Costing Procedure of Flooring Contrator

1566 Words7 Pages
You can’t take it anymore. If you have to look at those scratches in the living room floor, the foot traffic stains down the hallway, the Kool-aid stains under the dining room table, or the chipped tile in the kitchen one more time, you might go off the edge and wind up in the looney bin. You are tired of going to a friend’s home and secretly envying their perfect looking floors. Gone are the days of flipping through magazines and drooling over the pictures of nicely decorated rooms with flooring that looks amazing. So you ask your friend what company did their floor and how much it cost, not to be nosey, but to get an idea. After perusing the flooring aisle of your local home improvement store and deciding on the type you want to use, you have the contractor come by for an estimate. Your eyes widen in surprise when he tells you that it will cost more than what it did for your friend. How can this be? It just flooring, right? How can there be such a difference in prices?
Flooring contractors have a mix of variable costs and fixed costs in their operations, with the variable costs being the vast majority. Fixed costs include the following: cost of vehicles, cost of equipment, cost of facilities, and cost of insurance. Contractors will pass fixed costs on to the customers by usually adding anywhere from $1 to $2 to the cost of installation per square foot. Everything else is variable, because what they charge depends on the number and types of jobs the contractor performs, and the labor and materials required.
To get a better understanding of the scope of the variable costs, let’s take a look at how a contractor determines the bid for a job. A typical bid for a flooring job is broken down into six phases: Initial Preparatory Work...

... middle of paper ...

...e, he may lower the installation charge, because he can rotated between the jobs at different between the phases.
So as you can see, the price quoted by the flooring contractor hinges on several variable cost factors. It can be a difficult task as the contractor begins his business. If he underestimates the time required to install the tile or to do any of the preparation work, he may end up losing money. If he fails to order enough materials, then he will have to cover the cost of any additional materials needed, reducing his profit. If mistakes are made, then the cost of fixing them will reduce the amount of profit he earns. It is imperative that a flooring contractor understands how to properly estimate the amount of material and the number of labor hours needed for each job. Failure to do these tasks correctly, will cause his business to go under very quickly.

More about Costing Procedure of Flooring Contrator

Open Document