Hey gang! I’m new to the sub-contractor thing. I’ve contracted my own jobs before and came up with a fair price for my work. I’ve been satisfied and they have paid, all’s well. I’ve recently hooked up with a developer who can keep me inside doing all his finishing work. Is there a fair hourly pay for a guy who has all his own tools and generator? Or is it better to get a price by the square foot? I like to cruise while I work, and as I get better and more efficient I’m thinkin’ a sq/ft price better. Any input on current rates /hour or sq/ft.
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Id say based on your post if you are comfy with the sf pricing, then have at it - you are probably correct that what pays the bills today makes the new truck payments next year, and sends you on vacation after that. Things I charge that route I have an incentive to learn efficiency on. Over time, the hourly goes up.
"If you pick up a starving dog and make him prosperous, he will not bite you. This is the principal difference between a dog and a man." - Mark Twain
Hey RW did you get the e-mail(s) I sent you regarding testing the beta version of the the new FileMaker 7 based estimating program I developed?
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I did, just havent acted yet. Between trying to keep a schedule, daycare, a hormonal spouse (preggers), and couging up what looks like green slugs . . ."If you pick up a starving dog and make him prosperous, he will not bite you. This is the principal difference between a dog and a man." - Mark Twain
Just checking. I don't think I've seen you online in months until yesterday which I just thought was ironic. I had a few users I e-mailed whose e-mail addresses are no longer valid and those bounced back to me. Just thought I'd ask anyway.
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beeb ".... Is there a fair hourly pay for a guy who has all his own tools and generator? "
Hmmnn I'll just plug in my standard reply to the first part of that question that I use whenever it comes up:
"Where Did the Money Go? will teach you the accounting basics you need to keep track of your business...and find out where the money goes!". In it you'll follow a character Bob Bird as he sets out on his own as a first time business-owner-contractor and it will give you a basic overview of the accounting principles you absolutely need to know and understand. In the section of the book entitled If My Accounting System Is Computerized, Do I Need To Know This Stuff? she writes " You don’t need to know everything about accounting. You do need to know everything in this book...as a bare minimum!" and I wholeheartedly agree.
Her other book How Much Should I Charge? which I just noticed is temporarily out of stock with her distributor but available through Amazon (I just ordered through Amazon and got a copy for one of my contractor consulting clients in just three days) is about the actual mechanics of how to set your hourly rate and price.
When you ready to get down to the actual work of setting you hourly rate there is an Excel spreadsheet I created that you can download from one of my company websites. I've been calling it the "The PILAO Worksheet" which is an acronym for PROOF/Indexed/Labor Allocated Overhead. It works right along with the principles that Ellen Rohr talks about in her books and Irv Chasen of PROOF Management Consultants talks about in his seminars. You'll probably want to read an article Mr. Chasen wrote about this type of markup method in last January's JLC called Allocating Overhead to Labor Makes Financial Sense.
I think the stuff I've mentioned up to this point while perhaps the most important stuff for someone just starting out is not necessarily what really interests them but BELIEVE me when I say IT IS THE MOST IMPORTANT STUFF TO GET DOWN AND UNDER YOUR BELT.
In Chapter 5 of Gerstels book (Estimating and Bidding) and more specifically on pgs 167 through 168 Gerstel talks about using what he calls a "Capacity Based Markup" which is the same thing as what is otherwise known as a PROOF or Indexed or Labor Allocated Markup which Irv Chasen
Ellen Rohr and I all talk and write about and why it's a safer
better bet for a new contractor with a varied mixed of projects to use.
As for the second part of the question: "Or is it better to get a price by the square foot? I like to cruise while I work, and as I get better and more efficient I'm thinkin' a sq/ft price better. Any input on current rates /hour or sq/ft. " Don't get into the folly of SF pricing without reading this first. The Hidden Dangers of Square Foot Estimating.
In a nutshell however if you really want to get somewhere in this business track everything you do and start to build you own database or cost book of unit prices that you'll charge for your services over time that are based on #1 how long you think the task will take. #2 What your true accurate hourly rate is and #3 the up-to-date costs of the materials it requires.
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so many different situations for me to feel comfortable with charging ####sq ft price.
I'd charge by the job.
and personally I'd never pay any of my subs time and material....I want a set price. I have enough to worry about.
Be well paid is all
a...
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