How Much Do You Really Cost?

How much does your belt machine weigh? How about if you add the weight of the buffer or edger? How many trips do you make between the van and the job site to set up an average sanding job? The numbers don't change whether it is a 200-square-foot kitchen or a 1,600-square-foot whole house refinish. The time to set up and the weight of the equipment is generally the same no matter the job. Then why wouldn't you have a minimum job cost on small jobs instead of just using the same price-per-square-foot model? Sounds simple, but let me tell you about a scenario I just witnessed.

I did an estimate a few weeks ago for a homeowner who needed to refinish a 145-square-foot kitchen. I normally would quote a job like that with a minimum over the phone, but I was doing an estimate a mile away that day at the same time, so I figured I would stop by just to validate my thoughts. I walked in and saw a competitor's bid lying on the table and the price almost made my jaw hit the floor. I'm going to walk you through the bid, which was $710.

The estimate included:

• Sand and refinish hardwood floors with dustless equipment
• Apply stain (customer to provide)
• Apply two coats of oil-based polyurethane
• Apply one coat of Bona Traffic waterborne finish

Let me explain a few other factors:

• The contractor owns the business and does the work himself
• He has a good reputation and is actively licensed and bonded
• He drives a gas-powered box truck (approximately 10-12 mpg)
• He lives about 12 miles from the job (I verified this with his business address and Google Maps)

Let's hard-cost the job:

1. Cost to drive to the home and provide an estimate (minimum 1 gallon fuel @$3.67, 30 minutes)
2. Time to set up equipment (45 minutes)
3. Time to properly sand, fill, and stain the floor (4 hours minimum)
4. Drive home and allow stain to dry overnight ($3.67 fuel, 30 minutes with traffic)
5. Return to apply first coat of polyurethane ($3.67 fuel, 30-minute drive, 30 minutes to coat)
6. Drive home while finish dries ($3.67 fuel, 30 minutes traffic)
7. Return to apply second coat of polyurethane ($3.67 fuel, 30-minute drive, 1 hour for intercoat abrasion, vacuum, and coat)
8. Drive home while finish dries ($3.67 fuel, 30 minutes traffic)
9. Return to job to apply final coat ($3.67 fuel, 30-minute drive, 1 hour for intercoat abrasion, vacuum, and coat)
10. Time to repack tools (45 minutes)
11. Abrasives/filler/finish:

• 2 belts @ $8.50=$17
• 10 edger discs @ $0.80=$8.00
• Filler @ $10
• Buffer paper, screens, and maroon pads ($20)
• 1 gallon polyurethane for two coats ($25)
• 1 gallon of Bona Traffic ($95)

Total man-hours on job: 11.5 hours total

Total materials cost, including fuel: $200.69

Total profit = $509.31   

Right? WRONG!

I ran some other quick calculations based on the cost to be insured, licensed, and bonded based on my own rates and I figured it's about $15 for the duration of the job.

$509.31 - 15.00 = $494.31

Taxes (state and federal averaged @ 20%) $494.31 x 0.2 = $98.862

Now what's left is a realistic total = $395.45

You ready for the real shocker?

$395.45 / 11.5 hours = $34.39/hour

Now I know that sounds good, but consider the following:

• I didn't factor the cost of health insurance.
• This doesn't include workers compensation (which a business owner can waive)
• I didn't factor for any 401K or retirement planning

Are you willing to give up that much of your life to make less than $400 for all of the liability and stress that comes with business ownership? What if the check bounced and you didn't get paid? What happens if there is a hair in the finish or a missed spot? What happens if the homeowner is neurotic and decides to make you resand the floor; or they'll make your life a living hell on the Internet on places like Angie's List?

Stand tall if you're a flooring contractor reading this and have the confidence to price accordingly on small jobs. A number of contractors have been so panicked by the media over the doom and gloom of our economy that they have forgotten how to make a profit that will build a good future when people want a small job done. Time is not infinite and there are a limited number of jobs that you can do in your lifetime.