One Monday morning last January a powerful windstorm slashed a 100-foot pine tree in half and blew it onto the roof of our house. I phoned three tree removal companies for an estimate: the first price was $600, the second $875 and the third $980. I asked each what the estimate included.

The lowest bidder said he had a bad case of arthritis and couldn't take on the job until Saturday, when he had a full crew available. His "full crew" was his 37-year-old son, who worked during the week at the post office.

The second bidder could perform the job immediately. However, his price reflected that he could remove the tree but not the stump. He didn't have a stump grinder, but he did have the phone number of a company that specialized in stump removal for about $100.

The third bidder recognized the emergency and came with a crew ready to remove the tree from the roof, trim the trees behind the row of pines to keep them from leaning toward the house, and remove the stump along with any other debris.

Now, let's take a closer look. By adding the bids and dividing by the number of bidders, in this case three, the average price is $818. This price is not right or wrong. It's the average rate. My guess is this pricing was developed based on time, materials, labor and capability. As I stated in the previous article on price-setting, check the prices of the companies in your area that offer the same service as you and use that price menu as a baseline and adjust your prices either up or down according to your ability to deliver immediate and quality service.

There are different theories on pricing, and in future articles we will visit them. But there's no better place to start with pricing your service than with your competitors. If you want to be competitive, you will need to know what the going rate is in your area. Each bidder for the tree removal had his own price based on his ability to deliver. Had I been interested in living with a pine tree on the roof for five days I would have considered the first bidder. Or, if a dead 3-foot stump enhanced the back yard, the second bidder would have gotten the job. I needed efficient service right away! Therefore, the highest bidder got the job. After all, under the tree was a damaged roof in need of an estimate or two. See you next week.

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