How To Bid A Spray Foam Insulation Job

Bidding on spray foam projects requires a thorough understanding of both the technical and business aspects of the work.

“When quoting a job, it is very important to make sure your numbers are accurate to ensure your business is making a profit.” — Jed Stellmacher, owner at Oak Ridge Foam & Coating Systems, Inc.

Let’s walk through the process to help you bid more accurately so you can increase profitability for your spray foam business.

Calculate Material Costs

Spray foam insulation is typically priced by the board foot. To calculate the material costs for a spray foam job, you need to accurately measure the spraying area and then calculate the foam thickness.

Step 1: Measure the Walls

It’s easy to get a quick and accurate measurement of the walls by using the studs.

Count the stud spaces. Wall studs are typically spaced 16 inches (1.33 feet) apart, so you can use that as a quick guide. Say you’re working on a living room and you count 10 spaces between the studs.
Calculate the wall length. Multiply the number of spaces between studs by 1.33 feet. Following our example, 10 spaces × 1.33 feet = 13.3 feet
Find the square footage. Next, measure the height of the wall. Then, multiply the wall length by its height. The standard height in most homes is 8 feet, so let’s use that for our example. 13.3 feet × 8 feet = 106.4 square feet.
Repeat for each wall. Follow the same process for each wall. Once you’ve gotten the square footage for each wall, add the totals. For simplicity, we’ll say it’s a perfect square with no windows. 106.4 + 106.4 + 106.4 + 106.4 = 425.6 square feet.

Step 2: Measure the Roof

You can quickly measure the roof based on the placement of the rafters — no ladder needed. It follows a similar process to measuring the walls.

Count Rafter Spaces: Ceiling rafters are usually spaced 2 feet apart. Count the spaces between rafters and multiply by 2. Let’s say you count 20 spaces. 20 spaces × 2 feet = 40 feet.
Estimate Roof Height: Count the seams in the plywood on the roof deck. Plywood sheets are typically 4 feet by 8 feet. Use this to estimate the height without a ladder or tape measure. Let’s say you count 5 seams. Since plywood sheets are 4 feet high, 5 seams × 4 feet = 20 feet.
Calculate Roof Square Footage: Multiply the roof length by its height for one side of the roof. 40 feet (length) × 20 feet (height) = 800 square feet. For both sides of the roof, that would be 1,600 square feet.

Step 3: Account for Thickness

Different applications (walls, roofs, crawl spaces) have different thickness requirements to achieve the R-value (thermal resistance) per building codes.

Determine the target R-value for your project.
Divide the target R-value by the R-value per inch of the spray foam type you plan to use.

Let’s say the target R-Value for Walls: R-20 and you’re using closed-cell foam with R-6 per inch. R-20 / R-6 per inch = approximately 3.33 inches.

Step 4: Calculate Board Footage

Now, it’s time to put it all together and determine how much spray foam insulation you’ll actually need for the project.

Step 5: Determine Spray Foam Costs

Once you understand the scope of the job and the board footage, you can calculate the cost of the spray foam you’ll use.

Calculate Cost per Board Foot: Divide the price of one set of foam by its estimated yield Say a set costs $2,000 and yields 4,000 board feet. 2,000 / 4,000 board feet = $0.50 per board foot

Calculate Total Material Cost: Multiply the cost per board foot by the total board footage needed for the job. If the job requires about 1,500 board feet, 1,500 board feet × $0.50 per bd ft = $750 material cost

Estimate Labor Costs

On top of materials, be sure to calculate and factor in labor costs. Estimate your time investment, including the time for administrative tasks, preparation, application, and cleanup.

Administrative tasks: Running a business includes significant administrative work, including responding to calls and emails, meeting and site inspections, ordering necessary spray foam supplies and equipment, scheduling, preparing proposals, and more. Keep track of that time to establish a baseline and factor that into your ongoing bids.
Preparation: This includes time spent organizing the site and setting up equipment, safety barriers, and ventilation. Time varies depending on the project, but about 1-2 hours is a safe bet for a standard residential project.
Application: This is the time it takes to spray the foam and ensure quality. Spraying 1,000 square feet might take around 4-6 hours but can vary depending on the surface and project complexity.
Cleanup: Cleanup involves restoring the site to its original condition post-application. This step is essential to customer satisfaction. Typically, cleaning up takes about 1-2 hours for residential projects.

Your hourly rate may vary depending on experience levels and competitor rates in the area. Do some research of other companies offering similar spray foam application services in the area and use that as a starting point to find a competitive rate.

Consider Other Cost Factors

Beyond labor and materials, there are other factors to consider when bidding. Quick turnaround times or overtime, equipment, safety, and customer loyalty initiatives can all impact your final bid.

Rush or Overtime Projects

If the project timeline is tight or work needs to be done outside regular hours, factor in overtime pay.

Standard Overtime: 1.5 times your regular hourly rate.
Double Time/Rush: 2 times your regular hourly rate, often for holidays or special circ*mstances.

Equipment Costs

Factor in the cost of equipment when establishing a baseline bid. Your rate should cover necessary equipment, ongoing maintenance, and wear and tear.

A mobile spray foam rig will run you anywhere from $55,000-$125,000, including a spray machine, hoses, spray guns, and transfer pumps.

In addition to the spray foam equipment itself, there may also be costs for safety gear, PPE, and other equipment.

Work with an experienced supplier (like Oak Ridge) to determine how fast you need to recoup that investment and what ongoing maintenance/replacement costs may look like to factor those expenses into your bid.

Overhead and Administrative Costs

Much like you have to account for administrative tasks in your labor estimate, you also have to consider general overhead when figuring out your bids and baseline costs.

These costs can vary depending on your business but may include:

Rental & utility costs (storage, space, equipment, etc.)
Insurance
Travel expenses
Business licenses and permits
Office supplies
Electronics (computers, phones, etc.)
Business software/subscriptions
Legal support
Marketing/advertising (digital ads, promotional materials, trade shows, etc.)
Accounting support
Professional development and spray foam equipment training

If you expand your business to include employees beyond yourself, you’ll also have to factor in employee benefits and compensation.

Customer Loyalty

Keep in mind that sometimes losing a bit of money or undercharging for a project can ultimately work in your favor.When bidding, consider monetary incentives to build customer loyalty and increase competitiveness.

For example, you might offer significant discounts or promotions during slower periods to help drum up some business and boost brand recognition before heading into the busy season.

You may also offer a small discount to secure large-scale jobs, as this is often more profitable and efficient than taking on multiple small projects. These big projects can also lead to significant referrals and name recognition in your service area.

Profit Margin

Set revenue goals and adjust your pricing accordingly to increase revenue. As a business, you don’t just want to break even on projects, you want to make money.

Many in the industry just double your material costs from the get-go when bidding. Others add in their necessary profit at the end.

Simultaneously, continuously look for ways to reduce expenses, such as discounts for bulk purchases from your spray foam supplier or good deals.

The typical profit margin for a spray foam business can range from 15% to 50%, depending on a number of factors including location, material costs, and operational efficiency.

See a Bid in Action

Let’s put this all together. Here’s how to bid a spray foam job considering the factors noted above.

Project Scope: Insulating a 2,000-square-foot attic with a required foam thickness of 4 inches.
Measurements: Calculate the surface area (2,000 square feet) and volume of foam required (2,000 square feet x 4 inches = 8,000 cubic feet).
Material Cost: If the foam costs $0.50 per board foot, then the material cost would be 8,000 cubic feet x $0.50 = $4,000.
Labor Cost: Estimate the labor hours required (e.g., 2 workers for 8 hours each at $25/hour) = $400.
Equipment and Overhead: Include equipment usage ($150) and overhead costs ($200).
Total Cost: Material + Labor + Equipment + Overhead = $4,000 + $400 + $150 + $200 = $4,750
Profit Margin: Add a 15% profit margin. $4,750 x 0.15 = $712.50. $712.50 + $4,750 = $5,462.50
Bid: Round up the proposal amount for a clear and even presentation. In this case, $5,500.

By following these steps, new applicators and contractors can develop accurate, competitive, and profitable bids for spray foam projects.

Keep Your Spray Foam Business Competitive

If you’re just starting a spray foam insulation business or looking to grow your existing business, Oak Ridge Foam & Coating Systems, Inc. can help.

With years of experience in the spray foam and polyurea coating industries, we can help you build a competitive business. From competitive pricing on spray foam and equipment from the top manufacturers to ongoing business support and training, we’re here for you every step of the way.

Connect with our team more to boost your spray foam business today.

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How To Bid A Spray Foam Insulation Job - Oak Ridge (2024)