Alright, I know I am taking a risk by posting this because I know everyone just loves the "how do I estimate" questions. However, I am going to ask this anyhow. I understand that every contractor has a different overhead, profit, production rates etc. Of course every job differs as well. Lord knows the market varies by geographic location among other variables. I am new to estimating. I have a question for the more experienced guys out there. Do you have a specific system you use to calculate your estimates with your company's figures? (IE overhead profit etc etc) I know alot of people go by the sq ft. I picked up the 2008 cost estimator book and it seems like a relatively solid system for bidding but I am sure not everyone uses that method and have their own formulas for calculating their numbers. I was hoping perhaps some of you guys would be willing share your methods. Or if anyone knows of another program or book out there. There is no "one size fits all" method for estimating, per se, but I kind of wanted to try on a few for size against the one's I have already used. Any other useful tips for estimating are welcome. By the way, as of right now I am mostly doing repaints if that helps you answer the question. Thanks!!!
Estimating Systems?
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First, look in the file swap section. Then click on these links.
http://www.outofthebucket.com/products/sales/sales.htm
http://www.paintestimating.com/
http://www.benjaminmoore.com/bmpsweb/portals/bmps.portal?_nfpb=true&_windowLabel=contentrenderer_1_9&contentrenderer_1_9_actionOverride=%2Fbm%2Fcms%2FContentRenderer%2FrenderContent&contentrenderer_1_9currentNodeUUID=%2FBEA+Repository%2F48089&contentrenderer_1_9NodeUUID=%2FBEA+Repository%2F156003&_pageLabel=fc_businessresources
If you use Quickbooks, and you have a years worth of data, the B/M cd may be a good start. And priced right. For a more complete system, go to "Out of the Bucket".
http://www.outofthebucket.com/products/sales/sales.htm
http://www.paintestimating.com/
http://www.benjaminmoore.com/bmpsweb/portals/bmps.portal?_nfpb=true&_windowLabel=contentrenderer_1_9&contentrenderer_1_9_actionOverride=%2Fbm%2Fcms%2FContentRenderer%2FrenderContent&contentrenderer_1_9currentNodeUUID=%2FBEA+Repository%2F48089&contentrenderer_1_9NodeUUID=%2FBEA+Repository%2F156003&_pageLabel=fc_businessresources
If you use Quickbooks, and you have a years worth of data, the B/M cd may be a good start. And priced right. For a more complete system, go to "Out of the Bucket".
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This formula works for every contracting job, big or small, interior or exterior, residential or commercial, plumbing or painting. When you understand it, and can snatch the pebble from my hand, you will have the key to the universe Grasshopper.
Total price = (((Overhead per man hour) + (Average wage + labor burden)) X Man hours) + (Materials + Material markup) + (Other expenses + markup) + Profit
While the above formula might look a little intimidating, it really isn’t that complicated. However, it does require that you know certain things about your business and your painters.
Overhead per man hour—this is the total of your overhead for a period (either monthly or annually) divided by the anticipated hours to be worked in the same period. This allows for overhead recovery during each man hour worked. (And don’t bother telling me you don’t have any overhead. You do.)
Average wage + labor burden—this is the average that you pay for wages, taxes, holidays, etc. on an hourly basis.
Man hours—the total man hours involved in the job. How to make that calculation is beyond the scope of this post.
Materials + material markup—the cost of your materials for the job plus your markup on those materials. You are marking up your materials, aren’t you?
Other expenses + markup—expenses such as scaffolding, equipment rental, etc. are included in this item.
Profit—this is what you want left over after everything is paid.
Brian Phillips
Total price = (((Overhead per man hour) + (Average wage + labor burden)) X Man hours) + (Materials + Material markup) + (Other expenses + markup) + Profit
While the above formula might look a little intimidating, it really isn’t that complicated. However, it does require that you know certain things about your business and your painters.
Overhead per man hour—this is the total of your overhead for a period (either monthly or annually) divided by the anticipated hours to be worked in the same period. This allows for overhead recovery during each man hour worked. (And don’t bother telling me you don’t have any overhead. You do.)
Average wage + labor burden—this is the average that you pay for wages, taxes, holidays, etc. on an hourly basis.
Man hours—the total man hours involved in the job. How to make that calculation is beyond the scope of this post.
Materials + material markup—the cost of your materials for the job plus your markup on those materials. You are marking up your materials, aren’t you?
Other expenses + markup—expenses such as scaffolding, equipment rental, etc. are included in this item.
Profit—this is what you want left over after everything is paid.
Brian Phillips
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2,451 Posts
It's not the "How do I estimate?", "How do you estimate?", "Estimating tips?", questions so much as the "What do I charge?" questions...there's a difference
In regards to the Cost Estimator
Although it's not always terrible for new const., unfortunately it doesn't take into account nearly enough of the problems/issues associated with Occupied Re-paints to be even close to accurate
Maybe for one particular part that you are not familiar with, say, door jams, you might be OK
But seriously the book/software has no idea how many end tables you have to move, hydrangeas you have to tie back, those webkins you had to individually pack, the H/O's cat peeing on your drop, Mr. Retired Engineer requesting a full report on every brushstroke, the pool in back which now blocks access to the entire back of the house so no ladders, scaffolding, or lifts can get back there, the huge pile of TV Guides (going back to the '70s) that is in the middle of the room leaving you 18" of room all around to paint the trim and walls...
Best to use your own production rates, your own costs, and a keen eye for what's going to be involved with a particular project
In regards to the Cost Estimator
Although it's not always terrible for new const., unfortunately it doesn't take into account nearly enough of the problems/issues associated with Occupied Re-paints to be even close to accurate
Maybe for one particular part that you are not familiar with, say, door jams, you might be OK
But seriously the book/software has no idea how many end tables you have to move, hydrangeas you have to tie back, those webkins you had to individually pack, the H/O's cat peeing on your drop, Mr. Retired Engineer requesting a full report on every brushstroke, the pool in back which now blocks access to the entire back of the house so no ladders, scaffolding, or lifts can get back there, the huge pile of TV Guides (going back to the '70s) that is in the middle of the room leaving you 18" of room all around to paint the trim and walls...
Best to use your own production rates, your own costs, and a keen eye for what's going to be involved with a particular project
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Two of the three systems I mentioned add your overhead to your projected hours. I think the "Cost Estimator" is a good tool (not the best) for somebody staring out. They do tell you to figure the intangibles such as setup and overhead, it is just not the friendliest system, but better than throwing the dice and totally guessing.
Time in the industry (experience) is the best tool, but when you are just starting, you have no real "production rates" and what you do have will change as you get proficient. (hopefully) So a guide at that point is better than nothing.
"But seriously the book/software has no idea how many end tables you have to move, hydrangeas you have to tie back, those webkins you had to individually pack, the H/O's cat peeing on your drop, Mr. Retired Engineer requesting a full report on every brushstroke, the pool in back which now blocks access to the entire back of the house so no ladders, scaffolding, or lifts can get back there, the huge pile of TV Guides (going back to the '70s) that is in the middle of the room leaving you 18" of room all around to paint the trim and walls..."
LOL Slickshift. So true.
LOL Slickshift. So true.
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