Estimating Large Commercial Retail Space

Estimating Large Commercial Retail Space

First of all, I am learning that you can generally base your estimate
on so many cents per square foot, but not necessarily so with an area
this large, 42,000 Square Feet. Although I am still open to hearing
from "experts" in that regard. This is linoleum, by the way.

What I have discussed with my owner is the approach that as long
as you make a good profit margin, what difference does it make how
you formulated the bid? Cents per sq. ft. or based on hours worked
and expenses?

The General Manager of the retail business, upon further query from
me, stated that the present crew they have, who they have become
displeased with, and thus, why we are approaching them with our bid,
would be in the store one night from 8pm until midnight. There were
4 workers total doing the work. The company locks them in at 8pm and
lets them out at midnight.

So, anyway, in our case, the cost of the materials that are needed to do
this job are around $800. There would be a total of 4 workers doing this
job, counting the owner. So, the 3 workers, hypothetically being paid $25
per hour - that would come to $300 - figure the owner for $25 per hour,
as well - and we're looking at a total of $400 for worker costs.

So far, that comes to $1200 in labor & materials. Considering if the
business had to rent the truck mount and other cleaning equipment,
extremely liberally I would say that would tack on at least another
$500. For my finder's fee, as I made the contact by phone and set
up the deal, my commission would be $200. That brings our expenses
to $1900.

Also, this retail business General Manager is saying that he would
want our company to perform this work once every month, a scrub
and buff. Once every three months, he would want a deep scrub and
wax and once a year a strip and complete re-do. Basically, it means
that whatever bid we submit would pretty much have to be paid by
the company every month, so we have to be sure it is as reasonable
an amount as we can get.

Since this is basically a potentially long-term monthly contract, we want
to do our best to not over-bid this job. We can't get a clue out of the GM
what the present cleaning team they now have is getting monetarily.
Sometimes they will tell you, but most not. In this case, NOT. He did tell
us that the present cleaning crew only takes 4 hours and they are not
happy with their work, it is also in my mind that maybe the 4 hours is
not enough and they rush and maybe that's why the place is not happy
with their work. My owner was VERY surprised that it could only take 4
hours to do the work.

Another thing is it is a hobby shop retail customer floor with lots of about
4'X4' product displays throughout the store. So, this is not a big, open
space floor area. It has a large number of these 4'X4' product display
stands. Does it sound like an area that could be cleaned in 4 hours by
4 workers?

I have suggested to the owner that as long as you are going to make a
good profit, considering all of your expenses and labor and time involved,
don't bid so high, if it is really only 4 hours for 4 people. He is thinking of
bidding around $3000 - i even thought $3500. That way we would have
some wiggle [negotiation] room.

I have also thought we need a clause that says if it does take longer than
the 4 hours the GM said, we would have to add a proportionate $ amount
onto our final invoice but not sure how we could do that - if we are agreeing
to a certain amount to do the job??? That is a question and a concern - what
do we do with that?

In my opinion, as long as the cleaner owner is making a good enough profit
margin and it is a long-term job - even $3000 would be a fair bid. As I am
not an expert at bidding, that is why I am presenting this scenario here for
your feedback.

42,000 sq ft of VCT flooring ?
Also 42,000 sq ft cleanable areas or that's the total square footage ? If that's the total, the cleanable areas would be a little less than 40,000 sq ft ?
I would bid $ 0.15 / Sq ft minimum, to compensate the once every 3 months deep cleaning and once a year strip and refinish.
In terms of time needed to do the job, I don't know, I hardly do VCT and never did strip and refinish.
But 4 hours 4 workers, that means 2500 sq ft for each pair of guys per hour sounds about right ? I think they might even be done a little earlier on the light cleaning, the once every 3 months cleaning should be okay in 4 hours. The once a year strip and refinish might need 2 extra guys to refinish if you still have to finish in 4 hours, but additional 2 guys once a year should only be $ 200 more.

42,000sf of linoleum, according to the General Manager of this retail business.  
Thank you for your feedback. I appreciate it, but we are thinking that we may
have to go with the hourly + expenses + materials & come up with a profit
margin - in order not to blow the job. It's a long-term deal and if we use the
standard approach of psf, we might scare this guy off. BUT, we also don't want
to shortchange ourselves.

If we go at .15 psf, that comes out to $6300.  Originally, my
owner was saying $5000, so not too far under.  He's going to
go look at the place, tomorrow.  He and his wife have been
there a few times, so they know the place.
I'll see what he says after tomorrow - thanks so much for
your feedback.  It is appreciated.

I haven't done hard floors like that in years, so I am not able to be too specific on the cost, but I would like to throw some thoughts out there based on large commercial carpets.

The last company charged by the sqft (I am sure of it), so getting it done under 4 hours was very important to make the contract profitable. That tells me 2 things. One, they under-bid the job and two, they really couldn't do a good job in only 4 hours which is why they are losing that contract.

I would forget everything that the losing contractor did as it clearly wasn't successful. On commercial, I charge by the estimated time to complete it with some cushion for surprises. For carpet, it is based on 1,500 sqft per hour....what it would be for a hard floor is going to depend on what your guy has proven to be able to do per hour. Only he knows, or at least should know if he wants contracts like this.

Also, forget about what the last guy was getting paid as it has no correlation to your business. I never ask about the last guy since I don't work for the "last" guy and his costs aren't my costs.

Calculate how long it would take your crew to "realistically" clean that size of floor, add a 10% buffer to it, and then establish what it would take to meet your profit goals. I like to aim for $150 per hour after expenses.

Bottom line: Forget all about what the last contractor was doing and charging and go at it like it had never been done before.

Mice that follow the old urine trail left by others only end up dead in the same trap.

milspec6 wrote:I haven't done hard floors like that in years, so I am not able to be too specific on the cost, but I would like to throw some thoughts out there based on large commercial carpets.

The last company charged by the sqft (I am sure of it), so getting it done under 4 hours was very important to make the contract profitable.  That tells me 2 things.  One, they under-bid the job and two, they really couldn't do a good job in only 4 hours which is why they are losing that contract.

I would forget everything that the losing contractor did as it clearly wasn't successful.  On commercial, I charge by the estimated time to complete it with some cushion for surprises.  For carpet, it is based on 1,500 sqft per hour....what it would be for a hard floor is going to depend on what your guy has proven to be able to do per hour.  Only he knows, or at least should know if he wants contracts like this.

Also, forget about what the last guy was getting paid as it has no correlation to your business.  I never ask about the last guy since I don't work for the "last" guy and his costs aren't my costs.

Calculate how long it would take your crew to "realistically" clean that size of floor, add a 10% buffer to it, and then establish what it would take to meet your profit goals.  I like to aim for $150 per hour after expenses.

Bottom line:  Forget all about what the last contractor was doing and charging and go at it like it had never been done before.  

Mice that follow the old urine trail left by others only end up dead in the same trap.

That is a PERFECT response !!

I really appreciate all of you guy's comments/help.  Everything
you are telling me helps.  I want to learn as much as I can about
estimating in general.  I will be back.  Keep the comments coming.
Thanks to the both of you, much.

Some minor numbers.
Factor extra % on workers(taxes) like $25 x 1.25/hr x total Mrs.
Owners pay @ $25? For me on the job=$100/hr
If the sf, materials, and time to do the work; then about $900 profit for the biz.
Spell out the details for the bid; add a contingency amount IF something outside the scope of the project pops up.

there are 3 different level of cleaning described, and each requires different hour and material estimates. I would bet the 4 hours is for the scrub and buff which will be the quickest and easiest of the 3 procedures.
I would normally figure at $75 per man hour.  If you've been doing this awhile, you should have an idea of the crews production rate per sq. ft.
I believe in our area, the strip and wax runs about .50 per sq. ft.

This job has been resolved as not acceptable as the owners do not want to pay a fair price, so case closed.

I will say this even after deleting my full lengthy reply....You will lose more work at this level by bidding to low than to high.

Yup, that is large commercial.....owner doesn't have the staff to deal with it because they are saving money on manpower. Then when they need to hire a contractor, they still don't want to spend the money.

Somebody will do that job....and lose their butt on it.