No Sales and Marketing plan can be effective without incorporating pricing schemes. Every job incorporates three components—the cost of the job, the job’s contribution to profit and the job’s contribution to overhead. Since the company’s overhead is fixed, sales above the break even do not require a contribution to overhead. With effective sales projections and control of the break even, the company can know how much and how often it can “sharpen the pencil.” Market penetration can be generating while maintaining pre-determined profit levels. There must be a pricing plan designed to “win” the game.


Estimating is a sales function. Sales and Marketing brings to estimating a pre-determined amount of appropriate bid opportunities.[1] The responsibility of estimating is to accurately determine what the companies direct cost will be of each potential project (take-off). It is not the job of an estimator to determine the Price. Pricing is done according to the Sales Plan and incorporates the break even of the company and other company objectives. The estimator is held accountable for the accuracy of the bid—which creates the budget for the field. The job budget is what the field must focus upon—not the price. All incentives have to be based upon the budget.

Although the market and your competitors control pricing, the market or your competitors cannot control your pricing strategy. Pricing must incorporate your real costs and pricing strategies based upon break even and company objectives. Pricing is an entirely separate function from the take off which is easily delegated.

[1] This is how you hold Sales and Marketing accountable. The company plan sets the standards as to what an appropriate bid opportunity is and how many opportunities per week/month/quarter or whatever they should generate. This of course is based upon the bid to award ratio.