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Discussion Starter · #1 ·
Overhead and profit, who shows on the estimate your overhead costs and profit?
 

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Painting Contractor
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I used to... but after some advice from PWG and some others I took it all out. Now it just shows one dollar amount. The price.
 

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Discussion Starter · #5 ·
Ok just to let everyone know, i do not do either overhead or profit.

Read this:

By Anne Patterson

J. T. Bradley has very definite ideas on what a good written bid should contain. As president of Bradley Builders in Carmichael, Calif., J. T. obtains new remodeling work in two ways: a direct call from a prospective client as the result of a referral, or a request for a bid from an architect, who typically has submitted plans to at least two other remodeling contractors.

In the first case, J.T. will walk the project with the client prior to preparing a bid. He pays great attention to detail and to all the client's needs and desires. If the project is small in scope, he will design it with the client and draw up plans. For larger projects, he recommends one of several architects with whom he has worked previously.

J.T. says that both types of bids should contain the same elements. "But when bidding against others, it's more important to have your bid stand out," J. T. says.

He recommends including the following elements in a bid proposal:


A complete line item breakdown of trade-specific tasks and costs: The bid should contain as much detail as possible about the tasks and costs of all materials and all work to be done on the project, including any work to be done by subcontractors. "I look for documentation from my subs," J. T. says. "I always try to be as open and honest as possible so my clients know exactly where they stand. I also show my overhead costs and anticipated profit."

A professional appearance: The bid should be typewritten on your firm's letterhead. It should contain accurate information on the project, including the full name of the client, his or her address, the address of the job site, and the completion date. J.T. avoids faxing his bids to his clients since the faxing process can distort the copy and doesn't look as professional.

An all-inclusive proposal: The completeness of the proposal is very important. His goal is to have change orders only if the clients change their minds—not if his firm belatedly decides to make a change. "I always include the phrase 'as per plan,'" J. T. says. He explains how much of a deposit is necessary and provides a payment schedule for the balance. He also has line items for services that other contractors often fail to mention, such as disposal of wastes, clean-up, and the protection of the rest of the home.

The completion date: J.T. tells his clients up front when he expects to complete the project, but he includes a contingency clause about factors not under his control, such as bad weather or delivery delays in specified materials.

A timely submittal: "I always try to submit my bids on or before the due date," J. T. says. He believes that timeliness is a reflection of professionalism.

J.T. appears to have developed a winning formula for bid proposals, at least judging from the business he receives from other building professionals. He's pleased with the response his bids have received from architects, many of whom who have seen thousands of such estimates cross their desks. He also gets a significant portion of business from referrals by his clients. The attention to detail that goes into his bids truly make them stand out from the rest—in many cases, head and shoulders above them.
 

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Flooring Guru
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The bid should contain as much detail as possible
Maybe for commercial, but for residential, the less stated the better.
IMO


But when bidding against others, it's more important to have your bid stand out
I believe it's better if YOU stand out.
We are talking about sales here....sell yourself...not your bid.

I agree with alot..but some I do not.
I would agree that the bid can include details on what labor and materials is included in the bid, but I do not agree that numbers besides the bottom line should have any value at all.
 

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No way will a bid of mine ever disclose overhead and anticipated profit.

Out of curiousity, I looked for Bradley Builders in the yellow pages. Not there. He does however have a California contractor's license.
 

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...jammin
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Re: as much info as possible
"...contain...cost of all materials..."
Florcraft said:
Maybe for commercial, but for residential, the less stated the better.
IMO
I can split up commercial as per my reply in the Line Item Breakdown Materials Cost thread
Residential, it's really just best not to go there
Joe Homeownwer just doesn't understand
They don't believe the overhead and think the profit is too high, or worse...
negotiable
 

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Cole what you posted seems typical when working with an architech who is controlling the project, I have seen that type of relationship stated many times. I don't see it being relevant outside that type of situation.

Any project I am working on the customer is mine, if an architech were brought in he/she would be working for me for the client.

Control of the customer = control of your profits.
 

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Discussion Starter · #11 ·
kodiak_island said:
I try to stay away from posting all this information . But it seems more and more customers want this damn breakdown. :eek:
Exactly, why I posted it.
 

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DGR,IABD
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kodiak_island said:
I try to stay away from posting all this information . But it seems more and more customers want this damn breakdown. :eek:
No problem, Mr. Customer. In exchange, I'd like to see your last 3 pay stubs or a copy of last year's 1040 for you and the wife.

Why would it be any of their business? On some jobs I make an obscene profit, and on others a make enough for a tank of gas and a large Slurpee. It all averages out. I sure don't want to voluntarily discolse it to a regular consumer in the day and age of the "Wal Mart" mentality.
 

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you'd offer an"OR" there? i'd want them both! plus credit reports from 3 agencies, 2 years of bank statements, 5 affidavits affirming your ability and willingness to pay me , AND a note from your parents.then i might,maybe,possibly, consider considering thinking about thinking about- aw hell! i'd just tell 'em where to go and how to get there! then i'd give 'em a map.(ya know some of them NEED the pictures.)
 

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Painting Contractor
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mdshunk said:
No problem, Mr. Customer. In exchange, I'd like to see your last 3 pay stubs or a copy of last year's 1040 for you and the wife.

Why would it be any of their business? On some jobs I make an obscene profit, and on others a make enough for a tank of gas and a large Slurpee. It all averages out. I sure don't want to voluntarily discolse it to a regular consumer in the day and age of the "Wal Mart" mentality.

You know how much a Frapichino(sp?) costs Starbucks to make? 11 cents. Including labor, overhead... everything. They charge $3.50 to $4.50 for it. These same people who beat us up about our 5% profit will gladly give Starbucks their 4000% profit without batting an eyelash, everyday! Wal-Mart mentality... It makes me sick.
 

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I agree a bid should be as detailed as possible. This is both for covering the ass of the customer and contractor. I am an advocate of being as detailed as possible. You will probably not find a more detailed quote than mine.

If you are BIDDING then yes the BID is all you have to stand out. If you are SELLING then YOU need to stand out, the bid is secondary and is nothing more than a contract. Because my sales system is a two part system... try for the sale but if it turns into a bidding war we can play that game too... I try to make sure that my sales team and my proposals stand out of the crowd, the black sheep but in a good way.

I never break my prices down for labor material and overhead. I simply will not do that PERIOD. I do give a flat base price with optional upgrades, but all prices are lump sum to include labor material and profit.
 

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Humble Abode said:
You know how much a Frapichino(sp?) costs Starbucks to make? 11 cents. Including labor, overhead... everything. They charge $3.50 to $4.50 for it.
Yet another reason to confirm why I don't drink coffee!
 
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