Estimating

From Principles of Applied Arts

When estimating projects the rules should never change. Remember that square footage pricing is not an effective way to price jobs; it is the result of looking back at jobs after you complete them and dividing the square footage by the end number for job tracking. You will follow a simple formula as follows:

Step1

Calculate your personal wage as if you were an employee of your own company. Example: you need to make $60,000.00 per year divided by 12 months = $5,000.00 per month. $5,000.00 divided by 25 work days in the month = $200.00 per day for your wage, to be used when estimating.

Step 2

Use your project Estimation form and calculate in your mind the job procedure, step by step, to figure out the exact number of days it will take to finish the job. Don't forget to include both a consultation day and a clean up day.

Step 3

Compile a materials list and put together a square footage estimate for each product. Paints average 200-450 sq ft per gallon; Textures average 40-120 sq ft per gallon.

Step 4

Calculate the overhead for your business. Costs for your phone, office rent, vehicle, and advertising are all necessary to keeping your business open. Example: Monthly office rent, $1000. Monthly phone, $50. Monthly vehicle, $150. Monthly advertising, $200=$1400 per month overhead, divided by 25 work days in the month= $56 per day overhead, to be used when estimating.

Step 5

Include any third party commissions for the project, such as designers, architects, or builders.

Step 6

Finally, add your desired profit to the end number of the estimate. If you don't add the profit into your bids, no one else will!

By including all of this information, you'll be sure to cover the costs that your business incurs, as well as have a flexible cushion with which to absorb the unforeseen ones.