What to include when bidding - Contractor Talk - Professional Construction and Remodeling Forum

Richard · 10-11-2006, 07:51 AM

Friends and contractors alike, I seem to be hearing a lot of questions and answers on bidding and am starting to wonder if I 'really' get it. I'm not looking for your secrets, but I guess, some good tips and advice. What are the essential things I should be charging for, when bidding (aside from the basics).

For example, I dont charge for my insurance or account for wear and tear on my supplies, but I've heard others do. Seems like the reason that I'm complaining I dont make enough for what I do, is because it could be true. Any help would be appreciated.

TonyD · 10-11-2006, 08:15 AM

Quote:

Originally Posted by Paintguy26

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For example, I dont charge for my insurance or account for wear and tear on my supplies, but I've heard others do.

Unless everything goes unpaid, you are charging for those things, just putting that much less into your wallet.

Peladu · 10-11-2006, 08:17 AM

First thing is, don't believe everything you read, especially here.
Someone charged $1 for wear and tear on a brush? Yea I read that also.
All that means is that they don't have a grasp on estimating either.

It seems like you are worried about something now that may not matter.
The important things, for me, is to not be the lowest bid and not be the extremely highest bid. Other then that, who cares.

What I am trying to say is, who cares if they are charging extra for other little things? Does your final quote correspond with the competitors? If you are the lowest bidder, raise your prices, simple.

I do not, and will never, bid a job out down to the screw. Why waste my time on nonsense?

Here's something that I tend to go by as much as I can:
"Don't sweat the little things."

painterjim · 10-11-2006, 01:24 PM

Quote:

For example, I dont charge for my insurance or account for wear and tear on my supplies, but I've heard others do. Seems like the reason that I'm complaining I dont make enough for what I do, is because it could be true. Any help would be appreciated.

Paintguy,
You should be charging for everything, ofcourse one doesnt charge per job for wear and tear on a brush, but sooner or later this brushes are going to wear out and will have to be replaced, same with tires on the truck, roller naps, ladders, pens, etc.. You need to understand your total overhead. That means ALL overhead. Insurance should certainly be in that category.

Once you have determined what your TOTAL overhead is then you can determine how much you need per hour, per day, or however you do your estimating to meet those cost, then you will need to add onto that figure how much profit you are comfortable with making.

One thing is for certain, the most critical aspect of your business hinges on knowing your overhead then estimating to meet those cost plus profit. You really need to know if you are making enough, guessing is very bad business. And it doesnt take long to realize that not only have you not been making money, but you have been losing. If youve lost enough it can be very difficult to come back from.

Hammatime · 10-11-2006, 01:54 PM

Like painterjim said those things come out of your overhead. Say you do 50 jobs or 120 hours a month and you go through 2 brushes. You could take the cost of the two brushes and divide it between the 50 jobs or 120 hours that is your over head for brushes per job/hour. You do the same thing for everything else. You can do it by the job or by the hour. I think by the hour is better.

Richard · 10-11-2006, 06:32 PM

Quote:

Originally Posted by Peladu

First thing is.....
The important things, for me, is to not be the lowest bid and not be the extremely highest bid. Other then that, who cares......
What I am trying to say is, who cares if they are charging extra for other little things? Does your final quote correspond with the competitors? If you are the lowest bidder, raise your prices, simple.......Here's something that I tend to go by as much as I can:
"Don't sweat the little things."

Thanks everyone so far....and in response to you P~ as a general contractor I'm sure you see tons of bids from all different trades coming in, but I dont. I very rarely am in a situation where I know what my competition is bidding.. I'm a 1 man business and rarely find myself bidding against anyone (as far as I know). So, what I'm wondering is, how do I know I'm charging a good rate? I really dont want to

myself with bidding too high or low. Is it weird that after I go on a job and write up a proposal, I'm left thinking there is no way I can charge what I'm asking? I know I charge about $5-10/hr. less than the bigger companies in my area.

ATH · 10-11-2006, 06:57 PM

When I come up with an estimate, I try to make sure I can make the rate I want on the work and that I've accounted for all labor and materials that I'll put into it. If I can do that, I'll make enough money to take care of the bills and have some left over to sink back into the business.

Note that nowhere do I worry about what others will be estimating for the same work. There will always be those that will undercut me. Some of them may have lower overhead. Some of them may not realize that they are slowly bleeding to death.

I once read that you should quote a price that you would be happy with if accepted and not be disappointed if not accepted.

Hope this helps a bit with the psychology of pricing.

dougchips · 10-11-2006, 09:00 PM

Don't worry so much about being to high. I have bid paint jobs at $65 per hour 8 years ago and got them because the client wanted me. Show how you are different/better/offer more, create a want, if the client wants you they will have to pay your price.

If you don't create the "want" then you have to bid only on price and that sucks! Your kids will starve and your wife will leave you.

paint slinger · 10-12-2006, 12:43 AM

T&M plus overhead and profit...To figure time you must know your production levels how long it takes to complete a given task, keep a daily log while on the job site to determine your time, account for every thing. Overhead accounts for everthing it cost you to do buisness, gas,equipment,advertising,insurance,association dues ect, this is figured into what you want to charge per hourly rate. Then add for profit. I have only been in buisness for three years and by no means an expert on bidding but have began using this as my guide on bidding jobs...All taken from this site mostly moderators advice on this subject.

Terrence · 10-12-2006, 03:11 AM

Here's a good way to tell if you are charging too much or too little:

If you say "ok that comes to $6780.00", and the client says "can you start tomorrow", you are too low. On the next job, increase by 5-10%.

If they say "Uh, ok. Well... let me talk to my husband about it. I'll have to call you tomorrow to let you know what we decide". That means you are either too high or just right. If they agree, and sign, then you are just right. If they turn you down, you may still be just right.

Your price should make them slightly uncomfortable, but your selling skills should make them want you at any price.

...and for crying out loud, don't forget 10-25% for company PROFIT!
...Oh wait, you're not a non-profit are you?

BMAN · 10-12-2006, 06:51 AM

I stand by my comment of including your brushes and any other equipment for that matter. The need to be aware of your total cost is important. I do not itemize those types of things in my estimate but I was trying to make him aware that he needs to price something high enough to cover his total business not just what he wants to make that day. I almost always find my prices in the middle of the spectrum after I get the job and talk with the customer. Peladu with the amount of experience you have its easy for you to know what it takes to cover all your expenses. The guy asked for real info to base his estimates on. My goal was to make sure he knew every little thing he is putting into that job.

Peladu · 10-12-2006, 07:32 AM

Quote:

Originally Posted by BMAN

Peladu with the amount of experience you have its easy for you to know what it takes to cover all your expenses. The guy asked for real info to base his estimates on. My goal was to make sure he knew every little thing he is putting into that job.

I understand that, but my general point was that he may be doing just fine the way he's doing it now. If he's in the middle of the ballgame, then why change what he is doing? He's going to start playing with his system and rearrange the way he bids, for what? To come to the same number he did before the change? That's like creating extra work to come up with the same conclusion. I didn't see the sense in it. If you don;t think you are making enough. charge more, sounds as simple as it is.

BMAN · 10-12-2006, 09:15 AM

Do we ever make enough? Thanks. B

paint slinger · 10-12-2006, 01:19 PM

Selling your self is a big factor in getting jobs at a higher than competion price.By being and looking professional you earn the HO trust and there by convincing the HO your the only painter he wants in his home. Clean company vehicle with company logo..shirts with company logos....SW or BM color charts and spec sheets on the material you will use. Professional bid sheets,Copy of insurance and buisness license and references that the home owner can use. Sell your self- point out the things you will do that others will not, listen to the home owners needs and engage him in conversation making them feel at ease with you. I explain that my buisness is faimly owned and operated and that i am his nieghbor from the next town over, compliment him on his home his town his yard.These things I have learned off this site and real life...they seem to work for me

Richard · 10-12-2006, 05:37 PM

Quote:

Originally Posted by paint slinger

Selling your self is a big factor in getting jobs at a higher than competion price.By being and looking professional you earn the HO trust and there by convincing the HO your the only painter he wants in his home. Clean company vehicle with company logo..shirts with company logos....SW or BM color charts and spec sheets on the material you will use. Professional bid sheets,Copy of insurance and buisness license and references that the home owner can use. Sell your self- point out the things you will do that others will not, listen to the home owners needs and engage him in conversation making them feel at ease with you. I explain that my buisness is faimly owned and operated and that i am his nieghbor from the next town over, compliment him on his home his town his yard.These things I have learned off this site and real life...they seem to work for me

Great points slinger....I am a very nice, confident painter. I tend to be too nice and try to be friends too much. I def. have a clean van, ladder racks, logo, fandecks, spec sheets, extra paperwork, ins, license, etc.

2 things I think I really need to work on are getting some shirts made up. I actually found a place with no minimum purcase requirements about 1 block away from where I live! Shirts will help, I'm sure. The other thing, is I dont carry references on me. I need to work on getting that whole aspect organized. All my customers are satisfied ones, so that isnt an issue. I just dont have anything on paper from them. I'm mad at myself for not doing this yet, but I'm learning.

paint slinger · 10-13-2006, 12:07 AM

Paint guy.....I bought 2 shirts with company logo in hunter green that I wear with tan dockers for all my bids. I believe it was around 50.00 for the set up fee and another 50.00 for the two shirts pretty cheap and looks professional. I printed up sheets using previous customers as references (with HO permission). Very few customers prob use it but shows you can back up the quality of your work, and I allways provide it. I have had recent customers complain that the bid was more than they expected but still managed to sell the job and others dont really bat an eye in most cases. It took me a while to go from being a good painter to a good sales man...but it really pays off. Do you use company signs?
I have been getting work off mine cost me 75.00 bucks and have gotten two good jobs in the last 3 weeks.

Richard · 10-13-2006, 06:54 AM

hey slinger...

yeah, I've got 2 yard signs~they look good too

I guess, from what you say, maybe I need to work on the salesman part of painting a bit more. I dont feel like I sell myself that well, now that I think of it. I think the main reason is I just need to get more organized. I need to refine my 'package' that I present at the estimate. I am a very socialable guy, so at least I have that going for me- that will only get me so far though....

Terrence · 10-13-2006, 10:15 AM

Quote:

The other thing, is I dont carry references on me. I need to work on getting that whole aspect organized. All my customers are satisfied ones, so that isnt an issue. I just dont have anything on paper from them. I'm mad at myself for not doing this yet, but I'm learning.

---
If you get anything from the customer, it's a testimonial, right? "yeah so and so did a great job and showed upon time..." blah blah.

You could easily type up the names and phone numbers of the last 10-20 jobs you did, and hand it off so your prospects can call around. No big deal. None of my customers mind being called. Go for it.

lmcgrew79 · 10-14-2006, 09:34 PM

I believe the market which you live and work in, is what sets the price. Just because a company cant control their overhead doesnt mean that their price should go up because they just purchased a dually diesil truck that they dont need. The customers and market determines the price that you charge. If your company has to have 45 dollars per man hour, and your in the market of cheap residental or apartment repaints, your probably in the wrong market. As a union commerical contractor, a residential contractor asked me once how we operate off what we have to pay our men. Then proceeded to tell me he bids against people that will paint a house inside for 500 dollars. I told him unless he likes ramon noodles, he better change markets, or try something else. Determine what your good at, how to be profitable, and which market suits you best. Then Control your overhead, work hard, and enjoy the profits.