How to Bid Spray Foam Insulation Jobs
Tips For Bidding Spray Foam Insulation
Being asked to bid on a spray foam job is exciting as thoughts turn to a profitable payday. But bidding also has its risks, especially if you’re just starting out. Avoid the temptation to provide an extremely low cost bid in hopes of winning the job, only to discover that the margin is too thin to make any money on the deal.
Good information is always crucial to providing a sound bid you can live with. It starts by having a good handle on labor and material costs. This can be difficult, however, especially when just starting a spray foam business, in which case you might not have similar past jobs for comparison.
Price Per Board Foot
The Foam Market and Your Competitors
To gain a better understanding of what spray foam competitors in your market are charging, consider calling and asking what they charge per square foot. This will help determine the acceptible market price range, and it’s always better to be competitively priced.
Once the market range has been determined, it’s important to know the precise square footage of the areas that will be sprayed. Carefully measure these surfaces to calculate the total square footage, and use that to determine the price and amount of material needed to complete the job.
After the square footage has been determined, use the following simple calculation:
Price = Your price per board foot x thickness (per local building code or desired by customer) x square footage (walls, ceilings, etc.)
Bidding Large Jobs
Discounts and Scheduling
When bidding large spray foam jobs, avoid the temptation to provide a volume discount. On larger jobs, there are more things that can go wrong – which will slow the work pace, disrupt the schedule, and ultimately, cut into profits.
Large jobs take longer to complete, and over many weeks the chance of bad weather interrupting work and causing delays is greater than on a small job that only lasts a few hours or days. Temperature fluctuations can also affect foam yields and can seriously impact profitability for the job.
Also, when it comes to completing the interior (of a home for example), spray foam/insulation contractors are typically the last trade on the job prior to sheetrock and finishing. If your scheduling gets delayed, the architect, homeowner, general contractor, and anyone else involved will be all over you to finish ASAP.
Safety and Equipment Availability
In addition to scheduling issues, large jobs can involve added safety challenges and other unforeseen considerations that can eat up more time and resources than smaller jobs.
If you have just a single spray rig, it might be tied up on a large job for months. This will prevent you from taking on other smaller and potentially more profitable jobs while your equipment is on-site at a large job.
To overcome these potential pitfalls, consider adding a 20-30% markup to your base rate. This can help ensure a large job is still profitable despite other factors that can cause unexpected delays and costs.
Data Tracking & Collection
Data tracking and collection systems are an excellent way to determine material usage and labor costs for each job. This information can then be used to confidently bid jobs based on past material usage and labor to complete similar size jobs.
Some of these systems enable jobsite activity to be collected in real-time from a smart phone, tablet or computer. High quality data tracking and collection systems provide information on electric and hydraulic Reactors, indicating whether they are spraying, idling or turned off. A job log, daily usage log and system event log also provide important information that can aid the bidding process.
Data tracking and collection systems that use the cell phone network store information in the cloud, so the information is readily available. If no cell connection is available near a job site, the information is collected and transmitted to the cloud when a connection is established. Data from jobs can also be stored in case questions about a spray job arise later.
Benefits provided by these systems include better fleet and crew management by knowing when Reactors are running, idling or off, and tracking productivity by crew or machine. Daily reports can be emailed to the owner or managers.
Having documented data showing the spray parameters for every job allows you to share data reports as a value-added service to your customers. This data can also help owners troubleshoot issues remotely, and recognize when it's time to expand their fleet of spray rigs.
The ability to successfully and profitably bid spray foam jobs depends on having good information at your fingertips. Knowing your labor and material costs, as well as local market prices, will enable you to confidently prepare bids.
A good data tracking and collection system can streamline the bidding process, while providing key information on job progress and performance as your business grows.
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