Estimating the price accurately is an art and helps a great deal in boosting your business growth. Do not compromise with your efforts just to survive the tough business competition. Home repair or remodeling jobs are much similar to new construction and so is the process of making the estimates. The only difference lies in considering some additional categories like demolition, repair, and replacement of various components.
For small businesses, calculating the estimates for home repair jobs include various factors. An accurate estimate will lead to healthy cash flow. But you may be wondering where to start? Here in this article, we will discuss all the factors that need to be considered before you make your estimates. Check it out!
The economic downturn in your business is not desirable, and hence it is necessary to make your estimates properly. An accurate estimate can provide you a well-maintained profit margin, which is required for business sustainability. Check out the below pointers before creating your estimates for house remodeling projects.
- Refer to your previous estimates
- Visit the site
- Determine the material cost
- Assess the labor cost
- Evaluate the specialty cost
- Include your mark up
- Try not to give discounts
Refer to your previous estimates
Before you quote your price refer to your previous job estimates to analyze the profit earned. This way you can have an idea to prepare your estimates efficiently. Referring to previous estimates helps you to figure out the similar projects done by you and the changes to be implemented in your current project. But in some cases, especially for small businesses, where one does not have much experience or does not have a long history as a contractor, taking the help of various online accounting software for making estimates is always beneficial.
If you are the one who gets your job done by contractors, then you can save some time analyzing multiple estimates from different contractors. These can save a lot of your efforts and can get you an appropriate estimate to earn a decent profit.
Visit the site
You must visit the site once before you start preparing the estimate. House repairing or remodeling tasks involve a lot of intermediate jobs that need to be considered while you make the estimate. Every detail may not be clear over telephonic conversation and hence, an on-site visit can give a clear idea to you. Check how much demolition is required to remodel the house. A slight repair on an existing structure involves less cost than demolition and creating something new. Besides, structural issues and various hidden conditions in old buildings or houses can spike your cost. Also, the safety measures involved should not be missed. Repairing some old houses may get you exposed to toxic and hazardous material, which are noxious. Safety measures involved in such projects involve certain extra bucks that need to be added to your estimate.
Determine the material cost
After you are done with the site visit, list out the materials required for your current project. Chalk out the raw materials involved along with the equipment required and other essentials. The requirement list also involves the quantity, which will be required to prepare the estimate.
Assess the labor cost
Even if you are the one working on the project, do remember to assess the labor cost in quoted hourly rates. Check out the ongoing hourly rate to quote appropriately. If you have employees who would be working for you then the labor cost must include the benefits, bonuses, insurance, vehicle, and phone charges besides, hourly compensation. Hence, to save some room for the variable, you can charge $35 or more as labor cost. Research the local rates to get more accuracy. For calculating the labor cost, you must also determine how much time it would take to complete the entire house repairing task.
Evaluate the specialty cost
Look out for specialized items required to complete this job. Your project may include various kinds of high-end materials. Hence, verify the prices and mark up the cost to accommodate the price rise for these specialty materials. You need to be aware of the prices for these special items as the fluctuating price might cost you more, if not ordered beforehand.
Include your mark up
There is nothing wrong with adding markup to the entire cost. Adding markup helps you to compensate for the overhead expenses for the smooth running of your business. Business expenses that need to be included in markup are:
- Rent of office (if applicable)
- Liability and health insurance
- Transportation cost
- Vehicle maintenance
- Tools and equipment cost
- Advertisement and website maintenance cost
- Phone and internet
- Licensing fees
35% markup is recommendable and is safe for business growth. Try cutting down on the overhead cost to keep a decent profit margin.
Try not to give discounts
Avoid adding discounts just to survive the tough competition in the business sector. Giving discounts cuts your cash flow that may affect a great deal in your business longevity. If you are thinking giving discounts would hold your potential customers, then you are wrong! In the end, your service is all that it matters. Offering excellent customer service will help you win more new customers. Always remember that it is not all about price, the service provided by you also counts when it comes to getting customers and holding the existing ones.
For 1500 to 3000 square feet houses, the current rate for rewiring a house is around $8000 to $15000. The amount also depends upon how old the house is and whether an electrician can get at the old wiring or not.
Per hour handyman charge depends upon the professionalism and the local rates. The current hourly rate of handymen is around $60 to $65, which can spike up to $125 if professional personnel is involved.
Current hourly rates of plumber vary between $45 to $200. Repairing bathtubs, sinks, toilets, or faucets usually cost between $175 to $450.
These are some of the ground rules that need to be followed while preparing the estimates. Every work or project is indeed different from one another, and hence, a little diligence along with proper planning can lead you to a successful business relationship with positive cash flow.