Replies

1. 
   woody1777 | Mar 08, 2010 08:51am | #1

   Hi hanby contracting,

   This response will bump your question back to the top of the list where one of the other pro's who may have an answer to your question will see it.

   be bumped,

   hey rez, make this work, alright?

   Would it help if I said something about one of seeyou's inventions here ?

2. 
   JeffyT | Mar 13, 2010 12:36pm | #2

   ready

   i went from working for an employer to subbing myself out to a general contractor before i started doing my own complete projects.  i'd recommend it to you too.  It's much more independent than eployee-land but doesn't expose you to quite the same risks and pressures as contracting your own work.  While you're doing that, land a few word-of-mouth independent projects for friends and relatives. 

   as you know i'm sure, doing the work is one thing, managing the work flow is something else, customer relations is yet another separate thing, and doing the administrative stuff of pricing, estimating, managing, collecting, is yet another thing. 

   i decided to take one step at a time so i didn't trip and it was a good call, looking back. 

   i guess i don't have a quick bid-sheet to offer.  sorry. 

   j

3. 
   Piffin | Mar 14, 2010 01:45pm | #3

   JLC has some good books on the professional side of the business. Forms, legal, etc.

   Browse around over there online and at their bookstore.

   http://forums.jlconline.com/forums/index.php

4. 
   CAGIV | Mar 14, 2010 03:21pm | #4

   The simple short answer is figure out how long you think the project or job will take, how much do you want/need to make an hour, multiply the two together, add in the material with a mark up on the material & trade contractors, and you have your price.

   The easy part is (usually) figuring out the material and trade contractor costs.  We add 25% on material and sub/trade contractors.

   Determing the labor portion can be a bit trickier.  While almost every project has something similiar to something else you've done, every project is also unique.  DIfferent site conditions, age of the house, how much hand holding the client will require, etc.  I like Jeff Bucks "bout a day" polciy.  Nothing takes less than a half day when I estimate our costs. 

   Maybe the hardest part is determining how much you need to make to cover your expenses.  It's not that difficult if you spend sometime looking and the cost of being in business.  Take every item you pay out, various insurances, license fee's, health coverage, utlities, rent, charitiable contributions, retirement contributions, vehicle expenses, marketing, office equipment, office expenses such as letter head, envelopes, paper, stamps and postage, etc.  Essentially anything that is not a direct job expense, the list goes on and on.  Once you identify everything add it up.  Figure out how many production hours you anticapate having. 

   Hint, It's not near 2000 hours a year if you're operating as a one man show, it's probably closer to between 1600 and 1800 hours of actual on the job work.  You'll have other meetings, paper work, etc that will take up more time than you think. 

   So then divide the total over head cost by the number of productive hours you estimate, then figure out how much you want/need to make in a year and do the same thing.  You can come pretty close to determining what you will need to charge for an hour of labor to make it work. 

   There's a good book to read that Jerrald has recommened here in the past,

   http://www.amazon.com/How-Much-Should-Charge-Pricing/dp/0966571916/ref=sr_1_1?ie=UTF8&s=books&qid=1268594252&sr=8-1

   I'd suggest taking a look at that.  

   That's the real short version, it's not rocket science, but if you don't take your time you might find yourself having heart burn.  Find yourself a good accountant and lawyer and ask a lot of questions.

   Neil 

1. 
   calvin | Mar 14, 2010 05:51pm | #5

   Yo

   I bet you're in hog heaven now as March Madness approaches.

5. 
   JeffyT | Mar 18, 2010 01:04pm | #6

   wing it

   ...and then there's the Wing It approach.

   You sit down at your desk with a pencil and scratch your head for a while and finally you invent a number for the job basically on intuition.

   After a while, if you find that you're getting every project you bid on but you can hardly keep a roof over your head, you  jack your rate up.

   But, after a while, if you find that you're not winning hardly any contracts but you feel like the king of the world when you do land something, you need to cut your rate back a bit.

   Low tech but when it comes down to it a lot of very good builders and subcontractors started out this way.

   Attrition rate is pretty high though ;) you gotta be committed

   j

6. 
   MikeSmith | Mar 18, 2010 08:15pm | #7

   well...

   how are you on commitment ?......

   and what is your family situation ?...if you're  willing to make the commitment .....is your family also ?

   getting started is a 7-day week commitment...long hours...lots of  pitfalls

   how old are you ?

   next...what is your business model going to be ?...employees  or   subs ?....or one-man-band ?

1. 
   calvin | Mar 18, 2010 09:01pm | #8

   Mike

   While I agree whole heartedly with what you wrote above, I'd also like to emphasize  the importance of the commitment of the family to the venture.  Their support can make or break a starting business.  Likewise, ignoring your commitment to family can destroy that relationship.

   I've been extremely lucky to have been able to balance my business and our life.  It isn't easy.  A lot of understanding both ways helps you make it through the pitfalls as well as the joys.  I made extra effort in not missing our daughter growing up.  You start missing your childrens days and all the success in business isn't worth squat.

7. 
   Coldstreambuilder | Mar 28, 2010 04:15pm | #9

   Read David Gerstel's Book: "Running A Successful Contruction Company"