Quoting Check List

Im trying to build a quoting check list. It seems we always miss something when quoting a part. Or at least I hear it a lot that we need to call the customer and see if they are willing to cough up more for blah(I hate doing this and they hate me calling, why cant we get it right the first time). My list includes the following but looking for more of what we are not thinking of. Maybe the admins could make a sticky out of this post as I think it could help a lot of folks.

Do we have to build, rebuild, or alter their solid models
Do we have to build, rebuild, or alter their blue prints
Material Costs including shipping, cutting
Labor Costs(ie shop rate)
Time frame they need the parts and our time frame we can make them(is employee overtime needed?)
Tooling, special non-stocked tooling, custom made tooling needed
Building Jigs & Fixtures for making the parts or for measuring them
Finishing the parts(ie. tumbling, sand blast, heat treat, coating with special magical slippery stuff, etc)
Boxes, shrink wrap, bubble wrap, plastic netting wrap, etc(msc only sends so many boxes to use,lol)
Delivery charge, handling charge, if not FOB

Other Sub contract costs besides finishing:
Welding, EDM, stress relieve, design

Documentation, inspection, inspection reports, certs if required

Tolerances required (i.e. tighter tolerances can lead to more internal rejects, more processing, more expensive tools)
Trips/visits necessary to customer site and/or expect conference calls to review their designs, etc.
Cost of time and material to print (or reprint) documentation if it's significant (large prints you have to have done outside)
Payment terms (charge more if they want 90 days, get your 3% or whatever if it's VISA)
Environmental charge (LOL, "just because you can", charge them for disposing of nasty shop rags, used oil, etc.)
As mentioned above by RJT, anything related to extra documentation; especially PPAPs!
Material costs need to reflect overall yield and usability for other jobs (i.e. you only use 1/4 sheet but no one else ever uses that, they bought the whole sheet just like you had to)
If we're talking big jobs that can take up a lot of space in your shop that are susceptible to hold-ups, you need to allow for that.
Sounds like your work is "complicated", might need to allow for a communication factor (i.e. complicated work that is poorly documented can lead to a ton of phone calls, emails, hold-ups, changes, etc.). I have the feeling you're aware of this but don't hesitate to throw in some extra allowances or make stipulations about that in your estimate. Have to balance that carefully with quoting too high and they go elsewhere but maybe that's a good thing (you don't need work that you ultimately lose money on).

Good luck and I laud your efforts to not leave money on the table!
The Dude

Phone calls and Emails! you absolutely nailed that one and everything else is great too!

How fast did they pay last time...

It's obvious, but still worth mentioning. Assumptions. These get you every time. Don't assume, pick up the phone and ask. It shows diligence.

Another thing to keep in mind, is you often know more about best practices that your customer. It is always worth picking up the phone and ask for clarification from an engineer. Don't be rude about it, but simply ask questions. I've been on both sides of those conversations. As an engineer I was glad to hear where I could drastically reduce the price by just opening the tolerance a small amount on a feature. It is great start to a business relationship versus just a transaction.

Another general quoting practice, follow up! With our quoting software that shops use, I can never stress this enough. Everybody gets busy but if you can set up a process to simply reply by email a few days or a week after sending a quote and not hearing back from them, this can land you a lot of work that otherwise you would have lost.

nitrousmudbogger said:

Phone calls and Emails! you absolutely nailed that one and everything else is great too!

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I'll PM you my address so you can start sending The Dude his commission checks!

The reality is that we are machinists, not fortune tellers. If the part hasn't been made before, than anyone who expects a quote down to the penny is probably not worth the effort...you will lose money no matter how much you build in for quote line items. I have found that establishing a criteria for vetting new customers is just as important. Thinks like not having prints, or sending along designs from unlicensed software, kickstarter types... not that doing business with folks who fit this criteria is bad..but it will certainly shape the quote in the end.
And, don't forget about the NET30 or 45 crowd! just because a customer is an established company, does your quote take into consideration the actual cost of lending them the money it costs you to make their part(s), and meet your overhead while waiting for payment?

GoodDoug
You hit that nail on the head when you said lending them the money!! It really pisses me off for these well established Big Companies to push there payments out. We have one that has gone from 30days to 45 days and now they have it on 60days which kills your cash flow. Makes you just about have to go take out a loan to pay bills because they put the squeeze on us small businesses to fund there companies. If you push they go to there secondary vendors and take you out of the picture. Not really fair business , because you are expected to pay your bills in 30days.

Bubba Machinest said:

GoodDoug
You hit that nail on the head when you said lending them the money!! It really pisses me off for these well established Big Companies to push there payments out. We have one that has gone from 30days to 45 days and now they have it on 60days which kills your cash flow. Makes you just about have to go take out a loan to pay bills because they put the squeeze on us small businesses to fund there companies. If you push they go to there secondary vendors and take you out of the picture. Not really fair business , because you are expected to pay your bills in 30days.

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At some point you have to ask whether it is worth having their business. You might be better off letting your competitor have them, let HIS cash flow suffer. I have never fired a customer where I later regretted it. On the contrary, I'd always hear that their next supplier was bitching about not getting paid.

Sounds like you need to increase the shop rate you are using for quoting just to cover the things you miss. Then you could reduce the price for additional quantities of the same part. ummm .... why do that?

On orders with a lot of the same part, we often do a small prototype run to make sure it's what the customer wants. It reduces risk on both sides, but increases overall costs.

It's interesting how many times I bumped a price per part because the customer could not or would not pay within the agreed upon time and the customer went to another vendor only to return 60 or 90 days later...

Enough said.

Hi there my family shop is having the same issues. one clients credit is 45days. but sometimes it takes them almost 2-3 months to pay, and they are one of our biggest clients. But just recently we´ve been doing alot of work for a shipping port thats pays exactly 30days, so what we do now is just use the late paying clients as our savings and use the shorter credit companies to pay bills. So far its been working fine, but always try to look for more clientel. My company is located in central america so many of our jobs is rebuilding and fabricating old parts that do not exist in the market today. But you guys are right on the late payments they do hurt alot, i dont know how many times we have asked for loans from friends and the bank to pay of debts or business expenses. My family business was in one city for about 13 years until business there went south really fast, so we took a risk and moved the entire shop to a more industrialized city. Took us about 2 years to really establish the name, and just this year we really started getting busy. Like working 24hrs straight kind of busy. All im saying is just hang in there and never sacrifice quality work, your work speaks for itself. hope this helps.

custorio said:

Hi there my family shop is having the same issues. one clients credit is 45days. but sometimes it takes them almost 2-3 months to pay, and they are one of our biggest clients. But just recently we´ve been doing alot of work for a shipping port thats pays exactly 30days, so what we do now is just use the late paying clients as our savings and use the shorter credit companies to pay bills. So far its been working fine, but always try to look for more clientel. My company is located in central america so many of our jobs is rebuilding and fabricating old parts that do not exist in the market today. But you guys are right on the late payments they do hurt alot, i dont know how many times we have asked for loans from friends and the bank to pay of debts or business expenses. My family business was in one city for about 13 years until business there went south really fast, so we took a risk and moved the entire shop to a more industrialized city. Took us about 2 years to really establish the name, and just this year we really started getting busy. Like working 24hrs straight kind of busy. All im saying is just hang in there and never sacrifice quality work, your work speaks for itself. hope this helps.

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This sounds like one hard working guy who knows our pain and works his balls off to provide for his family. He knows what it's like and is learning to play the game. 24 hours busy and I'll bet he is at work for most of them Taking care of his family and chasing the American dream south of the border.

Good luck my friend

Make chips boy's

Ron

overflow machine said:

This sounds like one hard working guy who knows our pain and works his balls off to provide for his family. He knows what it's like and is learning to play the game. 24 hours busy and I'll bet he is at work for most of them Taking care of his family and chasing the American dream south of the border.

Good luck my friend

Make chips boy's

Ron

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Thanks Ron,

Well actuallyl im only 24, im going back to college for the fall in Philippines. My family is filipino we opened the shop just by chance. I only manage the shop but during the years ive taught my self to weld and use the lathe and mill once in a while. Had to be well rounded cause it was getting costly hiring more employees so i put it upon my self to learn the trade.Just recently I adapted a magnetic drill to do line boring on an excavator for a client, had to do the mig welding by hand, very good and tiring experience. Im still learning though trying to improve the shop best i can, im actually planning on buying a few lathes and a mill when i fly up to the US to improve shop efficiency. Almost all the equipement we have is more than 60 years old and maybe one taiwanese lathe thats maybe 10 yrs. old. So upgrade for me is my next agenda.
Just hang in there guys, try not to be picky with work. Because i rather complain that i have too much work than complain that i have none. Food for thought. Im glan that there are forums like this that help us all out.