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Pricing Guide For The Inexperienced!!

 
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Old 08-30-2005, 10:06 AM   #1
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Pricing Guide For The Inexperienced!!


Hello Everybody,
I figure there's a couple of roofing contractors within this site that might
lend me a hand. I'm in the process of giving a couple of bids on two roof jobs totaling 36sq. I have some experience in roofing but not in pricing it out. I'm from Sothern Mass. I'm getting a lot of mixed messages up here as to how much I should charge to tear off two layers and lay new architectural shingles/new flashing and ice dam material. I know one person who paid $425.00 per sq. in your opinion is this to much,and if so what might be the norm for this area. Thanks Paul
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Old 08-30-2005, 03:48 PM   #2
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Re: Pricing Guide For The Inexperienced!!


Do you have the proper licensing and insurance to install a roof? Roofing contractors carry special insurance much higher than the industry norm and most areas require roofers to be licensed.

Pricing by the square is a great way to go into bankruptcy. I don't know the details of the job so I can't comment on the cost, but to give you an idea I am in the middle of a job where I was about $475 a square and I was the low bidder. On average I am usually around $220 but every job is different as you can see. On new construction I can sometimes be as low as $175 and still make money depending on the size and style of the building.

My advice to you is to throw the per square rate out the window. Figure out how much the materials will cost you. Figure out how much time this will take you and figure out how much you want to make on the job... This is really the only way.

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Old 08-30-2005, 06:18 PM   #3
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Thanks Grumpy, I do have comm. Ins. with some light roofing added in but I seldom do roofs. So maybe I'll put a rider on for these 2 jobs. heres the deal one job is a 4 pitch approx. 16sq. 2 layers. I'm thinking of chargeing 460. per sq.materials come out to just under 2500.00. I don't want to rip anybody off but at the same time I don't want to give my time away either. the other job is 20 sq. 8 pitch 2 dormers and some trim and siding involved this one I'm thinking of charging cust. 390. per sq. this customer is a little more frugal.
Gotta go where the money is right! thanks for the reply. Paul
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Old 08-30-2005, 08:04 PM   #4
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Re: Pricing Guide For The Inexperienced!!


Sounds like you have it all figured out and are just looking for the thumbs up from someone slightly more experienced. In that case :Thumbs:
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Old 08-30-2005, 08:37 PM   #5
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Re: Pricing Guide For The Inexperienced!!


Quote:
this customer is a little more frugal.
You can't adjust your prices because of this, or you'll be adjusting for every customer. Some customers want it done right.."no matter what, do it right...all the bells and whistles...i don't care...as long as it's RIGHT" and are willing to pay for it. Others are, as you say, "frugal" (and as I say...CHEAP), and just want the job done to an acceptable(barely) level. "I think the flashing is still good so you don't need to replace that"..."this little porch roof can just be covered over instead of torn off"...blah...blah...blah...and to them I say,
"I COULD just leave the old flashing, I might even agree that it's still good this time around, but will it be in another 15 to 20 years? Probably not. So, I can inspect the job(not for free either...this cost may or may not come off the price of the job if you hire us, depending on how much of a PITA you are) and report what I find and you can decide if you want us to do the job right, or if you want to go down to "Hack Street" where you can pick from a hundred "roofers" that will be happy to leave anything you look at (from the ground) and say is good"

BTW what I put in (here), I obviously wouldnt really say outloud to a customer
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Old 08-30-2005, 11:15 PM   #6
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Re: Pricing Guide For The Inexperienced!!


And that's the bottom line as long as it is "right."I try to live and breathe by these standards. It is hard to explain this to some home owners.alot of people think they are getting a deal just leavng the things that they think will pass or make it for now. I have learned over time to walk away from these people . I can't live with my conscience if I do a Half ass job.
Quote:
Originally Posted by jproffer
You can't adjust your prices because of this, or you'll be adjusting for every customer. Some customers want it done right.."no matter what, do it right...all the bells and whistles...i don't care...as long as it's RIGHT" and are willing to pay for it. Others are, as you say, "frugal" (and as I say...CHEAP), and just want the job done to an acceptable(barely) level. "I think the flashing is still good so you don't need to replace that"..."this little porch roof can just be covered over instead of torn off"...blah...blah...blah...and to them I say,
"I COULD just leave the old flashing, I might even agree that it's still good this time around, but will it be in another 15 to 20 years? Probably not. So, I can inspect the job(not for free either...this cost may or may not come off the price of the job if you hire us, depending on how much of a PITA you are) and report what I find and you can decide if you want us to do the job right, or if you want to go down to "Hack Street" where you can pick from a hundred "roofers" that will be happy to leave anything you look at (from the ground) and say is good"

BTW what I put in (here), I obviously wouldnt really say outloud to a customer
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Old 08-31-2005, 05:39 AM   #7
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Re: Pricing Guide For The Inexperienced!!


"16sq. 2 layers. I'm thinking of chargeing 460. per sq.materials come out to just under 2500.00"

Are you using the gold-plated shingles? How do your material costs come out to over $150/square? Even with new sheathing and 40-year architecturals, material shouldn't even hit $100/square. You might want to recheck that.

Bob
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Old 08-31-2005, 12:03 PM   #8
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Re: Pricing Guide For The Inexperienced!!


Quote:
Originally Posted by Paul Nee
Hello Everybody,
I figure there's a couple of roofing contractors within this site that might
lend me a hand. I'm in the process of giving a couple of bids on two roof jobs totaling 36sq. I have some experience in roofing but not in pricing it out. I'm from Sothern Mass. I'm getting a lot of mixed messages up here as to how much I should charge to tear off two layers and lay new architectural shingles/new flashing and ice dam material. I know one person who paid $425.00 per sq. in your opinion is this to much,and if so what might be the norm for this area. Thanks Paul
Paul,

Your rate per square should be driven by your costs and expectations not the so-called “going rate.”

Pricing by the square or by the hour works fine provided the rate was based on the financials.

To calculate hourly a contractor takes all their overhead, marketing, sales cost and profit expectations for a year and divides that by the number of man-hours produced in a year. This will give you the amount of money you need to receive for each hour to pay your non-direct costs and make a profit. It is somewhat more complex that this explanation but that is the general idea.

Pricing by the square is used successful when there is an agreed labor rate per square and known material rate.

When pricing by the square “degree of difficulty” will change the labor rate significantly and material slightly.

Based on reviewing probably 1,000 financial statements of profitable contractors the bottom line is Direct Cost (labor, material & labor burden) should not exceed 50% of the selling price. This allows 50% to pay for marketing, sales, owner’s management salary (10% of gross sales) overhead and profit.

This rough formula works for companies up to about $3 million. Small companies in the $250,000 - $500,000 range have a higher overhead cost because there is less revenue dollars to support the overhead. Many small contractors mistakenly think because they are small they need less overhead. This is why they often go out of business o burn out because they are not being paid what they are worth.

Labor & material = 50%
Marketing = 5%
Sales Cost 10%
Overhead 25%
Profit 10%

Hope this helps…Richard
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Old 08-31-2005, 03:06 PM   #9
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Re: Pricing Guide For The Inexperienced!!


Hello Richard
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Old 09-01-2005, 09:07 PM   #10
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Re: Pricing Guide For The Inexperienced!!


I would like to thank all of you for your responses. The information that people can come away with from this site is invaluable. The advise I've gotten will help me in my business. Maybe I'll succeed maybe I won't, If I don't! it was'nt because I did'nt try.
Hey Bob, How's it going? As I said I don't normally do roofing but heres what I come up with.
Heres a break down on my materials let me know if I'm way off.
$55 per sq. shinglesx16 =872.
$600. Dumpster
$100. ice dam
$25. nails
50. felt paper
$50. flashing
$200. staging rental (don't have any)
total $1897.00
Difference $603.00 included in this cost is.
The estimate you know it's never free
includes mark up and any misc. spending.including
2 nail gun rentals cost ?
Hell I did'nt even think about charging them for the gas I'd need to get to the job!
I just spent $3.15 per gallon today. I did my recheck and I feel I'm in the right .
Thanks again Paul
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Old 09-01-2005, 10:25 PM   #11
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Re: Pricing Guide For The Inexperienced!!


200 for staging rental......if your talking about roof jacks, that seems high to me...around here you could BUY enough jacks to work a 16 square roof for less than 200...and thats those nice 2x10 jacks....ahhhhh it's like walking on a floor in the sky ...at any rate, around here jacks are about 7 each for 45 or 60 fixed...adjustables are a little more
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Old 09-02-2005, 05:20 AM   #12
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Re: Pricing Guide For The Inexperienced!!


you might want to figure a bit more for nails,(they always bend and/or jam, especially using rented nail guns) paper ( it tears easily if you're not VERY careful)and Flashing (once you bend it or cut it wrong, there goes one piece down the drain. don't back yourself into exact amounts they never end up that way. also a good idea to have an extra square or so of shingles. you can make a mistake or three and still be ok,and it's good practice to leave your customer a bundle or two in case any become damaged in a storm or anything in the future. shingles are almost impossible to match exactly after a few years. good luck!
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Old 09-02-2005, 07:35 PM   #13
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Re: Pricing Guide For The Inexperienced!!


Dont forget to add a coupla percent for contingencies.
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Old 09-03-2005, 07:37 PM   #14
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Re: Pricing Guide For The Inexperienced!!


Thanks Carpenter 1st ,
As I stated in my original post I'm not a roofer by trade any more, Have had years of experiance 20 yrs. ago . Good advise to have extra shingles . I would not have thought of that until I make my the mistakes that I'm obviously going to make , being out of the business for so long. Taking a mental note right now!
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Old 09-03-2005, 07:57 PM   #15
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Re: Pricing Guide For The Inexperienced!!


Hey jproffer,
Hows it going? Picture this ,Your a Independent courrier you drive your own van or truck to make your living. You get a call to drive lets say 20 or 25 miles to pick up a 3 sections of pipe staging you drive it to a job site, set it up and then you leave. You know your expected to go back a cou[ple of days later to break it all down thow it in your truck and deliver it back to the spot were you picked it up. Then unload your truck or van. At $3.30 a gallon for gas, Add what ever you think you want for an hourly rate. Now does $200.00 sound like alot for staging rental? Perspective is everything my man!! Don't give your time away.... Thanks Paul
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Old 09-03-2005, 08:01 PM   #16
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Sorry jproffer, I forgot to mention the stagging rental is $120.00 . Who's getting a good deal.
Thanks Paul
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Old 09-04-2005, 09:55 AM   #17
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Re: Pricing Guide For The Inexperienced!!


Hi...this site work very well.

Richard
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Old 09-04-2005, 04:54 PM   #18
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Re: Pricing Guide For The Inexperienced!!


when he said staging, I was thinking roof jacks...so put yourself in my shoes at the time...and picture this: You drive to the big box, BUY roof jacks at around $7 each, take 'em to the truck, throw em all in a bucket, take 'em to the job site, use them, and KEEP them...forever........now $200 is a little high.

But yes, if he meant scaffolding, then yea, I'd go along with $200.
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Old 09-04-2005, 10:18 PM   #19
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Hey jproffer, You think that was brain fart, When you said roof jack , I forgot what the hell they were.
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Old 09-04-2005, 11:09 PM   #20
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Re: Pricing Guide For The Inexperienced!!


For a remodeling business such as mine a 50% markup = 33% gross margin is good,a 67% markup is better anything more is unheard of. To simplify if direct labor+burden is $3000,material costs+tax delivery are $3000 then your selling price to the end user sould be at least $9000.

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