Pricing Work

P123_2

CAN ANYONE HELP!
I HAVE BEEN A PAINTER AND DECORATOR FOR 15 YEARS, I WANT TO START UP A LTD COMPANY AFTER CHRISTMAS. THE ONLY PROBLEM IS I LACK THE TRIANING NEEDED TO ESTMATE AND PRICE JOBS AS WORKING FOR A FIRM DOES NOT TRAIN YOU FOR THIS. CAN ANYONE ADVISE ME ON HOW TO TACKLE THIS PROBLEM. EG/ courses available, websites etc.........
THANK YOU

Nelski

Hi P123 and good luck with the new business venture (if your anywhere near Warrington I would say you will be well busy!)
I would start by visiting your local business link which I found really helpful for the logistics of setting up your business. The banks and BS's offer some great software for planning your sales and marketing so go and visit lots of them and see what they will offer. For your type of business the local networking groups can be really useful (breakfast meetings and such like - but be careful not to pay lots to attend some are rip offs)
Decide how much you would like to earn (ideal world) and how much you need to earn (to live!) add on any tax/ insurances/ expenses your business well have now consider how much you would want to be working (and what is reasonable to enable you to have some time off) Add in to the mix that you may have quiet times like Christmas or Summers hols and what you should end up with is daily rate. Its very much a rough guide but it helped me when I started - oh and remember not to charge too little! (People whilst they want value will generally choose a mid range quote so you dont want to always be the cheapest)
All of this is just my opinion but it has worked really well for me - good luck and pm me if you want any more info.
good luck
Nels

P123_2

Thanks Nelski

Pennywise

Don't underestimate your expenses - virtually every new business start-up is shocked at the costs involved -get quotes for insurance (public liability and equipment cover is a must) and "cost-in" the purchase price and running costs of a suitable car or van - even if you're using your own, you need to be saving towards a replacement a year or two down the line. Don't forget the extras such as more telephone calls to customers and suppliers, printing of business cards, letterheads and invoices, computer and consumables, postage, equipment (brushes, turps, ladders, planks, etc all need replacing and need to be provided for).

Don't forget materials when doing your estimates - even masking tape and brushes add up, not to mention lining paper, paste, undercoat, filler, etc. Make sure you include enough in your estimate to cover these costs - they should not be included in your hourly rate.

Cost-in your travelling costs and time. You should be charging more for a job that's 10 miles away than if the job was on your street.

Be very specific with your quotations. If you give an exact list of the work you will be doing, it shows you have thought properly about the job and also gives you the power to charge more for "all the little extras" that the customer will undoubtedly want. For example, if you are quoting for re-papering a room, give your quote for 1. removing old paper, 2. hand lining paper, 3, hang wallpaper. Then if there are cracks or holes to fill once you've taken off the old paper, you have the option to "give a price" for repairing the wall, or alternatively just hanging the new paper anyway. If you weren't specific with your quote, you could find yourself spending time and materials on repairing the walls - work that the customer was expecting you to do under the estimate!! Even if the "extras" are just say £10 per job, it all adds up, the customer hardly notices, and you're getting money you wouldn't have otherwise got. The extras are the difference between profits and losses for a lot of small business tradesmen!

Adopt a relatively high hourly or daily rate and be prepared to give discounts. If you were thinking of £10 per hour, go for £12.50 instead and offer discounts for OAPs, or for your quieter times. If you go in too cheap, you'll soon be too busy and miss out on the more lucrative work that is harder to find. Offer a discount for work close to home (saving travel). What you don't want to do is end up doing cheap work at busy times, i.e. height of summer - make sure you can always charge your highest rate for the peak times.

P123_2

thank you very much pennywise

Debt_Free_Chick

Here's something to think about.

Assuming you will only work Mon-Friday then there are only 261 working days in the year. Deduct bank holidays (assume you won't work them) and a further 20 days for four weeks holiday and you are left with about 230 working days.

You need a day a week set aside to deal with invoicing, expenses, bookwork, tax, VAT, quotes etc ... so deduct another 46 odd days. That means you have to earn a full year's salary in 184 days.

So if you need or want to earn £30k a year, you need to be charging £163 a day or roughly £16 per hour, if you intend to work a 10 hour day.

All this assumes that you will charge out materials at cost. Of course, if a modest markup is appropriate, then that will also be profit. But bear in mind that some customers will want to supply their own.

So .. how many hours a day and days a week do you want to work? How much holiday do you want and how much do you need or want to earn?

HTH

Poppycat

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