Replies

1. 
   Sphere | Dec 09, 2004 10:21pm | #1

   How fast do you cut? Fasten? cull bad wood? string out cords? ball park the help needed? A loaded ? with no answer.

   Have you stayed current on costs?

   got a hammer for when the compressor dies 40 miles from town?

   and most inportantly..how much ya want to lose when the HO says thier cieling is 2K and you ball park by SQ a price of say, 3K?

   Sq ft estimates has been trounced over and over, and I will not lead you into that foray of search function...

   bottom line..price by the stick.

    

   Spheramid Enterprises Architectural Woodworks

   Repairs, Remodeling, Restorations. 

    

    

2. 
   JerraldHayes | Dec 09, 2004 10:27pm | #2

   foobytor regarding your looking for a SF price for a deck I think you should forget about it and stick with your stick built estimate. The SF estimate will only cause you trouble. You might want to read my paper The Hidden Dangers of Square Foot Estimating to see what I am talking about. In fact the example I use in the paper to show why SF estimating can give such erroneous results is a deck job.

   While you've given us some specific regarding your project to further compound why getting SF prices from people here online is gonna be worthless is when you say "standard picket railing" I really have no idea what standard means. I am very sure that if standard means the most usual or most typical the most usual and most typical railing that we put on decks are not the one(s) you are thinking of.

   I am 1000% sure that there are people here however who will jump in and be all too happy to give you advice on what to charge for this project and to you (and them) I'll repeat something I wrote in the JLC Estimating Forum earlier today responding to a fellow who was looking help estimating a sidewall shingling project.

   Ryan while in total agreement with what Bob has just said to add a little bit more advice and a caution.

   First the caution. I think if you ask around in enough forums either here or on Breaktime you will get people who will tell you how much to charge for a SF installation of sidewall shingle. My caution is "If You Meet the Buddha on the Road, Kill Him". That's Zen talk for "No meaning that comes from outside ourselves is real". In other words if they give you advice on what to charge they are giving you bad (if not dangerous) information, don't use it. Sure that's a shortcut and you just want to give the person a price but you could very well be cutting your throat that way.

   Like what Bob has said there; "What you need is a productivity rate" to estimated the Direct Cost portion of this project but there's a slight problem there too. Depending upon the size and type of the shingle and the exposure they will be set at the productivity rates will vary. Think about it, obviously an installation with a 4" exposure would take probably take twice as long as one with 8" to the weather. So we would need to know all those kinds of things to even begin to talk about productivity rates.

   And those differing productivity rates are just for the shingle installation and don't account for setting up any scaffolding and/or pump jacks etc. That you may or may not need to do the job. So you will also need to estimate and account for the time that the work staging will take too. And if that's not enough will you need to rent the scaffolding or do you already have what you need? If you need to rent it you will need to account for that cost too.

   Now if all that wasn't enough what I mentioned there only accounts for the Direct Job Cost portion of the job. And I think estimating the direct costs is the easy part of estimating and pricing a job and it's certainly is the part that the tradesperson turned business owner first gets and understands. But what cooks them and drives the neophyte contractor under is they don't understand and/or account for the Indirect Costs of doing business. That's the part that no one else will know and no one else can tell you. We can tell you HOW to figure out and calculate them but you will have to your homework and crunch the numbers for yourself.

   Fortunately there is help.

   First I would recommend getting two short and simple books on the topic. Where Did the Money Go $19.99 and How Much Should I Charge? also $19.99 by Ellen Rohr. You can order them through her Bare Bones Business web site and one of the great things she's offers is in addition to getting a paperback version of her books sent to you you wont have to wait for them to arrive in that after purchasing the books she'll send you an email with a URL where you can download a PDF version of the books and start in on reading them right away.

   "Where Did the Money Go? will teach you the accounting basics you need to keep track of your business...and find out where the money goes!". In it you'll follow a character coincidentally named Bob (although no relation to our friend here Bob K) as he sets out on his own as a first time business owner contractor and it will give you a basic overview of the accounting principles you absolutely need to know and understand. In the section of the book entitled If My Accounting System Is Computerized, Do I Need To Know This Stuff? she writes " You don’t need to know everything about accounting. You do need to know everything in this book...as a bare minimum!" and I wholeheartedly agree.

   Her other book How Much Should I Charge? which I just noticed is temporarily out of stock with her distributor but available through Amazon (I just ordered through Amazon and got a copy for one of my contractor consulting clients in just three days) is about the actual mechanics of how to set your price.

   It will help you figure out your "break-even point" and perhaps most importantly show you why you need to set your own selling price for your services and why it's so important not to use what people tell you is "the going rate".

   Parenthetically for everyone else reading this who has seen me writing about what I've been calling the PROOF/Indexed/Labor Allocated method that's is what Ellen Rohr is prescribing too although she never attaches a name to it. Indeed on page 53 she gives a another good rational and explanation as to why you don't need to and shouldn't try to recover overhead as a factor of your material sales. For my case as to why see my white paper: Markup: Comparing the Traditional Volume Based Markup vs. the PROOF/Indexed/Labor Allocated method which explains the potential problem that comes up when you perform labor only work while using a traditional volume based markup.

   The second thing you should do Ryan is download the freeware Excel spreadsheet I set up to help contractors set hourly rates that really work. I've been calling it the "The PILAO Worksheet" which is obviously an acronym for PROOF/Indexed/Labor Allocated Overhead. It works right along with the principles that Ellen Rohr talks about in her books and Irv Chasen of PROOF Management Consultants talks about in his seminars. To read last January's JLC article that Irv Chasen wrote click Allocating Overhead to Labor Makes Financial Sense .

   And lastly just another reminder if anyone actually does tell you what they think you should charge remember the lesson in the saying If You Meet the Buddha on the Road, Kill Him. However if someone tells you they can help YOU figure out what YOU should charge then that's the person who can really help you.

   And get back to everyone here regarding the specifics on the type of shingles and the exposure your going to set them at so we can at least coach you and help you on that part. And P.S. shingle installations are usually figured and talked about by the Square not the Square Foot with a Square being equivalent to 100 SF.

   The fact that you are asking for pricing information regarding a deck project is sort of a tip off to me that you need more help than just estimating this particular project so I think the advice I wrote on JLC this morning is apropos.

   And remember my admonitions above regarding If You Meet the Buddha on the Road, Kill Him. If anyone does give you advice here regarding SF prices for decks in North Carolina they are giving you bad advice.

   You might also want to checkout the recent discussion here entitled FRAMING ESTIMATES! for some conversation on the topic of estimating and how you should really be creating you own Systems Estimating methods.

   ---

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1. 
   foobytor | Dec 09, 2004 10:57pm | #3

   good gawd, surely you pasted some of that response.  I appreciate the effort.  I never in 30 yrs have priced anything by the foot.  I know my costs and profit needs.

   I was simply fishing.  thanks anyway.

1. 
   JerraldHayes | Dec 09, 2004 11:24pm | #5

   Yup I did paste it. However most of it is from something I wrote earlier today .

   " I never in 30 yrs have priced anything by the foot." Well good, but certainly don't switch to SF estimating and bidding now! However doing it by the stick is a little bit of overkill, certainly at least for my taste. unless you are 100% sure you have the job in the bag I thinks its way too much effort for all but the smallest simplilest projects. I think Systems or Unit Cost Estimating is a faster, more efficient, better way to go.

   If you can post a better description or perhaps a drawing or photo of this railing you were talking about I might be able to look up and compare it to something we have and give you some of the productivity numbers (labor hours) for the tasks involved with it.

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1. 
   foobytor | Dec 10, 2004 12:11am | #6

   Jerrald, thanks again.  All my work for years has been for repeats or referrals.    doctors wives, with few exceptions. I always have the job.  I'm like family.  My kids all go to the same expensive private school as their kids.  The connection WAY MORE than pays the tuition.

    For decks, costing is simple, I was just trying to get a GENERAL idea from the forum to see where I was.  The railing is 2x4s nailed UP top and bottom to the inside of the posts, 1x6 deckboard to cap.  pickets are $1/per 42" beveled end, cut to terminate on the bottom 2x4 spaced 3 1/2 to match the neighbor's I built last year.  This whole discussion is probably a waste of forum resources.  I already figured cost and p&o and was just running this out on a rainy afternoon.

    

1. 
   RW | Dec 10, 2004 01:31am | #7

   I do the same thing. I know what I'm going to charge, then I get curious what someone else would. Just because. I don't really care about it, I'm not going to change my bid based on it, I just get the curiosity bug. I think most of the folks here probably think pretty much alike inasmuch as the right price is what the market will bear and do the same sort of thing. i.e. same as you, same as me. So we ain't much help on sf pricing because we don't use it.

   I will say every time I have found out what someone else would charge and its a s.f. price, I don't know how they afford to eat. I got underbid by a guy (and he can have it!) on a 2nd floor deck, 12x26, with stairs, all in timbertech with rails. He bid 900 labor only. And he and three helpers were there all week. Man. Have fun.

    "If you pick up a starving dog and make him prosperous, he will not bite you. This is the principal difference between a dog and a man." - Mark Twain

2. 
   JerraldHayes | Dec 10, 2004 02:43am | #10

   foobytor re: "This whole discussion is probably a waste of forum resources." Nah I don't think so at all. In fact I think it's really just the kind of discussion we need more of.

   I think

   The majority (over 50%) of contractors suck at estimating.

   And the vast majority (way way over 50%) don't really understand or know their Indirect Costs.

   And then again there are also a group of contractors who while they know their Indirect and Direct Job costs they are still losing money or not making the money they really should becuase they are using the Tarditional Total Volume Based Markup I always seem to be railing against

   So..., given that I think any discussion regarding estimating or markup is always worthwhile.

   I think I know just the kind of railing your talking about and while we don't do anything quite like that anymore I have a contractor who we sometimes work with who does and it just so happens I'll be seeing him tomorrow morning. If he's got his laptop with him I'll see if I can get the data on it from him. You talking about something like this maybe?

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   Close maybe?

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3. 
   BobKovacs | Dec 10, 2004 03:43am | #13

   Man, I'm too tired to even attempt to comment on that.....lol

    

4. 
   JerraldHayes | Dec 10, 2004 04:53am | #20

   Hey it was my first light day in weeks so I had time on my hands. You'll notice I been pretty quiet for the most part this last month and a half or so. Ya miss my chatter?

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5. 
   foobytor | Dec 10, 2004 05:27am | #21

   how many words per minute can Jarrald type?

   Edited 12/9/2004 9:28 pm ET by foobytor

6. 
   dieselpig | Dec 10, 2004 05:29am | #22

   all of them

7. 
   foobytor | Dec 10, 2004 03:44am | #14

   bingo.  that is exactly it

8. 
   JerraldHayes | Dec 10, 2004 04:43am | #17

   Okay then I see what I can find out from my buddy then tomorrow and I'll get back to you here on it either tomorrow evening or Saturday sometime.

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2. 
   Sphere | Dec 09, 2004 11:02pm | #4

   Jerrald, your timely responses of your research and notations has saved me countless hours of turmoil...keeep up the good stuff bro. Waddaya want for xmas? 

   Spheramid Enterprises Architectural Woodworks

   Repairs, Remodeling, Restorations. 

    

    

3. 
   xMikeSmith | Dec 10, 2004 01:44am | #8

   $25/ sf

   Mike Smith   Rhode Island : Design / Build / Repair / Restore

1. 
   JerraldHayes | Dec 10, 2004 02:27am | #9

   You're saying that just becuse you know how that'll piss me off correct?

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1. 
   xMikeSmith | Dec 10, 2004 05:00pm | #25

   no...i'm sure that at least one of my decks actually came out to that.. or close.. or i thought it might ...

   anyways..

   as you know... i stick build almost everything and mentally build the labor..

    the only SF prices we plug in are the ones our subs give us.. if they want to live by them .. then so can weMike Smith   Rhode Island : Design / Build / Repair / Restore

1. 
   JerraldHayes | Dec 10, 2004 05:33pm | #26

   Mike Smith - "the only SF prices we plug in are the ones our subs give us.. if they want to live by them .. then so can we."

   Same thing here. We'll never estimate our own work by the SF but will accept a SF price from a sub. But I feel like I always want to ask them "are your sure you really want to do that?" The guy I just met with this morning used to price everything by the SF or SWAG until I got him to read The Hidden Dangers of Square Foot Estimating and talked to him about finding a better way.

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2. 
   EricPaulson | Dec 10, 2004 03:32am | #11

   I had 10k in my head before I read your post.

   I want to make a smart azz comment about how long it would take just to figure it using Jerralds method. but I just can't disrespect a man who is THAT smart and takes so much time and effort to put out good advise here.

   I love you Jer!!

   EricI Love A Hand That Meets My Own,

   With A Hold That Causes Some Sensation.

1. 
   dieselpig | Dec 10, 2004 03:43am | #12

   I hear you RE Jerrald.  I only wish I had my sh1t that kind of together.  Maybe someday.

1. 
   EricPaulson | Dec 10, 2004 04:40am | #15

   My thoughts exactly including the one after yours.

   His posts are provacitve to say the least, then I start to feel light headed and start sweating!!!!!!!!

   There's my smart azz comment.

   I'm done.

   EricI Love A Hand That Meets My Own,

   With A Hold That Causes Some Sensation.

1. 
   dieselpig | Dec 10, 2004 04:50am | #18

   I hear you.  Everytime I read through his posts I get all nervous and start thinking that I'm gonna be out of business by spring! 

   Progress not perfection once again rings true.

   I've made strides this year.  Every day when I pull into my driveway I write down hours for the guys.  About a year ago I also started logging in notes about what else went on that day.  I write down what we got down in rough lineal foot measurements or sq ft measurements or whatever general measurement is applicable.  I also record weather cuz that can play a big part in productivity in framing.  I also make notes of odd things that can consume time onsite like visits from the architect, lumber deliveries that need assistance etc.  So right there I can "walk" back through a job and see how long it took, who worked, what the weather was like etc.  It's finally starting to pay off a bit in estimating.  I don't wanna suck at it, but I kinda still do sometimes.  That's why I'm back to 99% framing.... I love it and it's the part of the business that I'm most familiar with. 

   Jerrald's system (or something resembling it) is a goal for me.  But like anything else worth having.... it's gonna take some time and effort.

2. 
   JerraldHayes | Dec 10, 2004 04:51am | #19

   dieselpig - "I hear you RE Jerrald.  I only wish I had my sh1t that kind of together.  Maybe someday."

   I don't know Brian and I think I've said this before but I don't think you are that far off from getting over the hill and really hitting stride yourself. I've been reading all your posts for a while and you are certainly a lot more aware and on target than I was at your age and I am not really that much older than you.

   But keep in mind the learning and growing never stops. I never cease to be amazed each day at just how stupid I can be at times repeating the same mistakes and actions that have caused me trouble in the past. It's a process of ongoing improvement that we all need to keep on moving ahead with.

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1. 
   dieselpig | Dec 10, 2004 05:52am | #24

   I don't know Brian and I think I've said this before but I don't think you are that far off from getting over the hill and really hitting stride yourself. I've been reading all your posts for a while and you are certainly a lot more aware and on target than I was at your age

   Doesn't feel like it most of the time, but if I am, it is a credit to and a direct reflection of you and the rest of this forum.  So thanks for the compliment, and thanks for all the good advice.

   Hey Firebird... I'm 31... it's Tim Uhler who's only 27 and running his own show and writing for JLC on the side.  Whew!   Now that's a go-getter.

2. 
   JerraldHayes | Dec 10, 2004 04:42am | #16

   Firebird - "I want to make a smart azz comment about how long it would take just to figure it using Jerralds method. but I just can't disrespect a man who is THAT smart and takes so much time and effort to put out good advise here."

   Well there is a lot of truth to what your saying there about "how long it would take just to figure it using Jerralds method" but once you have it figured out and set up as a system it doesn't take long at all to perform an estimate. That's really the point.

   When some of the other contractors see the systems I set up for my company they'll ask me:

   "how long did it take you to setup something like that?"

   To which I always answer:

   "It took me all my life"

   Which is unfortunately true. I think the real significant turning point in my career as a businessman contractor was when I took a seminar at the time sponsored by JLC called How to Survive & Prosper in the Contracting Market which was the PROOF markup method that folks like Mike Smith, myself and others keep talking about. At the time is was taught by the now retired Irv Chasen who founded the company PROOF Management Consultants. That was back in the summer of 87 but still since then I've been studying, working, and continuing to "sharpen the saw" so to speak in both that and other management areas too and it's all paid off.

   I posted all the links to Ellen Rohr's Bare Bones Business books (Where Did the Money Go and How Much Should I Charge?) because people are always e-mailing me regarding where they can get information on using what I now call the PROOF/Indexed/Labor Allocated Overhead Markup Method. Since the manuals that Irv Chasen wrote that I learned from seem to be so hard to come by I thought is was a great alternative.

   And then again while I think I personally prefer Mr Chasen PROOF Markup workbook because it's "technically written" and I like reading that kind of stuff I think Ms Rohrs books maybe the better option for most contractors since they are written in a much more story telling type of style with real examples of what she's talking about that any contractor can relate to instantly.

   Yeah it does take time to get yourself set up with all this but I think of it this way. I wouldn't build a house without working having the plans in place first and drawing up those plans always take time. So why should running a business be any different? You really need to or really should have a plan and method in place first shouldn't you? How many contractors figure all this stuff out as they go along? I know I did that way and it really hurt me at times. You can think of it metaphorically as rebuilding the aircraft you are in while it in flight. Pretty difficult huh?

   Having a good operating system all set up and running I can now estimate projects in just a fraction of the time that others contractors can and do and they are a lot more accurate than the estimates they turn out too.

   Which brings me to one of the other things on Ms Rohr's site that I also think is just great. She's got The Bare Bones Biz Fitness Plan which quote:

   "offers a simple strategy for creating a business plan and using it to build a winning business.  All you need is you and a three-ring binder.  Commit to 60 minutes a day, five days a week, over the course of six weeks.  We’ll help you create your Bare Bones Business Binder, a workable plan for crafting your Vision and making it happen. "

   And I think it a great product. I plan on using it with a contracting company I am working with on a consulting basis as a guide or plan to getting their company back in shape and geez it's only $12.99 so how can you go wrong. I think I'm running a pretty good lean machine right now but reading through the 152 pages of that guide there were things I picked out that we still needed to work on and straighten out ourselves too.

   In an earlier post Sphere said "

   Jerrald, your timely responses of your research and notations has saved me countless hours of turmoil...keeep up the good stuff bro.

   Waddaya want for xmas?" and that got me thinking. I think every contractor should do themselves and their company a favor and buy and read Ellen Rohr's books. Really, that would be a great idea. (And the E-Myth Contractor and David Gerstel's book Running a Successful Construction Company wouldn't hurt too).

   Unfortunately Sphere I've got all them already (and in some cases more than one copy) so I think I'd like a new extended cab pickup truck instead. You can surprise me with the make model and color.

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1. 
   EricPaulson | Dec 10, 2004 05:47am | #23

   Jerrald,

   All I can say at this point (in my life, and especially this week) is thanks for all you do here.

   You rule. I wish I could elaborate more. I'm dead tired. my older brother went in the hospital Mon. night, I was up till 4 am, with a perforated ulcer in his stomach. Long, long story about substance abuse. He almost died, and needless to say it's been a looooong week.

   Just here to relax. Brians next up post had me laughing. He's a good guy as you said. Lot's of promise in his future, I can tell. 27. sheeit. Youngin,got the world by the balls.

   So thanks again for all the good work here.

   EricI Love A Hand That Meets My Own,

   With A Hold That Causes Some Sensation.