The last post logically progresses to the above question. Ironically The Wood Whisperer has helped me out again with this new posting on his site:
He shares his technique with the disclaimer that he his not a business consultant and you can certainly consider the same for me. Anyway, the method that he shares is similar to mine and has worked well in the few paying projects I’ve done thus far. I’m pretty handy with Sketchup as well as the Cutlist plugin so I enjoy sketching up ideas on there. It also forces me to consider the construction methods like deciding what kind of joinery, choosing final dimensions to minimize waste (e.g. like all the parts being cut from one sheet of plywood), etc. I get prices from my supplier and total them up and tack on 10% to cover time and gas spent shopping (more on this in a minute).
From there I make a time sheet. I cut my teeth as a flat-rate mechanic and got very accustomed to jobs being broken down into tenths of an hour so that’s what I do. I make an Excel spreadsheet (I’m an Excel geek) with a column for tasks, one for time (with the number setting to fractions in tenths), and a column for the time multiplied by my hourly rate. Then I fill it out. It might say “mill stock to S4S” and the next column says 8/10 and then the next column figures out the price. When I get the total I may tweak it a bit to get the amount to where I feel comfortable. Marc calls that the “common sense adjustment.” Then I make another spread sheet with the materials and I usually throw in a certain amount for misc. which would cover screws, sandpaper, varnish, etc. Then I present this to the customer so they can see exactly why the project costs what it does. Also, if I email it to them I convert it to a pdf and make it read-only so that it can’t be easily altered. I doubt that any clientele I’ve dealt with thus far would do that but it’s a good habit. I also title it something like “Smith Toybox Quote – rev. A” as I figure the price may move around a bit depend on customer’s wants and it’s a good habit to keep a history of the revisions in case there’s disagreement come payday. Lastly, if the customer wants a price break I send them shopping. I don’t do it for fine hardwood but if the project needs some box store plywood or they want a particular paint color or hardware I let them get it to save the 10% markup that I charge. Plus I get ick of going to HD all the time. I haven’t needed this trick yet but it’s in my pocket if needed. Once I go through the work of designing and figuring a quote I really want to make the deal happen, even if my profit goes down a bit on the job. Otherwise, if there’s no deal my profit goes down a lot since I did a bunch of work with no payoff. Plus I think everyone feels better when they end up with a price that’s less than the original quote so I always try to stay flexible and keep it alive while avoiding the classic used care salesman question “so Mr. Smith, what will it take for you to buy a new bookshelf today.”
Interestingly this method has proven my guessing to be pretty accurate. I start the process thinking “this oughta cost about $250.” Then I’ll do the process and it will end up pretty close to that. Some may say that makes it a waste of time to do the estimating process but it still gives the customer an explanation of what they’re paying for and it get’s my brain thinking about the specific needs for the project. This also keeps me in check by preventing me from just starting out willy-nilly which I am notorious for doing with all things, not just woodworking.
Lastly, if you read the TWW story then be sure to check out the comments. There’s plenty more info in there. One reader put up a link to this interesting site:
I clicked through it a little and I’ll probably try it out for my next quote by comparing it to my usual method. It seems pretty similar but it does a lot of the thinking for you so you’re less likely to forget something. Let me know if any of you have tried it.
Cheers until next time,
-- Don't just talk about it, be about it.