I left the boss two months ago and decided after 6 years that Im ready to work on my own. Lost plenty of jobs – I think , due to high bids. I know how much lumber cost and I can estimate jobs ive had experience doing. Leery of estimating bigger jobs by the sqf. since its me and maybe someone else working. Anyway, are there some resources out that may help with estimating? Bobby
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"Lost plenty of jobs - I think , due to high bids."
When you say you've lost plenty of bids, have you won some too? You're not thinking you should get everthing you bid, are you? I've heard old pros say they expect to get about 1/3, or 1/4 of the work they bid, but it really depends on what type of work you bid on, too.
Have you asked lost customers why they chose another contractor? There's lots of times I hire someone who isn't the cheapest. Just think about the impression various carpenters make when you interview a few - there's an aceptable price range you'd be willing to pay someone...if someone blows your socks off at their interview you might go a little higher for that one person, right? So translate that type of thinking to a customer, or G.C., who is soliciting bids.
The main thing is, you are going to get some jobs you bid, and you're going to lose some. I'd be way more concerned about whether I get referrals and repeat customers or not, and that takes time to recognize.
I never do sq ft bids..........as I don't build tract housing......or work to barely acceptable industry standards.
And I go round and round on this with the company I do a ton of sub work for.....mainly tile and trim. Starting to get a line on their cabinst installs too.
My background was in remodeling...so something different everyday. With the company I sub for alot.......it's all high end stuff....but each project is a worlds different then their last......no two basic tile jobs have been comparable basic tile jobs!
Every cabinet install has some custom details added.....even a simple bath vanity will have angled fillers.....custom columns......site make face frames to fill some odd area to match the cab's.....etc.
I do my estimating on a daily basis.....as in......."this" should take about a day.....that would be about a half day...but since nothing happend in a half day....add another day......maybe combine several small projects under the same roof into a long day....and so on.
Then times the days by 8 hrs..and there ya go. Add 15% for security and missed items...even better.
Sometimes ya win....sometimes ya lose. The more ya do it...the more ya win. I double check my times and prices with Craftsman CD estimator. I have an interior and exterior estimating book.....a coupla trim books with pretty good time estimates.......but mostly go with the "it'll take a day, or so" approach.
Might be a more scientific way......but my way gets me pretty close to their expensive computer estimating program cross referenced with the Means books......unless they try for sq ft prices for a 5x5 bath tile floor.
Jeff.......Sometimes on the toll road of life.....a handful of change is good.......
Bobby,
Jim and Jeff are on the right track. If your just starting out and your reputation is at that tender stage of being developed, your gonna hafta bid a bunch of work and meybe be happy with 1 outta 10. That's one profitable job. One at a time. Live to get a better one next week, but at least live well in the meantime.
Let's say you bid ten jobs and get nine of them? Busy. So busy you have to cut corners or worst, hurt yourself. So much for that reputation.
Do one job atta time and do it well. Ask for a letter of recommendation when you ask for a check. And ask for your customer to actively refer you.
Bobby,
If you’re looking for a good resource for bidding jobs…………..look in the mirror.
As you’re starting out, I agree with Jeff’s “this should take about†approach, but be careful about what might be hidden until you open things up. Leave yourself an “out†on the estimate verbally or in writing with the client, concerning the unforeseen/unknown. Experience will teach you how to do a guess-timate better with each job you put under your belt.
First off though, I’d say you have to decide if you even want to or have to get into the bidding wars that many contractors engage in. When you’re first starting out, you may have to do this in order to put food on the table, but I’d personally be leery about taking this as a long-term approach. If you get involved in low price bidding to win jobs, then you can pretty much assume that you’re going to have under-bid everyone else to win the job. Those other contractors are all trying to present the lowest bid also because they’re hungry for work. If you win the bid, you’ve just insured that you’re going to be hungry as well………..because there’s going to be little food on the table when you’re done. You could even end up in the red. Nonetheless, you may have to endure some of this to get your work and name in circulation. Be prepared to eat beans and rice for a while.
If you truly want to succeed, then make certain your work is always top notch, your service is top notch, and if there’s a problem with anything you’ve done……tend to it immediately, apologetically, and cheerfully….for free. Get it right the second time because three strikes and you’re likely out. Please that customer and word will get out. Soon enough your phone should be ringing with referrals. Displease that customer and word will get out also, but no phone will be ringing.
You’ll have to constantly (and I mean constantly) improve your skills and knowledge by reading, observing, expanding your capabilities, and honestly critiquing your own work. When the green flag drops, the bullsh*t stops. There are plenty of guys out there who can talk a good game, but if you want to build a lasting clientele, you have to produce the goods each and every time. In this business, you’ve never “arrived†to the extent that you can rest on your laurels. There’ll always be some “new gun†on the block trying to take your customers from you. After all, isn’t this exactly what you’re trying to do by striking out on your own?
If you want your clients to be devoted to you, you must be devoted to them, in both what they want and need. If you want them to know that you’re the best, you must be the best. Not only must you have the knowledge and skills, but you also have to be ready and able to communicate your knowledge and skills to your clients so that they’re assured in their decision to hire you over and over again. You must court them to some extent if you want repeat business and referrals. Dazzle them with your skills, knowledge, performance, concern and attention to their satisfaction by producing quality and trouble-free performance. If it’s their business you’re after, it’s acquiring their trust that you must focus on. If any of them have an emergency situation, tend to it immediately. Do this and you just hit a home run with them. Yes, it’s exhausting, but that’s how you get a clientele that’s yours for years and years to come. Nobody ever said this was going to be easy and if you thought it was, you’re about to learn different.
I haven’t run an ad since 1975, didn’t have a business card until five years ago, and am usually booked out about 2 years. We (there’s just two of us) haven’t done any bids since about 1980. We work strictly time and materials and our customers are obviously, very comfortable with this. Once in a while, we’ll give one of them a SWAG (scientific wild a** guess), but that’s it. No bids. This way, we always get paid for what we do and the client knows we’re not milking them to make up losses on a previous mis-bid job. They like that, and we like that…………. no games, just quality workmanship and results for a fair price.
Thanks for your thoughtful response- its much appreciated. Bobby
Quoting in the industrial field is much the same in success at sales. 1/5th is good to start. In insurance it is 1 to 2 percent of the people you call that yield a sale. Just don't waste your time. Do the stuff that people get for free as quickly as you can.
To make any money do these things:
Be profitable.
Estimate quickly.
And of course do all of that quality shtuff.
Labor estimating needs to be quick and pretty accurate. To build a GM automotive part I used to time study down to .01 seconds for accuracy on each part placement for a labor record. We aren't doing that here. We won't build 6 million of whatever it is. so ... you get loose with your figures.
Labor is done this way.
Time how much time you spend driving on a productive day. Time how much labor you put into a 1000 foot deck assembly. Time the labor you spend placing posts. Time your "Units of work". Keep a notebook and just scratch this down for a month. Review your "units" after a month and figure out how much of a day you spend in the truck.
Come up with a time for the day. 1- or 1.3 hours etc.
Come up with a time for building a 1000 foot deck, or placing posts, or sheets of plywood put down, or studs nailed up. Whatever the assembly hours are you need to make it understandable in hours per part.
Now you run up the BOM and price the lumber and other materials (use a spread sheet like Excel) Make a column for labor. (.02 hours per stud) X Studs = hours spent on studs. If you get good at excel you make a master sheet and plug in the figures and sums (that Greek "E") can appear on your master sheet.
I know this may be too much to read but some wiser minds suggested above you gotta get organized. Total materials, total labor hours (including driving around) and figure what you need to earn. You can be gross and go 2x materials, or if you do this right you get what you need to survive then you gauge the customer to figure what you can get them to pay above your needs.
Think, "Sell" not "Bid"
These guys have covered it. Dig deep to see if it any other reason than price.
bobby- "Lost plenty of jobs - I think , due to high
bids." I doubt it. Your bids may have been high but you most likely
lost the jobs because you didn't sell them or sell them correctly. I've closed
on 23 of the last 25 projects I've submitted proposals for and I know my prices
are (now) amongst the highest. For some of the stair projects I do I actually
buy the straight run stair units from companies that are competing with me on
certain projects.
Two things I done differently over that last 5 to 7 years that have made all
the difference is I have read everything I could on "selling" and
I've applied what I've learned. It wasn't at all easy learning all that but
it has made a world of difference when I now look back on how I used to "un-sell"
jobs.And I've learned to "differentiate" my company. We do the weird
odd or difficult stuff that nobody else is interested in doing or willing to
take the chance on. I'm not saying the solution is to do the weird odd stuff
like us but it to single yourself out from the rest of the crowd for something.
Maybe it's being "the world's cleanest contractor" or "the the
contractor with the fastest response times".
"Leery of estimating bigger jobs by the sqf. since
its me and maybe someone else working." You obviously haven't seen
any of my other post here or on JLC regarding "Estimating by the Square
Foot".
Check out message
# 20437.3 in the s.f deck price discussion for my reasoning as to why I
feel that way and an example of how Square foot Pricing can screw you up.
"Anyway, are there some resources out that may help
with estimating?" Unfortunately there aren't many resources that
really go in to the philosophy and techniques of estimating. I've tried to get
real discussion going here on BreakTime on JLC and as far back as the old Remodeling
Online Forums but the subject never really takes off and gets anywhere. Something
else I've sid here before that seemingly fell on deaf ears since I got little
response to the poke in the ribs I was making with the statement
And I'll add to that statement..
Bobby, shoot out some questions and fill me in on what kind of work you do
or want to do and then maybe I can give you some more specific answers. Estimating
new house construction is incredibly different from estimating
a whole house remodel and both of those of differ from estimating
a siding job and all three of those of different than estimating
architectural woodwork. But then again they all have some similarities
too. Confused enough yet? Over the past ten years or so I done a pretty good
job of collecting books, articles from trade journals, talking to different
kinds of contractors about their techniques and I even looked in to and studied
how NASA estimates their projects like building a space shuttle or station (Parametric
Estimating). It's all helped out.
We need questions and more info about yourself. Try describing a specific project
like cutawooda did a while back in crown
molding prices. He filled me in with some details and I went through my
processes for that particular (small) project with him online. I offered to
help a guy just last week come up with a price for a small deck project online
here but he never took me up on the offer.
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"You start with a bag full of luck and an empty bag of experience. The trick is to fill the bag of experience before you empty the bag of luck."--author unknown
Bobby:
It might be a good idea to check back with the folks that you gave a bid to and were unsuccessful with to ask if you might have a little chit chat. Something along the lines of "I am trying to grow my business and I would like to discuss why you chose to go with someone else." You would be amazed at the responses. "My brother in law said that he could do it for a case of beer and your bid was $1500, but now he has been at it for two weeks at night and the end is nowhere in sight." Or I got someone else to do the work for much less. Would you mind if I asked how much? Most people will tell you. Plus, low ball guys do not always turn out to be the best guys and if the HO needs someone to do some work in the future, they are not going back to the knucklehead who put a gouge in the the dining room floor, they will go to the guy that called and tried to build a relationship with them. Plus, sometimes we loose jobs for a good reason, most of us take jobs on the basis of what we need to make and how it will take us to complete things. If you can't make your dough, and you are fooling around with project when the right one comes along, enough said. Geez, I have got to cool it on the caffiene, I went off on a rant here.
Cheers,
Jeff
Bobby, Jeff has a good point...go back and talk with the lost bids. But be careful what you say. Don't bad mouth the selected contractor, or brag how you could have done a better job at the same price, etc, because you will come across as sour grapes. Be professional and ask for feedback on your proposal and presentation, and listen to what the HO says.
jeff,
That's not a rant, that's excellent advice. Knowledge is power, but only if applied in a timely fashion.
Bobby: Jeff and several others have given good advice. My two cents gets thrown in on Jeffs comment about bidding in increments of days. I build curved stairways and I bid those as how many weeks ...breaking it down to the nearest 1/2 week.
I keep accurate records of various types of stairways I have built. When I am bidding a stairway that has some unusual features that look like potential hour eaters..I click into a conservative mode and bid it so that should I take longer than I think..I am still profitable.
As far as profitable....never forget that the clock is running on expenses 24/7...and your actual hours that you are have earmarked to do a job...has to allow for the bidding..running for materials..talking to clients..etc.
In my case...I am fortunate that I have a high percentage of production hours/non production hours.....usually I am actually working 90% of my time.
I keep this high because of having several projects going at once..and for instance....I may be gluing up a curved stair stringer in the morning..and routing on another one that afternoon.