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Mitch;
Goverment school teachers in Texas just got about a 2.50 cent an hour increase in pay to bring thier
fee for fraud to any where from 22 dollars to 30 dollars an hour. Trying to keep my standard of living somewhere near the same as the brainwashers,oops I mean the “teachers” I proposed a two and a half dollar an hour raise for myself,
and was given walking papers instead.
So being on my own again I am charging 30.00 an hour for myself and 20.00 an hour for an apprentice, 15.00 an hour for laborers and marking
up materials 20 percent for everyday items.
It is still not as much as an auto mechanic charges but I can sleep well at night.
brisketbean
Replies
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Mitch;
Goverment school teachers in Texas just got about a 2.50 cent an hour increase in pay to bring thier
fee for fraud to any where from 22 dollars to 30 dollars an hour. Trying to keep my standard of living somewhere near the same as the brainwashers,oops I mean the "teachers" I proposed a two and a half dollar an hour raise for myself,
and was given walking papers instead.
So being on my own again I am charging 30.00 an hour for myself and 20.00 an hour for an apprentice, 15.00 an hour for laborers and marking
up materials 20 percent for everyday items.
It is still not as much as an auto mechanic charges but I can sleep well at night.
brisketbean
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Mitch,
A few years back I bought a manual called "National Construction Estimator" from the Craftsman Book Company. It is a yearly publication with I believe quarterly updates via the internet. The figures for various tasks are adjusted for different metropolitan areas of the country. I also received an inquiry from them asking for a low-down on our rates and pricing. I would assume this is just one of the ways they gather their data. Any chain bookstore should have a current years copy.
*Mitch,As far as set and piece work pricing I think the R.S. Means books are the industry standard although personally I find them confusing as hell on some things. They do give a geographical differential though which may be of some help to you. Estimating isn't the holy grail or a closely guarded secret, I think that the more established guys just don't want to tell you and have you undercut them by a nickel.The best advice I can give you is keep careful job records. Review them frequently and see where you made money (hopefully) or where you broke even or lost. At the end of the year if you turned a profit and it was a reasonable percentage of your gross, then you know your in the ballpark. If not... then raise your prices.To some extent the market will set your pricing as well. Ask for feedback on the jobs you don't get. If a job is lost on price and you were still in the middle of the pack OK, but if you were way over sit down and figure out why. If the phone stops ringing ...lower your prices (or market yourself more aggressively).Charge what your worth. Every time I raise my prices I seem to get busier and get bigger and better jobs.After a few years in business you'll figure out a system for yourself. Estimating is one of the things I like the least about this business, so I won't tell you it gets easier, but after awhile it doesn't seem like such a heavy rock to push anymore. Good luck,Richard Max
*Port has some great advice, especially about keeping and reviewing logs from past jobs. Every bit of anecdotal information you can get is helpful. This means keeping paper than is legible and meaningful to you. Keep a file on every job, aside from the normal paper you will have.Also, as he mentioned, make it a policy to follow-up on your past projects. Some call them "happy calls" designed to find out how the owner likes the job. But it's more than just a call; I send out postcard size mailers featuring a short questionaire.These follow-ups show the customer you are interested in them, help cultivate a business-minded relationship, and will generate good will for your company. Of course, if there are any problems, you will want to be the first to know. The alternative is to have someone out there bad mouthing your company.A old retail trick is to raise your prices if you want to generate an increase in business. But, given the nature of this business, you better be able to substantiate every penny.
*Journal of Light Construction had an exhaustive article on this last year -- see if your can't get a copy. There are a lot of costs that you do not even know you have -- my roofer charges me $40 an hour per man and he has a pretty nifty spiel if you ask him how he gets to 40 -- its all in there and it seems hard to pay a roofer $40 an hour but after you hear his presnetation you are glad that you have that kind of a guy up on your roofs. So, pick a number and be able to say to the customers that ask, exaclty how the number was derived -- the guy may on get 15-20 in his pay check but the rest is what it costs to keep a quality guy/company on site.all the best
*I would advise not getting in any kind of situation or conversation where you will have to explain or justify your pricing.Simply and clearly itemize all the work to be done and state your price.Don't try to "sell" anything.I want my customers(and notice they are customers not clients) to want to buy from ME.I don't want them to feel like I sold them something,and I don't want to feel like I smooth talked them into anything.I really try to keep it simple for the customer.The customer has a problem(his roof leaks).I carefully explain,line by line ,how I will solve his problem for him. What materials,methods ,special precautions,etc.And I list the price.(and my price will not be the lowest).I never tell how much I pay for shingles,labor,flashing,vents etc.The customer is buying the entire package,take it or leave it.I realize as you read this it will seem rather abrupt or rude.In practice ,however, many customers have told me that they went with me because they felt confident I would do exactly what I said I was gonna do.(Steve ,you really seemed like you had done this a time or two before)(and believe me you better have confidence in the company that is gonna tear the roof off your house and potentially expose all your wordly possessions to the elements)Try to walk the fine line between abruptness and visible self confidence.I am sure that those more creative and artistic business' that specialize in trim work etc. would have to use a more polished approach.I don't feel that keeping track of your profit margin as measured against your yearly sales would be of much use.It would be of much more use to keep a tally of what you were making off of each project and ensuring that EACH project was profitable. That way you won't find out at the end of the year that you made most of your profit on a few jobs and were working for free the rest of the year.When in doubt.price it to high. Better to stay at home and loose money than to WORK and loose money.Best of luck to you all ,Stephen
*Add all your costs for materials, labor, tribute to the State, etc. Add to that the amount of money you could earn by working for someone else as your cost. Add to that the interest income you could get if the money you have in equipment, etc was invested wherever you would put it. Add to that total a percentage you are happy with as a reward for the risks of business.Then present that number to your customers like Mr. Hazlett suggests. Then do the job you promised and then some.You will either make it or you won't. If you do you will know you are doing good. If you don't you will have to review your numbers. But, never allow a book or someone elses numbers to drive your pricing or performance. It is your business, not theirs.Have fun on your adventure.
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Its not that anyone is trying to be close lipped about pricing and formulas, its just a fact that there are about as many ways to price a job as there are types of jobs. I try to use whats called a stick method of pricing. This means that I try to estimate every piece of material that is going to go into that job and figure the labor to install it.It is the most time consuming but also the most accurate and that what we strive for.There are some basic rules that I use to make the process less burdensome. Check into past articles in the Journal of Light Construction, they have done some great articles on estimating and on how to figure overhead and profit as well as hourly wages. Nothing is better than experience.
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After many years of in the school of remodeling carpentry hard knocks, I have recently (4 months) started the first legitimate, licensed, insured business of my career. 13 years of experience in various areas of home improvement have given me a strong foundation on which to build my empire.
One blind spot for me, however, is accurate pricing references. It seems that for some unknown reason others with more experience in this area are extremely reluctant to part with this precious information.
I do understand that location has a great deal of influence on pricing but surely there are some general square and lineal foot guidelines I might use as a starting point. Also piecework items such as doors, cabinets, windows, etc... must have some general pricing structure...
Have been really busy since startup and getting busier and just don't want to lose a bunch of cash because I was afraid to ask the more established contractors out there for a bit of advise...
So remember...What goes around, comes around...
Thanks,
Mitch
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If you want to check out the Craftsman estimating guides, click here. They have several choices including one specifically for remodeling. They're a good guide to start from, just remember to look at the final numbers and ask yourself if they look right, then be willing to modify them if they don't.