how much is a reasonable day rate for a qualified carpenter?
- Thread starter CHIPPY10
- Start date
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How long is a piece of string?
What are you worth? Are you good, do you have proper expensive tools, a van etc. Higher costs = lower net profit or you have to up your price. What profit margin are you working on, do you know?
Do you have lots of work, so your services are in high demand? High demand = higher price etc.
What are you worth? Are you good, do you have proper expensive tools, a van etc. Higher costs = lower net profit or you have to up your price. What profit margin are you working on, do you know?
Do you have lots of work, so your services are in high demand? High demand = higher price etc.
Well, I started on my own in April.
I have a good van that is signed up, we do professional quotes etc, advertise in a few places (one of the highest costs) and I got every possible tool I needed in the year before I went self employed (all good quality tools).
I have had loads of work and about 3 months ago the work started to really pile up. My waiting list got really long so I employed an apprentice and a fully qualified carpenter so now there are three of us. We still have enough work.
People often are surprised when I turn up because they think I'm really young but then they realise I know what I'm talking about and I get most work through recommendations.
I need to work out our profit margins properly but our costs are quite high. Cash flow can be a problem at times when waiting for bigger jobs to pay but we do alright.
I just worry about charging too much and hate asking people for money so I tend to give the best prices I can. I was just wondering about rates because other people such as my painter friend and a tiler I know charge £150 a day.
I have a good van that is signed up, we do professional quotes etc, advertise in a few places (one of the highest costs) and I got every possible tool I needed in the year before I went self employed (all good quality tools).
I have had loads of work and about 3 months ago the work started to really pile up. My waiting list got really long so I employed an apprentice and a fully qualified carpenter so now there are three of us. We still have enough work.
People often are surprised when I turn up because they think I'm really young but then they realise I know what I'm talking about and I get most work through recommendations.
I need to work out our profit margins properly but our costs are quite high. Cash flow can be a problem at times when waiting for bigger jobs to pay but we do alright.
I just worry about charging too much and hate asking people for money so I tend to give the best prices I can. I was just wondering about rates because other people such as my painter friend and a tiler I know charge £150 a day.
Hi Chippy10
Good on you!
IMHO you should keep a close eye on your cash-flow and perhaps try to - if you're not doing that already, for first payments etc - for materials you have to buy for a specific job.
Everyone - us too - normally thinks they are charging too much, but as soon as you start to think the other way around: what are most clients willing to pay you'll be amazed sometimes how much difference - the good way - there is.
I think you should start with just upping your price a bit for quotes, say £ 150, or £145 if you're not happy with raising it too much at once, and see how many still say yes to you. In the event they want to 'haggle' you can easily drop the price a bit - everybody happy.
It's a known fact that when you rise your price and keep you profit margin the same you can afford to have less clients and still earn the same net profit amount at the end. so imagine what would happen if the price rise doesn't effect the number of clients you have!
Good on you!
IMHO you should keep a close eye on your cash-flow and perhaps try to - if you're not doing that already, for first payments etc - for materials you have to buy for a specific job.
Everyone - us too - normally thinks they are charging too much, but as soon as you start to think the other way around: what are most clients willing to pay you'll be amazed sometimes how much difference - the good way - there is.
I think you should start with just upping your price a bit for quotes, say £ 150, or £145 if you're not happy with raising it too much at once, and see how many still say yes to you. In the event they want to 'haggle' you can easily drop the price a bit - everybody happy.
It's a known fact that when you rise your price and keep you profit margin the same you can afford to have less clients and still earn the same net profit amount at the end. so imagine what would happen if the price rise doesn't effect the number of clients you have!
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Thanks WoodYouLike,
Taking prices up in small stages sounds like a good idea.
Can I ask you another question.
Do you get customers to sign their agreement to quote or maybe even a service agreement. I have a couple of times but don't know how much good it would do if I did have any really problem customers.
The reason I ask is because I have just quoted for a really big job that would probably take six weeks to complete (january time). The customer seems really happy with the quote. I'm just worried that if there was any problems with payment I could find myself in real hot water. I asked the people at business link and they suggest I draw up a service agreement but didn't have any template to go by. Any suggestions?
Taking prices up in small stages sounds like a good idea.
Can I ask you another question.
Do you get customers to sign their agreement to quote or maybe even a service agreement. I have a couple of times but don't know how much good it would do if I did have any really problem customers.
The reason I ask is because I have just quoted for a really big job that would probably take six weeks to complete (january time). The customer seems really happy with the quote. I'm just worried that if there was any problems with payment I could find myself in real hot water. I asked the people at business link and they suggest I draw up a service agreement but didn't have any template to go by. Any suggestions?
Hi again
It's always a good and business wise sound idea, specially with larger jobs, to send an order confirmation which specifies your terms of payments (best place to start mentioning your terms of payments is your quotation in fact, we always do).
In our situation we and the client agree to pay 50% of the materials at the moment of ordering (their commitment in fact), 50% of materials on delivery and labour on completion of the works.
I can imagine in your situation the terms could be different, but make sure you're not out of pocket when you have all materials for the job bought and they are at the clients property.
If you want, send my an email and I can forward you our template of the order confirmation (and our quote template too). Also, if you want you can send me a draft of what you had in mind and I can have a look at it?
Cash flow is your life-blood, as my accountant and business adviser hammered into me
It's always a good and business wise sound idea, specially with larger jobs, to send an order confirmation which specifies your terms of payments (best place to start mentioning your terms of payments is your quotation in fact, we always do).
In our situation we and the client agree to pay 50% of the materials at the moment of ordering (their commitment in fact), 50% of materials on delivery and labour on completion of the works.
I can imagine in your situation the terms could be different, but make sure you're not out of pocket when you have all materials for the job bought and they are at the clients property.
If you want, send my an email and I can forward you our template of the order confirmation (and our quote template too). Also, if you want you can send me a draft of what you had in mind and I can have a look at it?
Cash flow is your life-blood, as my accountant and business adviser hammered into me
1) Business References: take then up and phone the business owner. Look for the company names on other vans you see outside. If you discover the customer has started failing to pay his bills in the ordinary course of business you are entitled to stop work.
2) Stage Payments: Establish acceptance criteria in advance for each stage. If they quibble about quality of work for any stage, explain that you must get that stage right before you go onto the next one. Don't get suckered into doing the whole job before you see any money.
3) Change Control: Agree at the outset who has to approve any changes, and how. Changes must be in writing, say what is to be done, what the acceptance criteria are, how much extra it will cost, AND HOW MUCH TIME IT WILL ADD TO THE COMPLETION DATE (you will of course be blamed and penalised for not finishing on the original date). You must establish in advance who must agree these changes. And you must get this person to approve them, in writing, on the agreed document which includes the details I said. You may need an additional purchase order for each additional piece of work. If you are dealing with a husband and wife you may find that one of them asks for changes that the other doesn't like and you may be expected to reverse them at your own expense
4) If you are working with a medium or large business, you must have a purchase order for each job you do. Imagine trying to get payment if you haven't
"Hello, is that Accounts Payable at Universal Conglomerates PLC? When will you pay my bill for £20,000?"
"I need our purchase order number, and I can only pay the amount on the order 90 days after the person who raised it authorises payment "
"Er, Mr Scroggins said it would be OK"
"Hahahahahahaha!"
2) Stage Payments: Establish acceptance criteria in advance for each stage. If they quibble about quality of work for any stage, explain that you must get that stage right before you go onto the next one. Don't get suckered into doing the whole job before you see any money.
3) Change Control: Agree at the outset who has to approve any changes, and how. Changes must be in writing, say what is to be done, what the acceptance criteria are, how much extra it will cost, AND HOW MUCH TIME IT WILL ADD TO THE COMPLETION DATE (you will of course be blamed and penalised for not finishing on the original date). You must establish in advance who must agree these changes. And you must get this person to approve them, in writing, on the agreed document which includes the details I said. You may need an additional purchase order for each additional piece of work. If you are dealing with a husband and wife you may find that one of them asks for changes that the other doesn't like and you may be expected to reverse them at your own expense
4) If you are working with a medium or large business, you must have a purchase order for each job you do. Imagine trying to get payment if you haven't
"Hello, is that Accounts Payable at Universal Conglomerates PLC? When will you pay my bill for £20,000?"
"I need our purchase order number, and I can only pay the amount on the order 90 days after the person who raised it authorises payment "
"Er, Mr Scroggins said it would be OK"
"Hahahahahahaha!"
If you want, send my an email and I can forward you our template of the order confirmation (and our quote template too). Also, if you want you can send me a draft of what you had in mind and I can have a look at [/quote]
Hi, I had a problem with my email but I've sorted it now. I sent you an email. Thanks.
Hi, I had a problem with my email but I've sorted it now. I sent you an email. Thanks.
all tradesmen talk a good wage.
you will certainly earn more money on price work as opposed to a day rate.
price work carries the greater risk for the tradesman.
day rate carries a greater risk for the customer.
it is up to you how much risk you wish to take.
the longer you are in business the better you will get at pricing.
some you will win and some you will lose.
don't get too greedy. if you have put in a high price and it has been accepted, then deliver a high quality job. if you have put in a lean price, never cut corners. accept the loss and move on.
Sound advice noseall.
Our clients know exactly what they pay for labour the minute they accept out quote: fixed price per job, no surprises afterwards.
I know horror stories from clients who had been quoted 150 a day with the promise it wouldn't take longer than 2 days. In the end they had to pay for 4 days due to too many tea-breaks, phone call interruptions, chatting to each other, being away for hours to buy some materials they'd forgotten etc, etc, etc.
You win some you loose some with our our method: if it takes longer than we expected - our mistake of calculating the time wrong, not the client. If it take shorter, client also happy - less days not being able to use the room we're installing in.
Our clients know exactly what they pay for labour the minute they accept out quote: fixed price per job, no surprises afterwards.
I know horror stories from clients who had been quoted 150 a day with the promise it wouldn't take longer than 2 days. In the end they had to pay for 4 days due to too many tea-breaks, phone call interruptions, chatting to each other, being away for hours to buy some materials they'd forgotten etc, etc, etc.
You win some you loose some with our our method: if it takes longer than we expected - our mistake of calculating the time wrong, not the client. If it take shorter, client also happy - less days not being able to use the room we're installing in.
A decorator in Sussex definitely gets £120.....no bull......one I know well....You ARE TOO cheap on your day rate.........think about CORGI "plumbers" £ 200 a day --and ...Jobs on the cards for them locally @ £25k per year
I am exactly the same, I give a price, and if it takes me a day longer than I anticipated, I cut my loses, I never say to the client, 'ah erm I'm sorry but I need to charge you X', like you said I made the mistake, not them.
But it can be very difficult at times, specially when I am stripping paper, as you cant very well go over the clients walls and take pieces off just to see how many layers of paper there is when you are there quoting.
So I say, I will charge you X amount but if I start stripping and find there is 2-3 layers paper, I'm afraid I will have to charge you more, and I also write this on the quote, and they are more than happy with that.
I feel its best to be up front with the client.
Sometimes, I have have finished quicker than I anticipated, so its swings and roundabout.
The other thing that you should consider is what you do in a day. For example, if you had a house full of internal doors to fit, how many would you comfortable fit per day? If you charge £25 per door, and you fit five, then you have earned your £125.00, but if you fit only four you would need to charge of £30 per door.
Spike
Chippy
Try approaching it from another angle ....
How much money would you like to earn in a year, comfortably ?
How much 'work' can you get (are you always mega busy, or do you have a few lean days)
If, for example, you can reasonably expect to 'bill' 35 hours a 5-day week, and would like to earn say £35k a year, across maybe 50 weeks, then £35,000 divided by 1750 (hours per year), works out at an hourly rate of £ 20.
If you start work at say 09.30, finish at 1730 and have a half-hour for lunch, then thats £20 x 7.5 = £ 150 per day.
This is the way I worked it out, based on 35 hours a week and a target annual of XXXX. Much of my work is outside, so in the winter months it can be as low as 30 hours a week, but in summer with good weather I start at 0800 and can still be going at 2000, sometimes 6 or 7 days a week if i've got a lot on and jobs queuing up; so can be actively billing 65+ hours a week. Its all swings & roundabouts.
Also, I spend quite a bit on time on leisure during the winter months, so may only average 3 1/2 days a week. It all depends on what you want, how much you want to earn & what else you prefer doing than work
Try approaching it from another angle ....
How much money would you like to earn in a year, comfortably ?
How much 'work' can you get (are you always mega busy, or do you have a few lean days)
If, for example, you can reasonably expect to 'bill' 35 hours a 5-day week, and would like to earn say £35k a year, across maybe 50 weeks, then £35,000 divided by 1750 (hours per year), works out at an hourly rate of £ 20.
If you start work at say 09.30, finish at 1730 and have a half-hour for lunch, then thats £20 x 7.5 = £ 150 per day.
This is the way I worked it out, based on 35 hours a week and a target annual of XXXX. Much of my work is outside, so in the winter months it can be as low as 30 hours a week, but in summer with good weather I start at 0800 and can still be going at 2000, sometimes 6 or 7 days a week if i've got a lot on and jobs queuing up; so can be actively billing 65+ hours a week. Its all swings & roundabouts.
Also, I spend quite a bit on time on leisure during the winter months, so may only average 3 1/2 days a week. It all depends on what you want, how much you want to earn & what else you prefer doing than work
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