not the experts), and ultimately create an accurate estimate that prices the work for the client, and then is used to manage the work in the field.  When the estimate covers all of the work needed and the crew understands the scope and the labor, material, and equipment that was planned into the contract price – they can execute.

Problems will surface much earlier – if the services are consistently taking too long, you’ll know after only a few weeks, rather than finding out after a few months – or worse – at the end of the year.  If a crew has been given unrealistic timelines, then they’re going to voice it earlier, and then we can proceed to find out why the timelines aren’t being met.  It could be that the the crew is misunderstanding the level of service required, or they are not doing the service the most efficient way, or maybe the estimator did under-estimate the time that this job was going to require.  Make it a priority to find out why you’re going over time, then and add that reason to the 20% of problems you’re going to solve with better information gathering in the sales/estimation phase.

Cost Over-Runs in Construction: Landscape Design/Build

In the landscape construction business, I believe that the problems start long before the project hits the estimator.  In my experience, the design phase of a project has an enormous impact on the profitability of the project.  In design + build projects, landscape contractors have a lot of control and flexibility.  Done properly, your design can value engineer the work to ensure a profit.  Done improperly, a design with incomplete information will ensure that your work goes out underpriced – and you’ll consistently fail to achieve the profit you deserve.

Now you can hope to find/hire good designers/salespersons/estimators who just “get it”, but hoping that my designers/estimators just “got it” has cost me more money than I care to count.  Depending on finding capable people is, at best, rare and probably even unrealistic.  Instead, create a consistent, repeatable design build process that prompts your sales/design/estimation persons for the information that they need to gather to ensure the job is estimated and priced accurately.  This is going to be a form that’s several pages long – design build work is not simple – but 30-60 extra minutes studying the job upfront will save your company from hundreds, even thousands of hours of doing ”free work” on jobs that weren’t completely analyzed before we put a price on the job.  The form will also help you get better.  As new problems come up – the questions you need to fix them in the future can be added to your form.  Your form becomes a living document that gets smarter with experience… and it only takes minutes to update a form – well worth the time invested.

If you build projects designed by others then you need to analyze these drawings and specifications even more carefully.  In my business, the most costly mistakes that we’ve encountered have come on projects that we didn’t design ourselves, and usually resulted from information we didn’t have when we priced the job – but we priced it anyway and hoped for the best.  When “the best” turns out to be “the worst” it can turn a good job into a nightmare for the contractor, the designer, and the customer as everyone looks to protect themselves from the effects of the changes.  Just some of the things you should be looking at include:

• Was the scale of all drawings confirmed accurate?
• Are the property lines marked on site?
• Is the demolition plan clear?
• Is the drainage plan clear?
• Are the depths of all plant beds and the type of soil required clearly marked?
• Is the size and/or condition of all plant material identified?
• Are there there other trades working on the same property?  If so, who is responsible for site cleanup?
• How many times will equipment mobilization be required?  Have you clearly communicated the cost of re-mobilization if its necessary for reasons outside your control?
• Are samples required before installation?
• What is the process for change orders or information that is unavailable at this time?

These are just some of the many, many questions that need to be surfaced in order to ensure your profitability.  Over the next few weeks, we’ll continue this topic with more articles on how to create a proper sales process and information form, how to sell jobs (especially when your competitors are submitting a price without having all the information you have), and some common value-engineering tips and tricks that will help your designs give your customers more bang for their buck.  Stay tuned….

 

The Landscape Management Network helps great landscape contractors grow great landscape businesses with its online collection of software tools, procedures, policies, checklists, handbooks.  It’s just about everything you’ve wanted in your landscape company, but were too busy to create!   Check them out at www.landscapemanagementnetwork.com.

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