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How to Estimate and Price a Remodeling Project
Construction and home repair estimating is actually an involved process where you should take into account many factors including true labor costs, materials costs, overhead and profit margin. If you take the time to price your jobs right, you’ll end up with healthy cash flow and a home repair business that’s built to last. Don’t base your estimates on what the competition’s charging. Read these remodelers specialities to have the best remodeling for your house.
1. Check Past Estimates
Take a look at your estimates for past projects that are similar. This will help you arrive at a preliminary estimate that you can share with the potential client. This can also help you figure out if it’s worth it to take on the job, based on whether similar past projects were profitable. The size of the home repair service will play an important part in comparing past projects with your current estimate. If your previous services were only for small jobs such as replacing faulty downlight globes or repairing a dripping faucet, you won’t be able to easily compare that to more intricate and complicated electrical work.
2. Calculate Material Cost
Put together a list of materials you’ll need to do the home repair job. There are a variety of ways to calculate how much materials you’ll need. One method is to use a building materials calculator. There are also a variety of apps for contractors that will help you calculate materials costs. In general, a good cost calculator tool will help you calculate the amount of material you need to fill a certain volume, depending on the material type.
3. Calculate Labour Costs
Include labor costs in your price, even if you’re the only one doing the job. If you have an employee doing the work, make sure you factor all labor costs into their quoted hourly rate. Using a labor cost calculator can be a lifesaver when it comes to calculating different types of employee rates, such as supervisors or site managers. Other factors such as overtime billing rates or specialized labor will also affect the final price estimate.You need to know how much worker's compensation, benefits, bonuses, insurance, vehicles and phones are costing you.
4. Accommodate Specialty Costs
Look into the cost of high-end or specialized materials needed to complete the job. Always verify the pricing of these specialty items yourself but be aware that by the time you actually order them, the price may go up. Mark up specialty items more than usual to accommodate these inevitable price increases.