A few pointers for a newbie...
Hello all, I have been browsing this site for months and have finally registered. I believe I filled out all the required data and info, If I missed something please let me know.
A little about me: I have been doing carpentry and remodeling all my (working) life. I started as a laborer for a window and door company and caught the bug! Anyway, many years later, after working for many other contractors, and a carpentry trade school, I've decided to start working towards going out on my own. I have been doing a tremendous amount of research regarding licensing, insurance, marketing, budgeting, etc. mainly on this site. I plan on saving up atleast 6mos. living expenses and 6mos. of working capital (overhead costs) before going out on my own full time.
The one area I can't really get my head wrapped around is how to project, or estimate my first years sales in order to figure out my overhead percentage to add to each job. I want to estimate and budget correctly, not just throw numbers at jobs. The only thing I could really come up with is calling local contractors, remodelers, etc. and asking them what a realistic range would be for my first years sales. However, I don't know how willing they will be to help out. I have no problem doing that, the worst they can do is hang up on me. I was wondering if any of you would be able to give me any suggestions, or methods of figuring this out. I am in the Baltimore area. I'm basically planning on doing general contracting, from 1/2 baths to additions. I am skilled to handle most of the work and will sub out what I need to. If any other info is needed to answer my questions let me know, or PM me. Thanks guys.
A little about me: I have been doing carpentry and remodeling all my (working) life. I started as a laborer for a window and door company and caught the bug! Anyway, many years later, after working for many other contractors, and a carpentry trade school, I've decided to start working towards going out on my own. I have been doing a tremendous amount of research regarding licensing, insurance, marketing, budgeting, etc. mainly on this site. I plan on saving up atleast 6mos. living expenses and 6mos. of working capital (overhead costs) before going out on my own full time.
The one area I can't really get my head wrapped around is how to project, or estimate my first years sales in order to figure out my overhead percentage to add to each job. I want to estimate and budget correctly, not just throw numbers at jobs. The only thing I could really come up with is calling local contractors, remodelers, etc. and asking them what a realistic range would be for my first years sales. However, I don't know how willing they will be to help out. I have no problem doing that, the worst they can do is hang up on me. I was wondering if any of you would be able to give me any suggestions, or methods of figuring this out. I am in the Baltimore area. I'm basically planning on doing general contracting, from 1/2 baths to additions. I am skilled to handle most of the work and will sub out what I need to. If any other info is needed to answer my questions let me know, or PM me. Thanks guys.
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First year sales
Worst case sub 75k, basically working for 15 an hour.
Mid range 80 to 150k doable with a good marketing plan and long hours.
Ambitious 150 to 250k. Selling a product in an industry where you already know the numbers procedures and have some trade relationships.
Worst case sub 75k, basically working for 15 an hour.
Mid range 80 to 150k doable with a good marketing plan and long hours.
Ambitious 150 to 250k. Selling a product in an industry where you already know the numbers procedures and have some trade relationships.
Thanks alot that def. helps!
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There must be an app out there that can project sales based on the billions of variables involved.
Sorry guys, just having a bad morning. But its not like I was asking how to price a job or how to figure out 16" oc. Did you automatically know how to make an educated goal on your first year sales? I'd rather ask for help than take a shot in the dark and end up in the 95% group.
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I would say 250k or more better be your first years sales if you are going to eat as a GC....:blink:
Metro, do you mean labor or labor, materials, subs, expenses ect....
Metro, do you mean labor or labor, materials, subs, expenses ect....
Yes, this thread is now shorter than it was. Kind of a shame that now we look like jerk offs picking on the new guy when it's the other way around.
Yeah, if youre going to use subs. But if hes hands on one man show starting out fresh these are the numbers Ive seen.
So many guys start out and have no marketing, then they expect to sell 10 15k bath remodels and a couple 40k kitchens and that isnt going to happen unless your dad can give your name out to his thirty year client list or he has 15 to 30 grand for advertising and a developed crew and sub list.
So many guys start out and have no marketing, then they expect to sell 10 15k bath remodels and a couple 40k kitchens and that isnt going to happen unless your dad can give your name out to his thirty year client list or he has 15 to 30 grand for advertising and a developed crew and sub list.
Good point metro I was planning on setting aside 10k for startup marketing, what in your opinion is the best and most professional way of attracting clients who not only need but can afford higher end remodels? Obviously I wont be able to rely on word if mouth, but i also don't expect on craigslist to produce a 15k bathroom! However although i dont mind doing it, i dont see door to door in nice neighborhoods or mass mailers really getting me that either. Is my best bet just getting a business card in as many hands as possible and striking up impromptu convos and rely on the other methods kind of as back up?
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I currently have ads up on craigslist but I dont get a whole lot from there because im not willing to discount my services at the cost of my reputation or in the fairness of other hard working and respectable contractors. All leads through there get mark up and profit, etc not just a junk number that i know will get me the job, im trying to do everything right from the start.
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If your looking for the high end clients you aren't going to find them on Craigslist or Kijiji.
You cant do MEPs down here unless your liscensed. We did everything that was legal when we started, wouldnt of been open long at those #s. Never spent any real money on marketing. The old man did get us a lot of work out of his Roledex, but most of it comes from hunting them down and finding them. Getting in front of the right people.
Gotta have the time to go pound the pavement and time costs money. Insufficient reserves makes it possible to run out of money before you meet the right people.
Meh we kinda are jerk offs...
check out this thread,
it will help you with estimating
http://www.contractortalk.com/f16/estimating-excel-small-contractor-youtube-129319/
it will help you with estimating
http://www.contractortalk.com/f16/estimating-excel-small-contractor-youtube-129319/
I built my first years budget assuming I would be my only labor and that I would work for 2,000 hours. I then used $42 an hour for my labor rate. That is $84,000 of labor. I assumed that as far as cost is concerned material would be around half. That now brings things to $84,000 x 2 = $168,000. I then added up all my costs of being in business and my planed profit and came up with a multiplier to apply to job budgets. My cost of doing business was $21,000 and my planed profit was 5%. That put my first years goal at $198,450. My multiplier to cover overhead was 1.18. I would have to look back to see how everything went down but it got me started well enough that the numbers where working.
On site 7-530. Shower and start networking. :thumbsup:
Don't bother trying to predict the future. As long as you know all the costs of contracting, just build them into your hourly rate. That's why electricians, for example, charge $100 an hour around here. An employee making that would gross about 200k a year, but the sparky isnt making that. All his overhead is built into that rate, no need to project the future.
Until you have some financial numbers to look at to review your business, you can get away with just kind of guessing at it, just add "a bunch" for this and "a bunch" for that.
For example, you're taking a job that requires 3 trips and is 30 miles away, dont spend all day calculating gas cost and wear-and-tear on the vehicle, just add a few bucks onto the bid.
You seem like the guy who wants to have every dollar accounted for, which is fine, but not all in the beginning.
Until you have some financial numbers to look at to review your business, you can get away with just kind of guessing at it, just add "a bunch" for this and "a bunch" for that.
For example, you're taking a job that requires 3 trips and is 30 miles away, dont spend all day calculating gas cost and wear-and-tear on the vehicle, just add a few bucks onto the bid.
You seem like the guy who wants to have every dollar accounted for, which is fine, but not all in the beginning.
Thanks, yeah i've watched that a few times already, good stuff!
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