The estimating process is just that, its an estimate or an educated guess. Companies many times will add to the beginning of a quote a process step called Engineering. Engineering can mean many things including
- CNC Programming
- Design Work
- Creating Solid Models
- Creating Prototypes
During the estimating process it is key to include these costs into your quote. Things to consider is this charge can be either amortized into the unit costs or as a separate charge. The nice thing about amortizing the costs into the piece price is that a repeat job your profit will go up because this tasks has already been complete. A separate charge has the advantage of lowering the price to the customer for future job orders which may give you a pricing advantage in the long run.
Hourly cost for these engineering tasks need to be taken into consideration based on the cost of the employee completing these tasks.
Lastly, a key consideration if you do lots of engineering work is becoming a partner which gives you a head up on your competitors.
Take a look at an ERP system that handles engineering tasks at