Tree service
Tree Service Bid Profit Calculator
Checks whether a bid actually made money, which in tree work is mostly an estimating question.
Result
Gross profit is what is left after the cost of doing the job. Overhead comes out of that: the building, the office wages, the vans, insurance, software and advertising. A healthy gross margin still loses money if overhead is larger.
Get a Free Business AuditHow the calculation works
Bid value less the direct cost of delivering it gives the job's profit and margin. The reason this matters more in tree care than in most trades is that work is bid per job from a visual assessment rather than measured from a drawing, so the estimate is a judgement about how long a tree will take. Comparing bid against actual across many jobs is the only way that judgement improves.
What moves the number
- Estimated crew hours against actual, which is where bids go wrong.
- Whether rigging was needed when felling was assumed.
- Debris volume, which is consistently underestimated on large trees.
- Equipment time, including grinder and crane hours.
Where this one goes wrong
Tree bids fail in one direction more than the other: the job takes longer than assumed, because rigging turns out necessary, the drop zone is tighter than it looked, or the debris volume from a large canopy is far greater than it appears from the ground. A business that does not record actual hours against bid cannot see that bias and will keep absorbing it. Logging both on every job for a season is the cheapest improvement available to a tree service, and it usually reveals that large removals were underpriced while small jobs carried the minimum comfortably.
Before you quote
- Record actual crew and equipment hours against the bid on every job.
- Review the bias by job type rather than in aggregate.
- Re-examine debris volume assumptions on large canopies.
Questions
About this calculator
Why do tree bids come in short?
Because the error runs one way. Rigging turns out necessary where felling was assumed, the drop zone is tighter than it looked from the ground, and debris volume from a large canopy is consistently more than it appears. Those all add hours rather than removing them.
How do I get better at bidding tree work?
Record actual crew and equipment hours against the bid on every job, then review the bias by job type rather than overall. Most tree services find large removals were underpriced while small jobs were comfortably covered by the minimum, which is only visible with the data.
Should equipment time be costed into a bid?
Yes, at an internal hourly rate, because owned equipment is not free. A grinder or bucket truck on a job has a real cost in depreciation, finance, maintenance and wear, and a bid costed on labour and fuel alone makes every equipment-heavy job look more profitable than it was.
The formula
gross profit = revenue - direct costs
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How to use this calculator
- Revenue ($). Enter your own figure; the page starts at $37,000.
- Direct labour ($). Enter your own figure; the page starts at $16,000.
- Materials and equipment ($). Enter your own figure; the page starts at $11,000.
- Other direct costs ($). Enter your own figure; the page starts at $2,200.
The result updates as you type, so you can try a figure, see what it does to gross profit, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Revenue | $37,000 |
| Direct labour | $16,000 |
| Materials and equipment | $11,000 |
| Other direct costs | $2,200 |
What comes out
| Result | Value |
|---|---|
| Gross profit main result | $7,800 |
| Gross margin | 21.1% |
| Total direct cost | $29,200 |
| Profit per working day | $354.55 |
That is $7,800 at a 21.1% margin, about $354.55 for every working day. Overhead still has to come out of it.
How sensitive the answer is
Holding everything else steady and changing only revenue, this is what happens to gross profit. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Revenue ($) | Gross profit |
|---|---|
| $18,500 | -$10,700 |
| $27,750 | -$1,450 |
| $37,000 example above | $7,800 |
| $55,500 | $26,300 |
| $74,000 | $44,800 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Revenue ($)
- A money amount, starting at $37,000.
- Direct labour ($)
- A money amount, starting at $16,000.
- Materials and equipment ($)
- A money amount, starting at $11,000.
- Other direct costs ($)
- A money amount, starting at $2,200.
What the results tell you
| Result | What it is |
|---|---|
| Gross profit | The headline result. A money figure. |
| Gross margin | A percentage. |
| Total direct cost | A money figure. |
| Profit per working day | A money figure. |
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.