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-   -   The Art of Estimating (http://www.diychatroom.com/f2/art-estimating-168094/)

HandymanCA 01-03-2013 12:47 AM

The Art of Estimating
 
Lately, everyone and their Mom has been asking me to take care of some "small job" and it has been leading to their friends calling me... The problem I am running into is giving a fair price for the job - is there an art to estimating larger jobs or a formula in school I missed?

Hanging shelves, building furniture, electrical repair is pretty much straight forward, but painting rooms and doing preventative maintenance on their restaurant equipment has me lost. Any help or book references would be greatly appreciated, thanks guys!

AtlanticWBConst. 01-03-2013 06:22 AM

Its tough. It takes experience to get it right.

(There may be books out there, but I have not read any of them).

Basic Formula:

Material Costs + Material Cost Buffer of 10% to 20%. If you get a discount, then you should be charging retail on your materials. Account for EVERYTHING.

Labor Costs - Account for EVERYTHING (time spent on meetings, picking up materials, moving equipment, setting up equipment, breaking down equipment, cleaning up property, etc.). If you have to hire a helper, etc. Subcontractors = You should be making a minimum of 10% off (their costs) for the time and energies managing them.

Fuel Use - Account for EVERYTHING (all trips to project and material pick-up runs, etc.) Figure out approx. how many days the project will take you and factor your gas use in.

Debris Disposal - Dumpster Cost (Dumpsters are based on weight of the debris). Heavier debris = more cost.

If its a particularly complex project, account for that likely additional time and unknown factors to a degree, or place clauses into your written contracts that will account for the expected unknowns.

oh'mike 01-03-2013 07:51 AM

Also figure something into the labor cost for your selling time-----(and gas)

Windows on Wash 01-03-2013 07:58 AM

Quote:

Originally Posted by oh'mike (Post 1085131)
Also figure something into the labor cost for your selling time-----(and gas)

+1

Travel time and the cost of merely presenting on the business is something that is lost on most guys. You need to figure on what your median hourly potential is and that should be leveraged into the project.

With the cost of travel and gas being so volatile, this is another item that needs to be adjusted for. Depreciation and wear on a vehicle.

Commission if you are paying anyone.

Overhead or professional fees to do your books or legal.

Sometimes the jobs that looked great in your head turn out to be just breaking even.

ToolSeeker 01-03-2013 08:04 AM

The is a program by Craftsman Book Co. called National Estimator. It's a CD you buy.Its less than $100 I think around $60. You might want to check their website.

joecaption 01-03-2013 09:25 AM

Takes a while to get it in your head that you have to charge far more then your used to being paid on a reguler 9 to 5 job working for someone else.
At first there may be jobs where you make little or no money due to the fact you have to go out and buy the new tools to do the job. But the next time you have to do that job you can make up for it.

Do not forget your going to have to get a licene if your getting paid to do the work.

The busyest contractor in my area writes all his quotes as time and materials plus 10%.
That helps to cover expendable tool cost, misc, nuts, bolts, scews, wire nuts, over head ECT.

Duckweather 01-03-2013 10:32 AM

I went to a seminar put on by Home Tech that said whatever a job costs, materials, labor, subs, vehicles, insurance, benefits, etc. Everything but office and sales help. Add at least 60%. Then on a $1000.00 bathtub repair job, ($1600.00), if the shower head should start to leak next month, and your plumber is in the Caribbean spending what you paid him, You will have to repair it yourself. There goes most of your $600.00.

Davejss 01-03-2013 01:10 PM

I use a pretty simple system: Time plus material. I know what I want to make per day and I just add the material. So if I'm doing a bunch of small projects for a customer where it wouldn't make sense to bid by the job or by the foot I just charge say, $300 a day for me plus the costs, whether they are for material, equipment, permits, whatever. If the job takes three days it's going to cost $900 plus material.
I find this system is better than charging by the hour. It's less stressful on me and the client.
With my day rate they get me, my truck, my trailer, my tools and my experience as well as my license and insurance. If the job is running into more days than they can afford they can cut me loose and bring me back later when they're ready.
For larger jobs like decks or additions I'll give them a set price. But even that price is figured the same way. If I calculate that the addition is going to take two weeks my bid is based on two weeks of my day rate plus expenses. If it takes longer I eat it. Unless of course it is due to unknowables like finding rot or damage that couldn't have been seen prior to starting. With enough experience and proper due diligence combined with a competitive rates this system works pretty well. I've been making a pretty good living for thirty years and I have a client list based on repeat work and customer references.

HandymanCA 01-03-2013 03:15 PM

Awesome, you guys really helped me open up mind and gave me a place to start. I paid the tax or business license to just be legal and stay away from the headache. I have been thinking about getting the liability insurance for servicing bigger facilities. I have a regular 9-5 as a facilities manager, but I might have stumbled onto something here. Thanks again guys!

mae-ling 01-04-2013 10:33 PM

Start keeping track on a spreadsheet (exel or the like) of the time you spend doing different jobs.
I had worked out spreadsheets for different jobs and variables.
Ex. for framing, how long to frame standard 8' 2x6 walls with sheeting, + so much for every corner over 4, + if over 8', + for difficult access, + for material deliver, + for Number of interior walls (8' or + if higher) 10' or less in length - if more then 10' add X for each wall. Etc.

Really easy to do up spreadsheets for.

Also you will spend about 50% of your time not actually on the job but related to it (well I did).

AndyWRS 01-04-2013 11:04 PM

Quote:

Originally Posted by Davejss (Post 1085340)
I use a pretty simple system: Time plus material. I know what I want to make per day and I just add the material. So if I'm doing a bunch of small projects for a customer where it wouldn't make sense to bid by the job or by the foot I just charge say, $300 a day for me plus the costs, whether they are for material, equipment, permits, whatever. If the job takes three days it's going to cost $900 plus material.
I find this system is better than charging by the hour. It's less stressful on me and the client.
With my day rate they get me, my truck, my trailer, my tools and my experience as well as my license and insurance. If the job is running into more days than they can afford they can cut me loose and bring me back later when they're ready.
For larger jobs like decks or additions I'll give them a set price. But even that price is figured the same way. If I calculate that the addition is going to take two weeks my bid is based on two weeks of my day rate plus expenses. If it takes longer I eat it. Unless of course it is due to unknowables like finding rot or damage that couldn't have been seen prior to starting. With enough experience and proper due diligence combined with a competitive rates this system works pretty well. I've been making a pretty good living for thirty years and I have a client list based on repeat work and customer references.

+1

I do something similar. I know what our guys cost per day and i can generally figure out material costs and a company profit. New customers i have no real discounting for, returning customer i give much better pricing too.

AtlanticWBConst. 01-06-2013 04:46 PM

Also factor in ALL overhead based on %.

Example: Monthly, or annual insurance policy costs, phones, etc.

rossfingal 01-06-2013 06:21 PM

A long time ago -
I ran into people involved with remodeling -
They said -
A "rule of thumb" -
Materials - times 3 - plus 20%

"RF"

(Try getting that now!) :)

jeffnc 01-06-2013 08:51 PM

Some things are very different. Painting a room, for example, has been analyzed to death, so the question becomes one of competition. How much are you willing to do it for? It's a very easy calculation based on square feet of wall space. For example, for a 13x16 bedroom with 9 foot ceilings, it's (13+13+16+16) x 9 = 522 sf. I don't drop that for windows or doors, because while it takes slightly less paint, it takes more time to cut in. Now you just have to figure out your price per sf. 50 cents is pretty good. So you'd charge $260 (that includes the cost of your paint.) The problem is some of the "ethnic" or other low priced labor will charge something like "$75 per coat" using the customer's paint. That comes out looking like a lower price to the customer, especially if they can go out and buy cheap paint. So, you might need to drop your price to .40/sf, it's up to you as to what you can get.

Other things are more difficult than that.

jeffnc 01-06-2013 08:59 PM

Quote:

Originally Posted by rossfingal (Post 1087781)
They said -
A "rule of thumb" -
Materials - times 3 - plus 20%

I've heard things like these, and personally I don't like them at all. Mike Holmes says on TV that half materials, half labor is about right. That's crazy much of the time. Consider a tile job for example. Tile can be .80/sf at Home Depot, or it can be $12/sf. How can you possibly make a formula based on that?

Could I get away with $3,500 for installing this wall sconce?
http://www.destinationlighting.com/s...ml?iid=P953237

Prices are just so all over the map, I think formulas just don't make sense.


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