Thomas Walnut Dresser: First Estimate Lessons Learned


Today I finally got some prices on the materials I’ll use for the Thomas Walnut Dresser, and submitted my first estimate for customer approval!

 

Things learned

  1. Quickbooks is widely used, but not that easy to use. UI needs polish!
  2. Washington State has a Reseller Permit that I can use to get great prices on materials without being charged sales tax. When I buy wood, turn it into furniture, and sell the finished product I charge sales tax – charging sales tax on the materials and the finished goods would be double-dipping.
  3. I registered today with the Department of Revenue – meaning the Washington Tax Collectors. I’ll need to pay a minimal B&O tax, transfer any sales tax that I collect to them, and get my small business tax credits!
  4. My prices might be high, but I’ll get better at estimating over time.
  5. Printing to a PDF file is useful, and you can do it for free with a product called from Bullzip.

Project Information – The Inspiration

I thought I’d include some information here about the project and the bid, while keeping the customer information confidential.

The first project is a dresser for a former co-worker who is about to be married. He would like it complete and delivered by March 15th. I call it the Thomas Walnut Dresser. It is inspired by a design from West Elm. The West Elm piece is imported and made of wood except for the metal base, has wood drawer slides, and requires assembly. I couldn’t find information on the type of wood they use, where it is harvested, and where this piece is made.

 

Project Information – The Sketchup Based on Customer Design

The couple-to-be has specific requests for overall dimension and drawer dimension. His fiancé sent some sketches and dimensions, and here’s what I came up with. I’ll build the base out of solid walnut, and I need to see if they want the face of the dustframes showing, my sketch below doesn’t show that. I’ll need to ensure that this doesn’t sag, so there may be a prop in the center of the base.

Thomas

I then broke this down into cut lists and parts lists so that I could figure out how much material I needed. Then I called around to my favorite suppliers. That’s when I got the tip from Crosscut Hardwoods about the Washington Reseller Permit.

Project Information – The Task List

Here’s how I break down the build tasks and time estimates for each.

Task Estimate
Break sheets down 1 hour
Prepare solid stock for dustframes and base 1 hour
Build carcass
rabbit for top, and bottom, dadoes for dust frames, groove for back
1 hour
Build & install two dust frames 1 hour
Build & install 8 drawers 2 hours
Build & install base 1 hour
Trim out carcass and drawers 2 hours
Sand & finish, multiple coats over a few days 4 hours
Total 13 hours

Project Information – The Estimate

My materials and parts lists, along with their prices and my estimate of hours was entered into Quickbooks, and I created an estimate. I used to show the estimate right here but after a lot of insightful comments, I removed it.

But wait! You can see that I reduced my estimate here by subtracting out 5 full hours of labor. Am I crazy or just bad at math? Well, here’s the reasoning.

  • This is my first estimate. I’ll use this experience to refine future estimates.
  • I just couldn’t see adding another $250 to this project. I need to remain competitive.
  • I like this guy, he’s taking a chance on me being my first customer and this is for his fiancé.
  • The price at West Elm for the similar piece is cheaper already (damn you cheap rainforest wood and foreign labor).
  • He helped me move once, and all he got out of it was pizza.

 

Let me know what you think, please comment on this post.

6 thoughts on “Thomas Walnut Dresser: First Estimate Lessons Learned

  1. Gordy

    Matthew, I also think that there is a place on the Dept of Revenue B&O reporting form to take a credit for sales tax paid when you use the product purchased in re-selling. FYI, Gordy

  2. Jason Schklar

    Hey Matt,

    First, thanks for posting this. I had a private blog (parents, sisters, and wife could see it) when I first started my business in ’08. It was super helpful to talk details and specifics — not just for feedback, but also just to write it out myself so I could see it in black and white.

    A few thoughts:

    – Do you need to charge sales tax on your labor costs? It just seems weird to me.

    – While I can see you value transparency (and some of your clients might) you may find that most customers like to just see the specs and a final price. You can also ‘hide’ actual costs to you, which might vary depending on various deals you can make with sellers and “friendship deals” where you cut them a bit on the rate you charge. Think of your cut from 13 hours to 8 hours less as “5 hours free labor” and more as “charging $31/hr for labor”. You’re still going to work those 13 hours (think: overhead labor including tool and workshop maintenance and cleaning, cost of stopping and starting again time, time spent purchasing and transporting raw materials). In that case, I’d just say “Labor: $400” and let the customer note that it’s a pretty reasonable value add to the $700 in quality materials that are going into the piece.

    – I, like you, started out charging less than I should have. When I got overwhelmed or felt “this isn’t profitable enough for me to go at these rates” then I raised them. Substantially. I’m still in business, so for me it worked out.

    – Remember as well that your competitor is NOT West Elm. They make inferior products that are mass produced and do NOT reflect the pride of owning a locally, handcrafted piece of furniture. This doesn’t mean “gouge my customers.” At some point, if our economy doesn’t completely collapse, people will hopefully start to remember that “you get what you pay for.” You can buy the cheapest toy from who-knows-where and let your child put it in his/her mouth. Or, you can spend more time and money researching and purchasing a safe, quality product. You can buy discount beef at a supermarket, or you can pay more to buy from a local butcher or farmer.

    Whew. Sorry for the long and meandering post.

    Keep it up!

  3. JonKi

    The other option re: the 5 hours of work that you might (or might not) perform would be to treat that as contingent/contingency. Not unreasonable given that this is a request for a new design you’ve not done before. Having said that a delta of close to 40% is probably a bit more than most customers are going to swallow, but something like 15-20% on a new design is probably not out of the question.

    Maybe not something you want to try out with your first customer, but as projects get larger/more complex might be something you want to consider.

  4. Pingback: Project Progress – Thomas Walnut Dresser « Upper Cut Woodworks

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