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post #1 of 18 (permalink) Old 05-22-2014, 11:24 PM Thread Starter
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Bidding

This is probably a personal question, but how do you bid? We never know how much our boss bids. We have never seen this side of the business before. Do you use a general formula when approaching a job site? Do you have a general price set for each type of job? Or, do you have to first see what your up against, factor in time, money spent, and labor cost then create a proposal? Im asking this because, I wanna know how to bid properly. Not over bidding nor underbidding myself. I know this depends on alot of factors, but I know some vendors use a general price sheet. Like SG will pay $32.50 per cbyd. But what if you go to a broker directly, what is a comfortable price that they may agree upon, or may be able to bend and take the proposal? Since we are talking to our first broker, any good general ideas on how to tackle a bid would be greatly appreciated!!!! Thank you!
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post #2 of 18 (permalink) Old 05-22-2014, 11:36 PM
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for brokers go highwe 40 50 cu yd 125 lock change 125 board up
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post #3 of 18 (permalink) Old 05-23-2014, 12:04 AM Thread Starter
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for brokers go highwe 40 50 cu yd 125 lock change 125 board up
Thank you! I dont want to step on anybodys shoes here...What I mean is that the crap company we work/worked for(yes slowly doing less and less for them each day) has made us "numb" to what we should be getting for the work we do. When I hear $30, $40, even $50 for cbyd! That is extremely exciting for us because it 3-5 times more than what were use to making. BUT, were scared to even ask for this because it seems to much. Ya know where im going with this? If this is "normal" for what a broker or local bank will see, then by all means that is what we will charge. But we do not want to do work for cheap because then brokers/local banks/ or regular clients will see good work for a cheap price...who wouldnt take that? But maybe the saying you get what you pay for comes to into play. Now 125 for boarding, is that for a single opening(i.e. Broken window, security door, hole through a structure or home? we are use to .50 cents per united inch for boarding, but not the way you would think....the way thy have had use calculate what we make is we take the length and width added together times by what we make per inch. so a 22in by 20in (44in) opening would pay $22. But thank you for the post!
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post #4 of 18 (permalink) Old 05-23-2014, 12:53 AM
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Heartland,

Download the 1month trial subscription of Xactware (xactimate). You won't be able to print your estimates due to the watermark BUT you can see the pricing that us everyday full fare contractors charge for your geographical area.

Www.xactware.com Download xactimate version 27 or 27.5 since they are easy to figure out/operate.
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post #5 of 18 (permalink) Old 05-23-2014, 02:26 AM
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It all depends,Preservation is a lot different then private sector.I ussally dont give a price up front,I return to my office and do the paperwork there.
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post #6 of 18 (permalink) Old 05-23-2014, 02:28 AM
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First and foremost you have to know how much it cost you per hour to run your business, including payroll for yourself. This will allow you to have a baseline to use for pricing. For example, with the arrangement for my hourly payroll a $14 per hour person costs me $22 per hour. This includes all taxes and insurances.

Before anyone blasts me I know this is higher than it should be as an overhead cost, but I get a lot of flexibility with my payroll by using the company I do for the rare times I have to pay hourly.

With this in mind I can know if a job takes two guys 4 hours then my labor costs will be $176. To this I add other fees such as equipment rental (including the time to pick it up and return it), dump fees, etc. I charge a flat rate of $50 per trip to the dump for the vehicle plus my dump fees. So the same job with one trip to the dump will cost me $226 plus what I estimate the dump fees to be.

Now comes the tricky part. If I know the job does not pay well and I still want to do it to make a good customer happy or keep a couple of good guys working I will do the job for maybe $275 as a bottom line.

If I know I can charge more I will with no guilt whatsoever. So if the job costs me $50 and will pay $700 I will charge $700.

This is where experience comes into play. Look at the job and think about what factors define it. Who is your competition and how good are they? Is this an emergency gotta have it done now rush job? Are they getting 3 other bids? What kind of special equipment do you have to have to get it done?

Make it a point to be the go to guy for brokers and they will rarely call someone else or question your bids as long as you do not get too crazy.

Most of the nationals and regionals will mark up your bids at least 40 to 60 percent. I will usually bump up my price by 25 to 50 percent for direct work, depending on the customer.

Do not be afraid to ask a broker what they have been paying to have routine work completed such as re-keys, pressure washing, etc. You may be pleasantly surprised to find out they are used to paying a lot more than what you had in mind.

I once had a broker ask me to see if I could figure out why a lawn was washing out and bid to fix the problem. It turned out is was a broken pipe for the septic system and I recommended a local septic company to to the repairs becasue it was going to be extensive. When I asked who to send the invoice to in her office she told me and then said make sure to bill for $150. I did not argue and made $150 for about 30 minutes work including drive time. Turned out $150 is the allowable for a lot of different tasks. I do a lot of $150 jobs for her.

Do not be afraid to bid a little high. This way you can back down from the price and still make money.

The bottom line is that no matter how it is calculated you have to be profitable.
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post #7 of 18 (permalink) Old 05-23-2014, 07:55 AM
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The bottom line is that no matter how it is calculated you have to be profitable.
Exactly!

Most jobs I bid are figured by: Labor + Material + Overhead + Profit + PITA = price.

However, I do some items off a price sheet. For example, storm doors. I've installed so many of the damn things that I can put a Larsen door on for $249. Provided its not a Lead RRP job and I don't have to drive 3 hours to get there. I give the quote out over the phone without even going to look at it.

Keep in mind, my stuff is all rehab and private party. I'm outta the P&P rat race.



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post #8 of 18 (permalink) Old 05-23-2014, 08:02 AM Thread Starter
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wow you guys are awesome! thank you for all of these helpful post! I was not sure if this was a touchy subject but we needed the advice for sure.
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post #9 of 18 (permalink) Old 05-23-2014, 08:12 AM
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Not touchy that I know of. Never fear your competition. Think of them as a way to make you better.
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post #10 of 18 (permalink) Old 05-23-2014, 08:41 AM
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Not touchy that I know of. Never fear your competition. Think of them as a way to make you better.
I love my competition. If I were to ever start a standup act I would never want for material because of them.

My latest favorite one is a 5 acre lawn cut on a 32 acre horse ranch that my competitor agreed to do for $150 per cut. I had bid $330 per cut. The area around the buildings and the yard is five acres.

He cut it three days late, cut only 3 acres, cut nothing around the barns and sheds, did not trim the weeds around anything and cut a fenced pasture instead of the yard. I love this guy.

Looks like they got their $150 worth.
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