Would you build for free?
The Cost to Price the Job should be covered – irrelevant of who does it!
I’m not sure where it comes from, but there is a massive perception out there in the industry that builders should price their jobs for free.
Where does that even come from????
Would you build a house for free? No? Of course you wouldn’t!
How much time goes into pricing a job? Its not just a few minutes you are inconvenienced, its hours, and far more likely days or weeks!
There must be a better way
We MUST change this mind set…. As all it does is creates burnout and frustration from builders who KNOW they don’t quite know enough to perform the task confidently. I know that my builders are NOT trained in the art of pricing when they complete their building apprenticeships, so unless they want to spend a few years learning how to be a QS, there are no options for them to gain a qualification in this highly specialized industry.
Rant over; so how do we make sure the costs of pricing are covered – irrelevant of who does it – and why do you care?
A Few Things We've Learnt
Its actually really easy. Pricing jobs is one of those items that straddles the offsite/onsite overheads items. You have to price work to win it, so it’s a necessary evil of running your business. Have a look at how many jobs you price in a year, times that by a dollar value (average cost) to price it.
Use an estimate from us if you need to! Whatever that dollar figure is, you need to slot it into your offsite overheads percentage. You apply your offsite overheads percentage to every job that you price, and that my little ducklings, is how you cover the cost of QSing.
The ongoing costs of financially running that job you have won, now that cost is an onsite overhead (or P&G). Again, I couldn’t care less if its you doing that job, or your friendly QS, there MUST be allowance of money for that task. Otherwise you are just working for free, and THAT cost comes out of your PROFIT.
You should protect your profit as though it is the most precious thing ever…. It is your reward for being in business, and it is what (is supposed to) make the sleepless nights and early mornings and overall hard yakka of running a business all worthwhile. It is NOT there to just help cover your overruns or all the other things you do but don’t charge for.
So why else should you RELIGIOUSLY charge for quoting?
Well, one day there will come a time where you no longer wish to be in business. You might want to do something else, or you might want to retire. If you have any interest in making sure your business has value, then you have to show that it can support its key service providers, either in house or out of house.
If you can show that your business can support either paying a QS on the books or as a contractor, then it is likely it will be worth more to someone looking to buy it.
What does a business offering look like if all the key tasks the owner has to just ‘do for free’??? Do you think that will get you a premium for a business you have put heart and soul into? Food for thought?