Pricing, Estimating, and Success - Page 10 - Contractor Talk - Professional Construction and Remodeling Forum

dave3717 · 08-12-2009, 04:19 PM

Great article. Something some contractors may look at to help them estimate accurately is Hometech I used this software while I was remodeling and it was really helpful and pretty easy to use.

15element · 08-21-2009, 03:26 AM

nice

modterry · 08-25-2009, 07:50 AM

All good points here. Back in March 2009 Qualified Remodeler did a study of basic financials for different size remodeling firms and their rates of return on sales. I could not figure out if owners were making any money and I called the author of the article to discuss the numbers.

What he told me is that firms with sales under $ 1 Mil most owners are just working for wages. They are the sales person ( no fees for sales ) , they are the estimator, they are the project foreman, and lastly they are the management of the business. The average owner was just working for wages, and the business was not large enough to be able to make a return for the owner without the owner wearing many hat.s

The summary of the article was it took about $ 1.5 Mil in sales before remodeling as a business is large enough to sustain the owner and reach maturity.

Terry

MikeStan · 08-28-2009, 06:40 PM

Quote:

Originally Posted by Petit Const.
....... First off I show up on time , clean cut , well dressed (work cloths but not cut offs and tank tops ect.) . I have a professional business card , letterhead , and estimate sheets . My truck is kept clean and free of damage. ....... When meeting with the customer I don't ever mention the competition , I don't care about them . I sell my skills and abilities. ........ Once I get the job I try to do everything I have promised or implied I would do. ......... I know when I'm figuring the job I am worth every dime I charge .......... I've had bad jobs , I've had good jobs I dropped the ball on and made bad , there's always somthing to learn .
Once again Thanks for a Great site .

Quote:

Originally Posted by macbuz

Just highlighting a couple of my thoughts Petit has already mentioned.

Beyond that, after 30 yrs in the business I refuse to bid - just won't. If a customer asks for a bid, I will explain the difference between a bid and an estimate and that I am more than happy to supply an estimate. I have yet to meet JoeHomeowner who has compiled a detailed spec sheet complete with plans and details. I cannot bid based on a concept.

Excellent points from both posters. Presentation is half the sales equation, the other half is content. Macbuz is absolutely right, you can't bid on a concept, to do so is just plain rolling the dice. Estimates are always the way to go.

Lots of good ideas and opinions on how to arrive at a solid estimate on this thread. The most important tools were mentioned in the opening post: know your company numbers. Between that and a solid, up-to-date costbook for your area, estimates should be a snap.

Great thread.

SeamlessGutters · 09-04-2009, 09:43 PM

Pricing and Estimating:

I have found that anybody can price things by the foot. That really takes no talent. If you want to survive in this economy and actually make money you need to learn to price by time. Your footage cost are always in the back of your head, but even in my business, (seamless gutters) were everybody bids by the foot, I have noticed that I can make more in a day at $3.75 a ft vs. $7.00 a foot on certain Jobs. Time Estimation is very difficult and requires estimating for the variable x. Learn to do this and you will always be making money. On small jobs, you really can't bid by the foot, figure you overhead for the period and what you need to make for say a day of work, then add materials. Yes, you will get customers who say, wow $1500 for that? Usually when you explain that is a small job and if they had more things they need done you could do it for a much lower price comparably and get higher value...Most people will understand.

BrianNNOLA · 09-06-2009, 10:59 AM

Quote:

Originally Posted by SeamlessGutters

Pricing and Estimating:
On small jobs, you really can't bid by the foot, figure you overhead for the period and what you need to make for say a day of work, then add materials. Yes, you will get customers who say, wow $1500 for that? Usually when you explain that is a small job and if they had more things they need done you could do it for a much lower price comparably and get higher value...Most people will understand.

A really good point and post here. Many clients do understand this concept while others need an explanation as they feel SF is SF large or small job. Its the DIYer that aggravates me the most, the one who has decided he'll hire out the dirty work while he sucks up the gravy or calls me in to finish what he couldn't do or is too lazy to do. I explain to them its like the difference between shopping at your local convenience store versus the retail grocery store. You buy in bulk quantity, you save money. You buy the smallest packaging of an item, you pay the most. They don't understand setup, pickup, and cleanup time along with coordination and organizing factor into doing these minimal SF jobs which can take up a half to full day of your time.

Since the promotion of these "workshops" in stores like Home Depot for the DIYer, I now get clients wanting to "help" in the project they're hiring for in an attempt to save money, and even going so far to tell me how it should be done and through their own logical processes. Sorry, but I just don't have time to school people and if my expertise is of no value, they can just hire the folks standing outside of Home Depot as well. I'm getting to where I don't waste any more time with these type of clients, shifting my business more toward commercial where clients treat you more professionally, and don't moan so much about how I'm breaking them over a $50 service call to install a couple pieces of trim. I'm encountering all kinds of idiots out there, especially for handyman type service calls.

I'd be interested to hear if anyone else in this forum ever deals with these types of clients and how they respond. Perhaps most contractors here are just building hospitals, skycrapers, and casinos.

On another note, I get calls from people pretending to be clients, asking how much I charge for a shower install or SF price of a wood deck, when actually it is just another contractor fishing for my price structure. I like to give clients a ball park figure, or have in the past, but now insist to tour and inspect the job before giving any quotes over the phone. This helps to eliminate these incompetant contractors who probably have no knowledge or business taking on something that is beyond their ability.

aotisinwa · 09-09-2009, 08:34 PM

Oh, I guess you cant create a post and then delete it.. sorry new here.

corona09 · 09-13-2009, 07:25 PM

hello i ben working for somebody for last 5 yrs and last week he ask me about how would i like if i well like to get pay by percentage what would it be a good percentage to ask for if he ask me how much percentage i well like to take please i need help thanks

chocolatecamil · 09-22-2009, 06:00 PM

Quote:

Originally Posted by Chip_Block

The only way you can get accuracy in your bid is to be scientific about your work. You need to keep track of the time it takes to do different aspects of your job. If you think it takes 2 hours to hang and trim a door, but your on site experience is 4 hours - then 4 hours is what's got to go into you bidding form. (What do most amatauers forget to include in their bid? setup, material handling, layout, cleanup, and the all important "misc, labor", the catchall for all those little unique oddities that show up in every job.)

In my spreadsheet, every aspect or phase of the job includes these 5 items. And whenever I run into something I didn't think of before, or a new wrinkle, I add it to my spreadsheet template. After 30 years it's massive. But I won't forget anything!

You've simply got to keep a timecard for yourself. It's a habit. Then, overtime, you'll see your bids being more and more accurate. You'll also notice that your bids are probably more expensive than some others - but that means you're really accounting for all that's involved - and you won't be working, working, working - and wondeing why your not making enough money. You'll also have longevity as a builder. That adds to your credibility as well as your bottom line.

For those great "sales" people who just sell themselves but don't have the goods to back it up, they're a flash in the pan. Not even worth thinking about.

damn, thanks for all the info guys. im glad i read this thread before aking before asking anything. this is actually my first post here although ive been lurking the past few days. anyway, i think im gonna take your advice with the spreadsheet. it seems like the most logical thing for me to do at this point and learn and add to it overtime. im gonna get on it soon and put down the stuff i already know and just let time do its job. thanks guys, and lots of thanks to chip!

deftworks · 09-25-2009, 11:32 AM

Hey guys, I'm new to the site and wanted to thank you for everything that's been said so far. I've been reading this thread for about 4 hours now and it has given me alot to think about. I actually took my test and got my trade certification a year ago but I've been waiting to get the business up and running mainly because I just didn't know if this was the right time economically to try to start a business when I know people ARE outbidding each other to death just to stay afloat. Anyway, to stay on topic, I was just wondering how you guys are doing during these lean times compared to a few years ago or so as far as adjusting your pricing?

Roofer Dave · 09-26-2009, 07:01 PM

Yes have to agree with you but time most companys figure like you saying no way to compete with the guys that low ball and folding under. So kinda in a catch 22.
When figure your cost to stay in bussiness legal and people cutting you on small jobs 1500 to 2000 kinda puts in a rough spot either no work or drop down to just getting by and hope no one get hurt.

Roofer Dave · 09-27-2009, 08:48 PM

Yes I have read this post and agree with alot But not sure about other bussiness but in the roofing bussiness all seems to complain about cut thoaters and it is very cut throat bussiness but I feel that alot of the cut throat comes from not knowing the going rate for an area and if everyone stays so secretive about this seems like cut throaters isnt going to slow down or change for take the sub contractor that been doing your work that makes 40 buck a sq and has to have insurance to do your work guess what in his mind he can do the job for 50 or 60 bucks over material cost and think he doing good and the whole time going under and getting called a cut throat in process. I hate cut throat as much as anyone. And I know if I was being successful dont think I will be so secretive about what I charge to give the newbie at least idea where to bid a job that be one less i have to worry about.

**framerman** · 09-28-2009, 05:55 AM

Alright Dave, we'll play it your way.

In Sanford, ME I have a guy who will do it for $60/sq. 15 miles down the road in Kennebunkport ut is $110/sq. Does this help? No.

You need something more local right? Say one guy comes along and says "my price is $45/sq. Another comes along and says "my price is $52/sq. A third guy comes along and say "how do you guys survive, I need at least $60/sq just to pay bills"

now what are you going to do? You now have 3 local prices, all different.

You STILL need to make your own decision on what you are going to charge.

It's cut throat for everyone. It's called business. No matter if there's a recession or boom, it is still business and you ultimately choose what you want to charge, no matter what anyone else tells you.

Roofer Dave · 09-28-2009, 06:47 AM

Thanks See what ya saying so seems like $175.00 A sq here to tear off 1 layer haul away refelt entire roof put 30 year shingle on and pull permits
have insurance w/c and general Liablilty. and be bonded too for wont get license unless you are bonded. also that includes new drip eve. replace all pipe boots.
I dont see how make profit at that but Seems to be what the average going rate is here and that to me is mighty low to survive in the industry.

I knew every where is different and there is a big spand between what people bid just was hoping to get some kinda general # across the us see if i was the only one thinking this is crazy price or not. and on top of all this must 6 nail all shingles. For me seems like should be getting at least $200.00 a sq. and that is on shallow roofs. Guess I bid what I need to And if they give it good if not no worry just find new trade. Be one more of the 99%. Maybe the ones that is making it in this bussiness does it more for hobby for this isnt there living.
And I will drop this subject for it is wast of time as framing man telling me
I kinda dumb I guess.

DavidC · 09-28-2009, 08:06 AM

Here's how I define a couple of topics being thrown around;

Cut throat would be knowing who else is pricing a job and at least roughly their rates, then cutting their price so you are the low bidder.

Going rate would be the actual average unit charge in use in your area (info most are not likely to really know) or the rate overheard in conversation at the diner or bar.

The successful bidder is the one that looked at a job, calculated the cost based on his/her own business model and profit objectives then presented their proposal in a manner that convinced the buyer that it was the best value of all considerations.

Note that winning the job by cut throat or going rate pricing is not successful bidding. More likely it is buying an opportunity to lose money.

Also, successful bidders are not always the highest quote. Odds are that they will be in the top end of prices, but if your honest pricing sets your quotes in the lower cost area and meets all of your objectives then your job is easier. The main point is to make certain that you are selling for what you need to prosper. If you're having trouble getting that price than you may be lacking in selling skills and should consider hiring a sales rep. or learning the art of presentation yourself.

Good Luck
Dave

MagicPoolSvcs · 09-29-2009, 04:22 PM

One tip that seems to work very well for us is email a professional estimate ( PDF ) along with a picture of the work ( fix pump, clean pool ).

The photo along with the estimate really has " wowed " our customers.

Rebel Plumber · 10-18-2009, 01:53 AM

What a great thread! Thanks to everyone for their input!

-Ryan

Holmstedt · 10-31-2009, 01:47 PM

Quote:

Originally Posted by George Z

Give a man a fish... never mind.
Why would you want Brian's or somebody else's stinky fish anyway?
That information is available for everyone to see, just search for it.
I got a lot of my information from these boards, it was useful.
There is no old boys' club.
I remember not long ago, I asked some of the people here questions,
I got some very useful information from people like Brian, ProwallGuy
No secrets, what you are reading is indeed as good as it gets.
Be open minded and learn how to fish yourself.

And why wouldn't you teach a man to fish? Is this not a forum for learning and teaching and comparing notes? Yes this is most definitely is an "Ole boys club".

JAD · 10-31-2009, 06:50 PM

Excellent thread. I agree with the excellent post that started it.

I would only add that estimating the maximum time it will take to finish a large job is vitally important. If it takes a lot longer than you allowed for, you're probably going to lose money either in carrying charges or in time you could be using on the next job.

Even if your cost estimate is on target, beware waste as the job the goes on. Bad execution and impatience are often the causes. When I was starting out an old timer warned me that one reason so many people fail in business is "that they walk over nickles and dimes."

One poster said he counted salesmanship as just as important as a good bid. I couldn't agree more. Other things I find very helpful in landing jobs is making an effort to solve tough problems, staying in control of meetings, follow through on promises, patience and courteousness.

Just my 2 cents.

aegisroofing · 11-02-2009, 09:11 PM

Great Thead!