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How to figure out overhead and profit amount?

Discussion in 'Bidding & Estimating' started by JMHConstruction, Mar 3, 2013.

  1. JMHConstruction

    JMHConstruction PlowSite.com Addict
    Messages: 1,722

    Hey guys, I am still pretty new to the game. I've got 3 years under my belt now. I only do sidewalks and residential drives and walks. I'd like to get a plow in the future, but for now I'm making the same, if not better money doing this. I have a 2 - stage blower and shovels. Depending on the storm I have 2-6 extra guys helping out. It's a small business and a very small overhead.

    The way I bid right now it just look at a place, and figure out how long it will take, amount of ice, and guys. I try and charge about $130 an hour and write it into a per push and inch increments amount and give my bid. I have found that I have no problems getting my commercial and sub accounts because (not to pat my own back) we are one of the few sidewalk crews that haul ass and run circles around some of these other guys. However, with my resis I seem to have trouble convincing them that we are better than the guys out there doing drives for $15-$20.

    I live around the KC area and we have not been getting too many storm. Three this year, and only one last year. How do you guys figure out how to charge your overhead for the storms? In the summer I know about how many jobs I can do a year, but I can't predict weather, so I have no idea how to break down my overhead. Also, with my smaller overhead and expenses, my % of profit is going to be smaller than some of the larger business. I don't want to low ball (for both myself and other snow management company's). If my overhead is $10 and i add in a 20% profit thats a $2 profit where as if my overhead was $20 and same profit % it would be $4. My bid would be half the price of someone else.

    I'm sorry this is so long I'm just trying to give as much info as I can. I am trying to figure out a bidding system that I can use that works a little better for everyone. When I just guess that $130 an hour will work, I could end up losing money :cry: down the road if my overhead ever increases. How do you guys bid a job and divide your overhead with winter and what kind of profit margin do you allow.

    Thanks in advance for your helpThumbs Up. I'm guessing my seasons over, so this will help when making bids for next snow season.
  2. thelettuceman

    thelettuceman PlowSite.com Addict
    Messages: 1,218

  3. Meezer

    Meezer Senior Member
    from Indiana
    Messages: 300

    So in your area residential drives are going for $15-$20??? Well then, depending on how tight your route is, how many of them can you knock out in an hour???
  4. JMHConstruction

    JMHConstruction PlowSite.com Addict
    Messages: 1,722

    No, I was only giving an easy number example. Residential drives go from $60 and up around here. Although the idiots on craigslist are always offering $20 driveways:realmad: and it makes everyone else look like we're trying to rip off home owners. I only have one area that I have about houses close to one another, all my others are here and there.
  5. JMHConstruction

    JMHConstruction PlowSite.com Addict
    Messages: 1,722

    thelettuceman, thanks for the link. Worked well and has a lot of other calculators to help with different bidding situations. It showed that I was still under bidding, and it only allowed for one helper, not a crew. I can just take the break down and figure out what to add. I am still open for suggestions. I have read about a few people who charge their commercial accounts a minimum push amount per year. Has anyone tried this on residential accounts? All my commercial I'm a sub, so a min per push wouldn't fly with the contractor.