Having Trouble Figuring Out A Price...

ruskent

I'm 19 and run my own company. I do mostly landscaping. 90% of the landscaping i do is hardscapes. Before i started my company i worked with a couple general contractors over a period of 5 years. So i know alot about construction and have the insurance to cover me in that area also.

A customer of mine recommend me to a friend of hers who wants her kitchen redone. Its a real easy remodel. All i have to do is remove the old cabinets, rip up lanolium, instal 108sq of pre finshed hardwood flooring, then install the new cabinets. She all ready has the cabinets ordered from home depot. Yea home depot. She already has the hard wood flooring. What i listed, is all i have to do. There is no new outlets are anything. No trim or nothing. Home depot is hooking up new applicance and installing granite cabinets. The kitchen is 9x12. The only materials i have to buy is proably some screws and some shims. The dump fee for the old cabinets will run around 65 bucks.

I know this is not a major job, but i feel it will help me move into a field i really want to persue. I normally like to make 600 a day. I figure this project will take me no more then 5 days. However, $3000 seems like an awful small #. I do not want to sell my self sure. I know all markets differ, but if you guys were bidding this job, what would you bid? It seems like every other job i sell my self sure, i just don't want to do it anymore.

What ever advice you guys could give me, i'd appreciate it.

Matt

Grumpy

Trade coordination is hard enough... it's even harder when the other trade is home depot. I'd be real real real upfront about the fact that you are not responsible for home depot's mistakes.

How can she have her granit on order of the counters are not in place yet? I certainly hope the granite hasn't already been final measured and cut.

I would think each phase of the project through from start to finish thinking of each phase as if it were the only thing I were doing. I would make a spread sheet of all the necessary materials including adhesives and fasteners and then in the spread sheet mark off who is responsible. If you are responsible then I'd add 'em up.

Next like I said think each stage of the project through and determine how long each stage will take you. Include setup travel and cleanup times. Add all the hours up. Determine how much you are worth, and how much your helpers are worth and use this rate per hour as your base. Add in your insurance and taxation modifier and now you have your labor rate.

Add up any rented equipment you might need. $65 for dump fees? Around here a dumpster is going to cost at least $325.

Ok onto your overhead. Determine how many days you will be spending on the job and how much your company costs you to run per day.

Add all these things up and tack on 10% for error, maybe even 15% for error since this is your first time.

Now you have your rock bottom dirt cheapest price you could do this job for. Now add on your profit. How much profit do you want to make? Usually 30%.

Submit your bid.
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I'm thinking a 2 man crew.
One day for demo.
One day for flooring.
I was unclear if you would be installing the cabinets but I would figure two days for the cabinets if you are installing them.

That's 4 days, two men, eight hour days = 64 hours total. I charge $75 an hour = $4800 plus materials and rental fees.

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lastly write out a very detailed scope of work defnining exactly what you will be doing. Also list what you will not be doing such as "This scope of work does not include baseboards or moldings at the floor". Seems odd that this person wouldn't want the person installing the floor to install the moldings also.

Who else is going to come in after you and do the rest of the work? Patching and painting the walls? Trim carpentry?

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Sell yourself short?


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Disclaimer the only kitchen I have ever remodeled is my own and I can tell you I ran into alot of unknows I didn't plan for which changed the whole scope of the project big time. I am no kitchen pro. Infact I do zero interior work professionally. I am sure someone like MikeF who specializes in interiors will have better advice than my own.

Grumpy

Alternatively you can always submit a real high bid and when the customer balks ask to see her other bids. This will give you a good idea of where your competitors stand. Then you can come back with something like "Oh Jeez! I charged you twice to lay the floors. My mistake"

Last thing I will say when ever I try new stuff I always always add alot of error and the funny thing is even the ammount I usually add isn't enough because it's my first time and there is a learning curve and it's impossible. Also the unknows a pro knows how to plan for, I did not because I was a novice.

Glasshousebltr

Holy crap Batman! 2 days for cabinets? Whats he got to do, fell the trees?

Bob

__________________
Bob

ruskent

The only trim is the crown molding on top of the cabinets, there is no baseboard or floor moldings.

Dump Fees- Since its not a gut job, all i have to remove is the old cabinets. I can fit thoses all in the back of my truck. So no dumpster.

She told me she had the granite taking care off. I assume she means she already has a picked out at home depot. Why do people put granite on home depot cabinets. I personally would rather have good cabinets and cheap counter tops. You can always change counter tops.

I forgot about paint.

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Here is how i figure my time break down

I am going to remove the old cabinets solo. 1 day
Do the floor solo 1 day
Hang cabinets with helper 1.5 day
Cabinet crown molding and whatever other odds and ends. solo 1 day

48hrs x $75= $3600
misc supplys +dump fees $325

total $3925

Grumpy are you saying i add 30% to that # to account for profit?

I know to expect the unexpected. My dads doing the kitchen in his own house right now. He ripped open the ceiling to remove the sofit, and it turned out that every pipe that went to the secound floor was in the sofit. Added 5k to the kitchen cost. But i think this job is pretty stright foward.

Matt

greenpastureslc

Make sure those dump fees include your time to take to the dump. Don't just charge what the dump charges you.

PipeGuy

Why $75 / hr? Why not $100? Depending on where you are, I'd be surprised if anyone's doing kitchen remodels, no matter how small, for less than $7,500.
What about dishwasher, range, exhaust fan, etc.?

ruskent

The lady told me the appilance company is hooking up the range, dishwasher and the exhaust fan. BTW its not one of those real exhaust fans. Its one of those ones that just circulates.

You say you doubt no one is doing remodels for under 7500. Thats what i'm worried about. When i work the price out with a 75 dollor hourly rate it just comes out to a low # and i would hate to be charging 5k for a job i could get 7500 for. Thats why i am hoping more people resond to this thread and give me some ideas what they do small jobs like this far.

Matt

mvpulsts

Yes, thats exactly what he's saying. You've figured out your costs of doing the job above. This includes the wage your paying yourself and your helper and the rest of the actual costs of the job.

Now you have to add in the company's profit. 30% profit brings the total to $5102.50.

Now your closer to the ballpark of $7000 or so that basic kitchen remodels cost. Since your not doing the counter tops or other small details to come later (you really ought to think the entire process through and see if you can sell the finish work, remember the paint?), your price of $5102.50 may be about right.

Heck, I charge at least $200 for a dump run. That's just the actual dump run, not the demo...

Matt

shopdust

Matt.
I like your spirit!, don't give your skills away.
First are you in a state that requires a license? and do you have same?
Most states don't allow you to collect your work unless you have one. Be sure to use a written contract ... plenty of sweet old ladies will cheat you in a heartbeat! Any changes get them in writting and if they add to the time required to finish, bill for them too.
And $5100 to $5500 sound about right. Let us know how it goes.

Mike Finley

As you yourself said, this job is a stepping stone for you, you want the job badly so that you can use it to get into this kind of work, so just getting paid for this one is a bonus. Basically this job is like getting paid to go to school.

I would say get the job, don't worry about missing the price by a few $100 bucks here or there. Just don't lose money. I take it that you have very little if any experience at this? This woman is really taking a risk and giving you a shot, she has a big investment in materials and is doing what amounts to taking a flyer on you the way I see it.

Keep careful notes on this job and compare them to your fees and adjust on the next one, each one you do will help you refine your pricing structure.

ruskent

This is my first job doing a kitchen remodel on my own. When i worked for other contractors i've gutted alot of kitchens and hung the cabinets in all of them. I just never had to figure out what to charge.

Yes i am licensed to do the work. Just got my NJ home improvement license in the mail last week! It is not required till 2006 though.

I'm going to call her this afternoon with a price, once i figure it out. I'm going to be somewhere between 5100-5500. I am going to make sure the contract spells out exactly what i am responsible for, and what i am not responsible for.

Thanks for the help.

Grumpy

Like I said in the disclaimer I am an exterior pro. I have only done very minimal interior work. In addition I don't know how many cabinets. When Did my cabinets I did it by myself actually. I had the cabinets that sit on the floor and hang from the wall, and they cover two entire walls.

It took me 2 days. If he's never done it before there will be a learning curve too and I bet it will take him longer than the average pro, also like I stated above.

Grumpy

At my current business model $75 is what I need to charge to make money. Again I don't do kitchens, but that's why I used the $75 number. I certainly wasn't suggesting anyone use my numbers because all businesses vary. I was only making it an example. Also yes you would still want to add the 30% to that number, regardless of what the number is.

Grumpy

That brings up a good point. When I started this company of mine, I had plenty of experience. BUT because I was a new company I pretty much had to "buy refrences". What I mean is, I had a hard time selling my jobs on a premium as I had become accustomed to doing. As always when I have a problem I dig below the surface to find out why, and the reason was ZERO REFRENCES. So the solution was simple...

Rather than sell on quality, which I prefer to do; For a few months I targeted the low ball buyers and I sold on price. I got my refrnces, was able to put out yard signs, and now I am back to selling at a premium

Just remember like Mike said Don't lose money.

The Yaz Man

Okay I am an interior guy. Kitchens are labor intensive. I used to do Time & material calculations on all my jobs but it took more time than I wanted to spend. Square foot doesn't wash either because the area is too small. Best to do is charge her a base price, based upon the posts I would say $5000.00. Then tell her at the close of work you will bill her for the materials and misc fees like dumping ect. at cost plus twenty percent.

Write it all down and have her sign it. If there ends up being add on's you dan charge her per. For example she wants base trim and casings, well maam that will be $175.00 + cost of materials +20% on material only. Don't get to nutty with cost analysis.

You'll get the hang of it.

By the way my structure is like this:

Small kit $10,000
Med. kit $15,000
Large kit $22,500

All rough mats. are after the fact billed at cost + 20%. Finish materials same.
The great thing about that is my bids are always lowest which gets me in the door with a deposit (but that is apples/oranges anyway but they don't know that) and by the time work is started I get in good with the lady of the house and I creep up to cha-ching central with add on's.

pitterpat

Yep, I wanted to take out the 3 sofits in my kitchen too. Posted a picture of what I found in the soffit on this forum. 2 of the soffits had a bunch of electrical wiring in it that I didn't expect and a plumbing vent stack. Luckily I took a cabinet down from each soffit, cut a hole in the bottom and looked up into it. The third soffit has the electrical wiring strung so tight I'll have to leave it but will be able to hang my pendant lights from it anyway.

Them thar soffits are a PITA of couse you guys would something that starts with a "B" and rhymes with witch.

__________________
Pat Harris
A HandyWOMAN Service, LLC
"Why call a handyman when you can call A HandyWOMAN?

mighty anvil

Much of this has probably already occurred to you since you have been working for awhile but I'm just mentioning problems I have encountered as they come to me.

If you are removing the flooring and the wall finishes or exposing any structure, add a clause in your proposal/contract that says repair of the structure/sub-floor is additional work to be billed in addition to the initial contract price (set a rate plus material cost plus mark-up for any extra work) and that any required structural design fees as well as testing and disposal of hazardous materials will be the owner's responsibility. These are two of the major pitfalls in renovation work. If anything looks like it could be asbestos (old 9x9 vinyl asbestos floor tile or even old paper backed sheet flooring) back off and let the owner deal with it; don't get caught trying to remove or dispose of it improperly.

Also, make it clear if the permit fee is included in the contract sum or not. List all of the documents you have received and their dates in order to help establish the scope of the work. Describe the scope of the work if there are not enough documents to describe it.

You might consider stipulating arbitration in case of a dispute but this might be too small a project for that and you are determined to make this owner happy whatever it takes. Be careful and clear about a "substantial completion" date even if it is not in writing. If something happens beyond your control to change that date be sure to notify the owner in writing that the date has changed. Owners cling to the first date they hear. Never promise completion just before a holiday — it will never happen.

Be sure to include a payment schedule with progress payments or whatever is appropriate and get a deposit up front.

Always clean up the job site before you go home and protect the rest of the house from dust. This is someone's home and you need to keep the inconvenience and the stress level low at all times. It will be appreciated and remembered when you ask for a reference.

Good luck

copusbuilder

I have done quite a few kitchens since starting in business. I always break things down item by item and price per item. I usually have a price in mind after I look and most times the broken down price is right there. Still always surprises me how you look and think you are going to make a real good buck and it ends up being a fair buck? A lot of little incidentals you can fight about or cover if you are not bidding to the bone. Just my 2 cents