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Too much time estimating

6/22/20       
Chris

The requests are getting out of hand and I am overwhelmed. We are a 3 man shop. 2 build and I do all the pricing, talking and meeting with potential clients, etc. We outsource finish, drawers and doors most of the time. We do "high end" custom work in the San Francisco Bay Area...kitchens, baths, built-Ins, etc.
I price work using an excel spread sheet I've made over the years.
After I punch in the numbers I add for
- difficulty/complexity factor
- expected red tape factor (indecisive designers and hard to reason with architects, emails, phone calls, researching that hardware that does what you've never done before, etc)
- 15-20% profit
All this takes time and it's exhausting. Have any of you outsourced estimating?
Would you recommend it? Have you learned anything to be aware of if you have outsourced estimating?
I hope you are all well and thank you

6/22/20       #3: Too much time estimating ...
Jeff

Are you estimating for every lead your receive, or just for qualified leads?

Assuming you’re busy enough, I’d only be bidding the jobs you want.

6/22/20       #4: Too much time estimating ...
David R Sochar Member

Estimating is at the heart of your business and your ability to make a profit. Outsource at your own peril.

Are you estimating and getting 90% of what you price? Or 40%? If 90%, then you just need to speed up your estimating time so it is shorter, and more enjoyable. If 40%, then you need to develop a shorthand estimating, so you can sort out the wheat form the chaff, as they say.

Streamline your estimating so you have most of it ready to print, just fill in the blanks. Do this only for qualified potential customers Let the tire kickers walk.

6/22/20       #5: Too much time estimating ...
Bill

How busy is the shop?

6/22/20       #6: Too much time estimating ...
chris

We are busy enough. Its a delicate balance of too little and too much.
The problem I have is that I think about the details not seen in the drawings we are given to price...for instance, a bookshelf shown with a bunch of lines could mean anything. I anticipate that it means high end and expertly executed. Meaning face frame and no double thickness partition frameless. Big difference. Do you go in low and vague or realistic also anticipating lots emails etc.

6/23/20       #7: Too much time estimating ...
David R Sochar Member

Again, what is your percentage of awarded jobs vs lost jobs? This is helpful so you determine if you are estimating accurately or not.

I you are too busy, then raise prices. If too slow, lower prices to the break even point. You should know your costs, determine break -even point, know how low you can go, etc.

I just spent the last 7 years raising prices to where they are now more than double. Should have done it years ago. But that is one way to control the flow.

6/24/20       #8: Too much time estimating ...
Alan F. Member

Chris,
After you describe your thought process the odds of getting a correct estimate for your shop from a 3rd party without a lot of review and verification would seem worthless.

I would never consider it unless everything I sold was by the unit / linear foot and my materials were constant and labor was constant.

You could try someone for 1 or 2 bids and see if its usable for you.

The most important thing is to constantly be selling. When you are you busiest is when you need to be selling so your pipeline stays full.

A-

6/24/20       #9: Too much time estimating ...
rich c.

Age old lament of the small business owner. I was so envious of the small auto mechanic business. They had a flat rate manual. Tells them how much time it takes to remove a transmission. Even if it's not too accurate, they can show the customer. "Says right here in the book" is the explanation they give. Customer couldn't argue with "the book". Estimating does get easier with the years, how many have you been at it? It took me at least 5 years to even feel confident, and then I closed up after 8 years. I was just not cut out to be a small business owner. Luckily for me, I got a corporate woodworking job with great benefits.

6/24/20       #10: Too much time estimating ...
Eddie

I have developed a system to quote jobs by LF with a number that works for us, some jobs gets a little bit more time consuming, so we add some more, but at the end of the day my numbers are right on with the other guys I know that produce the same level we do. A average size kitchen will take me about an hour to go thru the drawings and plug on my Excel, PDF than email to the client. I shoot for 20% profit and most of the times works very well. Our main problem right now is we need to educated our clientele that we are a custom Cabinet shop, we don't have their cabinets sitting on the shelf and ready to be finish and deliver, but that's a problem for another tread.

6/25/20       #11: Too much time estimating ...
Joe

I wonder if you are overlooking a key aspect. It's an estimate. That means your project will range from $18,300 to $20,500. 90% of my pricing is done this way. It takes 5-15 minutes for a normal kitchen. 30 minutes off plans. You get an exact price once you have completed your design you paid for. Speed and accuracy.

6/26/20       #12: Too much time estimating ...
Alan F. Member

These our our broad brush steps when we determine whether to bid or not. There are other items that come up but we try not to get to deep in a bid before we know if we can or want to bid.

Project Bid
Review plans for Job Walk attendance
Read Specifications and make sure we can bid
Determine how far out project is for labor rates
Review any special project requirements
Confirm schedule and if we can fit project in
Confirm material and hardware costs and availability
Determine long lead materials and inbound freight costs
Review Sections and details for special items and materials
Determine if we will bid or not
Determine RFI questions from specs, finishes and details
Determine if FSC or LEEDS
Determine if CERTIFIED Compliance or CSIP
Setup Component specs based on specs
Setup Composition specs based on specs
Copy run and immediately clear
Start Takeoff
Create Run layups for Abet, Laminart, Formica SC, Wilsonart K finishes and any other limited size special cost materials
Prepare proposal with Alternates
Submit to Alan for final review and pricing
Alan Submit Proposal

6/26/20       #13: Too much time estimating ...
rich c.

Joe,
The danger with giving a rough estimate is that the low number sticks in the head of the customer. I was constantly bombarded with a "just give me a ball park number". I refused as that low number sticks and it irritates the customer to come back with a higher price.

6/27/20       #14: Too much time estimating ...
Derrek

Was doing a home how years ago and a kitchen guy was a few booths down. He had about 6 kitchens with a detailed drawing and below each one he had an approximate price range and what you would get for that. I have tried to replicate it somewhat as it takes care of a % of people that want to know about what it costs. We use it for anyone that asks about price as a qualifier. If they say wow that’s a lot of money for you he 1500 option, we tell them enjoy the showroom and let us know when your ready.
It doesn’t work for everyone and every project. We also won’t just quote something without having a detailed discussion or visit with the customer. Our pricing comes right from Cabinet Vision so we design and price right from it. Our projects are generally smaller and less detailed than kitchens. I do a design and will make minor changes, if they want to make major changes then we are taking a deposit before we move forward

6/29/20       #15: Too much time estimating ...
David B  Member

Website: http://beaconcustomwoodwork.com/

I was going to say the same thing about the customer locking in on the lower number when you give a range. Plus I always tended to 'estimate' too low. So I aIways wanted to charge the high number while the customer was expecting the low number. I finally figured out to take a breath first, then double to low number before speaking. So if I was about to say 8-10 thousand, instead I would say 10-16 thousand. 3-5K became 5-6K. That produced much better results because we could both be happy with the lower number.

7/9/20       #16: Too much time estimating ...
Mauricio Member

So, Chris, I don't want to be a buttinski, but let me ask you this....Is it really worth it for you to have your own shop? I am in the Union also in the SF Bay Area and was thinking about doing side jobs that would lead to me having my own small shop. The last thing I want, though, is to one day be frustrated and say "Geez! I shoulda kept my job".....There's so much BS at the place I work and I'm really getting tired of it..........but what would you do if you were in my shoes? Grin and bear it or go out on your own? I appreciate your input.

7/9/20       #17: Too much time estimating ...
Alan F. Member

Mauricio,

The younger tech workers google and Pintrest and Instagram lots of ideas, so there are a lot of I want it to look like this. We even see it from Large bay Area Commercial firms.

If you have the ability to deal with the homeowner or small contractor and guide them through the process the work is there.

We quit doing residential years ago because for us the hours to sell for the dollars sold was much higher than commercial work and the schedule on residential always slip but by the time they get to the cabinets the owner is firm about moving in.

I think to sell in the bay area you need a showroom or a very well done website or both.

The pricing should be higher in the bay area but I don't know at what price point people go out of the area or out of state.

It really is a consultative sales approach.

You will be moving from a full time worker to a sales and business manger who also needs to go make and install the work. I think the need to have constant sales and the constant change of ideas is what brought Chris here for a faster way to deal with the sales process.

A-

7/13/20       #18: Too much time estimating ...
Chris

Im not getting email notifications that people have posted. Sorry for the lag.
Ive been at this for 14 years here in the SF Bay Area and 10 years elsewhere.

So far this year, I have sent 72 bids. Of those, 42 were accepted.
Mauricio, having your own business comes with other headaches and worries.
I personally prefer being self-employed for a number of reasons. The BS is a plenty on this side as well.
Thanks for your input everyone

7/13/20       #19: Too much time estimating ...
Derrek

Chris, that a good closing ratio. I figure the numbers for sales look like this for anybody that is marginally adept
1/3 will buy regardless of what you do
1/3 won’t buy no matter what you do
1/3 will buy depending on what you do


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