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  1. #91
    Join Date
    Nov 2006
    Location
    Lake of the Ozarks MO
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    3,470

    Default

    Interesting...If there was more people in my area I could charge more and work less. but end up running around bidding more for it

    Actually I'm sure I don't fit the norm...the majority of my customers come to me from referrals...I haven't advertised for many years. I have customers from previous businesses I've had as well.

    Altho now that the higher cost of doing biz is causing some competitors to feel the hurt, I may do a little (advertising) just to thin the herd a bit Seems like a plan anyhow

    Thanks for the info FatFab, it was good for me to hear.
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  2. #92
    Join Date
    Mar 2008
    Location
    Anchorage AK
    Posts
    344

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    You bet and good luck this winter.

    I appreciate you keeping me in my toes.

  3. #93

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    Quote Originally Posted by FATFAB View Post
    I don't get much more than 15-18% of the work I bid.

    I have been to two conferences on bidding work and both have said if you are getting 20%+ of the work bid then you are leaving too much money on the table. If less than 10% then you are too high.

    I'd ask for my money back.
    You can't even begin to formulate an accurate model based on what percentage of bid work you actually are awarded.
    Those numbers may (MAY) be applicable to service business' such as roofers, who bid a large amount of jobs in a short amount of time, but won't even begin to apply to the majority of business' out there.
    Good grief man, we spend between 40 and 200 man hours quoting a job, and usually make at least half of our gross per year from a single job. Sometimes less, sometimes the entire year.
    I get at least 80% of what I bid. But I don't "shotgun" bid work, I choose pretty carefully what work I'm interested in and quote it as close as I can.
    I know of large (top 5 in the world year to year) construction companies that I work for who get over 90% of what they bid, but they work similar to the way I do (or maybe I work similar to the way THEY do) carefull and selective.
    Neither one of us is about to spend the time and money to quote detailed jobs and only get 20% of it.
    To me that would mean i was wasting an incredible amount of man hours quoting work I didn't have a good shot at winning. And I'd be out of business within a year.
    There's no such thing as "leaving money on the table" in my world. I know my numbers and I don't quote work unless I can make the amount of money I want out of it. If someone else quotes way higher, that's their business, I don't lose a second of sleep thinking, wishing, hoping that I'd of come in just over the next highest bid.
    If I get it, I'll make what I intended to make or more 99% of the time. I don't give two hoots what everybody else comes in at.

    JTMcC.
    Some days you eat the bear. And some days the bear eats you.

  4. #94
    Join Date
    Aug 2008
    Location
    Florence,MT
    Posts
    7

    Default bid

    price materials, estimate time then multiply by 2. never fails.

  5. #95
    Join Date
    Mar 2008
    Location
    Anchorage AK
    Posts
    344

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    Quote Originally Posted by JTMcC View Post
    I'd ask for my money back.
    You can't even begin to formulate an accurate model based on what percentage of bid work you actually are awarded.
    Those numbers may (MAY) be applicable to service business' such as roofers, who bid a large amount of jobs in a short amount of time, but won't even begin to apply to the majority of business' out there.
    Good grief man, we spend between 40 and 200 man hours quoting a job, and usually make at least half of our gross per year from a single job. Sometimes less, sometimes the entire year.
    I get at least 80% of what I bid. But I don't "shotgun" bid work, I choose pretty carefully what work I'm interested in and quote it as close as I can.
    I know of large (top 5 in the world year to year) construction companies that I work for who get over 90% of what they bid, but they work similar to the way I do (or maybe I work similar to the way THEY do) carefull and selective.
    Neither one of us is about to spend the time and money to quote detailed jobs and only get 20% of it.
    To me that would mean i was wasting an incredible amount of man hours quoting work I didn't have a good shot at winning. And I'd be out of business within a year.
    There's no such thing as "leaving money on the table" in my world. I know my numbers and I don't quote work unless I can make the amount of money I want out of it. If someone else quotes way higher, that's their business, I don't lose a second of sleep thinking, wishing, hoping that I'd of come in just over the next highest bid.
    If I get it, I'll make what I intended to make or more 99% of the time. I don't give two hoots what everybody else comes in at.

    JTMcC.
    Just different business JT.

    I do maybe 300-350k a year gross sales, I sign maybe 10 contracts a year the rest is T&M "call out work" with little or no notice.


    The stuff I bid and get is usually stuff that bigger companies can't do efficiently, or they pass because the margin for profit is to small, in other words they have too much overhead. IMO.


    When I am bidding more standard stuff say a structural steel ********(hmmm cant say e-r-e-c-t-i-o-n but I can say flaccid) job 1-2 story and less than 50ksqft. I am vary competitive with other union davis bacon contractors. In these bids I will be with in 1-3% of expected costs.



    Many of the bids I don't get are going to one contractor in town that practices business "differently"



    Ill write, this year some 150 invoices, with only a two asking for progress payments.


    We are just working a different end of the the spectrum.
    Last edited by FATFAB; 10-20-2008 at 01:43 AM.

  6. #96

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    You're missing my point, my point is not that my way is the only way, it is this: There is no magic formula.

    The only way to accuratly quote work is to know your costs, know how much time it takes your personell to do the work, and know how much profit you want to make. Simple in theory, sometimes more difficult in application.

    As for those guys saying quote the job and double it.........when I read that I can only shake my head. Good luck coming in at $440,000 on a job that will be done (with a nice profit) by others for $220,000.

    JTMcC.
    Some days you eat the bear. And some days the bear eats you.

  7. #97
    Join Date
    Oct 2006
    Location
    Mpls, MN
    Posts
    1,790

    Default

    JT, I think the comment about doubling your estimate is aimed at those who don't have the full understanding of how long things actually take to produce. So what might seem reasonable to the inexperienced when bidding is actually nowhere close to how long it will actually take - so doubling it will get you where you should've ended up had you known the real time needed.
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  8. #98
    Join Date
    Mar 2008
    Location
    Anchorage AK
    Posts
    344

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    JT we are on the same page here, my bids are calculated down to the dime. I know (expect) how long it will take to do "X" and how many "X's" there are... and so on. I figure for all consumables equipment new tooling and on and on.

    For simple fab shop stuff I will use the materials cost multiplied by "X" method but that is for quantities of 20 or less and vary simple jobs, even then I will back check the number by figuring time and materials + shop expenses, + profit.


    And no magic formula exists is so true, after a while one will get a feel for what things will sell for. Just a few minutes a go I took a call for pricing on rooftop access ladder. I know that my market will only bear so much for ladders. I know that the majority of the money in in the time for fab and not the materials. At least in my market. So a 18' flat bar ans solid round rung ladder primed red oxide and delivered will sell for $650-$700 no more.

    One must learn the market and the clientele.

    So my advice for the new guy is figure down to the last dime your real expense, be honest on the time and add a fair profit. I know that I can beat the time of most all of my employees, but I have a different motivation, and many more years experience than most.

  9. #99
    Join Date
    Mar 2008
    Location
    Anchorage AK
    Posts
    344

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    Quote Originally Posted by Fishy Jim View Post
    JT, I think the comment about doubling your estimate is aimed at those who don't have the full understanding of how long things actually take to produce. So what might seem reasonable to the inexperienced when bidding is actually nowhere close to how long it will actually take - so doubling it will get you where you should've ended up had you known the real time needed.
    I have heard this formula all my life, it holds some water but it only gets some one in the same city as the ball park many times you cant even see the stadium let alone the end zone.


    Knowing real costs and real times, is the key. Being honest with how long it will take an employee to do X. Not what it should (in a perfect world)

    Then realizing the true cost of business, I think so many don't appreciate that a $10.00per hour employee may cost the company as much as $25 or more per hour. That a welding machine sitting in the shop not being used in the field costs the company, up keep taxes pile up no mater of the hours of use, then go up once it goes into the field. The bills for yellow page adds business cards office phone cell phone insurance ...... all pile up no mater the amount of work.


    So until you get a handle feel for the true costs one must fill in the blanks of the formula with something. What that something is... is the $64.00 question

  10. #100

    Default

    Over the last 16 years I've been in business I've timed everything that can be timed. I know how long it takes to burn a 3/16" LoHi, a 5/32", a 1/8" and a 3/32". How long it takes to make a linear foot of 3/16" fillet with 311Ni wire, how long it takes to make a complete 36" .500 Wall pipe weld, How long to bevel a 24" .750 Wall, ect, ect, ect, ect, ect. I've timed everything imaginable and written it down.
    At the same time I time by the day, that is operating factor in differing circumstances. Knowing how to adjust your operating factor is critical. The work takes more/less time when it's 10 below zero or 125 above. It takes more time on the side of a mountain than it does in a fab yard, on and on it goes.
    And I time by the week/month, that factors in things that don't happen often like breakdowns, rainouts, material shortages, sickness, helpers thrown in jail, ect.
    Every time I get a bid job, when it's finished I compare my quote numbers to the actual numbers and that hones my skills down just that much more on each job.
    I used to allways quote (for my info only) T&M work, for practice. This gives you a real world comparison to what you thought before the job started, and what the job actually cost. Anyone doing T&M work should be doing this to hone their bidding skills in my opinion.
    The people who take this serious, are the people who make serious money quoting, and rarely take a bath.
    Experience is what makes a good estimator, estimating T&M work is like free/real world experience with no down side.

    All of this is just my opinion so take it or don't.

    JTMcC.
    Some days you eat the bear. And some days the bear eats you.

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