Value Engineering and Phasing

Value Engineering and Phasing

As a landscape estimator and designer, I meet with clients who have big dreams. They envision a yard for their kids with hot tubs, lights, pools, basketball courts, patios, etc., the perfect addition to their home. They meet with me and they discuss these ideas, and my job is to put a price tag on it. In the market of life, we can’t have it all, sometimes we take many small items, some take one or two big ticket items. That doesn’t mean however, that you can’t have everything that you really want, and still get a great price.

Value engineering is explained simply by using a car analogy. You go to purchase a car with a $15,000 budget. The model that you like starts at $14,999. The next model up has Bluetooth, for $2,000 extra. The model up from that has touchscreen, fancy rims, and turbo charged engine, $5,000 more. The luxury model of your $14,999 car has heated leather seats, unlimited Wi-Fi, driverless, electric, satellite radio, classy rims, turbo engine, touchscreen, and most importantly, Bluetooth, and all for a $25,000 price tag.

Here you have a couple decisions to make. You ask yourself – what do I really want? You begin to place value on those additions to see if you are interested in spending your initial budget or nearly doubling it. The options are there, but what are your priorities? You want this car, but can you live without Bluetooth?

Deciding on a landscape installation can be like buying a car. Upon receiving an estimate from a landscape company many people experience sticker shock. To mitigate this, many estimators will try to feather out the total in categories or avoid putting a final price at the bottom. Often clients will only look at the total and ignore the extra features before they throw the whole bid away and never talk to us again. You could do that, but you may be missing out on an opportunity. Yes, we may have tried to sell you the luxury model, and maybe you didn’t want all those features, but the model with Bluetooth suits you just fine.  Through value engineering we can eliminate some of those add-ons, understand your priorities, and get you what you really want.

To get what you really want, you need to know what you are getting! Understanding your bid is key to getting a better value from your landscaper. If you only receive a lump sum price for a large scope of work, how could you accurately compare two bids? Bids can be broken down into line items to help you see where the landscaper has placed value. This breakdown also helps you see what this landscaper is good at. Proficiencies in rock walls, irrigation, or sod install could be very different between landscapers. Once you have a breakdown you can begin the process of value engineering.  Some examples of value engineering include reducing the depth of topsoil, changing from one type of stone mulch to another, shrinking the size of your pool, selecting a locally available product instead of an out of state product, or downsizing on plant size.

What happens if you are absolutely sold on the luxury model? You can’t live without the leather seats and the Bluetooth, but you don’t have the extra money. Do you take public transport and eat ramen noodles for the next five years and save up? There are always “financing” options available, in landscaping we call it phasing. Phasing allows us to break up the work over 2 or more seasons so that you can have everything that you want, but you just wait a little longer for it. For example, we could come in this summer and install your pool and patio in your backyard, and return the following summer to finish off the lighting and plants in the front yard. Ask your contractor about phasing opportunities and whether you could get a discount for your current work, if there will be more work the following year.

The adage you get what you pay for is as true in landscaping as anything else. An itemized breakdown helps you understand the true cost of the job and may eliminate buyers’ remorse of going with the low bid. Be informed about value engineering and phasing, and your landscaper will be able to sell you the landscape, with all the features that you really want, at a price that you can afford.

 

About Author: Rudy Larsen