Selling Price: So I Have Materials+labor+overhead...now What?

Titodbuilder

BTW, before getting to my point I must say that I bought the Markup & profit Guide, but for the first couple of jobs I am on my own...Michael will help me later I am sure.

OK, I am new at this. I had a partner dealing with most of this but now I am on my own and so I am flailing as I ramp up.

I have a project I have priced out at $107K for material and Labor (to include subs, etc). My overhead right now is about $13K a year. What should my selling price be?

Any suggestions would be appreceated. In the meantime I will be opening up Stone's book and try to make heads or tails of the process.

Cheers

rbsremodeling

That is highly unlikely unless your omitting some information or need some help with your accounting methods

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precisionbuild

13,000 does sound low. Work those numbers again, then get back to us...

Titodbuilder

Cheers, I'll do that....

rbsremodeling

What is included in your overhead?

How much do you plan to make a year from this business?


How many ours a day to you work in this business?


Is this a full time job for you?

__________________

OCRS

...

Titodbuilder

Oppps, overhead is more like ~$22.5K...still working on exact overhead expenses, but it's close.

Yes, this is NOW my full time job. I have not yet created a business plan because I want to get the first few jobs started. This landed on my lap when my partner and I "divorced" and he got the children (industry knowledge). I was more the business and financial person.

precisionbuild

Why don't you list your overhead items and we'll tell you what you might be missing.

SLSTech

While were at it - how long is the project supposed to take from start to finish & do you anticipate any delays?

__________________
Alabama Full Service Remodeling, Renovation, and Preservation by SLS Construction
Certified Energy Efficiency Audits, Ratings, Modeling, Verifications, & Consulting
Residential, Commercial, & Industrial Infrared Thermography Scans

Titodbuilder

Delays? Naaaw. OK, so there may be some delays. I have allotted two extra weeks for a total of 10 weeks as some of the work is an outdoor patio.

I was thinking monthly, but now I am way over. I told you I am retarded.......

Overhead in no specific order:

Truck(s)
Vehicle insurance
Advertising
Cost of sales
Office equipment
Phone
Internet
Staff
Tools and equipment
Cell phones
Taxes
Entertainment
Licenses
Accounting
Owner salary
General Liability Insurance
Interest

precisionbuild

Depreciation, insurance, legal fees, fuel (vehicles), rent, repairs, supplies, travel and utilities costs.

What is the profit you expect to make in that 10 weeks? Any other jobs going on at the same time?

480sparky

Here's a bit more extensive list (geared more toward electricians, but you get the idea:

Building
Building
Warehouse Space
Trash Removal
Lawn Care
Snow removal
Upkeep & Repairs

Office Expenses
Computers
Stationary
Copy machine
Fax machine
Forms
Printing
Software
Office Equipment
Computer maintenance
Files
Postage
Office Supplies

IT
Internet service
Email accounts
Web site
Initial creation
Updating
Maintenance
GPS services

Benefits
Vacation Pay
Holiday Pay
Uniforms
Uniform Maintenance
Unemployment
Bonuses
Incentives
Retirement Plan
Christmas Party

Taxes
Property Taxes
Tangible Taxes
Pay Roll Taxes
Income Taxes
Sales Tax

Training
Management Training
Office Training
In-House Training
Tech Training
Mfg. Training
Training Equipment
Safety Training
Update classes
License testing

Insurance
Building Insurance
Liability Insurance
Employee Insurance
Life Insurance
Business Insurance
Workers Comp.

Utilities
Gas
Electricity
Telephone / Fax lines
Internet Service
Toll Calls
Telephones
Pagers/Cell Phones
Radio Maintenance

Vehicles
Vehicle Maintenance
Truck Racks
Fuel
Truck Signs / lettering / vinyl
Tires

Financial
Accounting
Loans
Tax Preparation
Interest
30+ Day Receivables
Bank Charges

Travel
Hotel
Meals
Airline / vehicle

Unique to the electrical trade
Licenses
Bonds
Inspections
Trade Association
Subscriptions
Memberships
Dues
Retainers
Safety PPE
Lock-out/Tag-out kits
Fall prevention harness
Arc-flash clothing
Hard hats
Safety glasses
Hearing protection

Tools
Company Tools
Safety Equipment
Ladders
2-way Radios
Test Equipment
Replacement Parts
Parts Storage
Damages
Tool Replacement

Misc.
Trips to Supply House
Theft
Uncollected Money
Collection fees
Unbillable Hours
Commissions
Call Backs / Warranty work
Shortages
Bad Checks
Delivery
Credit Card Sales
Drug Testing

Legal
Legal advice
Law Suits
Incorporation / LLC fees

Advertising
Marketing
Business cards
Signs
Radio / TV
Newspaper
Flyers / brochures
Material Purchases
Inventory

Labor
Wages
Salaries
Dispatcher
Answering Service

__________________
Site : the area or exact plot of ground on which anything is, has been, or is to be located.
Sight : The power or faculty of seeing; perception of objects by use of the eyes; vision.
Cite : To mention in support, proof, or confirmation; refer to as an example.

Mellison

Sparky,
Getting ready for tax time?

__________________
"Enjoy Every Sandwich" Warren Zevon

480sparky

375 days a year!

__________________
Site : the area or exact plot of ground on which anything is, has been, or is to be located.
Sight : The power or faculty of seeing; perception of objects by use of the eyes; vision.
Cite : To mention in support, proof, or confirmation; refer to as an example.

Titodbuilder

How does $8500 a month sound?

Titodbuilder

Wow, so I missed a few things; however, generally speaking if we plan on doing $500K-$650K in sales then how would I price the current job.

There might be one other job overlapping with this one on the tail end. I hope there are others but right now that is all we have on the pipeline I will be growing soon.

SLSTech

A he11 of alot more than you originally thought, that's for sure

Now at minimum you need to add $2200 a week to the job listed above assuming it is the only job going at the time (yes guys I oversimplified it)

Now you also need to add $***X to the same job for Profit aka Oh fund, or rainy day fund (Some people think profit is a bad word - thus you can call it a rainy day fund)

As a quick thought to ponder - you might consider that there are only 50 weeks in a year & there are only 32 hours in a week not 40

__________________
Alabama Full Service Remodeling, Renovation, and Preservation by SLS Construction
Certified Energy Efficiency Audits, Ratings, Modeling, Verifications, & Consulting
Residential, Commercial, & Industrial Infrared Thermography Scans

rbsremodeling

I am going to be honest.

It takes some experience to do these bids and you don't have it right now. If you missed all the stuff in your overhead? What did you miss in your bid?


This seems like a decent size job. Big enough to sink you. I make mistakes still and I have been doing this 20+ years.

You need some professional help fast

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Stone Mountain

Is that $22000 a year, or a moth>
What's the 8500 for?

Generally, I would work out how much your overhead is on a weekly basis.
Then how many weeks the job will take. Then add in your COGS (cost of good sold). Then add in how much you need to earn every week. Take the whole thing, add it u, and put a % margin on it.
I.E.
COGS $107000
Overhead$22000/year =$1900/month 0r $500/wk (just round #s)
x 10 weeks = $5000
Your salary $1000/wk=10,000
Total cost $122,000
markup 25% = 30,500
Therfore sale price = $152,500

This is very simplistic, but it works.
Don't forget a fudge factor.

__________________
Residential Deck Specialist: Vist our Website
www.fenceanddeck.ca

Titodbuilder

I started on this site with an SOS telling you I was well over my head. I still am, but as I said, I want to get this job going and find my way as this job gets under way. I still don't really do the work as I have a guy that was running our jobs before that assisted me with the bid's labor and material. He has bee doing this for some 12 years so he knows a heck of a lot more than i do about the bidding but has been using the guesstimate and I forced him to think of all that would be needed down to the last nail. On material and labor we erred on the high side just in case.

I know this is totally the wrong way to get started, but I have no choice and will be happy to break even on this job as it will be the first job for a major architect with the new entity, but he is familiar with our work.

Thanks for your assistance....you guys are great. Any other suggestion would be great.