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Old 07-08-2019, 04:28 PM   #1
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New To Bidding


Hi everyone I'm new to budding for home repair. And I have to bid for vinyle flooring base trim painting and replacing all the doors and a few windows. Can anyone give advice on how to go about it all
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Old 07-08-2019, 05:39 PM   #2
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Re: New To Bidding


break it down by task and assign man hours as you go.

total the man hours & multiply by your rate.

only you know how fast you can work...

add materials and p&o and there you have it.

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Old 07-08-2019, 10:57 PM   #3
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Re: New To Bidding


Quote:
Originally Posted by griz View Post
break it down by task and assign man hours as you go.



total the man hours & multiply by your rate.



only you know how fast you can work...



add materials and p&o and there you have it.


Yup, its that simple!


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Old 07-08-2019, 11:34 PM   #4
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Re: New To Bidding


A few things I picked up starting out last April... Almost every job will have unexpected hiccups and costs so don't try to estimate too tight, give yourself a little cushion. Don't fall into the trap of trying to give customers a good deal or cut them a break, make sure you are making enough to make it worth your effort or you'll burn out quickly. I always estimate at a rate higher than I actually want to be making and usually after said hiccups and unexpected costs I wind up right at where I was hoping to be. Not saying that's the right way to do it but it works for me.
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Old 07-09-2019, 06:32 AM   #5
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Re: New To Bidding


Quote:
Originally Posted by Dontashvida View Post
Hi everyone I'm new to budding for home repair. And I have to bid for vinyle flooring base trim painting and replacing all the doors and a few windows. Can anyone give advice on how to go about it all
Are you looking to make wages or develop pricing for running a business? Many confuse the two (BTDT)... if it's developing pricing for running a business, you can use the following to get you going...
LOMP (with a brief descriptor of each)...

Labor - includes all aspects of labor (your pay, an employees pay, loaded costs like taxes/insurance, benefits, etc.)

Overhead - These are your annualized and variable costs... W/C, Business Insurance, Cell Phone, Truck payment if you have one, vehicle insurance, gas, repairs, the list goes on and is different from company to company...

Materials - self-explanatory but don't forget to include a mark-up to include handling, delivery, etc.

Profit - This is what you pay your company. It is NOT what you pay yourself as a wage. This is to used to develop your company and put together (ideally) 3-6 months of Capital Reserves (what it takes to run your company for 3-6 months in Labor and Overhead), Emergency Fund (self-explanatory - unexpected tool or vehicle repairs, customer doesn't pay, etc.), Marketing and Equipment Fund... it is usually a percentage based on the total of the Labor, Overhead and Material (total the three up and multiply by the percentage you need to make over a year to develop the above).
To make sure YOU get paid, your Labor and Overhead are covered in your Hourly Rate... Your pay is NOT what's left over after everyone else is paid but part of your Labor costs... This is how much you need to make per hour to cover yourself, any employees and/or business expenses. It is usually based off a 2080 hour yearly total (i.e. - 40 hours/week) so adding the two together (Labor and Overhead) and dividing by 2080 will give you your Hourly Rate. You can choose to work more or less than 40 hours but keep in mind the hourly rate will need to be adjusted accordingly. For example...
1. If you want to make $75K/year, but only want to work 35 hours/week, you're going to have to charge more than you would have per hour than if you worked 40 hours.

2. If you want to make $75K/year, but want to work 50 hours/week, you're going to have to charge more than you would have per hour than if you worked 40 hours to take into account overtime.
Your 40 hours/week (2080/year) is your baseline.

So a quick example of your hourly rate...
Labor - $75K yearly income (or $36.05/hour based on 2080 hours per year)

Overhead - Different for every company, but let's just say $25K (or $12.02/hour based on 2080 hours per year) for a one man show.
So you would need to charge a minimum of $48.07 per hour to cover those base costs (they do not take into account everything for YOUR company - you have to do that, and are only for illustration purposes on how to get to an Hourly Rate - fill-in all applicable numbers).

Now comes the part that tricks up a lot of guys starting out... Figuring out how many hours a job will take... that's going to be a combination of experience and tracking over time. There's no escaping it, but ways to minimize potential issues. Hang enough doors/windows and you'll get an idea of how much time it takes (that will also change over time with experience). But until you have a handle on that (only you know how long it takes YOU to do something), you're going to start out with a guesstimate. In the beginning, whatever amount of hours you come up with, it'll be in your best interest to multiply it by a factor of 1.25 to get the hours you need to charge for...

Now, if you're like most every other guy out there, when you add everything up, you're going to look at the number(s) and think there's no way you can cover all that.... you ABSOLUTELY can... get that thought right out of your head, because there are hundreds of thousands out there doing it...

Those numbers are the COST of being in business... EVERYONE ELSE will expect to be paid (your suppliers, your subs, the government, the permit department, the cell phone company, the gas station, etc.) from your project. The ONLY place that has any flexibility in your numbers are what you pay yourself personally as part of the Labor costs or the Profit you pay your company.

Do NOT make the mistake of thinking everyone is your customer (i.e. - retail mindset), they're not... You should be looking for customers that can support what you and your business needs to make. Once you find them, do an EXCELLENT job of under-promising and over-delivering and you'll find yourself with access to their referral base who is usually people within the same demographic (i.e. - income stratosphere).

Does that mean that from time to time you're going to take on a schedule filler or a customer you just want to help out, making a little less, sure, but that is the exception, not the rule, if you want to be able to support your family/income and companies income.

Feel free to ask any questions...

Best of luck... 8^)

Last edited by KAP; 07-09-2019 at 06:34 AM.
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Old 07-10-2019, 05:55 AM   #6
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Re: New To Bidding


Quote:
Originally Posted by KAP View Post
Are you looking to make wages or develop pricing for running a business? Many confuse the two (BTDT)... if it's developing pricing for running a business, you can use the following to get you going...
LOMP (with a brief descriptor of each)...

Labor - includes all aspects of labor (your pay, an employees pay, loaded costs like taxes/insurance, benefits, etc.)

Overhead - These are your annualized and variable costs... W/C, Business Insurance, Cell Phone, Truck payment if you have one, vehicle insurance, gas, repairs, the list goes on and is different from company to company...

Materials - self-explanatory but don't forget to include a mark-up to include handling, delivery, etc.

Profit - This is what you pay your company. It is NOT what you pay yourself as a wage. This is to used to develop your company and put together (ideally) 3-6 months of Capital Reserves (what it takes to run your company for 3-6 months in Labor and Overhead), Emergency Fund (self-explanatory - unexpected tool or vehicle repairs, customer doesn't pay, etc.), Marketing and Equipment Fund... it is usually a percentage based on the total of the Labor, Overhead and Material (total the three up and multiply by the percentage you need to make over a year to develop the above).
To make sure YOU get paid, your Labor and Overhead are covered in your Hourly Rate... Your pay is NOT what's left over after everyone else is paid but part of your Labor costs... This is how much you need to make per hour to cover yourself, any employees and/or business expenses. It is usually based off a 2080 hour yearly total (i.e. - 40 hours/week) so adding the two together (Labor and Overhead) and dividing by 2080 will give you your Hourly Rate. You can choose to work more or less than 40 hours but keep in mind the hourly rate will need to be adjusted accordingly. For example...
1. If you want to make $75K/year, but only want to work 35 hours/week, you're going to have to charge more than you would have per hour than if you worked 40 hours.

2. If you want to make $75K/year, but want to work 50 hours/week, you're going to have to charge more than you would have per hour than if you worked 40 hours to take into account overtime.
Your 40 hours/week (2080/year) is your baseline.

So a quick example of your hourly rate...
Labor - $75K yearly income (or $36.05/hour based on 2080 hours per year)

Overhead - Different for every company, but let's just say $25K (or $12.02/hour based on 2080 hours per year) for a one man show.
So you would need to charge a minimum of $48.07 per hour to cover those base costs (they do not take into account everything for YOUR company - you have to do that, and are only for illustration purposes on how to get to an Hourly Rate - fill-in all applicable numbers).

Now comes the part that tricks up a lot of guys starting out... Figuring out how many hours a job will take... that's going to be a combination of experience and tracking over time. There's no escaping it, but ways to minimize potential issues. Hang enough doors/windows and you'll get an idea of how much time it takes (that will also change over time with experience). But until you have a handle on that (only you know how long it takes YOU to do something), you're going to start out with a guesstimate. In the beginning, whatever amount of hours you come up with, it'll be in your best interest to multiply it by a factor of 1.25 to get the hours you need to charge for...

Now, if you're like most every other guy out there, when you add everything up, you're going to look at the number(s) and think there's no way you can cover all that.... you ABSOLUTELY can... get that thought right out of your head, because there are hundreds of thousands out there doing it...

Those numbers are the COST of being in business... EVERYONE ELSE will expect to be paid (your suppliers, your subs, the government, the permit department, the cell phone company, the gas station, etc.) from your project. The ONLY place that has any flexibility in your numbers are what you pay yourself personally as part of the Labor costs or the Profit you pay your company.

Do NOT make the mistake of thinking everyone is your customer (i.e. - retail mindset), they're not... You should be looking for customers that can support what you and your business needs to make. Once you find them, do an EXCELLENT job of under-promising and over-delivering and you'll find yourself with access to their referral base who is usually people within the same demographic (i.e. - income stratosphere).

Does that mean that from time to time you're going to take on a schedule filler or a customer you just want to help out, making a little less, sure, but that is the exception, not the rule, if you want to be able to support your family/income and companies income.

Feel free to ask any questions...

Best of luck... 8^)
this is AWESOME !( one of the best answers i`ve seen in a while )
just printed it out for myself
i am 60 , on my own since 27 years old

as i`ve gotten older , i wrestle with just this
worrying if clients will take the cost . it always seems high to me , because i`m thinking ... like i`m gonna pay this , and i couldn`t afford it.
was just meeting my plaster guy , and electrician , and designer for a bid yesterday evening.
i notice my vehicle was the crappiest of all of them
and i`m the g.c. of the job .
was talking to the electrician , about just this,
he said " your doing the same as my dad . he is a mechanic , and always tries to be a good guy , and wants to give " fair" numbers all the time , but hes always broke"

i think i have to grow up ..... now!

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