PDA

View Full Version : Bidding a job


ffjoe
10-12-2011, 09:44 PM
Ok guys- where are my old heads? I'm just a rookie at this and want to know the proper way to bid a job. I understand figuring up how much $$ you have in your equipment.. Example, 1000' spool c9's xxx.00. That's .xx per foot, + .xx for bulbs, etc... How do you figure a price per lineal foot by figuring in your workers, gas, plugs, cords, etc...

I guess what i am saying is how do you come up with a per lineal price from those costs?

Ex- say I use 25.00 gas In a day
Say I use 15 male/female plugs in a day as average
Say I pay out 250.00 per day for Helpers.

My question is how to fingure a lineal foot price from these numbers... How the heck do you go about doing that?
Posted via Mobile Device

David Gretzmier
10-13-2011, 02:24 AM
Your best bet is to install your own house or a friends house and track everything. add up all clips, c-9 cord, cords, 3 ways, timers, spool to put them on when done, instruction labels, labor up , down, and labor time to drive there and back twice ( remember, install and takedown), time to pack and label, cost of a box or 2 for cords or garland, mini lights etc, and the labor time unload and warehouse at shop. , gas, portion of ladder purchase, plugs, bulbs, figure 2 hours drive and work labor and a few bulbs times 2 service calls per customer. you will go down to 1 service call per customer after 3 years or so. it will start going up on older customers in year 7. I would also include some cost here is inventory that does not get used. example- you will have some c-9 cord that you will throw away from time to time. 3 feet, 8 feet, etc. you will always have to carry some bulbs, cords, clips etc, that you have to pay for and keep replenishing in inventory. you will not run out of everyting perfectly at the end of the season.

and then don't forget to add a few hundred bucks per customer for overhead recovery for advertising, cell phones, jobsite and management vehicle depreciation, shop foreman and secretarial, liabaility insurance, workman's comp, umbrella for fire protection on homes you install, and theft/fire insurance for storing at shop. include around 60 cubic feet of shop warehouse rack space (try to think of the cost of large wood shelves or pallet racks, those are common) per customer to figure a cost of warehouse rent or buy. in my case, yearly overhead recovery often exceeds the cost of materials on the job on the first year of buying materials. don't forget it. we honestly have tens of thousands in overhead recovery because we track it. and we recover it.

and then you add what you need to make on the job in pre tax profit. this number also represents what other costs come from if you have forgotten any. This is what you feed your family on and pay with and represents your risk of ownership in this business. what do you like to "take home" per day?

and then divide that final number by how many feet you got up.

I find that my consulting clients that are honest with themselves about the costs will be shocked by how much they have to charge. most were at 2-4 bucks per foot before adding it up. And hey, that is what their competition charges, right?

I will tell you that we charge $6.50 per foot the first year and 3.25 per foot thereafter. After tracking the costs for several years, I know that this year or next we need to go to 7 and 3.50 or we will start being unable to recover overhead. The profit margin for us at 6.50 is pretty thin right now. but, our overhead recovery currently reflects we are sized to grow to double our size right now from our recent shop. Your cost per cubic foot of shop space may very well be lower than me. our average cost per cubic foot will go down as we add customers and fill up empty space. but trucks will be added, insurance tends to be linear with payroll, etc.

good luck.

ffjoe
10-13-2011, 01:06 PM
David. More than appreciated! great info once again! thanks!

ffjoe
10-15-2011, 12:37 AM
David, I guess I'm still not 100% following. I understand to add all the costs up. I got that. Say I figure at a minimum it's around 6000.00. You then said take that number and divide by how much I have up... I am assuming you meant how many lineal feet I had up.. so 150 feet up divided by 6000 is 40. $40 x 150 feet is back to your original 6000.

where am i losing you?

addictedtolandscaping
10-15-2011, 06:09 AM
Yup, that is how I do it. Then you calculate you cost of material, labor etc like Dave mentioned, figure out your margin and see where you come out. That will tell you where to price it at.

ffjoe
10-15-2011, 12:31 PM
$40 a lineal foot... I don't think so. David came up with his $6.50 a foot. Wondering how he came up with that number... Bc you can't take your total investment price, divide by amount of lineal feet of lights you have up and get a huge per foot number like $40 a foot.. That can't be right. Somebody else???
Posted via Mobile Device

addictedtolandscaping
10-15-2011, 10:37 PM
David also didn't use the numbers you posted. I guess your right, I am wrong, thats why I continue to grow, my bad.

David Gretzmier
10-16-2011, 12:59 AM
David also didn't use the numbers you posted. I guess your right, I am wrong, thats why I continue to grow, my bad.
Posted via Mobile Device

David Gretzmier
10-16-2011, 01:18 AM
Posted via Mobile Device

David Gretzmier
10-16-2011, 01:19 AM
You have direct costs and overhead costs. You will need to recover all direct costs on each job, plus a portion of overhead on each job. I recover that by assigning overhead costs to shop and then taking a percentage of shop space used based on space available verses average cubic foot storage per customer. I think you may be taking overhead and trying to apply it all to one customer. If you only have storage space for 20, 50, or 100 customers, you can use those numbers to divide it if you wish. But the idea is to pric e jobs to be able to capitalize growth as it happens. The only way to do that is to recover 100% overhead costs right around the time you need to buy another truck or shop. That is why my overhead seems high right now, my new building is at less than 1/2 capacity, yet I still have to recover all the costs from my existing customers and turn a profit. The time when your overhead recovery is the highest and profit at the lowest is at at low utilization rate of assets like shop and trucks. But as the trucks and storage get close to 100% utilization, overhead on a per customer basis goes down and profit per customer goes up.
Posted via Mobile Device