A Contractor’s Guide on How to Price Drywall Jobs

How to Price a Drywall Job

Here are a few things to consider when submitting a bid for a drywall job to your clients. Follow these steps to price a drywall job correctly and confirm the deal.

1. Visit a Site & Record the Measurements

For preparing a fresh bid, it is necessary to visit a job site and perform quantity take-off to list out the materials and supplies required for the drywall project. This will help you find the scope of work and the time required to get the job done.

Once you assess the job site, you will get an idea if the structure needs to be changed completely or requires renovation. Moreover, when you are present at the site, you can measure the length of drywall, which needs to be replaced or installed.

Before you leave the client’s residence, you must understand the materials and equipment required to carry out the drywall installation.

2. Identify Type of Drywall Work

Next, decide on which type of drywall i.e. standard, soundproof, or fire resistant drywall work you need to perform. Remember depending on the type of drywall, project cost may also vary. Suppose your client wants to install a standard drywall (¼”), then it will cost around $0.30/sq ft.

Whereas, if you go for fire-resistant drywall or soundproof drywall, prices may go up to $0.45 and $0.95/sq ft respectively. So, at this stage figure out which one is preferable by your clients before you add markup to the overall cost.

3. Reach Out to Suppliers

Now that you know how much materials and supplies are required to complete the drywall job, contact your local suppliers to get prices. Reaching out to your suppliers will help you price materials and suppliers correctly.

While negotiating prices with suppliers, you must know your client’s budget and how much more they can spend on the drywall project. Once you have secured the best rates and materials availability, it would be much easier to estimate a project cost and competitive price for a drywall job. As a result, you can expect early approval from your client.

4. Assess Labor & Estimate Project Cost

Following materials cost, now you need to identify how many workers need to be hired for the drywall project. If labor requirements are more than two, then you can include the cost, at which you hired laborers, in the estimate.

For drywall contractors, paying laborers on the basis of hourly rate can also include their costs while preparing an estimate. In this process, you can retrieve data from recently completed projects to estimate the price and completion of the drywall project. Also, you can refer to labor guides in case you don’t have any data from previous projects.

5. Make a Bid

When you have learned the project’s scope, estimated cost, and completion time, create a fresh estimate in a professional manner. Either you can create paper-based estimates or make online drywall estimates through automation tools.

The latter can help you draft an estimate in a short time. You can download a drywall estimate template, enter project details, and share it with clients in no time. When it comes to making a bid, online estimates are mostly preferred by drywall contractors as they save time and improve the chances of approval.

How to Calculate Drywall Costs

Calculating drywall costs include two factors: material costs (such as drywall, tape, screws & mud) and labor costs. So, identify such material costs as per project requirements and add them to the overall project cost.

You can also include an additional service charge if needed to carry out a drywall job. Apart from this, ensure you have added transportation fees or extra charges for permits from government agencies.

Now, once you have all the data, use the below formulas to calculate drywall material and labor costs.

Drywall material costs formula:
Number of required materials X Sales Taxes = Total Material Costs

Suppose materials required to install a drywall add up to $210 cost and 4% is sales tax within your service area, then $218 will be your material costs (210 X 4% = 218).

Drywall labor costs formula:
Income (per week) / Number of Billable Hours = Hourly Labor Rate

Let’s say you worked for 25 hours in a week, in which the billable amount is $1,000, then $40 (1,000/25 = 40) is your labor costs.

Now, you have an idea of calculating drywall material cost and labor cost but don’t know about the drywall overhead cost. Simply, identify your expenses other than material cost & labor cost. Some factors that are accounted for in overhead costs are given below:

• Equipment
• Permits and licenses
• Safety equipment
• Drywall tools (ladders/nail guns)
• Vehicle fuel
• Business insurance
• Advertising and marketing
• Credit card processing fees

Once done, put those details in the below-given overhead cost formula:

Overhead Costs (yearly) / Number of Billable Hours (in a year) (number of laborers x working hours x 52 Weeks) = Hourly Overhead Costs

Suppose the total overhead costs are $50,000 for a year and 4,200 is your team’s billable hours, then hourly overhead costs would be $11.91. Now, you can use this resulting amount to identify overhead expenses per job.

Use the below formula:

Hourly Overhead Costs X Number of Hours Taken to Complete the Project = Overhead Cost for Job

Assuming that removing and installing the drywall job took exactly 2 hours. So, we will multiply 11.91 by 2. As a result, $23.82 will be overhead cost per job.

How to Determine Competitive Rates/Pricing for Drywall Jobs

We understand how difficult it is to strike a balance between undercutting your competition and earning profits. Here are a few things to consider when setting competitive rates for your drywall business.

Conduct Thorough Research

First thing to do is in-depth research about competitors to come up with robust pricing strategies that really pay off. Know against whom you are competing and what are their current pricing plans. Understanding such things would help you determine production costs, but that doesn’t mean you keep similar pricing as their overhead costs and objectives would be completely different. Hence, it’s important to do research work initially before finalizing fees for drywall jobs.

Calculate Drywall Profit Margin

Next, figure out what’s the perfect profit margin for drywall contractors. Based on job experience, you must finalize the profit margin to fulfill your financial goals. Generally, drywall contractors include around 18-20% profit margin. However, it may differ according to your service, completion time, and several other factors. Find out net income and gross revenue. Then, divide net income by total revenue and multiply it by 100 to get the profit margin.

Calculate Drywall Markup

Decide on drywall markup costs that can be added to your pricing chart, further helping you run a profitable drywall business. So, what’s the markup? It is the added cost to the material cost in pricing offered to customers for drywall servicing. While adding markup, you must take care of extra charges if applicable or any discounts being offered. The final price for drywall may fluctuate following negotiation with clients, so that’s another thing to keep in mind while deciding on markup and determining pricing plans.

How to Create a Professional Drywall Estimate

Nowadays, creating a professional-looking estimate for drywall jobs only takes a minute or two if done using the right tools. Since hand-written drywall estimates only delay the client’s approval, ready-made estimate templates become a go-to option to win clients instantly.

After all, you want to close the bid early and win another profitable project. So, undoubtedly, choosing an online estimate generator like Moon Invoice is the best bet. Let’s jump right into how to make a professional drywall estimate in a matter of minutes.

1. Register or log in to Moon Invoice

Either you sign up as a first-time user or if you are using it often, enter your credentials and log in to the Moon Invoice. Upon successful login, you will be able to see the dashboard of Moon Invoice. On your left, you can find many options to create invoices or estimates.

2. Create a new estimate

Enter the “estimates” tab where you can create a new estimate by filling in the required details. You can go with the default estimate template or later pick any other template that meets your business needs. Mention every detail about your drywall project, including estimated cost.

3. Review & Save

Double-check the details if they are entered correctly or not. There’s no extra effort required, just go through the entered details once before you hit the save button. Now, your drywall estimate is ready and it will be saved in the cloud storage.

4. Share an Estimate Online

If everything is good to go, share the estimate with your prospects via Email or WhatsApp instead of conducting physical meetings. Or else, take a thermal print of the newly-created drywall estimate, add your business stamp, and hand it over to the prospective clients for quick approvals.

Conclusion

Post-covid-era the housing market is getting back on its feet, giving rise to more drywall service opportunities that will increase drywall contractors’ demands. Since more prospects are approaching for drywall installation, you can’t afford to lose any of them.

Follow the aforementioned steps to price your drywall jobs rightly, share a drywall estimate wrapped in elegantly designed templates, and lock the deal straightaway.

Now you know how automation software like Moon Invoice can turn the tables. As a drywall contractor, you can easily generate professional drywall estimates, get approvals, and convert them to invoices with a single click.

Sending online estimates through Moon Invoice not only makes the estimation process smooth but also helps you convert prospects into clients easily. Start your 7-day free trial now.

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