What Is Your Way Of Estimating?

saucedo80

I recently bid high on three painting jobs. one was a victorian, the other was a modern two story exterior and the other was a two story interior.

I was later given advice by my old boss who has been painting for 30 years but is unlicensed, has never written estimates or contracts, and most importantly doesn't pay taxes on his work. He told me that i should "re think" my way of estimating. he said that i should hire some guys to do the work for me, and pay them less money therefore allowing me to lower my price and get more work. I responded by saying that if i hire one or two guys then i need to purchase workmens comp, i will need to supervise them, they probably will get the work done slower and in the end it is pretty much add up to the same price. His way of thinking though, is that if i hire a couple of guys to do the work for me and not pay workmen's comp then i could lower my hourly rate and beat my competition. However i thought that the hourly rate was based on overhead expenses, taxes and cost of labor, not just cost of labor alone?

For example, when i go bid on a paint job i first figure out the total hours it is going to take to do the job. then i multiply that number of hours by my hourly rate which i have already calculated based on my situation and it comes out to 40 dollars an hour regardless if i do the job myself or hire one or two guys to help me. I then add in for materials and wallah!! there is my price.

However my old boss was telling me that no contractor is going to bid 40 dollars an hour to scrape and sand or to mask. he was trying to tell me that if i get a guy to help me with the prep work then i can bid the prep work at lower rate, perhaps at what i am paying my helper, and then my price automatically becomes lower.

do any of you guys do this? do you bid different tasks at different hourly rates? does it work?

perhaps when you already have the ball rolling and have constant work, with one or two guys working steady, and know their production rate it can work, but i am just starting off i sometimes don't even have enough work for myself. I don't want to lower my prices too much because i don't want to join the low balling painters that bring the value of this trade down.

I bid every task at 40 dollars an hour regardless because i have noticed that if i hire some help to do a specific task it is almost for sure that he/she will do it slower because he/she isn't as experienced. so if i bid the masking on a particular job for example, i know that it will take me say, 2 hours, so i bid that particular task at 80 dollars, now if i get my helper to do this task, who is less experienced than me then i can't expect him/ her to do it in 2 hours it will be more like 3 or 4 hours. Say i pay him or her 15 dollars an hour then multiply that by four and it comes out to sixty dollars for my helper to it. It leaves me twenty dollars extra in that task for paying workmens comp, and making a little profit right? or say that person runs into some problems, cant get the masking gun to work, or wind blew off the plastic, and takes the person longer to complete the job that little extra will cover for it. These are just random numbers to help me explain my way of estimating they aren't the actual numbers that i use.

Does this make sense to you guys? is it logical? or do i reallly need to re think my way of estimating?

ProWallGuy

For a quick answer, your old boss sounds like a hack, the kind that are dragging the paint industry to its knees. Your way of bidding is way more on target to build a bigger and better business.

You said:
Then what is covering your wage while he is doing the prep? Nothing is, from what I see there. It'll will cover your helps wages, but it doesn't cover your pay at all? Where does he get that money from?

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Wallpaper Hanger St. Louis
Digital Murals Installation

slickshift

(yes, I've been waiting to use that smilie for a while)
But all kidding aside, I think PWG put it right into perspective
Very well put ProWallGuy

sauce, you are going about it the right way
Don't let your old boss lure you over to The Dark Side

AAPaint

Yup, sounds like he's telling you how to under-cut guys like me who have $1 million insurance policies, w/c, and a legit business license. I have absolutely no respect for people who work this way. They are making a serious dent in the professionalism of this industry.

Homeowner hires hack because of GREAT price. Hack messes up home...homeowner no longer trusts painters because of one bad apple. AND/OR Homeowner also sees no value in paying higher prices for better painters because hack did said work for 1/3 the price.

It's allready bad enough that half the homeowners comment "I was gonna paint it myself, but....." like it makes the price cheaper because they supposedly could have done it too.

We have enough of an uphill battle in this industry selling quality work at fair prices (meaning fair to them AND US!)...we don't need any more low-ballers, I prommise.

__________________
-AAPaint

AA Quality Painting & Pressure Washing LLC
Jacksonville Painters
Jacksonville, FL.

bluethumbnail

I agree, Sauce! Except that I don't recall you saying anything about markup. Several years ago, when I started out, I used to tell ppl that I get a discount on paint and that I would pass the savings on to them. Later, I got streetwise and realized that discount was mine and I was "buying" my jobs. Don't forget to use a fair markup for your time and gas to pick up your materials. One day, your paint pump will need a valve or two and the "company" should pay for that, NOT your paycheck! I'd say you're on the right bidding track. Develop it.

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Move your damn THUMB!

PipeGuy

Sauce, keep in mind that estimating and bidding, while interconnected, are not the same thing. One of the best things you can do to help your bidding is have a consistent method to estimate the cost of your jobs. Then have a system for deciding how much profit to add. If your not estimating costs consistently it can be very hard to know how to bid because you can't be sure of the real amount of profit that your price includes. When it comes to cost estimating, strive for consistency.
Also, finding ways to do the work for less, like having a lower cost 'helper' do certain tasks while you do others, is a great idea. While that may lower your job cost (estimate) it doesn't mean it has to lower your price (bid). Use it to your advantage as you see fit.

donb1959

Your old boss is a hack who doesn't know the first thing about the contracting business

And your right

I've started bidding by what I need to make per day, I bid $600.00 per day, and it doesn't matter what I do in that day. If it takes me all day scrapeing that doesn't change what I need to make in a day to cover my cost and allow for profit.

I don't consider lowballers here my competetion. Generally speaking I make allmost double on one job what it takes them two to make.

3 types of customers:

The customer that understands that nothing is free, and that if a price is too low, there's a reason for it. This customer wants a quality job on their largest investment, and is willing to pay a little more for the peace of mind that Shimmerz provides.

The customer that understands price only.Their logic is that the lowest price is best..period! I am often called in after these low priced contractors have finished.

The "tire kicker". A customer that either wants to get 10 bids and try to deciper what's involved in all these bids. This customer is usually not even interested in getting their project done, they just want to know how much it would cost....just in case.

val·ue (vly)
n.

An amount, as of goods, services, or money, considered to be a fair and suitable equivalent for something else; a fair price or return.


2.A principle, standard, or quality considered worthwhile or desirable:

I'm usually the high bidder on the job, but I'm professional in my presentation, and I do outstanding work. I cater to the folks that want value for their money, a good job done in a timely manner. My competetion can have the cheapos.

Keep doing things the way you do them, make money and do a great job, in the end you will be doing yourself and the rest of us legit contractor a favor

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I fish therefore I am
http://www.shimmerz.biz

saucedo80

thank you guys for the information you don't know how hard it is sometimes to get information and advice from the veteran contractors, its seems that they want every thing to be a secret that only they should know.
once again thank you guys