If you are
fairly sure that your finish room is operating at a reasonable
level and you still say that your finish department always
looses money, then you need to ask yourself a question:
charging enough for your product?
to this questions can only come through a fundamental
understanding of your finishing system that is then reflected in
your estimating system.
Your Estimating System
purpose of an estimating system is to help you get to a price
that will get you the job and allow enough of a profit margin so
that you make money. Use your estimating system as a tool. After
you do your calculations you can always adjust your numbers up
or down. Remember that there are exceptions in almost every
job, so donít forget to take notes and adjust your pricing
estimating system will work accurately and quickly. To do so
there has to be some flexibility built into the system. If you
spend all of your time estimating, that leaves no time for
I had a
wise person tell me that if you got more than about a quarter of
the jobs that you bid, then your prices are too low. The concept
is to price projects to make you money. Some projects are not
worth the misery at any price, so bid them high to discourage
the customer. If by some strange reason you still get the job,
then it is at least worth your time.
business is different. The equipment you have available and the
size of the finishing area will ultimately affect the volume of
work that can be handled at one time. People also operate at
different skill levels and companies require different profit
margins to stay in business. Bid the job with an honest estimate
of times and costs.
Estimating is often figuring out what your competition will bid.
Then you have to ask
yourself if you think your competition will do it for
less and if so, should you lower my price?Ē I think sometimes
people have a preconceived idea of what a price should be so
they adjust their times or costs to meet that figure. Double
check your figures and if you feel that these are the numbers
you need to make money on the job, then quote that price and be
willing to let someone else take the job. You should always be
willing to let your competition loose money. You are better off
spending your time and energy marketing your company and
drumming up new business than working on a project that you are
not going to make any money on.
systems fall into 3 different categories:
Single multiplier systems
multiplier of the cost of the materials
percentage of the rest of the project
cost per lineal foot
Dual multiplier systems
combination of anticipated time and material costs
Intuitive multiplier system
toss of the magic dart
There is no
one perfect system for every job or every company.
Single multiplier estimating systems do have some short comings.
those who like to estimate finishing cabinetry as a percentage
of the total job cost or as a cost per lineal foot. While these
methods might be adequate for mouldings or panels, they
generally are only accurate enough for casework when it is part
of a standard line so that you have gathered enough historical
data to estimate your costs accurately. Custom casework might
require small but expensive nuances in the finishing system can
easily be overlooked. The purpose of estimating is to insure
profitability while keeping the price attractive.
adequately account for labor intensive operations. Toning, wash
coating, glazing donít increase material costs much and donít
effect square footage but can add considerably to labor.
costs often have an inverse relationship to labor costs. It will
take 3 coats of PreCat lacquer to equal the film build of 2
coats of CV. The total cost of the materials might be close but
there is about 30% more labor for applying the extra coat of
account for the complexity of what is being finished.
Considerably more time spent finishing 32 - 1íx1í doors than 1 -
32 square foot panel.
hard to collect relevant historic data
cost of what it takes to build something has no bearing on what
it takes to finish it.
I prefer the time and material system. It
accommodates the variations in labor and material on an
individual basis. You can develop simple spreadsheets or even
paper forms that you can fill out quickly. Some design software
also has estimating capabilities. Your calculations should be in
labor man-hours plus materials so that you can adjust your
pricing to suit your costs without having to change all your