Over the past year, I've spent a lot of time refining this excel spreadsheet that I use to estimate cabinet jobs. I currently use Mozaik, so everything I do is based off of materials and labor. I'm building a kitchen and I can't help but think that my price is too expensive. I've attached pictures of the kitchen to be built. Am I overcharging somehow? I know it varies from shop to shop but if you have any tips please share! Offer any suggestions you may have or constructive criticism - I need the help.
A few questions
1) Do the doors cost you $1,413.00? if so why no markup?
2) Are you installing or subcontracting installation? Is the $2,000 a bid or a budget?
Same question as the doors, why no markup?
3) a lot of states installation isn't taxable.
I have a Markup on install labor and a separate OH for installation that is lower than Plant labor
I markup different buyouts at different % depending on what it is, what the risk is and how much management time, along with if we are paying a deposit.
If the doors and install are hard numbers and removing your "proift" you are working on a less than 15% gross margin (7891.78/$9,235.00) =0.85455116.
A 30% GM which is low would put you at 11272 before taxes.
I don't know what things sell for where you are or your soft costs to keep the doors open but you may want to move the numbers and overhead around to make sure you are making money.
FICA, SS, WC, vacations, holidays all that is usually at least 35% on top of labor cost.
You can either capture overhead on labor, labor and material or just in the gross margin.
The problem is a paint grade kitchen with everything else the same has almost the same amount of labor costs.
We split our OH between material and labor to account for that but you can just add more to labor to recapture overhead.
Basically you want to get to a price that is breakeven with all oh costs etc, that is your "cost", then your profit is "policy"
You may want to use consider using margin instead of markup.
Somewhere in your pricing model you need a contingency.
Not sure why you are putting "waste" on labor.
Labor is generally counted two ways
1) actual time * a rate that includes the non productive time per day
2) or processing times include the inefficiencies ( reading plans, going to the bathroom, changing a bit etc) of not getting 8 hours of work in a 8 hour day
1. The doors do not have a markup. Generally, I do, but honestly I was concerned that I was overpricing the project, so I looked at ways to cut down.
2. We are installing - and great point about the installation taxation
3. Alan, Thank you so much for your input. I'm pressed for time but I'm going to come back and read the rest over. You brought up several really good points and I'm happy to implement what is necessary.
Your shop rate is $22.50/hr? That's like 1950s rate. 10% waste on labor? What's that? I'm not sure that you have any markup on any materials except for the trash pullouts. Is all your materials delivered? What about the time spent getting those? Don't see any charge for design and estimating. Rental truck must be close. I've spent an hour just driving to them and standing in line to sign the paperwork. Fair amount of labor for $1,300 profit. How many jobs have you built with this pricing?
Rich - Since my time is an estimation I like to figure in a 10% margin. I just labeled it waste quickly - no specific reason. The rentals are close, and very cheap (fortunately). All materials are delivered. I haven't thought about estimation or design since I'm the one doing it. It's a great idea (because I'm not being paid for hours and hours of work) but I still just get concerned about high costs. But! That's why I posted in this thread - for everyone's input - so I guess I need to get over it. As for how many jobs - all of them. It's our second year of business and I'm still trying to figure out the business side of cabinet making.
You want to charge the highest price the customer is willing to pay. That has nothing to do with your costs. If at that price you canít make a good profit you have a problem. You canít think in terms of what YOU would be willing to pay.
I am located in Georgia and build face frame cabinets with overlay doors. A quick estimate based on your drawings would be around $13,500 installed not including tops or decorative hardware. Plain stain or painted finish with no extras to the cabinets.
Andy, i am in wisconsin. we would be around 13k-15k installed.Add more for a
3 1/4 crown. No tops or handles.We are 3x the shop rate u are. Hell Plumbers and electricians are around 90-110/ maybe more for there shop rate. At least u should be around 50-60.
I'm not a cabinet builder but will throw in my two cents as a consumer. Your pricing is way to low. If other shops are bidding this job they are likely to be in the range of what others posting are saying. The last thing you want is to be is thousands below what other shops are bidding. The quality of your work will be questioned. I've heard $50 an hour for labor tossed around by many of the shops I'm in.
Your labor cost are way too low. At $22.50 your guys are costing you more than that. Someone making $18 an hour on average cost you about $26 an hour even if you don't pay any toward their medical insurance. This number does include lost labor at 30%. All overhead should be build into this cost. Overhead is calculated buy ALL cost of the business per year minus the labor cost and material cost divided by the number of man hours per year. This number can easily be calculated with a profit and loss statement from quickbooks for the last year. The hard part is going into quickbooks and getting the number of employee hours worked in the last year. Your labor rate should be somewhere in the $50-$80 range depending on a lot of factors.
If you are only making $1,300 on a $10,000 job and it doesn't look like you have overhead build in anywhere there is no way that you will ever make any money.
If you still feel like you are pricing a job too high then you need to work with your shop on ways to get the labor down. 2.5 hours per box seems high because it doesn't look like you are finishing them. We are running a CNC and building mostly frameless boxes so its hard to compare if you are building face frame and cutting on a regular table saw.
The number one way to make money in a cabinet business is to knowing how to run a business its not knowing how to build cabinets. There are several guys in my shop that know enough about cabinets to easily run a business but they don't know enough about business to try and run one.
My only take away from it is that yes, your hourly rate seems crazy low, but I also didnt take the time to look at all the numbers in the sheet in detail but did notice there is zero dollars in there for finishing. If you are shipping the cabinets sanded/raw to be finished on site (by others) I feel less of an issue with regards to the total but its still a bit low for that job for me and I am operating in the armpit of the universe.
Shipping the cabinets unfinished will easily knock a third off most of our jobs (which we are never lucky enough to have happen). While for me your still low for unfinished cabs if thats the case your not insane low, but still close to cuckoo low but then I have no idea of your process and the details. If you fly them out it may be fine.
Did anyone really look at the sheet in detail? 1/2" pre-fin at 28 a sheet? 3/4" (gotta be raw) at 46/sheet? I havent been able to buy 3/4" shop grade birch or maple for 46 a sheet for ages but we buy domestic. 1/2" dog crap import pre-fin birch (the stuff is like a boomerang) is like mid 30's in quantity for me.
Yeesh. If it werent for the taxes on my shop, commercial property, on the main drag, being $400 a year,... Id be thinking of moving.
You are too low especially if you are including the countertops. If you're that unsure, take your plans to Home Depot and have them estimate it for you. I guarantee you they'll be 16-20k for stapled together crap with nice faces.
I think the $22.50 is not his shop rate but a hard labor number for bidding purposes. Am I correct in this assumption? If so I know folks who bid like this. I would think all your labor costs should be together but at a glance your bid looks low. No Design/engineering costs, we found our engineering costs to be considerable.
We try to mark up everything we touch since we are ultimately than responsible for it. When the client is upset who will they call??
FORUM GUIDELINES: Please review the guidelines below before posting at WOODWEB's Interactive Message Boards(return to top)
WOODWEB is a professional industrial woodworking site. Hobbyist and homeowner woodworking questions are inappropriate.
Messages should be kept reasonably short and on topic, relating to the focus of the forum. Responses should relate to the original question.
A valid email return address must be included with each message.
Advertising is inappropriate. The only exceptions are the Classified Ads Exchange, Machinery Exchange, Lumber Exchange, and Job Opportunities and Services Exchange. When posting listings in these areas, review the posting instructions carefully.
Subject lines may be edited for length and clarity.
"Cross posting" is not permitted. Choose the best forum for your question, and post your question at one forum only.
Messages requesting private responses will be removed - Forums are designed to provide information and assistance for all of our visitors. Private response requests are appropriate at WOODWEB's Exchanges and Job Opportunities and Services.
Messages that accuse businesses or individuals of alleged negative actions or behavior are inappropriate since WOODWEB is unable to verify or substantiate the claims.
Posts with the intent of soliciting answers to surveys are not appropriate. Contact WOODWEB for more information on initiating a survey.
Excessive forum participation by an individual upsets the balance of a healthy forum atmosphere. Individuals who excessively post responses containing marginal content will be considered repeat forum abusers.
Responses that initiate or support inappropriate and off-topic discussion of general politics detract from the professional woodworking focus of WOODWEB, and will be removed.
Participants are encouraged to use their real name when posting. Intentionally using another persons name is prohibited, and posts of this nature will be removed at WOODWEB's discretion.
Carefully review your message before clicking on the "Send Message" button - you will not be able to revise the message once it has been sent.
You will be notified of responses to the message(s) you posted via email. Be sure to enter your email address correctly.
WOODWEB's forums are a highly regarded resource for professional woodworkers. Messages and responses that are crafted in a professional and civil manner strengthen this resource. Messages that do not reflect a professional tone reduce the value of our forums.
Messages are inappropriate when their content: is deemed libelous in nature or is based on rumor, fails to meet basic standards of decorum, contains blatant advertising or inappropriate emphasis on self promotion (return to top).
Libel: Posts which defame an individual or organization, or employ a tone which can be viewed as malicious in nature. Words, pictures, or cartoons which expose a person or organization to public hatred, shame, disgrace, or ridicule, or induce an ill opinion of a person or organization, are libelous.
Improper Decorum: Posts which are profane, inciting, disrespectful or uncivil in tone, or maliciously worded. This also includes the venting of unsubstantiated opinions. Such messages do little to illuminate a given topic, and often have the opposite effect. Constructive criticism is acceptable (return to top).
Advertising: The purpose of WOODWEB Forums is to provide answers, not an advertising venue. Companies participating in a Forum discussion should provide specific answers to posted questions. WOODWEB suggests that businesses include an appropriately crafted signature in order to identify their company. A well meaning post that seems to be on-topic but contains a product reference may do your business more harm than good in the Forum environment. Forum users may perceive your references to specific products as unsolicited advertising (spam) and consciously avoid your web site or services. A well-crafted signature is an appropriate way to advertise your services that will not offend potential customers. Signatures should be limited to 4-6 lines, and may contain information that identifies the type of business you're in, your URL and email address (return to top).
Repeated Forum Abuse:
Forum participants who repeatedly fail to follow WOODWEB's Forum Guidelines may encounter difficulty when attempting to post messages.
There are often situations when the original message asks for opinions: "What is the best widget for my type of shop?". To a certain extent, the person posting the message is responsible for including specific questions within the message. An open ended question (like the one above) invites responses that may read as sales pitches. WOODWEB suggests that companies responding to such a question provide detailed and substantive replies rather than responses that read as a one-sided product promotion. It has been WOODWEB's experience that substantive responses are held in higher regard by our readers (return to top).
The staff of WOODWEB assume no responsibility for the accuracy, content, or outcome of any posting transmitted at WOODWEB's Message Boards. Participants should undertake the use of machinery, materials and methods discussed at WOODWEB's Message Boards after considerate evaluation, and at their own risk. WOODWEB reserves the right to delete any messages it deems inappropriate. (return to top)
Forum Posting Form Guidelines
The name you enter in this field will be the name that appears with your post or response (return to form).
Personal or business website links must point to the author's website. Inappropriate links will be removed without notice, and at WOODWEB's sole discretion. WOODWEB reserves the right to delete any messages with links it deems inappropriate. (return to form)
Your e-mail address will not be publicly viewable. Forum participants will be able to contact you using a contact link (included with your post) that is substituted for your actual address. You must include a valid email address in this field. (return to form)
Subject may be edited for length and clarity. Subject lines should provide an indication of the content of your post. (return to form)
Thread Related Link and Image Guidelines
Thread Related Links posted at WOODWEB's Forums and Exchanges should point to locations that provide supporting information for the topic being discussed in the current message thread. The purpose of WOODWEB Forums is to provide answers, not to serve as an advertising venue. A Thread Related Link that directs visitors to an area with inappropriate content will be removed. WOODWEB reserves the right to delete any messages with links or images it deems inappropriate. (return to form)
Thread Related File Uploads
Thread Related Files posted at WOODWEB's Forums and Exchanges should provide supporting information for the topic being discussed in the current message thread. Video Files: acceptable video formats are: .MOV .AVI .WMV .MPEG .MPG .FLV .MP4 (Image Upload Tips) If you encounter any difficulty when uploading video files, E-mail WOODWEB for assistance. The purpose of WOODWEB Forums is to provide answers, not to serve as an advertising venue. A Thread Related File that contains inappropriate content will be removed, and uploaded files that are not directly related to the message thread will be removed. WOODWEB reserves the right to delete any messages with links, files, or images it deems inappropriate. (return to form)
The editors, writers, and staff at WOODWEB try to promote safe practices.
What is safe for one woodworker under certain conditions may not be safe
for others in different circumstances. Readers should undertake the use
of materials and methods discussed at WOODWEB after considerate evaluation,
and at their own risk.