Austin Gray: Hey, welcome back to the OWNR OPS podcast! I'm your host, Austin Gray. In this episode, I am hosting one of my friends, Brock Peel. He has been on the show three or four times at this point, and the reason I keep bringing him on is that the guy is a great business owner. He knows how to focus, and he knows how to crank out jobs. So there is so much that I can learn from Brock, and that’s why I keep bringing him on, selfishly. But for you as listeners, you’re going to get to learn all the inside scoop.

Now Brock, if you have not listened to the previous episodes, he has generated $2.3 million in revenue with a total crew of just three people—himself plus two others. You can't doubt that what Brock has done is impressive, and what I love about it is he's so dedicated to becoming the absolute best. I just want to surround myself with people like that, and I want you all to listen to people like that too.

So Brock is going to break down how to estimate a septic system. We’re going to go through it in this episode, so stick around. If you are an excavation company and you want to either add on septic services or you're currently doing septic jobs and you're not making any money doing it, we’re here to help!

[Music] [Applause]

Austin Gray: Welcome back to another episode of the OWNR OPS podcast! Yes, we have Brock Peel on. He is going to show you how to do an estimate for a septic system. I just got a plan set last night from one of our customers. He's going to take us through it, and we are adding a dirt crew here at Bearclaw and would like to focus on septics with the dirt crew. So for this episode, we're just going to focus on estimating. If you stick around the whole time, I’m sure Brock is going to drop a bunch of gold nuggets.

Brock is the owner of Canadian Sanitation. If you have not listened to any of his past episodes, I’ve had him on three times before, and we just published his latest episode. He and his two-person crew hit $2.3 million in revenue, and that is very impressive!

So you're going to get to learn septic estimating from the "septic godfather" himself. That's what you call yourself, right?

Brock Peel: Uh, I guess self-awarded by you, but yeah, sure! I'll go by that.

Austin Gray: This episode is brought to you by Jobber. Jobber is the all-in-one software management solution specifically for home service and trade businesses. I remember when I was starting Bearclaw several years ago; I was wondering how the heck I was going to send estimates, keep track of a job schedule, send invoices, and collect payments. When I came across Jobber, I felt like I had found the Holy Grail. Jobber makes the backend of my business so efficient, and it saves me time as a business owner.

So, if you are in the early days of starting your home service or trade business, look no further than Jobber as your software management solution. And if you use our unique link, I get a commission from it, and Lord knows I still have debt to pay down on all this heavy equipment. If you've been enjoying the podcast, this is one way you can support us. Visit go.getjobber.com/OWNROPS.

Austin Gray: Okay, let me see if I can pull this up. While I'm finding these, do you want to just give a high-level overview of how you think about septic estimating? Where do you start and what’s the process overview?

Brock Peel: Your first step is to know your own costs. That's Step One. It doesn’t matter if you’re doing a septic or what you’re doing; you need to know your numbers inside and out. What your daily operating costs are, what your costs are to mobilize, and what your cost is for each crew on-site. You need to know what your costs to do business are, Monday to Friday. So that’s Step One: determine your operating costs, overhead costs, and the profit margins you’re looking for.

After that, and that's universal in any business, it doesn’t matter what you’re doing. For septic specifically, you need to know your local pricing—your aggregate pricing. That’s easy to find; I quote septics in different areas all the time. I can’t do them as fast as I can do locally because I have all of our price sheets, but it’s as easy as calling and getting a price per ton, per yard, or however they do it.

You need to know your aggregate pricing. You need to know who your local pre-caster or tank supplier is. You need to know that pricing, and if it’s an advanced treatment system, you need to know the pricing on that. Then really, at the end of the day, once you have all that pricing together, build out your quote. Calculate how much material is required and determine your baseline cost right across the job. What’s my cost to do this with some contingency?

On septics, depending on your area for inspections, you need to add time loss for that as well. Once you figure all that out, then look for your profit margins. What kind of margin are you looking to hit? What’s your net gain at the end? Then you’re going to take all those numbers, and that’s going to give you your final number.

Austin Gray: What profit margins do you shoot for in your business?

Brock Peel: We shoot for around 30% on any job. That’s our baseline. I say baseline because it depends on the job. When you’re looking at larger scale jobs, what we’ve found, again from doing a lot of quotes and estimates, is that as you scale up, the margins go down. Anyone in the larger scale civil construction can tell you that.

For a small job like a tank replacement, we might run a 40-50% margin on that just because there’s a “ground factor.” It’s a small job, but it takes the same brainpower and time for me to execute it, plan it, and get it done. I still have to do a design; I still have to deal with the customer the same way. I still have to mobilize my equipment there and back.

So I kind of add a little bit of an X factor there for my time. I’m not interested in making a 25-30% margin on an $8,000 job. I need to make more, or it’s not worth me doing that job.

Austin Gray: That totally makes sense. So what would you classify as a small job?

Brock Peel: A small job would be anything less than probably $15K to $18K.

Austin Gray: So you're shooting for 40-50% margin on anything less than that?

Brock Peel: Yes, definitely!

Austin Gray: So that’s going to give you a markup of about 40%. A 40% markup generally gives us a 30% margin typically. So across the board, on a smaller job, we’re going to have a higher markup, closer to 60-70% to get that higher margin.

Just because again, small jobs—they take the same amount of backend time as large jobs.

Brock Peel: Yes, understood!

Austin Gray: Now, one thing I want to clear up— and you and I have never specifically talked about this—is I view profit markup as specifically profit. When I do my estimates, I also have an overhead number that I tack on to every job.

That overhead covers things like salaries for estimating or if you have an estimator or a project manager. How do you do it in your business? Because the reality is, you're wearing a ton of different hats. When you say markup, is that all encompassing of your profit and overhead, or do you separate those two out?

Brock Peel: No, I look at my markup. My markup is going to be—again, I'm not a complete expert on defining these, so maybe explaining the exact difference will help. My markup is directly across the board.

I look at my total costs to do the job, and I work my overhead into that total cost. My overhead, what it costs for me to run my business, that's part of my cost to do it. I have a daily operating cost that I know it takes for us to operate.

When you’re smaller, this is a lot easier, but as you get bigger, that’s where you can start to lose track a little bit because you can’t take if you’re running five crews—you need to identify multiple crews. Some may have higher yields; they have a higher cost because they have different sets of equipment and skills.

So you need to look at which crew is attached to which job and what that’s going to cost. For us, at the scale that we're at, we essentially run two crews at all times—three guys. A lot of times, it’ll just be myself or my partner doing a job on our own and then either of us with our other lead operator doing it together or one on one job and one on another.

I base all my quotes assuming that if all of us are on that site at that time to get that job done. If I think it’s a five-day job, I know my operating cost a day, and that’s what I account for in my cost to do that job. If I can have two septics going at the same time, and I can get more done at one time, then that’s a benefit for us, not the client.

The problem with septics— I don’t know how it is down there for inspections—but we have a lot of inspections. You can put ten guys on a septic, but you're still going to be waiting on the inspector until the next day.

Pounding manpower into the majority of septics isn’t really beneficial. I’ve done many by myself, and that’s why we did so well this year. I was doing advanced treatment systems with a crane coming in to drop tanks, and I was completely on my own.

So that’s the benefit of that, and again, I’m dictated by the inspection. I’m putting in a hard 10- or 12-hour day, but I can’t get that inspection until the next day.

If I brought more guys with me, I’d just be done and have to go home for the rest of the day—there’s nothing more I can do. So I use it as if all of us were on that site at once. That’s how I base it.

Austin Gray: What is your daily operating cost?

Brock Peel: It’s about $2,000 a day.

Austin Gray: Sorry, I had to take a drink of water there.

Brock Peel: Yeah, our daily operating cost is about $2,000 a day, or $40,000 a month. It does get higher at different times of year when we're running more equipment and burning more fuel. But for standard operating costs, baseline, I base it off $2,000 a day.

It may be slightly higher at different times, but again, because I’m using the metrics—most of the time, all three of us are not on the same job. So I know that ends up on the better side of it at the end of the day, even if I use $2,000 as my baseline number.

When I do job costing at the end, I know if I base it on $2,000, say it’s a five-day job; my cost is likely to be $10,000. Then I can base my excavation costs off that.

Austin Gray: And that’s purely for equipment and labor, correct?

Brock Peel: Yes, that’s my business as a whole. We’re $2,000 a day to turn keys—that’s the way I look at it. So we’re $2,000 a day to get up in the morning and turn a key.

That covers our business in total: everything minus cost of goods sold, which I consider fuel. I mean, you're not burning fuel unless you're doing work, so I don’t really—fuel cost is definitely a factor, but the more fuel I burn, the more work I’m likely doing anyway.

So I don’t worry about it as much. That $2,000 a day is Monday to Friday for us to get up in the morning and go to work, and it covers everything.

[Music] [Applause]

Austin Gray: This episode is brought to you by Bearclaw Media. Bearclaw Media is a growth agency for service- and trade-based business owners. If you want to grow your business and you offer a high-ticket service in local service or trades, there’s a really good chance that we can help you grow with Facebook, Google Ads, and content creation for platforms like Instagram, YouTube, and TikTok. If you're interested in growing your business, check out bearclawmedia.com.

Austin Gray: So you would take your material cost and then bid at $2,000 a day?

Brock Peel: Yes, I'd look at… I'm trying to look at your design. So I have civil site and soil. I don't see… You’ve got soil analysis. I’m just trying to zoom in on your one picture here. So this is an infiltrator system, a 1,500-gallon concrete tank, a DB box, full gravity, which is nice.

You’ve got four infiltrators—4X 22. Okay, this is in metric too; that's nice. So have you got a count on the infiltrators? Do you know any of your pricing down there in Austin?

Austin Gray: I could pull it up for you real quick.

Brock Peel: Okay. You know what? Let’s do it. I'll do it on my Jobber. I'll check my costs for stuff.

Austin Gray: Okay, that sounds good! Are you able to share your screen?

Brock Peel: Let me try that. Can you see my screen?

Austin Gray: Yep, all good!

Brock Peel: Okay, so let’s go with first thing I’m going to do is figure out what I need. So for us, it’s going to be a 1,500. I normally just loop that into one, so I’ll go in and add my cost.

I know the tank cost, so I’ll add in here 1,500-gallon concrete. My cost on that tank is going to be $2,907, but then I know I’ve got an effluent filter. We got some pipes—all of your piping—so if you look at the design, you got 40 ft of pipe; down there to the divider and then down to your leaching bed.

So for me, you’re probably looking at 100 ft of pipe. For us, you’re around $150 a foot, so you’re probably $150 there. I usually carry, with an effluent filter, about $400-500 across the board for that.

So if I know I’m around $2,900 for that, I'm going to go in at $3,400. Typically, for a 1,500-gallon tank, by the time I throw in risers, safety lids, and a filter, I’ll carry, say, $500 across the board.

So I’m going to put my cost in at $3,500 or $3,400 for that, and I’ll put my 40% markup on that. I can play with that figure because sometimes—again, my clients are listening to this, so it probably wouldn't be the best to share—but you’ll quote sometimes, and it can be a bit of an art depending on who you’re dealing with.

Sometimes if a homeowner sees how much you’re charging for excavation, it may bother them. If they don’t know the cost of the tank, but when you're dealing with a builder, he can quickly reference the cost of the tank.

So if you’re telling him that a $3,000 tank is costing $8,000 with $7,000 for excavation, he’s going to say, “Okay, well, I’ll just buy the tank then,” and beat you down on that price.

You’re like, “Well, I was charging 150% markup on the tank to make my quote look better for excavation.” But you should have carried it across in the excavation.

So there are two sides to that. Some people say you should carry a 40% markup across the board; I kind of just gauge my client a bit and play with the quote to make it look better.

At the end of the day, they’re looking at the number at the bottom.

Austin Gray: Okay, I was just looking at your design. The water table looks normal for the leach fields; it looks good to me. The native soil looks fine as well.

So what you're saying makes complete sense. If you're finding it hard to get that bottom line and your inspection is thrown off, I think it’s really important that we keep that in mind.

Brock Peel: Exactly. And looking at that design, since I’m pricing it, it’s pretty straightforward—just a standard infiltration system or trench bed system.

I could probably do it in a day if I had no inspections, but it’s going to be about three days with the inspections. I would probably account for four days on this system.

This gives a little contingency and allows for the inspections as well, so I would do that.

Austin Gray: Exactly! Let me ask this: Have you done any work with smaller contractors in the septic industry?

Brock Peel: Yes, absolutely! At this point, I’ve helped quite a few people get their businesses set up. It’s awesome to see them grow. I will source my pre-caster and suppliers for them to avoid the learning curve I went through—because it’s pretty significant.

That’s why I’m so adamant about understanding the numbers and ratios: the numbers don’t lie, and you’re either increasing efficiency and profitability or not.

Austin Gray: I mean, this is such an important lesson! An important thing to take away for estimators is the need for experience. I had to eat humble pie in my first year to realize there's always a little extra that comes up!

But as you said, the experience in business allows you to eliminate things that come up over time—so that’s a super significant lesson!

Brock Peel: 100%!

Austin Gray: Is there anything else you would recommend to listeners or myself as we’re building a dirt crew specializing in septics? What should we keep in mind going into this?

Brock Peel: Really think about your estimating. Think about your standard costs for things and how you're going to make it easier and faster. I have standard templates that I know.

For me, I base it on volume for systems. I’ve done so many of them that I know what to carry across the board. I have my aggregate cost. I calculate it based on liters per day, so I put in the liters per day if it’s sand or clay soil. That spits out my aggregate price for the most part.

I’ll still double-check it, but it makes it really fast! Speed is going to be your friend right now. How fast you can do it is going to help you be one of the first ones in with the price and win the job.

A lot of times, just being the first one with a price will win you the job.

Austin Gray: Great advice!

Brock Peel: I just quoted a job in a provincial park — a $500,000 job. We were within $10,000 of two or three quotes that I know of, so we’re right in there.

Everyone is looking to be competitive, and these are large companies. So really understanding your numbers and calculating it is key.

The job I referred to a million-dollar storm sewer project—I had a friend who’s in the industry; his specialty has been storm sewer jobs, and he has standard metrics that he goes by.

So I had him help me price a job like that, and he worked through a price. My takeaway from that was, even though I know I’m going to make money at that number, I didn’t understand all the details.

I spent hours—probably six to eight hours—pricing that job myself through my method and accounted for every single dollar amount. I look through the drawings with a fine-tooth comb.

What I found was that I was within $10,000 of the price my friend quoted. I did that through understanding where the numbers came from in a very detailed way.

Austin Gray: Incredible! I want to thank you for your time and for sharing valuable insights.

Listeners, if you enjoyed this episode and want to know more about septic estimating, get in touch with Brock. He has a wealth of experience and is always willing to help.

Is there anything else you want to share?

Brock Peel: Just remember to keep it simple, ensure you understand your numbers, and don’t be afraid to reach out for help when you need it.

Austin Gray: Thank you!

Listeners, thanks again for listening to another episode of the OWNR OPS podcast! Once again, this is Brock Peel with Canadian Sanitation. You can check out a couple of his other episodes—we’ve had him on three times, and the last one was published on January 31st, where he shared the story about the year 2024 when they hit $2.3 million in revenue.

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