# Constantly underbid ....



## LCG (May 30, 2011)

Yes, It is hard out there but i'd say your doing just fine.

Sounds like the same learning curve we all go through starting a business. 

Advertise heavily, do home shows, etc.. It's very important to get your name out there everyday. Show YOUR face, build your reputation, stay consistant. Try the gutter thing and see how it works. 

It takes TIME. 

Are you buying your material from the local lumber store or the regional distributor? This matters.


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## kage (Aug 17, 2008)

yup..suck it up..a couple hundred is not underbidded, that sounds like a prime place to live..compared too here your either 10000 too high or low!! f'n pathetic around here..


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## Ext. Sol. LLC (Apr 22, 2012)

Get out there and network. Join your local HBA.
Also chambers of commerce and local lead and referral generation groups such as BNI. In fact very few contractors join these types of groups so you virtually have no competition at events. Like most groups tho, you can not passivley sit back and wait for business, you have to work the system they have to achieve success. That means 1 to 1 meetings with the other members and participating in any training they might offer.
People do buisness with businesses they know and trust. Getting a personal referral from a customer or colleauge will go farther than any ad or flyer in closing the deal.
In fact I just closed a roof that I know I was higher than the other contractors that bid it, but I was peersonally referred by a friend and that meant more than a lower price.


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## larryb (May 23, 2008)

There's bidding...and then there's selling


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## aptpupil (Jun 12, 2010)

sorry to hear about your problem with getting underbid. i agree with others that it is probably a sales/rapport issue more than anything else considering the amount you are being underbid.
i would also add that you should give your website some work. it's a little amateurish and difficult to read right now. give more quality pictures of the work you have done and work on the layout/design for a day or two and see what you come up with.
good luck.


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## nmarshall603 (Apr 24, 2012)

It also may help to evaluate the package you leave with your customers. Building value in your services is important. You can do this with an effective marketing package.

We always include in our folders the following:

Insurance certificate
10 references in 10 different areas of Denver's metro area.
Complete company information including website info, angie's list, facebook etc.
Deductible/Upgrade Rebate Coupon
Hail information sheet
Company directory.


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## RandyB1986 (Jan 2, 2009)

My buddy is a SM nut. He looks at 1 a day and sometimes 2-3. He gets probably 75% or more of them. He figures his cost and then adds around $1000. He is the Wal-Mart of roofing....he is all about volume. He does 2-3 houses a day, 5 days a week and very little overhead.


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## roofingbob21 (Mar 29, 2012)

RandyB1986 said:


> My buddy is a SM nut. He looks at 1 a day and sometimes 2-3. He gets probably 75% or more of them. He figures his cost and then adds around $1000. He is the Wal-Mart of roofing....he is all about volume. He does 2-3 houses a day, 5 days a week and very little overhead.


Is he Fully licesed an Insured, ( Insured to do roofing ) and does he have a crew? Just asking ? 
I'm out of Rhode Island and I know Rhode Island is a very crappy state to start a business, so many fees and regs.


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## BamBamm5144 (Jul 12, 2008)

roofingbob21 said:


> Is he Fully licesed an Insured, ( Insured to do roofing ) and does he have a crew? Just asking ?
> I'm out of Rhode Island and I know Rhode Island is a very crappy state to start a business, so many fees and regs.


Roofingbob- you sent to me in a PM that you basically use subcontractors, as in you hire two guys who are self employed to come and help on jobs. I don't see how paying roofing insurance on just one guy is what is killing you. Mine was $300 a month and now with employees is over $1200 a month, now that hurts. Also, you don't have to pay workers comp without employees.

I'm trying to figure out why you're having such difficulty.


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## roofingbob21 (Mar 29, 2012)

The goin rate in Rhode island for roofing insurance, on a partnership, without any workmans comp is about 6 grand a year... thats only for me and my father.... not any workers. add the price for a couple other sub contractors to help you do the roof so you don't have to have workmans comp an worry about keeping a crew busy all the time, it adds up. Plus not every winter was like the winter that just past, theres usually 3 to 4 months out of the year where i can't work.


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## BamBamm5144 (Jul 12, 2008)

Why are you insuring your sub contractors? They should have there own and you should have their insurance certificates.


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## roofingbob21 (Mar 29, 2012)

BamBamm5144 said:


> Why are you insuring your sub contractors? They should have there own and you should have their insurance certificates.


No, I don't mean add the price as in im insuring them.I just mean, adding the price to the job. That wouldn't even make sense for me to be insuring them. Lol


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## nmarshall603 (Apr 24, 2012)

I think many people in the industry try to sell the job and forget to sell their company and why it is better for the customer to work with you then a competitor.

In addition to folders everyone who is selling should have a presentation book with copies of their insurance certificates and that of their subs as well as licensing. Have references and also pics of jobs youve done.

Today you can put that on a tablet or Ipad...

Hell I just read an article about the Denver Broncos replacing their paper playbooks with Ipad's.. the prices are starting to come down...


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## BamBamm5144 (Jul 12, 2008)

roofingbob21 said:


> No, I don't mean add the price as in im insuring them.I just mean, adding the price to the job. That wouldn't even make sense for me to be insuring them. Lol


I still don't get what you are saying. Adding the price into the job for more labor? That doesn't make sense. Today I have 6 guys on a roof. If I would have 3 on the roof, the price the homeowner paid would still be the same.

It should be cheaper for you to have them as there is a lot less liability involved in having subcontractors - which I would assume you pay hourly instead of by the square.


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## Red Adobe (Jul 26, 2008)

subs or scabs dosn't matter much if your losing by a few dollars, it comes down to how you get the contact and sell your job VS. the other guys! 

My guys speak ONLY english, no cussing, look respectable, leave no mess, Do not do drugs (while working at least) ,and won't tell others to rob your house next week.


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## CSB (Nov 17, 2007)

Stop bidding jobs "to make little profit, if any". That's a waste of time and you're exposing yourself to taking losses on jobs -- might as well flip burgers, it's a lot less stressful. 

If the prospect can truly say he/she went with someone else over a couple hundred bucks then you need to find a way to create value and demonstrate it when you're selling. Better products, better quality work, better cleanup, better service, whatever. Make it easy for them to say yes. Do you accept credit cards? When you do get a job are you asking for a client testimonial and a referral? People buy from people they trust, and creating rapport with a prospect is part of demonstrating value.


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## ijt1970 (Apr 26, 2012)

First you need to decide what type of customer you are targetting? What kind of reputation do you want for your business?
If you want to be a lowest price company,then you need to figure out how to do it cheaper than every other tom,dick , and harry with a gutter machine.(its very hard to do) some customers shop 100% on price.This is a tough way to make a living.
If on the other hand you want customers that are not AS concerned with price then you need to give them Quality. (longer screws,more hangers,all custom cut corners,water test every job so the customer knows there is no leaks or standing water,Immaculate clean up,follow up with the customer to see how the gutter system works,send your customers exclusive coupons for discounts on cleanouts)These are all ways that over time you can build a reputation for providing high quality work and excellent service.This will give you the best sales possible, refferals.
over time you should be able to charge a little bit more for your services once you have a long list of very happy customers.
www.aplusgutters.org


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## Braciole (Jul 16, 2011)

roofingbob21 said:


> To be honest i think i might be losing these jobs to other contractors that may not have insurance or even be legit. I'm using 'Service Magic' and other lead sites, which my not be the best approach but they are bringing me leads to check. I'm just assuming there sending the leads to others that may not be insured or maybe they are, but not have roofing insurance. IDK, Im only usually off my a couple hundred. Usually...


Service Magic is a joke dont waste your time or money:no:


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## FerrisHI (Oct 20, 2010)

they are definitley not a top quality lead but i've run the numbers a couple of times for a month at a time we constantly come out on top...October of last year i paid SM $1,600 and brought in $8,200 with no single job over $1000...but you will definitely run a handful of worthless leads and your salesman better be good...





Braciole said:


> Service Magic is a joke dont waste your time or money:no:


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## BamBamm5144 (Jul 12, 2008)

FerrisHI said:


> they are definitley not a top quality lead but i've run the numbers a couple of times for a month at a time we constantly come out on top...October of last year i paid SM $1,600 and brought in $8,200 with no single job over $1000...but you will definitely run a handful of worthless leads and your salesman better be good...


Holy crap? Seriously?! You come out on top with a nearly 20% advertising budget for 8k?

You mean Service magic comes out on top, right?


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## FerrisHI (Oct 20, 2010)

Remember i started out by saying it wasn't the greates lead??? Remember that has not one big job in it...those repairs have a serious profit margin in them...your probably talking about a dozen repairs if that...i dont remember the exact numbers but i still like the profit margin on that month off of 1 service guy in a truck...its not like i have a crew out there or something...


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## BamBamm5144 (Jul 12, 2008)

I think that is crazy, but that's just me and what do I know. I would have a hard time justifying paying $1600 to get $8200 worth of work. Right out of the gate you're already at $6600. You said roughly twelve jobs. That is roughly $550 per job. You are paying $133 per lead closed! For $1600 a month I better see at least 75k. I just think you can do a lot better focusing on getting your own leads.

I think I will let the guys who like SM and their leads stick with that. I will stick with my 1k of advertising a month which is between 1-3% of what it brings in monthly, depending on the month.


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## FerrisHI (Oct 20, 2010)

HOLY **** YOU GET $75,000 A MONTH FROM YOUR SERVICE GUY....Dude start talking because i haven't had a single guy in a truck do more then $19,000 in a month and i thought that was impressive...dont get me wrong my 2 large crews will do over 100,000 a month without a problem...but damn you must of found something... 

If you do those numbers again you can see its probably 8 days worth of work from a SINGLE guy not to mention what else he does that month...i try not to leave money on the table...

p.s. i'm not focused on SM but we use it and make a profit each month but what do i know, maybe making profit is no good anymore





BamBamm5144 said:


> I think that is crazy, but that's just me and what do I know. I would have a hard time justifying paying $1600 to get $8200 worth of work. Right out of the gate you're already at $6600. You said roughly twelve jobs. That is roughly $550 per job. You are paying $133 per lead closed! For $1600 a month I better see at least 75k. I just think you can do a lot better focusing on getting your own leads.
> 
> I think I will let the guys who like SM and their leads stick with that. I will stick with my 1k of advertising a month which is between 1-3% of what it brings in monthly, depending on the month.


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## FerrisHI (Oct 20, 2010)

First question..r u a sub or do any sub work...because i do zero residential sub work...Second question if your doing 75k with a $1000 designated for advertising it seems to me you could up this and gain more work...i mean those are great numbers on return you have 1000 for 75,000 i mean damn just throw down some more money and watch your company blow the hell up





BamBamm5144 said:


> I think that is crazy, but that's just me and what do I know. I would have a hard time justifying paying $1600 to get $8200 worth of work. Right out of the gate you're already at $6600. You said roughly twelve jobs. That is roughly $550 per job. You are paying $133 per lead closed! For $1600 a month I better see at least 75k. I just think you can do a lot better focusing on getting your own leads.
> 
> I think I will let the guys who like SM and their leads stick with that.* I will stick with my 1k of advertising a month which is between 1-3%* of what it brings in monthly, depending on the month.


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## BamBamm5144 (Jul 12, 2008)

FerrisHI said:


> HOLY **** YOU GET $75,000 A MONTH FROM YOUR SERVICE GUY....Dude start talking because i haven't had a single guy in a truck do more then $19,000 in a month and i thought that was impressive...dont get me wrong my 2 large crews will do over 100,000 a month without a problem...but damn you must of found something...
> 
> If you do those numbers again you can see its probably 8 days worth of work from a SINGLE guy not to mention what else he does that month...i try not to leave money on the table...
> 
> p.s. i'm not focused on SM but we use it and make a profit each month but what do i know, maybe making profit is no good anymore





FerrisHI said:


> First question..r u a sub or do any sub work...because i do zero residential sub work...Second question if your doing 75k with a $1000 designated for advertising it seems to me you could up this and gain more work...i mean those are great numbers on return you have 1000 for 75,000 i mean damn just throw down some more money and watch your company blow the hell up


Are you mad? I don't have service guys. I never said I got 75k a month from a service guy. You said you spend $1600 to do a gross sales of $8200. I was trying to put that into perspective for you to see how ridiculous that is. If I paid $1600 to get work, I better see a return of 75k, that is all I meant. If you can afford a 20% advertising budget, you are done very well (I don't doubt that you are). I send the lead guy out to do repairs for one day when there are enough of them. If you don't think paying $133 for a signed lead is out of this world, then I can't help you there.

No, fortunately I do not do any sub work. Anytime someone has called me and asked, they wanted me to remove all my lettering on all my vehicles (yeah right) and pay me less than half of what I currently get a square (yeah right). I don't really see the point in asking that question because where does it matter how I get work? If I got it from subbing, obviously my advertising budget would be different (as in none).

Anyways, I only have one crew. I did the more than one crew thing and a sub crew but it was too much of a headache. 

I am sure I could spend 1k advertising differently than I do now, but I like to see results and don't really want to throw more money into it right now.

Edit to add: I don't do a lot of repairs mainly because when people call, I tell them instantly that there is a $85 trip charge out and then it is on a time & material basis with a minimum of $165. Most people immediately find the guy who doesn't charge to show up, or to get the materials, etc and so on.


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## TNTRenovate (Aug 19, 2010)

BamBamm5144 said:


> I think that is crazy, but that's just me and what do I know. I would have a hard time justifying paying $1600 to get $8200 worth of work. Right out of the gate you're already at $6600. You said roughly twelve jobs. That is roughly $550 per job. You are paying $133 per lead closed! For $1600 a month I better see at least 75k. I just think you can do a lot better focusing on getting your own leads.
> 
> I think I will let the guys who like SM and their leads stick with that. I will stick with my 1k of advertising a month which is between 1-3% of what it brings in monthly, depending on the month.


Any return has little to do with the source, and more with the sales person. I spent less than $1000 in a year when I first started with SM and raked in over $75K. It can be done, but you have to work for more than the lead they send you. I saw them as a way in to a home. Once in, skys the limit! I sold one lady $1400 in Christmas lights on a $12 lead. I then had my roofers replace a flat roof for $3500, and then we got a 700 sq ft attic remodel when all was said and done was over $70k. So the return on a lead isn't just measured by what you made on the initial project, but from the entire life of that customer.


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## BamBamm5144 (Jul 12, 2008)

TNTSERVICES said:


> Any return has little to do with the source, and more with the sales person. I spent less than $1000 in a year when I first started with SM and raked in over $75K. It can be done, but you have to work for more than the lead they send you. I saw them as a way in to a home. Once in, skys the limit! I sold one lady $1400 in Christmas lights on a $12 lead. I then had my roofers replace a flat roof for $3500, and then we got a 700 sq ft attic remodel when all was said and done was over $70k. So the return on a lead isn't just measured by what you made on the initial project, but from the entire life of that customer.


Well that makes sense but would you spend 8k to bring in 41k?


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## FerrisHI (Oct 20, 2010)

I love that kind of stuff...




TNTSERVICES said:


> Any return has little to do with the source, and more with the sales person. I spent less than $1000 in a year when I first started with SM and raked in over $75K. It can be done, but you have to work for more than the lead they send you. I saw them as a way in to a home. Once in, skys the limit! *I sold one lady $1400 in Christmas lights on a $12 lead. *I then had my roofers replace a flat roof for $3500, and then we got a 700 sq ft attic remodel when all was said and done was over $70k. So the return on a lead isn't just measured by what you made on the initial project, but from the entire life of that customer.


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## FerrisHI (Oct 20, 2010)

Just for service magic those numbers are for...they have nothing to do with any of my other advertising...it just seemed like you were trying to big time my service magic number i wasn't throwing it there to brag i was just noting that while the numbers are tight we continue to run the calls because we continously turn a profit thats all...





BamBamm5144 said:


> Are you mad? I don't have service guys. I never said I got 75k a month from a service guy. *You said you spend $1600 to do a gross sales of $8200.* I was trying to put that into perspective for you to see how ridiculous that is. If I paid $1600 to get work, I better see a return of 75k, that is all I meant. If you can afford a 20% advertising budget, you are done very well (I don't doubt that you are). I send the lead guy out to do repairs for one day when there are enough of them. If you don't think paying $133 for a signed lead is out of this world, then I can't help you there.
> 
> No, fortunately I do not do any sub work. Anytime someone has called me and asked, they wanted me to remove all my lettering on all my vehicles (yeah right) and pay me less than half of what I currently get a square (yeah right). I don't really see the point in asking that question because where does it matter how I get work? If I got it from subbing, obviously my advertising budget would be different (as in none).
> 
> ...


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## FerrisHI (Oct 20, 2010)

Hey Bam if i told you that you could designate a guy just for service and after gas and other overhead that will go to his truck you could turn a profit from him on a bad month of 3 to 3,500 on half a months work just from service magic wouldn't you do it??? Remember it wouldn't slow your main crew whatsoever...BTW there is a considerably larger profit margin in repairs then there is in a crew on the norm anyway...My guy can knock out a 1,200 dollar shingle valley repair in a day with a total of 100 bucks on material after you pay your guy there is a lot left...and that adds up when thats all he does is repairs...


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## TNTRenovate (Aug 19, 2010)

BamBamm5144 said:


> Well that makes sense but would you spend 8k to bring in 41k?


No, but if his $1600 of repair work added roof replacements and other projects down the road that brought his numbers up, it would be worth it.

All that I am saying is it is hard to measure the impact of any lead by just judging the initial project revenue.

But I would also say, that I might pay that if I were starting off and just wanted to get my name out and work under my belt. That's why I have always said SM has it's place and that the contractor needs to know what his objective is when using them.


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## FerrisHI (Oct 20, 2010)

I wasn't trying to make this into a pissing match just wanted to say we have had a positive experience with it...but back in the day when i was the only salesman i did drop them for some years...


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## dougger222 (Jan 29, 2004)

Back to the original topic.

Like others have said if your losing your jobs by a meer couple hundred bucks you either have the wrong sales approach or are approaching the wrong customers.

When I lose a bid to another contractor it's typicaly because my bid is thousands more than the other bidder. Used to advertise with yb and all leads were looking for one thing, the LOWEST bidder. Quality was of no concern in terms of labor or materials.

My company started when I was 19 and back then can't believe customers went with me! Was an ok roofer but knew nothing about sales. Over the years have built a business that doesn't rely on advertising one penny and brings in all the leads for 1 or 2 crews. My only advise is be patient as it takes time to get quality leads. 

As far as sales people my wife is perhaps my number one. She has sold me up to 50% of my business annually all through a steakhouse she manages. People trust and like her and they value her opinion. Even when she's not working customers come in and ask for my number as they or someone they know needs a roof.

As far as leads they come from,
Referals, family, friends, angies list (don't pay), roofing forums (3 jobs), and facebook (1 job).

My father works for me and once in a while I'll either have him do a sales call or we do them together. Although he doesn't sugar coat anything when it comes to sales he can sell a roof to anybody! 

The first 10 leads of the year 9 were sold... Keep in mind it may look crazy but all leads are word of mouth and several customers only get one bid, mine. The same is true of insurance work which is a whole nother animal!


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## BrandConst (May 9, 2011)

BamBamm5144 said:


> I don't think age really has anything to do with it. I've only been asked how old I was a few times and a few I still got and some I didn't. The ones that do ask normally asked because they couldn't believe it it because I "seemed" older on the initial phone conversations.


So.................how old are you there lil bam????


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## BrandConst (May 9, 2011)

roofingbob21 said:


> Is he Fully licesed an Insured, ( Insured to do roofing ) and does he have a crew? Just asking ?
> I'm out of Rhode Island and I know Rhode Island is a very crappy state to start a business, so many fees and regs.





BamBamm5144 said:


> Well that makes sense but would you spend 8k to bring in 41k?


Yes, ANY day of the week!


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## BamBamm5144 (Jul 12, 2008)

BrandConst said:


> So.................how old are you there lil bam????


Life is almost over. Nearly 26.



BrandConst said:


> Yes, ANY day of the week!


You would spend 8k for 41k in sales? That is crazy if you ask me.

I can't imagine someone who has a 20% advertising budget only bringing in 41k for every 8k spent being in business very long.

So you grossed 41k in sales. Alright.

Take your 8k for advertising off the top, leaves you 34k.

Now take a 40% rate for materials which is 13.6k.

30% for labor and burdens = 10.2k

20% overhead = 6.8k

10% profit = 3.4k

The only way I would be happy with a 3.4k profit as a business owner would be to do that every week, otherwise I could go work as a salesman at the bigger companies around here and make way more money.

However, to each their own.


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## dougger222 (Jan 29, 2004)

Young Bam, I'm totaly in agreement with you on this one. $8K for $41K in work, that's crazy!!!

I haven't even come close to $8K in advertising (yb back a few years ago) and have done several million in jobs. Again yb was a total waste of money and would never do that again...

One would think it would make more sense getting a peddlers permit and go door to than to pay big bucks for junk leads. 

BTW, I'm just a boy at 32. Most of my personal friends could be my father though. My renters have a kid same age as me! 

Age has nothing to do with sales or roofing except when you get up in age a bit your body can give out.

My goal is no more than 8 more years on the roof every day. By then will run the company from the ground.


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## FerrisHI (Oct 20, 2010)

Those are some tough percentages...20% advertising then 20% overhead...then 40% material...then 30% labor...these numbers are a good bit higher then what i'm using on average...

Bam maybe i'm missing this..when you keep talking about you wouldn't do the 8 for 41 you are talking about if your whole company only did 41 in a month aren't you??? Because if you only have one crew these would not be good numbers...




BamBamm5144 said:


> Life is almost over. Nearly 26.
> 
> 
> 
> ...


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## RandyB1986 (Jan 2, 2009)

All I can say is with 40% material allowance, 30% L&B, 20% Overhead...........I can see why you guys need to make $500 a square on shingles, lol. If 20% of every job I had went to overhead....I would seriously be checking into why. How can you have $7K in overhead alone on a 41K job? Just asking......


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## BamBamm5144 (Jul 12, 2008)

RandyB1986 said:


> All I can say is with 40% material allowance, 30% L&B, 20% Overhead...........I can see why you guys need to make $500 a square on shingles, lol. If 20% of every job I had went to overhead....I would seriously be checking into why. How can you have $7K in overhead alone on a 41K job? Just asking......


Well I spent a little more than 2k on gas alone last month. $500 for phones and Internet, $1500 direct advertising. $2400 for work comp and liability. Vehicle insurance, vehicle payments, rent, all disposable items like ink, paper and so on. 

That doesn't take into consideration money I am trying to put away for different things I want to be able to offer employees such as health, dental, retirement, etc. It also doesn't take into consideration money for new equipment like a dump trailer or new vehicles.

Most guys have no stinking clue how much money they really spend each month because they don't consider it a business expense. They only think about today.


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