Estimator's Corner
Determine your minimum sales requirements by how many hours that need to be sold to keep the shop busy for a set period of time.

For example, to keep six workers busy for four weeks, figure the hours required by multiplying 6 x 160 (4 weeks at 40 hours per week) = 960 hours. If your shop rate is \$45.00 per hour, then the sale amount would be \$43,200.00.

Add the sale amount of the projected materials, goods and services required to do a typical job to the sale amount for the labor you figured, and you have the amount for a sales goal to keep the shop busy for those four weeks.

Set Your Goals!
Expand your Customer Base
Most structural steel projects are a labor to materials ratio of 15% to 85%. Meaning, as a rule of thumb, the sold value of shop labor is about 15% of the total amount of the job, with the remaining 85% of that total being the sum of all the materials, goods and services on a given project.

These figures may be used in establishing a Market Analysis projection, which will be explored in future issues of The Fabricator's Resource.
Steel Advice - The Fabricator's Resource
Dedicated to support the steel fabricator with real world solutions to real world problems.
August
2011
Expand your Projections
Many estimators work on quoting whatever is put in front of them. Some act as sales people, spending some time visiting customers and potential customers in between working on bidding the work. When the available work to quote gets thin, it might be time for those doing sales to work on diversifying the product base in order to keep the work in the shop.

If diversification is a desired option, the next step is to determine what type of work the company wants to target. Take a look at some projects that are advertised in a different category, though still fall in the scope of work you do.

Finding the work is like a shell game. Sources are being moved around all the time, and it is those that are skilled at turning over the right nut that are able to stay busy. We see the regular players in the open market, yet there are so many more companies that are busy with work we are not bidding simply because we didn't know about them. Maybe we are not looking hard enough.

Try reviewing government and federal projects or think about what might be available in the industrial side. Expand your search to include road projects and utilities that might offer hidden specialty fabrications. Go to a different plan center either locally or online to see what might be available there.

Get out and introduce your company to potential new customers and make a personal visit to some of your current ones. Even those regular customers may have you locked in to certain types of projects and are unaware of what your company is capable of.

Expand on your customer base and your areas of expertise. You might find that there really is more work out there than you realize. You also might find out that is what has been keeping your competition busy.