Find the missing $400 before you send the quote
Try this with your next flooring estimate. Write down your selling price, materials, labor and other direct job costs. Then ask what you have left out.
Here is an illustrative job, not a market-rate quote. The customer price is $4,800. Materials are $1,800, labor is $1,400 and other direct job costs are $400. That leaves $1,200 in projected gross profit before overhead and taxes, or a 25% gross margin.
The job is finished. Four extra costs show up.
Disposal and dump run — $120
Extra floor preparation supplies — $160
A return visit for touch-ups — $80
Extra delivery expense — $40
Those illustrative costs total $400. If they were missing from your original estimate, direct costs rise from $3,600 to $4,000. Gross profit falls from $1,200 to $800. Your gross margin falls from 25% to about 16.7%. One third of your projected gross profit has gone.
Give your estimate a five-minute check
Check whether removal and disposal are included.
List floor preparation materials and labor separately.
Allow for delivery, transitions and the final return visit where applicable.
Count your own installation time as labor when estimating job costs.
Recalculate projected gross profit and margin before sending the quote.
Gross profit equals the customer price minus direct job costs. Gross margin equals gross profit divided by the customer price, multiplied by 100. Overhead and taxes still need to be covered from what remains.
Try the challenge on your next job
Download the free Job Costing Worksheet for Contractors . It is a one-page US Letter PDF with a worked example and space for your own numbers. Print it, write in your next estimate and check for omitted costs.
Want an editable Excel tool for repeated estimates? See the Contractor Job Costing Calculator for its current price and included files.
Made by GGC Studios. The numbers above are an example for explaining job costing. Build your estimate from your actual scope and costs.