unit pricing unit price estimating unit price unit price estimates faq How Can I do Unit Pricing in LMN?

Unit Pricing in LMN does not exist but there is a workaround if needed that you can find HERE. 

Here is why LMN does not recommend it.

Many companies want to price their work with unit pricing. This is when you bundle your material, labor and equipment prices together and divide that total price by the number of material units. Here are two example that demonstrate why this could be a flawed way of estimating, and why you should always break down pricing by separating labor, equipment and materials in most cases.

SCENARIO A: You are planting 50 trees and there is NO equipment access on the job-site so you will need a full day to plant all of those trees (8 hours).

 If you take the total price in this case which is $4,593.88 (labor + materials) and divide it by the 50 trees you will get a unit price of $91.88/tree

SCENARIO B: Say you are planting the same 50 trees but there IS equipment access on the job-site now. Now you can cut your day in half because the mini excavator and tracked wheelbarrow are a big help. 

With some equipment you cut your hours in half compared to scenario A. Although the price is still about the same. If you take the total price (labor + equipment + materials) which is $4,593.88 and divide it by the 50 trees you will get a unit price of $90.66/tree.

ANALYSIS:

Considering that both scenarios end up being around the same unit price per tree, you can see that you can do twice the amount of work per day when you have equipment. Consistently using unit pricing could cloud your judgement when pricing jobs and you will most likely end up spending too much time on jobs that make you less profit in the long run (because they are more difficult and high in manual labor).

Furthermore, now your clients expect you to always price their work at a certain level no matter how hard or easy it is. If two companies were battling over the easier (scenario B) job that has equipment access, the company that doesn't use unit pricing could come in much lower and win the job, and make less profit on the job compared to a company that uses unit pricing, although they will end up making much more profit in the year because they will pull in much much revenue overall by completing jobs quickly. In that case they will recover their overhead much more quickly too, and end up in a great place where they are making "super profit" on all the jobs that come after all of the overhead for the year has been recovered.

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