[MISSY]

How do you go about pricing install jobs..I usually take the cost of materials and multiply x 3 or x2 depending on the plant or material ...but some jobs are labor intense and this doesn't work well ....any suggestions???

[Bill Schwab]

Missy:

Do you know what it costs you per hour to work? Until you know that, any time you multiply cost of products to price out work you may as well hit the casino.

So, your mission should you choose to accept it is to calculate what your costs per man hour are, post that, and I'm sure you will get a better answer.

[Rob Shauger]

This thread will self distruct int 10 seconds. LOL Bidding this way can be very much a gamble as it has a tendency to cover up hidden inneficiencies.

Dale or Rick can jump in and explain it well.

[Nebraska]

.......as said, your cost per hour to work....... Then the hours needed to complete the work. All hours (planning, delivery, drive, instal, clean-up, etc). Add this to the markup on your cost of goods (a mark-up that considers ALL factors).

But first you need to know what it costs you per hour of work.

[RHayden]

Not the Rick that Rob was hoping for, but I'm in line with everyone else. Know your numbers first. The 2x or 3x idea seems to have been around for quite some time.

[Bill Schwab]

Now on a related but weird note....Not to be used as a bidding tool rather a WAGGING tool....

Anytime I have added all the supplies, dumping, trucking, machine time (anything but labor) and multiplied by 2-2.5, the number I get comes within 2% either side of a line after I cost every single item out.

[Rick Carver]

I agree that the 2X or 3x cost of plants has been around for a long long time.

I can only wonder then if this may be a reason why there is so much failure in the green industry? I know that some folks operation's do just fine this way,,,,, for a while.

There are many issue's with this way of estimating, the single maybe most important one would be, that you will never ever be able to nail down your TRUE cost on labor. IMHO!
1 hour of labor in your operation is valued at what? When you use the above method the value of labor would depend on the price of the plants?
Now,,,, let me just ask, when I mark up the materials does that mean I just increased the value of the labor to the customer, to the company, did I actually increase the value of anything or just increased the cost of the job? How can we ever benchmark/calculate value at all in the above scenario? Answer is you really can't accurately.

We are " TIME " resellers. We retail time for our product. We often have " EXTRA " items that we make money off of,,,,,, like the mark up on materials. If my product is time, and I resell it to a customer I sure better know what that hour is valued at and what it's cost's are so I can add my markup to it and make money from it when the dust clears. This way I can make sure I stay within my market price and get lot's of jobs.
With this understanding, I can also track the value of my employees time. If my employee takes more time to do a job then what I estimated it for, all I have to do is find out the REAL REASON WHY they went over budget and correct that issue. If I can do this then I just ELIMINATED inefficiency within the operation. Hidden inefficiencies is the KILLER of any operation.
How can we track all " TRUE cost's of Loss " when estimating a job in such a mannaer that doesn't actually allow us to see everything that we should ?

Not preaching here Missy. ;-)

I'll be more then happy to help you to figure out your AFFORDABLE NET so you can set your hourly CBR. (Company Billable Rate). Can do it here or on the phone? Just let me know if I can help.

Take Care
Rick

[Dale Wiley]

Rick pretty much covers it.... we are taking inputs...labor...company assets...instutional knowledge and experience and combining them, which is adding value and then reselling them to our clients.

We have to know the cost of our inputs, and have a way of measruing the value of the inputs AND the final value added product. Since materials are often 30% or less of a total job cost, that method of measurment and profit determination is flawed from the start. This leaves 70% of the input unmeasured and uncontrolled.

We have to have a sytem to accurately measure our inputs, the cost of adding value,a nd THEN monitoring the conversion process. Since labor is our greatest expense, the one that has the most potential to go south on us, then we MUST have a system to monitor and control LABOR.

Missy;

PM me your e mail address and I willsedn you a couple of Excell sheets I use in my business to determine hourly costs and correct markups and net profit.