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How to Bid on Residential Construction Jobs
Residential construction jobs run the gamut from gutting houses and repairing roofs to adding decks or extra rooms. If you're new to the construction industry, you don't have the reputation and reviews to win jobs on word-of-mouth. You'll need to let your bid for the project speak for you, since it's going to have to win the job for you. Preparing a bid doesn't need to be difficult, once you know how to get started.
Estimate how long the construction job will take to complete and how many workers are needed. Can two people do the job in two days? How much does their labor cost? Estimate daily business expenses for that time. If you'll spend $10 toward monthly business bills, gas and insurance over the course of that two-day job, those expenses will cut into profit. Come up with two figures: how much you need to pay workers for the job and how much you'll accrue in expenses during that time.
Estimate the amount and expense of supplies for the project. If you're replacing a roof, work out the number and cost of shingles needed from the roof's area. If you're building a deck off the back of a house, obtain the dimensions from the blueprints, and calculate how much lumber will be needed. Add on the cost of any other supplies, such as paint or nails. Factor in waste when calculating the amount of materials, since wasted materials can cut into your profits. For your first few jobs, estimate a 10 percent waste and do not charge the client for this; keep track of the actual wasted material, and adjust your waste percentage down until it is fairly accurate with your work.
Contact any subcontractors to discuss fees. You may need a subcontractor to do plumbing, lighting, painting or to haul away construction waste. You will be paying the subcontractors directly, so you must include their fees in your estimate. If you have regular subcontractors you work with, you may already know their fees for certain types of projects.
Add up the following four costs: employee wages, overhead business costs, materials costs and subcontractor payments. This is what you will spend on the project. Review these estimates before continuing to make sure you've accounted for everything.
Determine how much profit you want to make. Add this number to the expenses, and you will have the amount of your bid. The Contractors Group recommends starting with $100 of profit per workday. If you lose several bids, adjust that number down. After you've successfully bid upon and completed several jobs, you can raise that number.
Write up an estimate that discusses the work to be done, the services covered by payment and your bid. Your estimate should provide a detailed description of the work you would be doing.
Build some room for delays by subcontractors into your estimate. Subcontractors may be finishing up another job when you need them, drawing your project's completion out by the day. If a subcontractor proves unreliable, don't hire him on future jobs.
- Build some room for delays by subcontractors into your estimate. Subcontractors may be finishing up another job when you need them, drawing your project's completion out by the day. If a subcontractor proves unreliable, don't hire him on future jobs.
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