How Well Do You Know Your Pricing?

curapa

I can quote a price on a standard fence or small deck right on the spot but I am curious as to how some of you handle the bigger projects. What kind of project does it take for you to get to the office and crunch some numbers?

When I do larger projects I go through it step by step as if I'm framing it right then. I do a complete lumber, material and hardware takeoff and I envision myself doing the work in stages to estimate my time, add profit and overhead.

Do some of you know your numbers well enough to price jobs easier? With constant material pricing changes I'm always scared to try to transfer any of my expectant costs from one job to another. I will call my lumber guy with a material list for all my big jobs and get a quote before I even quote a price to the customer.

I would really like to speed up the process and seem more "on the ball" to my customers.

any comments or advise would help.

Thanks,
Curt

Double-A

I'm not sure what you mean by "on the ball". It seems to me that digging out a price from somewhere south of your back pockets just to look like you know what you're talking about is a sure way to assure the client you don't know what you're talking about when you have to explain the difference in your ballpark and your proposal prices.

Wood is a commodity, not a staple. That means the price fluctuates with the market, just like gasoline prices do.

Construction is not a market based service, its a cost based service. It costs what it costs and there is only so much you can do to keep the price down, after that, you are just dreaming of the good ol days.

Anytime you have any cost greater than 300 dollars you should be getting written quotes from your suppliers along with a statement as to how long that price will be good for. Your proposal should also show a date on which the prices were figured and when the proposal expires along with a statement that changes in the market may affect the price of materials, and therefore, the bottom line.

Now, just how much smarter would you like to look than someone that has done their homework, develops prices based on the specifics of the job, and doesn't pull numbers out of thin air just to win a job?

If you want a faster turn-around on the estimate, then get to it sooner, standardize your methods and talk to your lumber supplier and get them to commit to a short turn-around time for your quotes.

After that, it becomes the old adage of fast cars... How fast you want to go is proportional to the amount of money invested in the car. The more you spend, the faster you can go.

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"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

BreyerConstruct

Bigger jobs I go at 3 different ways: my usual averages based on sq. ft, etc... a fairly detailed T&M... and a rough overview, to make sure it "makes sence".

It's not perfect, but I'm working every year on refining it. Hopefully next year I've got it dialed in better than this year.

~Matt

Oh, and if it's too big, just pass on it. It's not worth sinking the ship trying to cary too much.

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WarnerConstInc.

Quick? It takes me at least a week to get any sort of estimate done, if not longer. No way will I open my mouth and spout out a number on the spot. Well, unless I really dont want to do it then I make up a huge number, that has backfired on more than one occasion!!! Made some kick ass money though.

curapa

Thanks,

I remember a while back I was doing a fence quote when at the same time the neighbor was getting a quote on a pergola. I "overheard" their conversation and was amazed at the fact that right then the guy measured, spec'd and quoted the job in a matter of minutes. This guy was in his 40's and had been in business a long time. I heard the price and the details of the job and went home and calculated the material costs and labor and I realized he had just spat out a price, got the job and made a killing. Granted I do not know this guys overhead but by the looks of his workers and such I dont think it was much more than mine, he has no office space and a trailer and tools similar to mine.


Although the above mentioned contractor could have been full of Shi^t and just randomly selected a price, I dont know.

I am not talking of pulling a price out of my a$$ but actually knowing what to charge at any given moment, does anyone have that ability?

redwood

I'm in my 50's, have had my business for over 30 years and I will never give a firm quote at first glance. I may give them some very rough ball park figures, just to see if they are in the same ballpark.

On most decks, I have a spreadsheet that covers most things and I add and subtract to it as necessary.

I'm currently bidding a very large job that is not to my specifications. I will take my time on this one and get quotes from my suppliers first.

__________________
Mark
Los Gatos, CA
www.creative-redwood-designs.com

Patrick

I'm lucky, with the exception of decks, all of our work can be broken down in easy units which all have assigned dollar amounts. We always price on the spot except for decks or something super super custom. We get a lot of jobs because of the instant price.

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Originally Posted by Celtic
Like I said...I'm sure you are very good at what you do ~ whatever that is and where ever it happens.

John Hyatt

I like the A x 2 go around the best.

Biding is an art form, a combanation,learned skill. Much input is needed to get on stage and have them standing up yelling when you leave. Prices go to the bottom end.. Bid it to get it...to the Top end>> Man I can make good money on first draw<<

Of course the Contractor has got to Produce,all the smiling/waving will lead to real trouble if thats all hes got.

Deck Contracting all together is a local thing I am not going to get the money here in Cow Town that a New York roof top deck builder will get but I dont pay $50 for a burger either.

I never give an on the spot price to the Wallet,on the other hand I pretty much know what the costs are in the first half hour. Lumber,fasteners,machine, tool prices do go up and most always dont go down but for the most part I keep up on this and dont worry about it. I am intersted to a high degree with the Bottom Line, always follow the Money, after the figures are done the last entry is how much I can clear for This job,not the last one,or the one last year.

Float like a Butterfly, Sting like a Bee...dammm that guy was good..

J.

Bone Saw

I have a spreadsheet that ive perfected tweaked and added things to over the years that will make you drool, it will give me per unit material pricing on you name it, key is keeping all my pricing current, I have formated the cells and created seperate sheets that are all intertwined together so I'll know if there is an error somewhere

BuiltByMAC

Nice! I built one this spring that I'm working on tweaking when I get free moments...I've looked over all the jobs I've worked over the past 3 years and figured out time on task, materials costs, time spent on misc. actions, etc. I've used it on the last 5 bids I've done and after double-checking myself - I'm exactly where my bid needs to be!

I should've done this spreadsheet a couple of years ago! It takes experience to have the data to build it though...

Curapa, I never kick out a firm price in the initial meeting. My clients aren't expecting one and I'd shortchange somebody if I tried. You're not missing the boat on this one...

Mac

Meetre

Have to agree with Mac on this one...if they need a price on the first meeting, I don't need the work. Those types will usually only look at price, and end up with what they pay for.

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curapa

Thanks,

I will get started on one as soon as I can. What software do you prefer to use for yours? Excel?

hailey

my standard "ballpark" reply ...I guarantee it won't be more than $72,000...of course it jumps exponentially for larger jobs...$720,000....and for the really big ones 7.2 million... I feel like if you can give a price at the first meeting ....someone is definately losing. I like to give a price that's fair to my company and my customer....my boss demands it and has an impeccable rep

s. donato

i have a spreadsheet also... well multiple ones. the only part i haven't nailed down is the labor number. there is so many factors that effect the time to build something that i usually just look at like Curapa does and add the days then add one or two extra on just in case.

i am very confident in my material cost. my spreadsheet counts every nail, screw and gives me a nice shopping list in the end. i even have it populate a quote sheet that i can fax to my supplier, so i make sure my numbers are good. they usually get back to me with in a few hours so never a problem getting a firm price to my customers within a 2-3 working days.

i will sometimes ball park a number based on my recent jobs sq ft price. one thing i do for every job now is fill out what i call a "job ledger" this is kinda like a T&M invoice that only i see but it helps me estimate every future job to know how long it took to do A, B, and/or C. it takes a few hours in the end for a smaller job, but for larger jobs - every night when i come home i write up my days work and costs. doing this has then helped me see the swing in my sq ft price for any deck i have done - $50-275 per sq ft in just the last year.

since i charge for proposals i usually use my sq ft pricing to give someone a ball park range for free - ie 5k-15k if that doesn't fit in their budget i don't waste my time working up the proposal. i have walked away from a bunch b/c of the range not even being close. i know i could probably sell the customer on quality and why they want me but around here most are price conscious so no matter what i do there is someone lower priced that they will go with - just have to find the right customers and by doing this range this has helped me find the right ones with out wasting my time with the tire kickers.

thefencepost

I rarely give a price on the spot unless it is a very basic fence (not doing decks yet but plan to by the beginning of the year) because I prefer to do a complete take off on my projects to be sure my pricing is correct. Since my labor is all subcontracted by the foot, that pricing is easy.

When I was in the plumbing business I created a spreadsheet where I just had to put in the measurements and fixtures and it would calculate for me, am working on one for the fencing, and will surely do one for decks.

Also, I like to email or fax my estimate with a drawing I make using Open Office Draw, which I turn into a PDF to email or fax, this way I have everything stored on my computer for referencing to analyze estimates after each month to see what percentages I am winning.

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Keith R. Bloemendaal
Raleigh Fence Contractors, LLC
Fence Advice

rbsremodeling

I quote 80% of my jobs on the spot with a ball park figure. Kitchens, baths, basements and additions.

Unless is a unique design or special materials.

We also design everything we build so it gives us the ability to control cost to a point and keep to the budget we establish

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HallisseyDesign

I can give a ballpark on most things. I do that because the time I have wasted before with not giving a ballpark has well got me thinking lots of time i have wasted. Normally unless I have screwed up on my math which depending on the week doesn't within a thousand or so depending on the job. IF you do give out a ball park make sure it is high tho too. Then when you come down in price they like you even more. Well sometimes! Just make sure you cover your bills at the end of the day along with make a decent living.

PA woodbutcher

I sometime throw out a ballpark if I suspect that we are in different areas on budget, but as a norm no. If they are still interested I do a material listing and go from there. When looking at a job, I usually have an idea of what I want to make on it. Once "building" it on paper (or computer) I sometimes remember or see things that I hadn't thought of earlier. Thats what keeps me from thowing out the ballpark.

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Stone Mountain

Fences are easy. So much a foot, plus removal, gates, special conditions, etc.
Decks, I work out material and labour. We ususally give fence prices on the spot, but decks I'll work out and get back to them.

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smadax

Newbie company still working on our numbers, lots of research for every estimate and started a basic spreadsheet, add to it as needed. Small jobs I can have quoted in a day, large stuff can take up to a week just to figure out our unit/lin/ft costs.