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Ive only been in business for about a year and a half. Im a one man operation looking to take my business to the next level. I specify in 100% custom cabinetry and furniture. Since Ive opened I really never established a proper estimate template to plug each job into to send to my clients. Ive basically been simply writing a summary of the work that I will provide with a heading, a price for the job and a line to sign. I recently just added a terms and conditions page that i found here on woodweb. How do you break down the job? For me their really isnt a way to say its going to take me X amount of hours to do this and the next thing. Do you ever include the material cost?...and so on. Would any of you mind posting or sending me one of your proposals you've sent to a client. Ive honestly never read another custom cabinet makers proposal before so i really have nothing to compare to. Thanks everyone!
First thing is to get legal with licensing in the states in which you do business. I see you are in NJ, but your website also mentions installations in NY. Assuming you do installations, you will probably need contractor's licenses in both of those states, plus any other states where you sell your installation services.
Each state will have specific requirements of what must be included in a contract. Here is what NOLO.com says about NJ home improvement contractors:
Beyond whatever state requirements you must have on your contracts, you should mention any supporting documents that are part of the agreement, such as signed off building plans, approved samples and the like. You generally are required to state a specific cost or cost range in the contract, as well as anticipated number of days of on site work. Some states also require a starting date for on site work.
If you are simply manufacturing cabinets and furniture to be installed by others, the home improvement contracting laws may not apply to your situation.
That said, we reference approved design drawings in our agreement, and list a total price, which includes labor and materials. We do not break out labor and materials on line items. I know of others who list a line item cost per cabinet, including accessories installed in the cabinet, as well as line item listings of moldings, end panels and the like that may not be specific to a single cabinet. Sounds like a PITA to do a line item listing of items, so we choose to simply have the client sign off on building plans or design renderings and color samples prepared for them.
I would encourage you to check the various state websites in the states where you do business for specific requirements for home improvement contractors contract provision requirements. Something you find on Woodweb to be used in your contract may be in direct violation of an applicable state law. Not that it would happen, but if you get into a court fight with a client, your contract needs to pass state muster for you to have a chance of winning.
You might want to check with state chapters of NARI or NAHB in your area for sample contracts. The Cabinetmakers Association may also have some general information or samples of contracts used by their members, as would AWI. It might even be a good idea to join one or more of those organizations so you can meet and pick the brains of like minded individuals for general and specific business pointers.
Best wishes in creating a successful, ongoing business.
I have 16 employees and run estimates on Quickbooks and just plug in a "casework" chart of accounts category and it populates "Custom Made Cabinets" and I add the description of the work. Then it can automatically be converted to an invoice
Don't get to crazy, look for "low hanging fruit" like eliminating double entry, that will save you real time
Some states do not charge tax on labor. That would be the only reason to break out material and labor. Most of my customers didn't mind a total cost. But a few, early on in my business life, did not want to pay me "all that money" for labor. I stopped breaking out material and labor after those bad experiences. Quickly discovered the general public has no idea how much work is in doing custom woodworking and are not willing to pay for my labor. Pretty certain that has gotten much worse in the past 40 years.
Don't get too crazy trying to add science to your estimating until you have science in your manufacturing processes. If results are not repeatable or predictable one project results is not prologue for another.
In reality you provide a service, not a product. If ten people came to you to buy cabinets next month you would pick three and send seven away. You would pick your best three and raise your price to reflect your opportunity cost.
If the same job came in when there was only it or starvation you would drop your price.
This type of analysis is for internal purpose only. It theoretically tells you what your costs are and if you frame it properly informs you how you can lower your costs.
Sell price for a service company depends on demand.
Eliminating double entry is a good thing.
Cabinetmaker is correct. As far as the customer is concerned the sell price has nothing to do with your costs. It is simply an agreement saying you are willing to do their job for a certain amount of money, take it or leave it. Your costs are non of their business.