How Should You Actually Price Landscape Construction Jobs?
If you own or run a landscape construction business, designing and building patios, outdoor kitchens, retaining walls, irrigation systems, planting beds, hardscapes, outdoor living spaces, or similar projects, one of the most important (and stressful) questions you face is:
“How much should I charge for this job so I actually make good money, consistently?”
Most contractors answer that question using one of two main pricing approaches. Let’s break them down in plain language before we go any further.
The Two Main Pricing Approaches Explained
Approach 1: The Traditional Markup Method
You list every direct cost of the job:
- Materials (pavers, stone, plants, concrete, lighting, etc.)
- Labor hours
- Equipment usage
- Subcontractors (if any)
Then you add a percentage markup to each of those categories to help cover your overhead (office rent, insurance, trucks, software, owner’s salary, etc.) and your desired profit.
Typical markups might look like this:
- Materials: ~10%
- Equipment: ~25%
- Subcontractors: ~5%
- Labor: a much higher percentage (often 35–95% or more)
This method has been taught and used in the landscaping industry for decades. Because it uses several different percentage markups to “recover” overhead across different cost types, it is commonly called the Multiple Overhead Recovery System, or MORS for short.
Approach 2: The Production-Focused Method
This newer approach works very differently.
Instead of applying different markups to every cost category, you calculate one single hourly or daily rate that your crew must earn to cover:
- All field labor costs (including burden/taxes/benefits)
- Your entire business overhead
- The exact profit you want to take home at the end of the year
This single rate is reverse-engineered from your real business numbers:
- Total annual overhead
- Total labor costs
- Realistic billable hours per crew
- Unbillable time percentage
- Crew size
- Your target year-end profit
Once you have that one rate (for example, $110 per crew hour), pricing a job becomes simple:
- Estimate how many production hours (or crew days) the job will take
- Multiply those hours by your single rate
- Add the actual cost of materials (no markup needed)
Because materials are deliberately left out of the core rate calculation, this method is called Production Minus Materials, or PMM for short. Tools like Profit Genie inside Elevation Advisor do the heavy math for you and update the rate as your business changes.
So Which Approach Is Better for Landscape Construction Companies?
For most landscape construction businesses, especially those doing design-build work, hardscaping, outdoor living features, retaining walls, irrigation, plantings, and similar projects, the production-focused method (PMM) is usually the stronger, more reliable choice in today’s market.
Here’s a side-by-side comparison:
Factor | PMM (Production Minus Materials) | MORS (Multiple Overhead Recovery System) | Winner for Landscape Construction |
|---|---|---|---|
Job mix variability | Excellent, same rate works whether job is 90% labor or 70% materials | Poor, low-material jobs under-recover overhead; high-material jobs over-recover | PMM |
Material cost volatility | Protected, material swings don’t affect core rate | Exposed, thin or negative margins when material costs rise | PMM |
Client-supplied materials | Handles perfectly (add at cost; core rate still covers everything) | Frequently loses money or requires awkward adjustments | PMM |
Profit predictability | Engineered, built to hit your exact annual profit goal | Variable, profit % changes with job mix and markup accuracy | PMM |
Quoting speed & consistency | Fast once rate is set; consistent across estimators | More steps; inconsistent results across jobs and people | PMM |
Scaling / adding crews | Easy, model efficiency or volume changes | Difficult, markups quickly become outdated | PMM |
Industry criticism | Very little among profit-focused contractors | Widely criticized for faulty math and poor job-mix handling | PMM |
Best suited for | Landscape construction, design-build, hardscape-heavy, mixed projects | Older maintenance-heavy or very stable job mix companies | PMM |
Simplicity: One of PMM’s Biggest Practical Advantages
Many contractors are surprised by how much simpler PMM is in day-to-day use.
Aspect | PMM (Production Minus Materials) | MORS (Multiple Overhead Recovery System) | Clear Winner |
|---|---|---|---|
Initial setup | One-time calculation → one single rate | More involved, determine separate % for materials, equipment, subs, labor | PMM |
Number of numbers to track | One number (your production rate) | Four or more different markup percentages | PMM |
How you price a job | Hours × single rate + materials | Apply different % to each cost category + profit | PMM |
Consistency across estimators | Very high, everyone uses the same rate | Lower, different people apply markups differently | PMM |
How often do you need to update? | 1–4 times per year (or when major changes occur) | More frequent, markups drift as costs change; many never fully update | PMM |
Training new estimators | Fast, teach one rate and “add materials” rule | Slower, teach multiple markups and when/how to adjust | PMM |
Risk of “set it and forget it” | Low, easy to keep current | High, most companies end up with stale/outdated percentages | PMM |
PMM feels like “set the cruise control once and drive.”
MORS feels more like “constantly tuning four different dials.”
Why PMM Usually Wins for Landscape Construction
Landscape construction jobs have high variability:
- Some projects are material-intensive
- Others are very labor/production-heavy
- Material prices fluctuate significantly
- Clients often supply or select high-end materials
The traditional markup method (MORS) struggles in this environment because low-material or high-labor jobs often fail to recover enough overhead, while high-material jobs can look more profitable than they really are.
PMM solves this by treating production hours/crew time as the consistent driver of profitability, fully loading the rate with overhead and profit, and handling materials separately.
Many landscape construction companies that switch to PMM report:
- 10–30%+ profit improvement
- More confidence quoting large or complex jobs
- Fewer “surprise thin-margin” projects
- Easier to scale crews without constant repricing
Bottom Line Recommendation
For landscape construction businesses (design-build, hardscaping, outdoor living projects, plantings, irrigation, retaining walls, etc.), the best pricing system in most modern scenarios is the Production Minus Materials approach (PMM), especially when using tools like Profit Genie / Elevation Advisor.
It is more consistent, more protective of your margins, more predictable, and, perhaps most importantly for busy contractors, significantly simpler to use day after day.
If you’re tired of second-guessing prices, dealing with feast-or-famine years, or watching profits disappear on certain job types, the production-focused method is worth serious consideration.
Updated on: 03/07/2026
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