Gutting a business for pipes...how much to charge?

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Originally Posted by BurlyGuys

OUCH! Well, you're probably right about the not knowing what I am doing part, except that I know how to do a room, and I know how to do a house. this is simply a matter of degree. and I bid the job so high I probably won't get it anyway.

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I'm sorry .... i really wasn't meaning to single you out. It was meant more as a general warning to anyone that's thinking about doing bid work.

As a general rule of thumb: You should have at least twice the amount of your bid as liquid cash asset. If you do a bid for 20 k. you need a 40 grand capital reserve fund so that you don't run into cash flow problems.

The construction biz is definitely high risk. Sometimes the owners acting as their own contractors go into bankruptcy halfway through the job and you get burned.

Could you sustain the loss ?

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Originally Posted by Scrappah

I'm sorry .... i really wasn't meaning to single you out. It was meant more as a general warning to anyone that's thinking about doing bid work.

As a general rule of thumb: You should have at least twice the amount of your bid as liquid cash asset. If you do a bid for 20 k. you need a 40 grand capital reserve fund so that you don't run into cash flow problems.

The construction biz is definitely high risk. Sometimes the owners acting as their own contractors go into bankruptcy halfway through the job and you get burned.

Could you sustain the loss ?

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The way I have it bid would be in payments at certain points of the job, with a 25% deposit to start. Don't think I could get hurt too badly.

25% isn't too bad as long as that second payment comes in
I usually ask for 50% up front on longer term bid jobs..enough to pay laborers and materials and overhead for the duration and then the other 50 being extra expenses buffer and profit.
I try not to pay out of pocket for labor and material if the contractor or in this case building owner is slow to pay then it's up to you to write checks out of pocket and chase the money...this can go on for weeks even months in some cases.
of course you said you bid very high so 25% might cover the major brunt of the main costs..not sure
I really hope it doesn't go this way for you... But unfortunately it does happen more often than not.
good luck Burly hope you knock it out and make some good cash and keep the crew working, sounds like an interesting project. Hope too see some pics if you get the job.

I'm not sure what you bid on the job, or what you stand to make upon completion. But I know that having the right tool for the job is crucial no matter what you're doing...and if we're talking 50,000 sq feet and a $25,000 bid...Buy this. Buy this right now.

Stihl demo saw (if the link goes dead or item is sold by the time you see this, it's a used stihl demo saw for $500 being sold in Detroit)

Put an abrasive disc in there for steel/iron and go to town. Cuts will be faster, you won't be burning up blades (as fast as sawzall blades), and they're just a blast to run.

I know you guys are big, wielding that saw will be a walk in the park for you.

I should also mention that once you have one that runs well, you'll wonder how you went so many years without one!

Abrasive discs are also the most efficient and safest method!

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Originally Posted by BurlyGuys

The way I have it bid would be in payments at certain points of the job, with a 25% deposit to start. Don't think I could get hurt too badly.

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I hope it all goes well. It probably will.

I've had a rough time doing bid work since the recession hit. It used to be that 90 % of my customer inquiries for a quote price on a job panned out. Post recession, it flipped the opposite way and 90% of my quotes didn't result in a job.

That makes it difficult because i'll have as much as a day in the office generating paperwork when i could be out on a jobsite somewhere making money.

Not quite sure what's going on there. I know in some cases they're just window shopping. In other cases i suspect they pedaled my quote and went with the guy that said he would do it for a couple of hundred bucks less. It's kind of a race to the bottom where some guys will do it on a break even basis just to keep their men working.

My feeling at this point is that it's like the old advertisement in Travel & Leisure magazine. There was this picture of a really nice high end motor home. The caption below read: If you have to ask you can't afford it.

I've had more luck simply selling skilled carpentry work by the hour. It's not huge profit potential like the quote work, but you pick up a grand here and a couple of grand there. It's nearly clear profit with minimal risk. If you bill out every seven to ten days the cash flow is good as long as the work is there.

The thing i've found is that you tend to get "mission creep" on the jobs where the owner feels most in control of how the money is being spent. When they can see that they are "paying for what they get & getting what they pay for" they seem to relax a bit and aren't quite so concerned about doing everything on the cheap. It becomes a win/win. They feel they're getting the best value for their money. Your jobs tend to "upsell" themselves without any effort because it's coming from the customer's own initiative.

With bid work it seems to be more of a tug of war where one side wins and the other side loses.

Anyway ... Just random stuff for whatever it's worth. The laws vary from place to place so if it's over a given amount there's no other option than to write up a legal contract with a set price for the work. Providing a written estimate & billing T & M every week won't play.