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Advise for bidding?

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Blog entry by studie posted 04-17-2010 10:16 PM 1364 reads 0 times favorited 16 comments Add to Favorites Watch

I’m in the bidding process for a kitchen remodel and am not sure just how to put a price on tasks. There will be new cabinets & plastic laminate counters, new laminate flooring & a breakfast counter. I did a very high end bathroom a few years ago and let the architect set the prices. Not only did I make a fraction of my usual wage but the cost to complete it was higher too. I’m sure there are formulas or average costs like price per square foot as on counters, floors, price per cabinet installation I just don’t know. I’ve been doing very well as a cost plus or time & material basis for many years and could give people an estimate but the final cost was usually a bit higher than the projected cost. I’m well versed in the abilities to build & have many satisfied customers. I also am a perfectionist so each job is my best. Can anyone give a few words of advise or formulas? Thanks

-- $tudie



16 comments so far

View TZH's profile

TZH

425 posts in 1795 days


#1 posted 04-17-2010 10:53 PM

Wish I could give you some advice that would help, but I’m going thru pretty much the same thing when pricing the pieces I complete for sale. I recently went to a log furniture store that wants my pieces in their store, but they say the split has to be 60-40 me to them, plus they require an exclusive. That means I can only put my pieces into their store in their community. Not too sure I’m willing to do that. Anyway, good luck cuz I think this is probably the hardest part of doing this work – pricing it at the value it’s actually worth. I don’t even keep track of my time, because I think if I did, I’d probably get a bit discouraged.

-- https://www.facebook.com/pages/Dead-Wood-Renaissance/361417090585685

View Moron's profile

Moron

4666 posts in 2548 days


#2 posted 04-17-2010 11:38 PM

i always get confused when people say “High End” as I have seen many kitchens that claimed to be “High End” but was anything but. No offence but it would be rare to have a high end kitchen that had plastic laminate counters, some exceptions but as a rule…rare. Same for laminate flooring…....I just dont see it in high end homes. laminate flooring should not be confused from engineered hardwood flooring.

I start the estimate at $1,000 a lineal foot, measurements taken at the wall, not the front of the cabinets. Counters are “extra” as well as plumbing, electrical fixtures and labour. Any renovation re-and re- work is extra, flooring tile, drywall, paint and any labour (except shop labour) involved is extra. If I sub out work, they pay the sub contractor directly and I charge 10% over and above what ever the sub contractors invoice is. Labour ranges from 25/hr to 185/hr depending what “labour” is required. Any shopping for appliances, fixtures is extra and installation delivery and or handling of appliances, sinks…...extra. any changes to approved drawings and specifications are extra. If at the end of the day I decide NOT to charge forsome extras, then thats my choice…....not thiers. Note, all the extra charges and they do sound sorta $$ching ching$$ but
extras can financially BURY you. They are the customers wants and needs, not mine. I make quite sure that they are “ACUTELY” aware of the fact, that if it isnt clearly shown, stated and specified on the approved drawings and specifications, that they arent getting it and it will be charged as an EXTRA in the event they want it. The “I thought we talked about it” “Dont you remember me mentioning” “We spoke” “She said he said”................doesnt cut it. Show me, on the drawings,.............or your not getting it for free.

Installation of kitchens and trim etc is charged at $500/day, per man and it takes as long as it takes.

-- "Good artists borrow, great artists steal”…..Picasso

View Frankie Talarico Jr.'s profile

Frankie Talarico Jr.

353 posts in 2011 days


#3 posted 04-17-2010 11:47 PM

$tudie,
What I do is consider everything. you can get anywhere from $125.00 – $600.00.
Depends on your construction, time, Are you removing the old stuff, is there other contractors involved, do you pay them or do they.

This is my pricing on average

low apartment grade. $125.00 – ln/ft
Mid grade homeowner. $365.00 – ln/ft
All the bells and whistles, exotic wood, big crown. the works. $620.00 ln/ft

It all depands on location, overhead, duties, and time, maybe a helper.
I would mess around with the numbers though and see what seems fair to you. After all you’re in in to make money, not pay. Don’t give everyone a good deal or you become a lower end manufacturer reputation. Keep up your quality and people will come, and pay, and tell all their rich friends when you finish…..lol don’t we all wish

-- Live by what you believe, not what they want you to believe.

View studie's profile

studie

618 posts in 1801 days


#4 posted 04-18-2010 12:06 AM

Thanks for the replies. This kitchen is certainly not high end. I would like to build the cabinets but cant come close to ready made units for the money. The bathroom I spoke of was very nice, it had porcelain tile thru out and 3 foot up the wall with glass detail tile under the chair rail. Heated floor, custom Bamboo 8’ vanity, acrylic freestanding tub & lots of changes to the layout. The kitchen I’m bidding couldn’t be easier, basically the same layout with a breakfast counter added. The owner had a contractor come in for a bid and he never called back so they think we contractors have a bad reputation for that. This client has alloted 25.000 for this job and I can’t see more than 15,000 in this job. I don’t want to leave money on the table but don’t want to charge too much either. Thanks again for the help!

-- $tudie

View Frankie Talarico Jr.'s profile

Frankie Talarico Jr.

353 posts in 2011 days


#5 posted 04-18-2010 12:26 AM

What I would do in a situation like that, is consider your time of course, I can install a pre-fab 1 corner 10×10 kitchen in 2 days with a helper; walls, bases, and counters. I work like 10 or more hours a day.
If you can come up with 15,000 on a simple job like that you should be doing fine.

If you think you can charge more go for it, Maybe by persuasion you can stir up more work for the rest. Upgrade the cabinet accessories (roll outs, lights, better knobs, built in appliances, stuff like that), This way you’ll get more time for labor, and materials ;), and you’re not ripping them off. Maybe do a deck later this year for them.

If thats whats allotted I’d tell them what they can get for that money with a few variations, and let them decide. this way I can keep busy, they get more than anticipated, and you make a profit. Once they like you, you’re in.

Offer options, people like to have the final say and this gives them that oppurtunity
Show up on time, work hard, and do a good job. You’ll be a much busier bee.

-- Live by what you believe, not what they want you to believe.

View Drew's profile

Drew

136 posts in 1754 days


#6 posted 04-18-2010 01:49 AM

I hate to be the negative one here but…..
If you don’t know how to bid a job then you are in over your head. Leave it to the professionals.

When I decided to go into business for myself I spent an entire year keeping track of exactly what I did each day, how long it took me and what materials/supplies I needed. Even armed with all that info I still get some wrong.

If you come up short you can lose a lot of money. But then again, it is like poker. Every dollar that you didn’t get people to put into the pot is a dollar that you lost. So you need to bid the job as high as you can w/o loosing it.

“Formulas” are for insurance work. Use a formula and loose the job to the pros.

-- That men do not learn very much from the lessons of history is the most important of all the lessons that history has to teach.” ― Aldous Huxley

View kolwdwrkr's profile

kolwdwrkr

2821 posts in 2244 days


#7 posted 04-18-2010 05:13 AM

I’d like to jump in and say I don’t agree with Johnny_Yuma at all about what he said. There has been forum conversations for who knows how long about how to bid certain projects. Especially now with the crappy economy. Being able to charge appropriately 5 years ago and being able to now are two different things. Nobody ever truly knows how to bid when things are ever changing.

Bidding isn’t about right or wrong. It’s about bidding to make a profit. If I bid 5,000 and joe blow bids 4,200. Who’s right? Joe blow goes out of business in 2 years for underbidding to get work. He never made a profit. Paying the bills by getting work isn’t the way to go. You need to figure out how you can pay your bills and have money left over. That’s called marketing.

Joe Blow’s price may be $4200 but what is he offering. You have to be able to sell yourself at $5000. Explain that you use such and such a method and the client needs to compare apples to apples. Make sure to include nice things, like undermount guides and dovetail drawers, etc. as a standard. If they say the price is to high then you can make those changes. If you loose the job because making a profit was your priority, then f-it. Move on to the next one and watch Joe Blow do a crappy job or never finish. You’ll still be in business in the future and will possibly offer to hire Joe Blow, and the client will get the $hit work they chose to pay for.

Good luck

-- ~ Inspiring those who inspire me ~

View TopamaxSurvivor's profile

TopamaxSurvivor

14747 posts in 2330 days


#8 posted 04-18-2010 06:07 AM

I have been told electrical prices are down 40% in the last year and a half among the bigger contractors. It’s a dog eat dog world out there and getting worse. If price is the only consideration, you are going to loose money in this economy. Like Keith says, you have to sell your service at your price.

-- "some old things are lovely, warm still with life ... of the forgotten men who made them." - D.H. Lawrence

View Brandon Hintz's profile

Brandon Hintz

53 posts in 1663 days


#9 posted 04-18-2010 09:39 AM

Based on what you mentioned about the time and material you have a value equated to your time. You need to get at least that amount for your time. If its a low to midgrade kitchen go with off the shelf stuff and make the most of your time as going in with a set bid the faster you finish the more money you keep so setting up a good schedule, utilizing as many prefabed items as possible and making sure that you are only doing things once but properly will be your best bet to ensuring profitability. Basicly figure out your time and materials then add 25% to the materials and 50% to your time and you will probably come out with about 15% profit on the job when you get done paying yourself, I know alot of people won’t agree with this but working for free doesn’t pay the bills.

-- Potential is limited only by imagination

View Peter Oxley's profile

Peter Oxley

1426 posts in 2529 days


#10 posted 04-18-2010 10:43 AM

I have a formula that I use … it’s a little convoluted … but usually I come out at 5 or 6 times my materials cost. But I don’t do floors, and I only do butcher block counters. Everything else gets sub-contracted by the homeowner or GC.

And I’m not sure how you calculate a bid without a formula. Bottom line, you have to figure out what the job is going to cost you (materials, overhead, labor, tools, mileage, etc), and how much you want to make. Even if that is as simple as: cost + 50% for you + 15% for your business, that’s a formula (by the way, I don’t think this would be a good formula).

On the other hand, the assertion that the pros don’t use formulas may not be so far off. I bid against the same guys all the time. Sometimes I cream them, sometimes they cream me, but I rarely lose money on a job, and I’ve never lost my shirt. When the other guys bid too high, I get the job and make a reasonable profit. When the other guys bid too low, they get the job and it’s not worth it to me to do it that cheaply. There were nine cabinet shops in town two years ago, and now there are three. I’m one that’s left, and I use a formula … so you do the math!

-- http://www.peteroxley.com -- http://north40studios.etsy.com --

View Brandon Hintz's profile

Brandon Hintz

53 posts in 1663 days


#11 posted 04-18-2010 07:52 PM

To clarify my method as it seemed mis-understood it would be material cost + 25% of the material cost + time + 50% of the time cost so basicly if your job is 500 materials 500 labor or 1000.00 time and materials you can charge 625 for materials and 750 for labor making this a 1375.00 job while not alot extra (37.5%) this will provide some cushion for unexpected things and should also allow you about a 15% profit at the end of the job. But as stated above the labor cost has to include everything except the materials meaning tools, time, overhead help, anything that you are not leaving in that house needs to be counted as labor. Just be careful with this because and adjust the numbers to suite you these are just a guideline to assist you and have worked for me on some jobs but each job requires something a little different.

-- Potential is limited only by imagination

View SCOTSMAN's profile

SCOTSMAN

5364 posts in 2239 days


#12 posted 04-18-2010 07:59 PM

The workers here in the uk have to be competative as there are so many kitchen shops, but when you are talking about a custom job well thats more difficult .If as suggested you charge $1000 a foot simply for your work without electrics plumbing etc then that seems like a lot of money.You need to be careful and don’t get greedy ask around what it would cost from other companies then take it from there.Alistair ps don’t
forget, you want them to pass your good name forward to the next potential customer friend of theirs.

-- excuse my typing as I have a form of parkinsons disease

View Moron's profile

Moron

4666 posts in 2548 days


#13 posted 04-19-2010 05:15 AM

for high end

if ya have to ask what it costs

ya cant afford it?....nor price it…..re top of thread

at the end of the day, yer only as good as your word.

every thing else is like the definition of success. A whole bunch of naked men climbing a mountain, nothing but assholes when looking up and nothing but smiling faces looking down.

greed drives the world.

high end is far easier to speak about then deliver. When the time comes that you can deliver it…........it doesnt come cheap.

-- "Good artists borrow, great artists steal”…..Picasso

View Moron's profile

Moron

4666 posts in 2548 days


#14 posted 04-19-2010 05:56 AM

until you figure the above out ?

time and material is hard to loose money at ?

-- "Good artists borrow, great artists steal”…..Picasso

View heatpumpproducts's profile

heatpumpproducts

6 posts in 1700 days


#15 posted 05-07-2010 03:50 AM

i have started contracting on a steady bases for the past few years .
but always end up lossing , rephrase that , giving my best and sweat blood and yes even tears some times . but i want to build , draw , renew, its part of me . i ask the clients to pay for all the materials , my labour by the hour , and any miledge or a daily rate for travel ,
after 9 hours of work i charge for a meal .
tools i never charge for , but do put aside 10% of the take for . buy good tools buy less.
bits , blades, or rentals for the job are all charged to the customer.
keeping this all accounted for and invoiced in a timely maner and collecting the money is what i am having a problem with . and also ,interested in finding out how to charge for the office work too.

-- Kier Mizuik,Miramichi ,New Brunswick,Canada ://www.heatpumpproducts.com

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