area where significant costs can be overlooked if we aren’t careful. If a contract requires that we include items such as composite clean- up, safety orientation, daily stretch and flex, maintained protection of completed work, full-time supervi- sion, 30-hour OSHA classification, delivery during non-standard hours only, and many more, we can lose significant amounts of money. The way we perform our take-offs should be very consistent from job to job. Whether you use a scale and pencil or a digital system, use it the same way on every job. Work your way through each room, area and level of the building the same way each job. Look at every page, read every note. Repetition and consis- tency are your friends because they help to reduce omission errors. Begin the pricing process - Once the quantity take-off is complete, we can begin the pricing process. Again, this needs to be standard- ized so that you approach every bid the same way. I recommend using a system where all the items normally found in a job are pre- listed. After pricing all the direct costs including materials, freight, sales tax, delivery charges, labor, payroll taxes, insurance and labor burden, equipment, trucks, and a factor for miscellaneous small tools, remember to add all the indirect costs. These costs could be a factor of annual costs spread across all your projects such as safety training, supervision, craft training or apprenticeship. Overhead should include all your infrastructure costs such as office, warehouse rent, and all the costs associated with it. Remember to include management, estimating, human resources, regulation com- pliance, licensing, accounting, etc. This should be the total of all your fixed cost of doing business that is not actually installing tile work. Break out the questionable costs – WFG, crack-isolation membrane, epoxy grout etc. – in fact, anything in question. GCs have said they prefer this type of break-out vs. leaving these items out of the bid. Being the expert to the architect and GC makes the knowledge- able tile companies an asset that every good client needs. When they have a question, who do they call? You? Are you building loyal partnerships or just trying to get another job? Build to last. Calculate your profit margin - Nowcomesthefunpart!Calculating your profit margin. Please see this video for a detailed explanation of Mark-up vs. Margin calcula- tions. https://www.youtube.com/ watch?v=BCo5i1mMO3E&t=527s or http://bit.ly/2r7wFL5. Here is the formula: Sales Price minus Costs of Goods Sold divided by Sales Price. Example: $125 sales price – $100 costs/$125 sales price = 20% gross margin. PRESIDENT'S LETTER ––––––––––––––––––––––––––––––––––––––––––––––––– 16 TileLetter | February 2018