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#163508 05/09/07 08:38 AM
Joined: May 2006
Posts: 19
I seem to keep losing bids I don't know if I'm over bidding or if the customer thinks its to much for someone who has a regular full time job......The jobs I do get it dosen't seem like I'm making any money for the time spent doing the job. I am in Conn and usually price @ $65/opening everything included. Any help would be great.

Latest Estimating Cost Guides & Software:
Joined: Apr 2005
Posts: 33
Hi Pete, my recommendation would be to get an estimating program. For residential work, you can get a (I think it is called) "Craftsman" series for short money. It is user friendly and you can adjust all the pricing to meet your area. You can also update it via the internet.
$65/opening seems like throwing darts.

Joined: Jan 2005
Posts: 5,389
Likes: 1
Cat Servant
If these are 'real' bid jobs, the results ought to be posted, and you would know where you stand.

Since the property bubble burst, I've seen a lot of jobs just 'disappear' ... along with the funding. Other projects are scaled back, drawn out, etc.

Finally, it is a sad fact of business life that there are those who seem to make a hobby of collecting quotes, etc., without any intention of getting work performed.

All you can do is follow up, even ask the customer the reasons for the loss. This is no guarantee that you'll hear the truth, but it's a start.

You also might compare yourself to whoever did get the job. I've known "little Hitler" property managers who would choose contractors on as arbitrary a thing as whether the guy they met was wearing a jacket, or gym shoes.

Joined: Oct 2002
Posts: 482
.."little hitlers"

I see we work with the same type of property managers/HOA's reno.

Good asdvise from renosteinke, I must concurr. Nicely ask the client if there is anything you could do in the future to better satisfy their needs, i.e. get their business. This may or may not bear fruit, but it's worth a shot.

Also, if it's a commercial application, the winning bid is often available for review. Take a good look at that bid and see if you can figure out what they have that you do not.

Sometimes it's just the presentation of the bid, and how professional it looks.

Do you have a sharp and professional looking letterhead?

Do you spell check and check for grammarical errors?

Is your bid well written and to the point?

Sometimes this makes a difference, and sometimes the bottom line ($$) is all they look at.

Good luck in the future Peter!

Zapped #163635 05/12/07 11:48 PM
Joined: Nov 2006
Posts: 348
ITO Offline
What kind of jobs are you bidding?
What is your labor rate before markup?
What dollar value are we talking about here?
What estimating method are you using?

101° Rx = + /_\
ITO #166505 07/22/07 05:43 PM
Joined: Jul 2007
Posts: 34
You've got to know your labor burden and overhead expenses to sucessfully compete with the big dogs. The more you know the more you can tweak your rates on jobs to get competitive.

For example, I recently was in your shoes. I got with the wife (an accountant and mine on the side) who figured my labor burden was at 28%. That is to say that each dollar I pay anyone for labor, you can add 28c per dollar to your cost to do business. This is for social security, wc, and unemployment and liability insurance + she added in health insurance for mine.

Then you got your overhead. Trucks, fuel, maintenance, utilities, rent/mortgage etc which don't vary much month to month.

Lets say you have $5000 per month overhead. You have 4 guys working in three trucks, your entire crew. If they work 40 hrs week, you take 5000 and divide that by the total expected hours. That is, 40 x 4men x 4.33 weeks (average # of weeks per month)and you get 692 hours worked/month. $5000/692= 7.22/hour overhead per man per hour. You got a man making $15/hr, x 1.28 (My burden) + 7.22= your cost/hour per $15/hr man. That is 26.42/hr you must make to break even.

Now figure adding a fifth man to your crew. No additional expense unless you give him a phone/radio. If he works 40hrs/week you can now divide your $5000 by 866 hours/month. That dramatically reduces your hourly overhead from $7.22 to 5.77/hr. A sixth man and it is now 4.81/hr. Now you can charge less per hour if you need to and still make money.

A 3 or 4 man operation cannot compete with larger outfits who employ say 15 guys. Sure they have a larger gas bill etc. but the rent, utilities etc will remain the same.

That is what I've been trying to do. Working my A## off and making a decent living but if you figure all the hours I've worked my top guys probably made more than I did per hour. You've got to grow a bit to get your hourly costs down.

After doing some figuring I adjusted my rate down only a couple dollars in my estimating software. Now I've become very competitive and getting jobs. I had to plan to hire a couple of guys to get the same profit.

As I said, you must KNOW YOUR labor burden and overhead in order to get competitive and still make money. If you don't know and you lower your rates you may seal the deal to closing your contracting business.

Good Luck!

Last edited by teester; 07/22/07 05:44 PM.

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