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Conrad Eggan
Works at Red Cat Manufacturing Solutions
Attends Member - Manufacturer's Alliance
Lived in Bloomington, MN
1,817 followers|10,763 views
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Conrad Eggan

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Don't Guess at Your Costs!

How do you estimate the cost of the products and services you sell? Do you add up your materials and use a rule of thumb multiplier to cover labor and other costs? Or do you just assume that selling at "market" price will cover your cost and leave some margin left over? If you do not know your cost to produce you are asking for trouble! It's not that difficult - see my blog post on the subject. At the bottom of the post is a link to a template that I use for simple estimating. There is no excuse for not knowing your costs!

How do you estimate your costs?
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Don't Guess at Your Costs
 
Free Excel estimating template. Build an estimate and quote for a manufactured item by defining a bill of materials and routing steps required to produce. Define your own work centers, costs and markups. Use it, change it, share it. Download link at bottom of blog post.
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Free Excel estimating template. Build an estimate and quote for a manufactured item by defining a bill of materials and routing steps required to produce. Define your own work centers, costs and markups. Use it, change it, share it. Download link at bottom of blog post.
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Conrad Eggan

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Free Excel estimating template. Build an estimate and quote for a manufactured item by defining a bill of materials and routing steps required to produce. Define your own work centers, costs and markups. Use it, change it, share it. Download link at bottom of blog post.
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Thanks for posting. This is useful to remember even when you manufacture overseas. All too often people tend to overlook the hidden costs of their products, everything from shipping costs to inspections. Before asking someone to build your product for you you need to know that product inside out and have a very good idea of what it is going to cost.
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Conrad Eggan

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What is it you really want to do?
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Conrad Eggan

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Thanks to everyone that visited Michelle's studio during the Art Wander this last weekend. You helped to make it a great success! Don't forget that you can find her organic soaps and candles online at www.heartatplay.com. If you want to inquire about her artwork you will find her contact info on the website. Thanks again!
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Conrad Eggan

Resources, Advice & Tools  - 
 
Don't Guess at Your Costs!

How do you estimate the cost of the products and services you sell? Do you add up your materials and use a rule of thumb multiplier to cover labor and other costs? Or do you just assume that selling at "market" price will cover your cost and leave some margin left over? If you do not know your cost to produce you are asking for trouble! It's not that difficult - see my blog post on the subject. At the bottom of the post is a link to a template that I use for simple estimating. There is no excuse for not knowing your costs!

How do you estimate your costs?
1
Add a comment...
 
 Free Excel estimating template. Build an estimate and quote for a manufactured item by defining a bill of materials and routing steps required to produce. Define your own work centers, costs and markups. Use it, change it, share it. Download link at bottom of blog post.
1
Add a comment...
 
Free Excel estimating template. Build an estimate and quote for a manufactured item by defining a bill of materials and routing steps required to produce. Define your own work centers, costs and markups. Use it, change it, share it. Download link at bottom of blog post.
1
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Conrad Eggan

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Don't Guess at Your Costs

Any company that produces a product or service must know their cost to produce it. No guessing, no rules of thumb allowed - you must know it.

Making pricing decisions based on inaccurate costing methods will cost your company money. You will price some jobs lower and some jobs higher than you should. Through adverse selection you'll get lousy jobs that you underprice and lose good work that you overprice. Accurately account for your costs so you can make sure all of your work is profitable.

I posted a simple Excel estimating template on my website. You can build an estimate and quote for a manufactured item by defining a bill of materials and routing steps required to produce. Define your own work centers, costs and markups. It's geared to job shop manufacturing but it could be used for anything you have to quote that involves materials and labor. Free to use, modify and share. Download link is at the bottom of the blog post.
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Conrad Eggan

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Our Catalpa tree has decided that today is the day... to drop all of its leaves. Hadn't dropped a leaf until this morning after the first hard frost and they've been dropping all day. Fall is here and Old Man Winter is on the way!
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This is Amos. He weighed 11oz when he was found and now weighs in at a little over 6lbs. Amos has no fear. He's a sweetheart and we're so happy to have found him!
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Work
Occupation
Solving problems for small manufacturers
Employment
  • Red Cat Manufacturing Solutions
    Owner, 2010 - present
  • Preferred Sheet Metal
    Operations Manager, 2010 - 2011
  • Industrial Wood Products, Inc.
    Founder/President, 1981 - 2010
Places
Map of the places this user has livedMap of the places this user has livedMap of the places this user has lived
Previously
Bloomington, MN - Jacksonville, FL - Minneapolis, MN - Cologne, MN
Links
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Tagline
Manufacturing Guy
Introduction
Accomplished leader with thirty years of experience in manufacturing management. I focus on developing sound manufacturing strategies, improving operations through reduction of non value added activities and coaching of team members to improve performance.

Specialties
  • Manufacturing management
  • ERP implementation
  • Capacity planning
  • Equipment selection
  • Scheduling
  • Materials management
  • Estimating
  • 2D & 3D CAD design
  • CNC machining systems
  • Setup and cycle time reduction
At Red Cat Manufacturing Solutions I specialize in working with small and medium size manufacturers to improve efficiencies and eliminate waste in their manufacturing operations. My many years of experience in every position from machine operator to President give me a unique understanding of the challenges and opportunities at every level.

A common area of focus with small manufacturers is the implementation or re-implementation of ERP systems. After spending many thousands or tens of thousands of dollars purchasing and installing an ERP system many small businesses find they are getting little or no benefit from their investment. In some cases the system is not being used at all. Improvements in materials management, production scheduling and performance measurement have failed to materialize. I help these businesses get their systems on track providing the information, control of the business and bottom line results that were promised.
Education
  • Member - Manufacturer's Alliance
    Monthly continuous improvement / networking sessions, 1995 - present
  • Leader's Alliance
    Monthly peer group sessions - sharing, benchmarking, critiques & discussion of critical issues, 1998 - 2004
  • Member - Manufacturer's Alliance
    Workshops - Lean Manufacturing, Visual Management, Value Stream Mapping
  • Minnesota Wood Promotion Council - Education Chair
    Development of educational programs for member companies, 1995 - 1999
Basic Information
Gender
Male