Investing a little time into learning how to bid roofing jobs and how to estimate roofing jobs can pay dividends for your business. Roofing Contractor has found that 90 percent of roofers underbid their jobs. The whole industry could benefit from brushing up on how to bid a roofing job. You could earn more margin by changing how you measure the roof or how you estimate costs to better reflect the real costs you’ll pay.
You’ll also benefit from learning how to get roofing jobs through better pricing and bidding. Perhaps your bid isn’t complete or isn’t clear to the homeowner? If you can use your bid as an opportunity to express your value, you can stop focusing on being underbid and make more profit overall. We’ll walk you through every step of the estimating and bidding process so that you can keep growing your roofing business.
The first step of any estimate is to measure the roof and calculate the largest material cost you have – shingles. Refining your estimating skills can help you find the metaphorical or literal hidden corners that cost you money.
You might be wondering, what if your roof has a different pitch? Well, if this roof’s pitch were closer to 3:12 than 5:12, you would multiply the number of flat squares by 1.15. If the pitch were 4:12, you’d split the difference between 1.25 and 1.15, so that you would multiply by 1.20.
What about steeper roofs? For roofs with a pitch between 6:12 and 9:12, multiply by a number between 1.24 to 1.4. For high-pitched roofs with a slope between 10:12 and 12:12, multiply by a number between 1.4 to 1.7.
If you’re working on a roof that has multiple slopes or is composed of multiple shapes, you’ll need to calculate the area and squares of each portion separately and add them together to get your final amount. The easiest way to measure each section separately is from the roof, so you don’t need to walk through your client’s home.Consider that if this same roof had a 12:12 pitch, it would need 34.8 squares (20.48 x 1.7 = 34.8), which you would round up to 35. That’s a huge increase from the low slope square amount of 26. If you miscalculated the area or forgot to account for slope, you could be estimating considerably under your actual costs. You may also run out of shingles while you’re on the job – costing you time.
You will find that some shingle manufacturers place fewer shingles in their bundles. You’ll need more bundles if you’re using a brand that cuts it closer to 100 square feet than others. Further, some specialty shingles may cover less than 100 square feet per three bundles, so be sure to double-check.
Even if a homeowner is directing you to a specific area of the roof where they believe there is a leak, you should thoroughly inspect the whole roof. There may be more damage the homeowner does not know about, and you could save him/her money by catching it before it causes damage. Plus, this will help you sell a larger job and earn the homeowner’s trust.
When inspecting the roof, write down the following:
Before you climb down from the roof and return to speak to the homeowner, make a general plan of what the roof needs, so you can answer some of his/her questions up front. Leave the details to the bid.
Now you need to find the costs of your other materials as well as labor and overhead. When you first learned how to bid a roofing job, it’s likely that you neglected several key costs, including a portion of rental costs or insurance costs. This list will help you find those missing costs.
First, before you start calculating your materials and labor, refamiliarize yourself with any relevant building codes, because they can significantly impact your calculations. For example, some municipalities require you to use more than four nails to secure shingles. Others require an ice and water protector. It all depends on the location of the home.
Once you’re ready, calculate each material you’ll need:
Now that you know approximately how much the job will cost you, you have to decide what to charge your customer. According to Roofing Contractor, more than nine out of 10 roofing professionals won’t achieve their goal revenue because they simply do the math wrong. If you want to make a 10 percent margin on a $1,000 job, you charge $1,111, not $1,100. How do you get to that number?
The total cost to you for this job is $1,000. If you want a 10 percent margin, those costs represent 90 percent of the final selling price, while the margin is the other 10. So, the final selling price is equal to the costs to you divided by the percentage: 1,000 / 0.90 = 1,111. Therefore, you charge the customer $1,111.
Let’s say you wanted to calculate a 5 percent margin on this same job instead. If so, your costs would be 95 percent of the total selling cost, while the margin is the other five. Again, you write out the percentage as a decimal place and use the same formula. 1,000 / 0.95 = 1,052. So, to achieve a 5 percent margin, you’d charge the customer $1,052.
Knowing how to achieve a particular margin is important, but it doesn’t help you decide which margin will work best for your business. Instead of picking a single margin, offer your clients three (with increased value at each price point), and see what they choose. This strategy is called good, better, best pricing.
There are a few different ways to accomplish this pricing scheme. You can offer homeowners different shingle and underlayment combinations, making three discreet packages. For example, a customer who wants a premium shingle, like IKO’s Crowne Slate™, will pay the best prices. On the other hand, an elderly couple who have traditional tastes and are on a tight budget might prefer a good package with IKO’s 3-tab shingles. So, you might present your bid with three packages that look like this:
You’re not only adding on the price of the higher cost shingles, but you’re also adding a higher margin for each package. Perhaps you can see the rationale already: Though these numbers are made up just to serve as an example, you can see that it’s a much lower jump to the better package than to the best. You can see the value of the higher-end packages and so can your client.
To justify a higher margin, you can also offer good, better, best pricing packages based on your services. For example, your best pricing package might offer a second roof inspection a certain amount of time after you’ve finished the job. That gives clients more value and enables you to charge more for only a modest amount of your time. On the other hand, if your goal is to prevent callbacks, that might not be the strategy for you. But, there are other services you could offer. You could even feature a service you already provide in this pricing scheme.
Offering a good, better, best pricing scheme allows you to serve a wider range of customers, growing your business. You will still capture high-end clients who are drawn to the best package. Of course, when you’re considering how to price a roofing job, you’re also thinking about being undercut. However, this pricing scheme actually reduces the likelihood that budget-minded clients will choose another roofing company that offers a lower price because you are still offering a very competitive price.
You can offer more than three pricing packages, but the more you offer, the more likely it is that the homeowner will get overwhelmed by their options and simply go with a company offering a less-confusing pricing structure. Your price needs to be clear, like the rest of your bid.
Once you have a pricing structure, you’re ready to write a formal bid. You need to keep three key things in mind to write a successful bid:
It can be a challenge to balance these needs. Some clients will be more knowledgeable about roofing than others and will understand or want more details. Others will be less inclined to get the details. However, what you never want is for a homeowner, who has multiple bids, to see an important detail on someone else’s bid that you didn’t include on yours. Make sure that you cover all of the basics.
Homeowners expect to see the following on a job estimate:
Homeowners will have multiple bids in their pocket. You want yours to stand out. Therefore, there are a few marketing items you can include to help seal the deal. They include:
Of course, there are many more tactics from the marketing world that could apply to your bid. See IKO’s advice about marketing to women , and more general sales presentation advice for roofers.
The last thing you need to do is decide on a format for your bid. Larger companies may want to develop a form with the help of a graphic designer, which can help their bid stand out. Those who are just starting can rely on free roofing bid forms available online. Here’s where to find them:
When choosing a template, remember that it needs to be clear to homeowners. Look for a template that has clean lines and doesn’t feel overwhelming. Plus, you can highlight the most important parts, such as the deposit information and final price. Don’t forget to run your bid form and your roofing contract by a lawyer before you begin to use them.
Now that you’re equipped to hand out more accurate and persuasive bids, the only thing left to do is follow up on some leads and refine your strategy over time. IKO offers more information for roofing professionals, including how to generate more leads, handle negative reviews or start your own roofing business.