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By Anna Turner, May 24 2017 12:15AM

We just wanted say a big congratulations to our Clients, Bowles & Wyer and Landscape Associates, for taking out a GOLD MEDAL each in the 2017 Chelsea Flower show.


Royal Bank of Canada Garden


Designed by Charlotte Harris

Built by our clients Landscape Associates


This garden features the coolest gazebo you’ve ever seen, along with HUGE granite pavers and 50year old Pinus banksiana. Wow!


The Linklaters Garden for Maggie’s


Designed by Darren Hawkes

Built by our clients Bowles & Wyer


They’ve created a secluded garden, using 3m tall hedging. Inside you’ll find basalt concrete that has been finished in a number of ways. The concrete structures are heavy and bold, but are perfectly balanced with the very soft, gentle planting.


Congratulations teams, we couldn’t be prouder!!


Pop over to the Royal Horticultural Society website to check out all the photos and descriptions on these medal winning gardens



By Anna Turner, Apr 27 2017 04:50AM

Have you ever wondered why you’re working so hard, yet you seem to be struggling to break even each month?


Are you charging yourself out for a good hourly rate, and putting 20% on all purchases, yet you still don’t have any money in the bank?


The likely culprit is that your Margin is too low.


Many landscapers, me included for a long time, assume that placing a good mark-up on materials, and charging a decent labour rate will be enough to see the money rolling in. Wrong! Running a business, especially a landscape business, is a little more complicated than that. The only way to ensure you will make a profit is to ensure your Overheads are covered & a profit margin is built into the sale price.


There are two ways to cover Overheads. Our previous article, entitled “The Cost of Landscape Labour”, explored the option of adding Overheads to the labour rate, the alternative is to spread them over the whole project as a Margin.


Knowing your margin is KEY.


This article gives you the tools to work out your own margin, and explains the difference between Margin and Mark-Up.


Understanding Margin & Mark-up


Let’s first understand the difference between Margin and Mark-Up, because if you’re not an accountant this stuff confusing!


Mark-Up – Mark-Up is a percentage placed on the cost price to get a selling price.

Example: an apple that costs $1 has a mark-up of 20% is then sold for $1.20 (excluding GST).


Margin – Margin is the percentage difference between the Cost price and the Selling price, which is gross profit.

Example: An apple that is sold for $1.20 and cost $1, the margin is 16.7%.



To add the cost of Overheads to an entire project we must first understand what percentage of turnover (the amount of money charged by a business in one financial year) are overheads (your accountant should be able to tell you this). A typical landscape company runs on overhead of 15-25%, so today we will use 20% as an example. With 20% of turnover being overhead cost, then if we wanted to make 10% profit we would need a 30% margin on the sell price (this is 30% gross profit, to make 10% nett profit). Taking the apple example above, $1.20 would only give us a 16.7% margin, which would not cover our overheads, let alone make us a profit. Selling the apple for $1.20 would cost us money!


Step 1. Work out your Overhead costs as a percentage of annual turnover. Ask your accountant, business coach, or sit down a do the numbers yourself.


Step 2. Decide what percentage nett profit you would like to make.


Step 3. Combine these two numbers to set your Margin. 18% Overheads + 10% Profit = 28% Margin


This is how you apply the Margin to the project you’ve just priced:


If we know our Cost Price and we know our Margin, this is how we work out the Sell price:


Sell price=cost/((100-margin)/100)


Example: Tim from Tim’s Landscapes knows the overheads for his landscape business is 20%, and he aims to make a 10% profit. Tim has priced a project with a cost of sale (the raw costs to build the project, including materials, labour, plant and subcontractor) $100,000. Tim now wants to work out his sell price. He knows he must have a 30% margin on his sell price in order to cover his Overheads and make a 10% profit. Here is how he works out what he will charge the client.


Sell price=cost/((100-margin)/100)

Sell price=$100,000/((100-30)/100)

Sell price=$100,000/(70/100)

Sell price=$100,000/.7


Sell price=$100,000/.7

Sell price=$142,857+GST



If we know our Cost Price and we know the Sell price, then this formula shows us the Margin:


Margin=(1-(cost/sell))x100


Example: Tim knows the cost for the project is $100,000. He has placed a range of mark-up on different items (e.g. 50% on plants, 60% on labour, and 20% on materials) to arrive at a sell price of $145,000. Tim wants to make sure the 30% profit margin he requires is covered in that price. The calculation below shows that Tim is covered, with a margin of 31.04%. This leaves Tim with a nett profit of 11.04%, if all goes to plan on site.


Margin=(1-(cost/sell))x100

Margin=(1-($100,000/$145,000))x100

Margin=(1-.6896)x100

Margin=31.04%



On a project where labour is low and material costs are high, Tim might find the calculation above revealing a margin of less than 30%. If Tim’s margin drops below 20% not only is ne not making any profit, but it is actually costing Tim money to do the work. In this situation, Tim should increase his Mark-Up on materials until his Margin is reached.


Conclusion

Knowing your overheads is key, don’t sell yourself short, you must get paid in full for the good work you do!


Whether you add Overheads directly to labour, or spread them out over the whole project as a margin is up to you, as long as you add them you will be well on your way to making a profit.


Happy estimating!

Anna Turner

LiberRATE Australia



By Anna Turner, Nov 30 2016 09:17AM


How much does it cost to build a deck? There are many components, and variables influencing those components, that make up a deck. This article guides you through those components, to help you arrive at the answer yourself.


ASSESSMENT

First we must assess how the deck should be built. Site conditions will determine the best method, and advice from an engineer is appropriate at this point. Decks may be built on a frame secured to an already solid base, such as a concrete slab, or they are (usually) secured to post that might be concreted or fixed to the ground in some way.

Here are a few websites that may help you with the assessment process:

The Australian Timber Database, www.timber.net.au , especially their PDF “Domestic Deck Design Guide”, http://www.timber.net.au/images/downloads/flooring/TDA_Domestic_Decking_Guide_Aug_2013.pdf, which takes you the different decking frame and footing options in clear detail.

Decks By Design, http://www.decksbydesign.com.au/, has a great PDF called “How to build a deck”http://www.decksbydesign.com.au/wp-content/uploads/2013/08/How-do-i-build-a-deck-version1.3.pdf

Referring to the Australian Standards (AS1684) Residential Timber Framed Construction is always advisable.



PRICING

Once you have reached the conclusion of how you are going to build the deck you are ready to price it.


After assessing our fictional site we have arrived at the conclusion that our 20m2 deck, sitting 350mm above ground, will be built as follows:

90x90m H4 Treated Pine posts, at 1.5m centres, concreted 450mm into the ground.

150x50mm H4 Treated Pine joists and bearers, with joist at 500mm centres and bearers at 1.5m centres.

19x130mm Blackbutt decking boards, with 4mm spacings, fixed with galvanised decking screws.


The best way to work out the price of any item is to build it in your head, and price each step as you go. I find it best to list all materials required, in order of use, followed by all Labour requirements in order of task. (NOTE: this table has been extracted from the LiberRATE program & converted to a table for this article).


Decking board formula: Quantity Required (in Lineal metres) = Area/(Board Width(inc.space))

Exampe Quantity required (lm) = 20m2/.134 = 149.25lineal metres



The labour section of the table below shows all the tasks/steps that must be completed in order to build the deck. Breaking the steps down like this allows you to clearly think the process through, and assign a considered amount of labour to it.


Material

90X90 Treated Pine H4 - 24.00lm = $456.00

Coach Bolts - 106.00each =$482.30

150x50 Treated Pine H4 - 69.00lm = $320.85

19X130 Blackbutt decking - 157.00**lm = $2,094.38

Decking screws 50x10G 1,000 box - 0.75 box = $69.55

Timber delivery - 1.00 each = $80.00

Concrete mix - Pre mix 10mm - 1.00Tonnes = $63.64

Concrete mix Delivery - 1.00each = $55.00

Total Materials = $3,621.72*


Labour

Carry materials in - 2p x 1.5hrs = $105.00

Set out - 2p x 4hrs = $280.00

Dig post holes - 2p x 4hrs = $280.00

Set posts in ground - 2p x 8hrs = $560.00

Bearers and joists in - 2p x 8hrs = $560.00

Install decking boards - 2p x 36hrs = $2,520.00

Clean up - 1p x 1hrs = $35.00

Total Man Days: 15.50 = $4,340.00*

Item Total = $7,961.72*

Rate per square metre = $398.09*


*NOTE: The example above is a GUIDE ONLY and not meant to be used to price work; each site will need to be assessed on its own merits. All prices listed are an example only, and are not intended to be used for pricing.

**NOTE: Quantity includes 5% wastage.


Once you have worked out what it will COST to build the deck, you must add PROFIT and OVERHEADS to that price to arrive at the SELL PRICE. Until you add Overheads the true cost to build the deck is unknown, and there is no point working for free so Profit is just as important.


I hope you have found this article helpful? Please leave me a message with feedback and/ or suggestions of what else you would like me to breakdown the pricing on. Thanks for your support!


Cheers, Anna Turner.


*Image by Outside Space Landscapes, www.outsidespace.com.au


By Anna Turner, Sep 27 2016 11:34AM

We have some exciting news, LiberRATE is the newest corporate partners of the LNA Master Landscapers Association. We cannot wait to meet and get to know all you LNA members over the next 12 months. If you see us at an event please, please come and introduce yourself, we are very friendly!


In other LNA news, we are currently in the thick of updating the LNA Rates book. This task is mammoth, as you can imagine, but also very, very interesting. It has already forwarded us the opportunity to contact, and get to know, some members, who have all been a delight!

If you have any suggestions, opinions or beefs with the rates book, now is the time to speak up. Drop Anna a line at the LiberRATE office, she is very interested in the views of all LNA members. The aim is to make the next rates book the best one yet, and we are right on track to do so.


If we don’t hear from you before, we look forward to meeting you at the awards night in October. Put your dancing shoes on, it’s going to be a fun night!

Cheers,

Anna@LiberRATE



By guest, Apr 11 2016 12:15AM

Please stay tuned for regular articles on everything estimating. Over the coming months we will post articles and information on the following exciting topics:

The cost of labour

The cost of preliminaries on a landscape construction project

Edging, mowing, weeding

Maintenance costs

Overheads

Profit margins

And many more!