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Conrad Eggan
1,860 followers -
Manufacturing Guy
Manufacturing Guy

1,860 followers
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Conrad's posts

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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!

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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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.

Post has attachment
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.

Post has attachment
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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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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What is it you really want to do?

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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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