Using Rule of Thumb Prices

How do I use a "per square foot" price, or "rule of thumb" price in my estimates?

Many experienced estimators have "rule of thumb" prices for different types of work, that they want to set up in Goldenseal estimating software.

You can do a simple cost item for a "per square foot" price, or you can turn your "rule of thumb" price into a real unit cost so its components will be included in bills of materials and schedules.

NOTE-- Click here for rule of thumb prices that you get from subcontractors.

Cost Items

The simplest way to enter a price per square foot (or some other measurement) is to use a Cost Item. It's just a simple item that you can set up however you want. Follow these steps to create a "quick and dirty" cost item that you can include in estimates:

  1. Choose Cost Items from the Costs menu.
  2. Click the New button.
  3. Type in a brief description for the work.
  4. Enter Labor, Materials or one of the other classifications, in the Cost Area popup field.
  5. Enter the unit size into the Unit Size field.
  6. Enter the price into the Purchase Price field on the left side of the screen.
  7. Choose Save Record from the Edit menu (or hit the Enter key to save the record).

Assemblies

If you have a "rule of thumb" price that you use and want to convert it to a real unit cost, follow these steps:

  1. Choose Assemblies from the Costs menu.
  2. Check for an existing unit cost that is similar to the work in your "rule of thumb" price. HINT-- you can use the Find command to search through existing items by name or by category.
  3. If there is one, check the Gross Price field in the Calculated Prices section.
  4. If it is already close to your price, you're done! If not, adjust the component quantities or prices so it matches your rule of thumb price.

If you can't find an Assembly that is similar, follow these steps:

  1. Choose Assemblies from the Costs menu.
  2. Click the New button.
  3. Enter basic info for the Assembly.
  4. Click in the first row of the component table.
  5. Click in the Cost Area column of the new row, and enter Labor.
  6. Click in the Cost Item column, and enter the type of labor you'll use for this work.
  7. Click in the Unit Cost column, and enter the hours of labor per square foot (or other unit). You can also fill in the other table rows.
  8. Add a new row to the table-- hit the Return key or Enter key.
  9. Add any materials that are needed for the work.
  10. Repeat steps 7 and 8 for each material item.
  11. If necessary, tweak the labor or material quantities, until the calculated price is equal to your rule of thumb price.

NOTE-- If your rule of thumb price includes markup, you should probably adjust it downwards so it equals the hard construction cost, instead. Goldenseal will add markup separately, in the Estimate.

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