I always ask the homeowner what their budget is, that way I can help them out with material options, discount opportunities, etc.
There is really no iron-clad formula or rule of thumb that will work for every project. The key to good budgeting is to have a very clear idea in writing and drawings (even crude ones) of exactly what you would like to do. Like creating a shopping list. Break the work into line items. Investigate material costs. Working with experienced design and construction professionals will allow you to inquire what similar projects in your specific area may have cost, but a reasonable contingency should be added in every case.
Meet with home owner for measurements for materials. Research for best quality and prices for home owner’s budget. Work up estimate. Work in cost of overhead to cover business costs, such as Workers Comp and Workers Liability; office overhead; labor and materials. Submit proposal to home owner.
Cost of material + labor cost +15% overhead
Estimates in the earliest stages of project selection are usually based on information from previous projects that can be adjusted—scaled—to match the size and complexity of the current project or developed using standardized formulas.
All projects have unique characteristics and need to be identified accordingly to their designs. The main formula is to identify the materials involved, code requirements and structures involved to equate to time and cost involved.
Its years of doing jobs; there really isn’t a formula. We go by the the job and what it consists of and a per square foot price.
Always get a understanding of expectations and desired level of finish. From there I use a custom “Per Sqft” pricing method which utilizes the size, finish, time and complexity of project, as well as cost of materials. Pricing is inclusive with materials.
As an example I’ll list pricing for complete residential cosmetic remodels:
Builder Grade Finish=$25-$39 per sqft
Pro/Mid Grade Finish=$40-$69 per sqft
Designer Grade Finish=$70-$89 per sqft
Custom Grade Finish=$90 & up
We price each job individually, accounting for as much expected time and material as possible. We then reference similar projects we have completed and verify the budgets are comparative. Some projects have accounted for a loss and as a company we can’t stay in business without making money. We chalk these losses up to lessons learned and move forward constantly adjusting and improving how we do business. Unfortunately I have not found a magic formula that is simple and works for every job; when I have tried these techniques on paper they seem over priced or under priced.
We use a Good, Better, Best Estimate process. For each selection in the project we offer 3 choices. We will review the choices with you and help you select the ones that best suit your budget and project goals.
I personally use the following formula…
- I do line by line quotes to eliminate questions about costs.
- No whole room or whole project bids bundled up together. I find this is way more efficient as it provides you the means to actually know where the money is going down to the penny including taxes for the job.
- I detail everything, lay it all out on paper, and come up with a solid functional way to accomplish the project’s costs and go over it with the client prior to starting the work.
- I make sure to allocate a small portion of money for unforeseen issues that may come up based on the type of project. This is a listed line item on every bid I write up and is refunded prior to closing out the job or removed from the job if nothing unforeseen comes up so if it isn’t used the client doesn’t have to pay for it but in the event it is needed then it is already allocated for there in the original bid for the job.
I usually go by square footage and the room involved.
We have a sophisticated estimating program that we use to come up with materials and labor costs
Before we can tell you how much your job will cost, we will need to know what it involves. We understand your concerns about budget and keeping costs under control. We have the same concerns ourselves. Therefore, the best way to estimate a cost is to have a representative come to your home and provide a detailed estimate.
Experience. Previous jobs help us determine how long something will take. Then we add the cost of the material.
We use a detailed computer software program that aids in creating the budget. It is very successful and always on point so as there are no surprises nor any hidden fees later on for the customer.
We take our exact costs and add our liability to it. That’s it. No padding. However, our quality is very important to us and we build above code standards. As a result, we will not cut corners or perform substandard work in order to “beat out the competition”.
Unfortunately, the electrical trade is different than most other trades with regards to estimating a project. We do not have the luxury of using a simple formula to arrive at a price. For example: Flooring = (area of room X labor multiplier) + (area of room X material expense) = estimated cost. There are far too many variables to be considered for a proper estimate and often times the estimator has to do the entire job in their head, adding up labor and material costs as they go. Things like construction of the building, age of building, and other job specific details have to be factored in.
Example: Installing a ceiling fan in a modern drywall ceiling at the normal ceiling height of 8ft. should have a different price than the same ceiling fan installed at 16ft in a vaulted ceiling, with plaster and lathe in a historical home from the early 1900’s. Same fan, different installation requirements and work area conditions to consider to provide a finished product that the owner would be satisfied with.
Our windows and doors are priced competitively with other dealers selling and installing comparative products. We take a “value added” approach in providing the appropriate window to the home not using a “one size fits all” model. Two or three manufacturers are selected based upon those best fitting the project. These products are then utilized in providing a comparative quote. The basic formula is adding the respective manufacturer’s cost plus the direct labor, sales commissions and a reasonable profit margin to arrive at price for each manufacturer. The homeowner can then select which scenario best fits the design specifications and budget desired.
We price out what all the material will cost as well as how many hours of Labor the job will require. If the Project manager ever needs a break down of cost we do not hesitate to provide it.