I've been working as a "subcontractor" in name only for several years with different builders. The finish work and built-ins are generally reserved for me, and I want to go into business for myself just doing that work. One of my biggest head scratchers is the issue of pricing. Any advice on this thorny issue would be welcome. What do you find is working for you - pricing by LF? By unit? What about built-ins? It's probably relevant to note that I am a one-man show in a small shop (think 2 car garage).
From contributor R:
I charge $140 - 160/LF for standard stain grade. $110 - 125 for paint. Then add for each drawer $10 - 30 and door $20 - 40, end panel $125 - 200, any custom pull out $250+, arches, glass fronts, radius corners, and exotic woods are priced per job. These prices do include installation.
Also important is what skill level you work at. Can you do fine finishing? Will you be working directly for the homeowner? You charge more than for contractors who get discounts because they usually handle the customer.
If you get almost every job you bid, then you may be too low and leaving money on the table. If you find you lose a few jobs because they were wanting cheap, then you may be more in line. Bottom line is, charge a fair market price for your area for the level of customizing they ask for. If you know your quality is better than another bid, don't be afraid to explain the better value you are giving.
You have to price what your area is capable of paying. For just starting out small with low overhead, my best advice is this: Price your work as if you had higher overhead, or you will never be able to afford a bigger shop (i.e. higher overhead).
Right now I do qualifying estimates by the linear foot with actual bids done by a cost breakdown + markup + profit. This method works well for me doing ten to twelve kitchen cabinet jobs a year, furniture and several small projects like bath vanities. I don't think it will work well when it's a salesman doing the bidding and I think the linear inch + add-ons method will be better, especially since we'll be targeting multiple unit sales in the lower-end market.
In my case, I work for many different types of customers. Some are decisive and others, the gun to their head will go off before they can decide what they want. I tried to figure a way to market my cabinets but found that there are too many variables and options to throw around.
I first tried to establish different grades of cabinets and then add a number for drawers, shelves, etc. But then there was the paint vs. stain issue and then the door style and then the wood species and then face frame vs. Euro, then laminate vs. wood, then... And if all that wasn't enough to make you want to drive a truck instead, my customers would do the "well how much would it be if we changed X to Y and eliminated Z," two or three times before signing the contract.
I realized that I needed a good way to price and a better way to re-price. My solution - I put together a spreadsheet with all the common variables across the top (interior materials with cost, doors with cost, etc.). On the line items, I input the cabinet sizes and other options number of drawers, doors, pullouts, etc.). You can get as simple or complicated as you want to and the good thing is that the spreadsheet can usually be altered or added to, or you can change something that doesn't do the way you want.
When a customer says how much for alder instead of walnut, I change one number and I'm done. Same with doors, pullouts, whatever...
I am not going to tell you that it is not a lot of work to setup, but I have gotten that time back 100-fold in the savings of time I now spend bidding. A job that used to take me 4-6 hours to bid I can do in under an hour now. It also makes it easier to teach someone else how to do the stupid part of the bidding, as it breaks it down to all inputting numbers from the take-off. The only thing you have to do is add profit (mine calculates that and tax and overhead and installation and employee costs) and make adjustments for unusual issues and the pain-in-the-butt factor of the customer.
I still have unusual jobs that I have to bid more the old fashioned way, but I have a spreadsheet that takes a lot of the calculator work out as well.
Personally, I like the exercise of listing out what materials and labor we will need. And while I am not too exacting in my methods, I try to add cushion on my prices so that if there is an error (often there is) we still are making profit.
Also, I liked contributor V's advice using more overhead for your future, larger shop! I need to think about that...