Example of Profitability
GapArmour Preferred Partner Program
A Fort Bend Brothers, LLC Product
Example of ProfitabilityAs an example, we will use a 400 linear foot driveway as an example. Be sure to have a measuring wheel with you when you measure the linear feet of the driveway and always give yourself a 10% (minimum) allowance of product. For example, if the driveway joints measure out to a total length of 350 linear feet, estimate 385 linear feet of product and installation. As projects increase in size, the allowance may need to be increased.
There are two methods of estimating projects: Measure for the exact amount of each size product you will need for the project (Exact Measurement Estimating Concept) OR Measure the total linear footage of product and use an average product cost (Average Measurement Estimating Concept).
Exact Measurement:
Using this method is more time consuming but allows you to estimate the precise amount of product you will need to complete the job.
Average Measurement:
Using this method saves you quite a bit of time but requires that you keep a sufficient inventory to cover all sizes and lengths of product required to complete the project.
At Fort Bend Brothers, we use the Average Measurement Estimating Concept, because we always have a sufficient amount of on-hand inventory and it saves a significant amount of time. For this example, we will use the Average Measurement Estimating Concept.
We further break our estimates down into three separate line items: 1. Joint Preparation (Adhesives $4.25/LF, Forming Boards $3.40/LF & Natural Debris $1.70/LF), 2. Product Cost (Average product cost as of May 1, 2020 is $2.94/LF, & 3. Product Installation $2.50/LF. For the example, we will use Natural Debris for the Joint Preparation, which means the majority of the expansion joint material is missing and will require minimal labor to prepare.
Finally, our pricing strategy uses the above information and breaks the line items into hour required for the project, based on a one-man crew. The hourly rate we install at is $85.00/hour (Always rounded up to the nearest half hour). This is the rate that covers my overhead and labor and provides our company with the margins we desire. The time requirements my crews are expected to achieve are 20 LF/Hour for Adhesives Joint Preparation, 25 LF/Hour for Forming Board Joint Preparation, 50 LF/Hour for Natural Debris Joint Preparation & 34 LF/Hour for Product Installation.
Using all of the prior information, we are now ready to estimate the project. Please see the data below.
Actual LF of Expansion Joints: 400 LF
Allowance for Product & Installation (10%): 40 LF
Total LF for Product & Installation: 440 LF
Estimate for Joint Preparation (400 x $1.70/LF): $680.00
Converted to our Hourly Rate (400/50, then x $85.00): $680.00
Estimate for Product Cost (440 x $2.94): $1,293.60
Estimate for Product Installation (440 x $2.50): $1,100.00
Converted to our Hourly Rate (440/34, then x $85.00): $1,105.00
* By converting the job to hours in our pricing structure, my crews can see exactly how much time they have to complete the project on the Work Order Slip. This job should take a one-man crew approximately
Estimate Total ($680.00+$1,293.60+$1,105.00) = $3,078.60
Preferred Partner Product Pricing:
100-500 LF Purchase Average $2.21/LF x 440 LF = $972.40
600-1,000 LF Purchase Average $1.76/LF x 440 LF = $774.40
1,100+ LF Purchase Average $1.48/LF x 440 LF = $651.20
Margin Before Overhead Costs (Using the 1,100+ Purchase Average):
$3,078.60 - $651.20 = $2,427.30
This project should take an experienced installer no more than 21 hours to complete from start to finish. We typically try to run a 3 to 4-man crew and a job this size would take us no more than one day to complete.
We hope this document helps you make an informed decision about becoming one of our Preferred Partners. If you have any further questions, please do not hesitate to contact us!
