How to Price a Roofing Job? A Game of Estimating and Bidding

How to Price a Roofing Job?

Many factors play their roles in setting the price for a roofing job. It all includes unbillable hours, billable hours, and labor costs.

Hourly Price (Time + Materials)

The hourly pricing model is all about the working per hour concept. It bills the customer by hour which includes materials and time. The total cost of the roofing jobs is obtained by the time required to complete the project.

The itemized estimate represents the hourly price and material cost to the customer.

Flat-Rate Cost

In this kind of costing model, customers make the payment based on a flat rate. The number of hours applicable on the project completion is not taken. The labor cost, overhead costs, and materials are considered to find the price.

It has a customization approach and professionals can easily upgrade roofing service. This means, generating a new estimate and invoice for each roofing project is not required.

The roofing company can observe an improvement just by adding flat rate pricing. Customers have an idea of expecting payment they need to pay and professionals are also aware of the amount of money they get from the business.

Hybrid Price Model

This kind of model includes hourly and flat-rate fusion. This model provides more accurate pricing. Flexibility is another cherry on the cake in this kind of model. Professionals can choose to charge an additional fee with a hybrid price.

Professional roofers can consider flat rate prices for smaller projects (new or repaired roof) and hourly rate models for complex and large roofing projects.

How to Calculate Roofing Costs?

It is important to include the entire cost in the roofing cost calculation. Professionals must understand tarps, roofing shingles, screws, and nails.

After determining how much it will cost for the entire project, the next step is to how much should charge your client.

You must consider the following:

• In what period will the roofing job be completed?
• What is the expertise and experience needed to complete the project
• Is the roofing industry competitive? If yes then how much?

How to Calculate Roofing Material Costs?

In the process of how to bid roofing jobs, determining the price of the material is crucial. The type of material and their suppliers determine the cost of material. There is a need for an itemization of all the materials and supplies while calculating roofing material costs.

The most common material for asphalt shingle roofs, costs from $3.60 to $5.50 per square foot.

For instance, if you are installing the asphalt shingles at the cost of $3 per sq foot for 30 square houses then the total material cost will be as follows –

1 sq house = 100 sq feet

For 30 sq houses, it will be 3,000 sq feet.

So material cost will be –

3,000 x $3 = $9,000

Along with this, never forget to include the other roofing materials like vents, flashing, and nails. Any cost associated with these, you must add in your material cost.

How to Calculate Labor Costs for Roofing?

It’s crucial to determine the hourly base rate in calculating roofing labor costs. This is the amount that you pay to yourself before adding the overhead cost or material cost. Mind it, there will be a variation in the hourly rate as per the experience of a professional roofer. You must include travel time or an additional fee along with it.

To calculate the labor cost we follow three steps as follows:

1. Calculate the Necessary Labor Hours –

It is about the total number of hours of labor invested to finish the project. For instance, if there are 2 persons involved in the project to complete the roof in 40 hours, then as per the calculation:

40 hours x 2 persons = 80 labor hours

2. Finding hourly labor wage –

Hourly labor wage includes the crew’s hourly pay including workers’ compensation and taxes. Suppose the hourly rate is $20 per hour and 20% applies to tax and insurance.

20% x $20 = $4

Now, we add this to the base hourly rate.

$20 + $4 = $24

This is the hourly labor wage.

3. Finding the total labor cost –

You have to multiply the hourly labor wage and labor hours and the result will be total labor cost.

$24 labor wage x 80 labor hours = $1,920 total labor cost

How to Calculate Roofing Overhead?

Overhead costs are the overhead expenses that you apply to run your business. Determining the overhead costs is necessary after calculating the labor cost.

Overhead costs can include –

• Rent and utilities
• Employee salaries
• Safety equipment
• Fuel, vehicles, and maintenance
• Roofing marketing and advertising
• Roofing business management software
• Employee benefits

For example, your business has a monthly overhead cost of $2,000. We consider this weekly by dividing it by 4 (usually there are 4 weeks in a month)

$2,000/4 = $500 per weekly

Now suppose you have worked for 8 hours for 5 days in a week. Then, it is 40 labor hours a week.

$500/40 = $12.5 hourly overhead cost

We will again multiply it by the total number of labor hours.

$12.5 hourly overhead x 60 labor hours = $750 in overhead for this job.

Suppose the material cost is $7,400, the labor cost is $1,250, and overhead cost is $750 and the total cost is $9,400.

How to Obtain Competitive Rates/Pricing?

Analyzing your competitors is necessary for your business to win the competition. It is also suitable while you think about how to estimate a roofing job. Thus, it is also important to retrieve the rates and prices that your competitors are taking.

Performing Competitive Research

Are you giving a reasonable price or not? This you can determine with your competitors rates. Whether you are below or above your competitors, you need to adjust your rates. However, you don’t need to consider the exact matching figures.

Keep a note that overhead, goals, and costs vary from competitor to competitor. Analyze your service and process to ensure that your price does not affect your quality of service. Most of the customers like to avail high-quality service.

Calculating Roofing Profit Margin

To calculate the roofing profit margin, determine the net profits using the following formula:-

Net Income = Total revenue – Material cost – Labor cost

In the next move, you find out profit margin as follow –

Profit margin = Net income / Total revenue

You have to predict which profit margin will be the most ideal one for your roofing business.

How We Need to Calculate Roofing Markup?

In simple terms, markup is the difference between your cost and the charge you take from your customer.

Markup is a crucial concept in determining the cost of roofing services. It is because your business profitability is proportional to the amount of markup you decide upon.

You must ensure that your charges are appropriate according to your work. You can use the below formula to calculate the markup percentage –

Markup percentage =(selling price – your cost)/your cost x 100

Suppose you pay $20 (your cost) for the roofing material and your customer makes a payment of $30 (selling price) then the markup percentage will be as follows –

= 30-20/20 x 100

= 0.5 x 100 = 50%

How to Create a Professional Roofing Estimate?

Creating a professional roofing estimate is important and a bit difficult. You need to focus on the tricks and tips to start. How much does a roofing job cost? When you think over it, you need to create a well-defined estimate to reflect accuracy with the following details:

Material Choices – Explain the different types of materials that are available for the project. It refines the budget and needs understanding.

Measurement – Measure the roof that you will consider working on. Accurately determining the precise dimensions is essential for ensuring accuracy and attention to detail.

Labor Cost – Calculating labor cost is important

To create a professional estimate you can consider estimating software like Moon Invoice. This platform enables professionals to make a professional and accurate estimate for the roofing project.

1. Sign in and create an account at Moon Invoice
2. Log in with your credentials
3. On the left-hand side navigate to sales and click on Estimates
4. Click on Create an Estimate
5. Fill in the details like customer name, address, estimate number, currency, and date
6. Include the service description with quantity, rate, tax, and discount
7. Add terms and conditions
8. Send the estimate online through Email or WhatsApp

Last Word

The answer to how to price roofing jobs might seem to be complicated. You have to consider many things to calculate the right amount of estimate. An accurate estimate is necessary to keep running the cash flow. It is crucial because your business profit should be on the right track. Moreover, you can consider Moon Invoice to create an accurate estimate.

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