There’s more to pricing than hard costs | Woodworking Network

Editor’s note: Years ago, James Falk shared with readers of Cabinetmaker magazine and members of the Cabinet Makers Association his pricing theories of pricing work using the term “soft variables” to describe things that often affect the cost of work but seldom are accounted for in bidding spreadsheets. Today, Falk has expanded on this concept and greatly expanded the number of “soft variables” he calculates.

No manufacturing job exists in a vacuum. Each individual job/project must be managed. Often the management and non-manufacturing portions of the job, will cost more than the price of materials and labor to fabricate the product. Even after one knows their true fabrication costs, one must figure in the cost of having the job flow through the shop, in order to get an accurate idea of what the bottom line expenses actually are. Regardless of the company size or job size, extenuating non-fabrication variables come into play.

Typically a job may go through most of the steps below. Each one needs to be explored, to make sure as many aspects of the job are known before supplying the first price to the client. Anything that takes time or saves time affects the bottom line.

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There’s more to pricing than hard costs | Woodworking Network.