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Leonard Stansbury Posted: Mar 19, 2009 10:25 PM	bids when biding jobs does anyone take the price of the material and double it or does that seem high priced? when i bid i take the price of the material, what id like to make. It does not come out to be exactly double. does that seem to be to low?
Edward Brassington Posted: Mar 19, 2009 11:03 PM	Bidding can be a difficult process. I really think most contractors have no idea of their true operating costs. Arrange a meeting with your accountant and ask them to help you figure out all your expenses, calculate how many hours you work in a week and month and then figure out an hourly rate. This should include all your expenses, foam, plastic, tape, hand tools, fuel, lease payments, insurance, rent/mortgage, labour, workers comp, repairs, your own labour, etc etc. If you have been in business for awhile base your calculations on a yearly basis. Once you have all this information you should be able to determine exactly what each board foot of foam costs you. You can then mark up your product and service. A healthy business needs a 25-30 % profit margin to remain viable and grow for the long term. I have an excel spread sheet that I put together, that allows me to know exactly the profit margin on every job. I usually have my office people calculate this on a daily basis so I know immediately whether we made money or lost. This exercise may surprise you on just how expensive your operation is. Don't base your price on what your competition is charging, they probably don't have a clue to their costs. At least knowing exactly your costs gives you a bit of flexibility when it comes to pricing jobs. You can lower your margin a little on larger jobs. After a while you will know what your profit margin will be before you do the job.Have fun.
Dennis Davidson Posted: Mar 20, 2009 09:56 AM	foammaker is right, don't go by what other contractors charge. Who's to say they are bidding right? It also depends a great deal on your geographic area too. I've done some coating only projects in Illinois and Michigan and got around $1.50-2.00/sq ft, but doing the same thing in Florida I got $4.25. All expenses were basically the same. I've actually lost jobs at $1.50 because it was a $1.25 area. It's all a mater of what your market area will pay.

Author

Comments

Leonard Stansbury

Posted: Mar 19, 2009 10:25 PM

bids

when biding jobs does anyone take the price of the material and double it or does that seem high priced? when i bid i take the price of the material, what id like to make. It does not come out to be exactly double. does that seem to be to low?

Edward Brassington

Posted: Mar 19, 2009 11:03 PM

Bidding can be a difficult process. I really think most contractors have no idea of their true operating costs. Arrange a meeting with your accountant and ask them to help you figure out all your expenses, calculate how many hours you work in a week and month and then figure out an hourly rate. This should include all your expenses, foam, plastic, tape, hand tools, fuel, lease payments, insurance, rent/mortgage, labour, workers comp, repairs, your own labour, etc etc. If you have been in business for awhile base your calculations on a yearly basis.

Once you have all this information you should be able to determine exactly what each board foot of foam costs you. You can then mark up your product and service. A healthy business needs a 25-30 % profit margin to remain viable and grow for the long term.

I have an excel spread sheet that I put together, that allows me to know exactly the profit margin on every job. I usually have my office people calculate this on a daily basis so I know immediately whether we made money or lost.

This exercise may surprise you on just how expensive your operation is. Don't base your price on what your competition is charging, they probably don't have a clue to their costs. At least knowing exactly your costs gives you a bit of flexibility when it comes to pricing jobs. You can lower your margin a little on larger jobs. After a while you will know what your profit margin will be before you do the job.Have fun.

Dennis Davidson

Posted: Mar 20, 2009 09:56 AM

foammaker is right, don't go by what other contractors charge. Who's to say they are bidding right? It also depends a great deal on your geographic area too. I've done some coating only projects in Illinois and Michigan and got around $1.50-2.00/sq ft, but doing the same thing in Florida I got $4.25. All expenses were basically the same. I've actually lost jobs at $1.50 because it was a $1.25 area. It's all a mater of what your market area will pay.

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