Should you use a square foot price to estimate remodeling?

NO!!!!

Did I say that loud enough?

The answer is a resounding no.

Square foot pricing cannot take into account all of the variables of remodeling. Product selection, current condition of the project, jobsite access are only a few.

Do yourself a favor. After looking at the job site, prepare a detailed estimate based on the work that will have to be done for this particular job. Include labor and materials. Apply your mark-up. Stick by your estimate.

Happy Selling!
John

Even if you are the owner, you need to track your hours

The reason? Because if you hired someone to do the same work that you do, you would pay them for it. Right? Which means that you need to provide for this time in your job estimates. You won’t know how much to put in your estimates unless you track your time on a regular basis.

It’s easier than you think. You don’t need to go hog wild with it. Start by breaking down your time in ½ hour increments. Using an Excel spreadsheet, divide each day into Production – on the job time; Superintendent – planning and supervising labor and materials time; Sales – meeting with prospects and preparing estimates time; Office – any administrative time; and Owner – working on your company time.

Enter time each day and total on a regular basis – weekly or monthly.

You may even find that you are spending way too much time working in your business rather than on your business. But that’s the subject for another day.

Falling Lumber Prices Keep Job Costs Down

I recently read an article about the lumber industry. The article detailed that the industry is hurting, production is down, and employment has dropped specifically due to the housing crisis including the large inventory of unsold homes and the number of homes in foreclosure. The article mentioned that demand for lumber hit its peak along with the peak in housing starts in mid-2005.

So what does this all mean to us? It means that prices are down because demand is down. I started noticing this at the lumber yard a while back. I’m sure you have, too.

The down-turn in lumber prices has allowed me to sharpen my estimating pencil when I’m doing my job estimates. I can give my prospective customers better prices.

It’s a good idea, though, because prices can fluctuate quickly to put an expiration date on all of your estimates. I like to use a short time period, like 30 days, because it protects me from price increases and it creates a sense of urgency in my prospective customers.

Happy Selling!
John