“A rising tide lifts all boats.” This ought to be the case with the incomes of land surveying firms, but it is not necessarily so. There seems to be a lag between our surveying ship lifting and the rest of the economy. I believe this is due in part to our approach in how we bid out our services.
This morning my wife started her day at the endodontist to see if one of her teeth could be saved. The crown had come off and there was extensive decay, plus she had a previous root canal. She phoned to update me that the endodontist thought it was possible, but wanted her to also get an opinion from the dentist who would complete the restoration as to whether the dentist agreed. She badly needs a professional she can trust and I recently lived out the same scenario and had a tooth saved after our former dentist suggested it be pulled and a post and crown installed instead.
At no time did it matter what the cost would be. Both professionals did estimate our cost before beginning any work, and they used their standard rates. When you must have work done, need a great doctor, and can afford the work, everyone would like the best professional available. I cannot have this dental work done by an unlicensed person. To be redundant, I must find a licensed person to work on our teeth.
Here is my point as it relates to land surveyors: the public and private sectors will find times when they must have our seal on the plan. Plans like a building permit plan, subdivision plan, plan of survey for fence installation (in some Pennsylvania townships), stormwater management plan or grading plan, to name a few, must be prepared by a licensed person. If they must have our seal, and if there are 1,000 plans needed within a given geographic area in a year, they all need us. So why do surveyors bid each other into a financial grave?
In addition, if you don’t charge correctly for your services, how can you afford to compensate employees? The Better Business Bureau told me that to compute what to charge for services you should multiply the hourly rate for an employee by 2.75 in order to make a profit.
If you take that into consideration you can use your rates and compute in reverse what you could pay an employee. If you are using two-person crews, then that pay figure would need to be split. What does that hourly rate look like when you compute it in reverse from the charges you bid?
When a surveyor puts in a rock-bottom bid, they may be robbing their own employees. If you work for yourself, then you steal from your pocket to give it to the homeowner. Remember that the public must have your licensed seal or that of your competitor to start their project, or perhaps before they can even start to see if they can do anything with their property.
Supply and Demand
I often hear supply and demand referred to with regard to the cost of products and services. With the average age of a licensed land surveyor being 58, it suggests a diminishing supply as more licensed land surveyors reach retirement age. I’ve already pointed out our license should be in demand, which should push the price upwards.
Our employees work under our seal, so they are also in more demand. We have the only supply and the demand exists because the government requires our expertise to protect the public health and welfare. In the private sector we are required by title people to protect investors and so home owners do not find themselves fighting with neighbors.
Here in Pennsylvania there are some very sparsely populated counties. If you are the only surveyor for 60 miles and you are bidding against “Far Away Land Surveyors LLC,” you know they must add two hours for travel time. That means you can raise your price equal to two hours fee over whatever you have been charging. This goes for Far Away Land Surveyors when they are bidding against you. Why let yourselves beat each other up on prices?
I ran into a person who was going to charge $400 for a survey I bid at $800. I thought my bid was low. I actually spoke to the other surveyor to see if he was a real person and to check that his license number was not being stolen, which is what I really was thinking. He told me he could make the drive in two hours and 20 minutes. I was astonished that his price didn’t seem to reflect that time.
How many of us prepare a plan, charge a client and then have someone else ask for a copy of our CAD drawing? Recently, a surveyor called me at the request of his client to see if he could get a copy of a 6-year-old computer file I had prepared for the former owner of his client’s property. He did explain that he was asking only because his client requested him to ask me since he had knowledge of my former survey. I may have charged $4,000 for that plan of survey.
My first impulse had been to give him the CAD file. After thinking it over, I emailed back to explain that I wanted the other surveyor to make money. I did not know his client, and why should I give him such a valuable product? My message was for the other surveyor to do the work, charge his client and make the money. On a subsequent phone call, I suggested to the other surveyor that when they got the contract to phone me for help with controls, which I would be happy to provide.
In an article comparing two types of topographic surveys and how new technology makes the creation of plans less costly to surveyors, I thought the author made good points. It was very informative and detailed. What bothered me about the explanation was how, for half the cost, they could do twice the work. Who saved the money? I don’t think it was the surveyor. The aerial service company certainly made its fee. Perhaps the surveyor explained to the client how they cut their costs by doing the work a better way? Do we really want to do that? I believe in that case it was the federal government who saved the money. What the surveying company may have done is remove profit from their bid.
If you are using new methods to prepare a topographic survey plan and now can do that for $2,000 and your competition does it the “old way” and will charge $4,000, why not bid $3,800 and either make the extra $1,800 or let your competition make a proper fee?
I don’t know if I can say it enough that all of the work will be done, and they will need our license to proceed with their design plans, fences, pools, patios, driveways, shopping centers, townhouses, additions, corporate centers, etc.
I have personally surveyed a particular piece of property at least five times. The first was a boundary and topo. The second was to stake out a house and driveway. The third was an as-built plan for the municipality. The fourth was for fencing. The fifth was for a title company to satisfy the mortgage company. Each time it was absolutely necessary that a licensed land surveyor was involved in the process.
Unless your client is your mother or cousin, why do you want to penalize your company and its future by not charging a fee worthy of your work? If we charge correctly for our services, then we can afford to compensate our employees well, buy better equipment and ensure the future of our profession. I would like to encourage you to learn more about your competition whenever possible so you can adjust your bids in relationship to our real value and create the tide that may raise all of our boats together.