|Home » Forums » Business » Message||Login|
You are not logged in. Consider these WOODWEB Member advantages:
How do you price a reface?3/30
Normally if I do a remodel or new cabinets what I do is whatever it costs me I triple it. But for a reface there's obviously a lot less labor. What would you guys do?
Your pricing plan is a guarantee to do one of two things for you and your business.
1. To put you in bankruptcy in fairly short order.
A selling price using a multiple of cost of materials will eventually fail you. There are just too many variables where you will not earn even minimum wage if you persist in pricing projects that way. Let's say you find a project that will require $50 in materials, but will take 2 or 3 trips to the job site to complete the work. The job site is 30 minutes away and takes about 45 minutes to drive to. Each time you go to the job site, you spend 3 hours.
Using your pricing method, the total charges would be $150. Less material cost equals a gross profit of $100.
If it takes you two trips, the math works out this way:
Let's use a rate of $0.50 per mile for operating your truck. The IRS mileage rate is higher, but this keeps the math simple.
2 round trips to the job = 120 miles or $60 in truck cost. $100 minus $60 equals $40.
You have a total of 6.0 hours of work on site, plus 3.0 hours of driving time for a total of 9.0 hours. $40 divided by 9 equals
That scenario does not take into account wear and tear on your tools and equipment, supplies you may not consider as materials for this job, like bits, blades, paper towels, garbage bags, etc., your business insurance cost, your rent and utilities for your shop/office, the time your took to design and order materials (and maybe even pick up the materials) and a host of other costs your business has that you will be paying one way or another. Some of those costs are fixed, meaning they happen every month even if you have $0 in sales. Other costs are variable, and the jobs you run through your business will have costs beyond "materials" you will be buying.
There are lots of ways to approach pricing. My preference is to use a "loaded" labor rate, mark up materials and add profit to that total for each job. A loaded labor rate includes all the fixed expenses you incur, plus your desired earnings per year, plus employee costs, taxes and other variable expenses.
The Cabinet Makers Association used to have a class they offered on pricing that will open your eyes. They may even have it recorded so you can view it online. You may want to look there as a place to start.
If not, I will hire you to do work on our projects, mark up your work, add a profit and sell it to our clients. You are much cheaper than I could do it myself. I cannot hire employees for $6.67 per hour.
Best wishes in your business! Learn pricing for profits and start using it if you want to have a chance of remaining in business for the long term.
There are many variables in refacing work that you cannot always foresee or have control over. It's tough work and labor can quickly blow out. Once you give someone a quote, That is the number they have in there head. It's hard to go back and say this was broken that was damaged extra $$$$.
I would price it with a "heavy" labor component and then add some more to cover your butt. In the past I have also supplied a seperate quote for completely new cabinets, when the price is very close for brand new cabinets sometimes people just go for the new ones. Much better for you, much more predictable.
I'll keep this simple. I don't price those jobs. Too much time that can't be quantified in getting all the details correct. Chase jobs that don't get you crawling in and out of cabinets. To me it is a waste of resources.
If you haven't done a reface, there is a lot more labor and time than you might think. Especially if you are veneering over old frames. I would think everything through before you think of bidding it. I did one a few years back and spent more time applying the veneer and finishing it than I could have build all the frames from scratch.
There are a few ways to reface, but your comment...
"But for a reface there's obviously a lot less labor. What would you guys do?"
...makes me think you haven't done it before... if you don't know the fabrication and/or install process for your particular technique, it'd be like pricing fabricating cabs from scratch and installing them versus buying cabs and installing them...
You have know what you don't know, and to help you, we'd need to know what method of refacing you plan using...
JeffM makes a good point. Consider taking good measurements and building a FF with doors pre attached etc. You can also pre-finish this way. You glue and nail the FF on the old boxes. The nail holes should be sparing and are invisible if you fill them with wax. I did a set of cabinets in cherry this way and they looked like new when I was done.