# How to price your work



## katoman (Apr 26, 2009)

James, thanks for the answer, but that's not what I meant. I'll try again -

Here's an example - employee's pay $20/hr. Add - 4% vacation, 4% stat.holidays, 2% for training, safety courses. etc.

I take the $20/hr. multiply by 1.5 and that more than covers the cost of the employee.

Now, my comp rate is 8.6% Here's my question - should I add that on to be shown seperately, or roll it into the markup on the employee?

Example - if I took the $20 multiply by 1.7, I more than cover the comp.

Downside is it's starting to push the limits on what can be charged for a worker.


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## rbsremodeling (Nov 12, 2007)

katoman said:


> James, thanks for the answer, but that's not what I meant. I'll try again -
> 
> Here's an example - employee's pay $20/hr. Add - 4% vacation, 4% stat.holidays, 2% for training, safety courses. etc.
> 
> ...


--------------------------

I would apply a markup to it but it does not necessarily have to be the standard 1.5 you use. You could use 1.2 just on the comp rates and that would probably be fair and keep costs in line.. 

I do think some type of markup should be added to it..

If the 1.5 applied now covers all your expenses and profit then using a smaller markup on the comp should be a safe move..

You could also try a few bids with the 1.7 applied across the board and see how people react (if your in a position to do that) if you get little or no opposition from the new prices then just apply it to all your bids in the future.


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## Mike's Plumbing (Jul 19, 2010)

It should be as simple as job tracking. If your tracking better than your bid you should have no worries. I track my bid times with my goal times. I always have a goal I try to hit.

For a plumber our most expensive "big tool" would be a drain cleaner so I guess it's different but if I need a tool I'm buying it no matter what the numbers say.

Were still comparing apples to oranges though. Angus and I are 1 man shops, vs some of you with a crew. That's really quite a diference when you have emp. to consider.

You guys in remodeling must have certain numbers that's a baseline for bidding....I'm talking about sq foot stuff that creates an entry level for the bid. Then I would imagine you increase your numbers for things like unusual soffits or a cut up roof line etc. 

Once you hoave those numbers have you ever broken the job up into componants and did motion studies?

Just wondering, I'm just a knuckle dragging plumber so.....you know........

Mike


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## JamesDibben (Apr 5, 2010)

rbsremodeling said:


> I am building a few programs for estimating, markup costs etc for phones, laptops etc..
> 
> I will let you know so you can be a guinea pig (I mean beta tester).
> 
> Most of the stuff out there is either to simple or overly complex we need something on the market right down the middle that you can add to as you progress in the biz


That sounds great. I do have the iPhone 4 as well.

I'm having trouble finding software that lines up with your description. I'm sick of trying to get excel to do what I want. I would like an easy way to expand depending on the size of the company.

I also work with manufacturers like cabinet and counter top shops. I assume this software will be able to integrate material costs for that type of environment as well?


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## WarnerConstInc. (Jan 30, 2008)

I just charge the same as the local Doctor's, no one bitches about their prices.


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## Mike's Plumbing (Jul 19, 2010)

rbsremodeling said:


> --------------------------
> 
> I would apply a markup to it but it does not necessarily have to be the standard 1.5 you use. You could use 1.2 just on the comp rates and that would probably be fair and keep costs in line..
> 
> ...


 
I see what your saying. Rbsremodeling is right, you have to kind of feel it out. Regardless of how you choose ityou still know what your numbers are going into it. It will either work or it wont.

Mike


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## ApgarNJ (Apr 16, 2006)

I used to be anal about my numbers but I am happy just knowing I am making money, making profit, paying all my bills in this economy when many others are not. I feel for them. Not that I don't work my ass off for it, I just know that I'll go crazy if i focus on every single CENT that goes in/out on a weekly/monthly basis. 

If I have to make a major purchase. I figure out what the payment will be if there will be a payment, and factor that into a realistic hours worked per year and adjust my hourly rate accordingly. 

We can only adjust our rates so much, before you are running yourself out of business, there is a line that some people cross and then they can't make enough to support what they thought they wanted, or needed in their business. Those people usually fail eventually.


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## rbsremodeling (Nov 12, 2007)

JamesDibben said:


> That sounds great. I do have the iPhone 4 as well.
> 
> I'm having trouble finding software that lines up with your description. I'm sick of trying to get excel to do what I want. I would like an easy way to expand depending on the size of the company.
> 
> I also work with manufacturers like cabinet and counter top shops. I assume this software will be able to integrate material costs for that type of environment as well?



Yes it will..


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## ApgarNJ (Apr 16, 2006)

rbsremodeling said:


> --------------------------
> 
> I would apply a markup to it but it does not necessarily have to be the standard 1.5 you use. You could use 1.2 just on the comp rates and that would probably be fair and keep costs in line..
> 
> ...


in my experience with employees, you gotta charge more than 1.5, at least where I am. Work comp alone is 15% or more of their income. then SS, and other expenses, I factor x2 at the minimum for any employee and that usually gets bumped up above that number.


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## katoman (Apr 26, 2009)

ApgarNJ said:


> in my experience with employees, you gotta charge more than 1.5, at least where I am. Work comp alone is 15% or more of their income. then SS, and other expenses, I factor x2 at the minimum for any employee and that usually gets bumped up above that number.


I'm talking costs, P&O are on top of the number I carry for the employee cost.

I'm at 1.5 now, and it actually will cover the comp., but it's tight.


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## JamesDibben (Apr 5, 2010)

katoman said:


> James, thanks for the answer, but that's not what I meant. I'll try again -
> 
> Here's an example - employee's pay $20/hr. Add - 4% vacation, 4% stat.holidays, 2% for training, safety courses. etc.
> 
> ...


The only way I know to help is give you a screen shot...hopefully I can explain it well...










Okay, on this spread sheet I set your $20.00 rate and this fictitious job takes 10hrs so $200.00 is your hourly expense. I changed the work comp to your 8.6 number and included the liability number and matching FICA for a total of a 16.57% mark up. This example does not have the vacation holiday and training included.

The 35% is overhead and the 20% is profit margin for a total of 55% or 1.5. I actually do the 'divide by 45%' trick to come up to $518.08 as my charge for this 10hr job that my employee goes and does for me.

Does that help?


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## JamesDibben (Apr 5, 2010)

PS. I hired a freaking consulting company and paid them over 40k (don't ask) to teach me this crap (okay, you can ask but it's bloody!).

I'm more than happy to just give it away! If anything just to spite them! :furious:


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## ApgarNJ (Apr 16, 2006)

if it's 1.5, shouldn't it be 582.85?

divide by 45% and you 518.08.


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## katoman (Apr 26, 2009)

James, thanks for that. The great thing about this thread is the exchange of how others do things. Using your example here's how I would price that job -

One man 10 hrs. at a cost of $30/hr. (that's $20x1.5) = $ 300.00

Add 20% P&O 60.00

Total $ 360.00

Now in my business I don't do 10hr jobs. The one I'm on now I have 4 men, job duration approx. 4 months.

My client would not pay the amount you show, although it seems like a fair amount for a one day job.

Also, I'm marking up all materials and subs the 20% also. So that increases 
my profit margin.


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## JamesDibben (Apr 5, 2010)

katoman said:


> James, thanks for that. The great thing about this thread is the exchange of how others do things. Using your example here's how I would price that job -
> 
> One man 10 hrs. at a cost of $30/hr. (that's $20x1.5) = $ 300.00
> 
> ...


Yeah, this has been real fun!

I make my living on 10hr jobs. Even the apartment buildings we do I break down this way because we are just installing the cabinets in the kitchens.

Now, we also bid some prevailing wage jobs and I have to pay my guys $36.00 an hour.

On those I run 40% total margins. With such a higher wage rate I can't do that 55% stuff either. I don't need to!


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## katoman (Apr 26, 2009)

I see we are in different areas of construction. I, being in the residential renovation area, I could never get jobs at a 40% margin.

Just saying. The rates I'm charging now (also we have a 13% tax on top of my total price) are pushing the limits. 

I should change customer bases :thumbup:


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## Mike's Plumbing (Jul 19, 2010)

katoman said:


> I see we are in different areas of construction. I, being in the residential renovation area, I could never get jobs at a 40% margin.
> 
> Just saying. The rates I'm charging now (also we have a 13% tax on top of my total price) are pushing the limits.
> 
> I should change customer bases :thumbup:


You should be able to get close if your super efficient, like start a still to make your own fuel and your own beverages.....two birds one stone.:laughing:

Mike


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## JamesDibben (Apr 5, 2010)

Wow, and I do so much crying around here!

I have a friend in Chicago who works for a big mill-work company. They sell several lines of cabinetry. He told me on Friday that the installers there are getting $65.00 per box!

I told my guys and they wanted to move!


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## Mike's Plumbing (Jul 19, 2010)

I know a carpenter that orders top of the line studs for building houses. He says he does this so he doesn't waste time with bad lumber. He swears it saves him money in the end. Don't know much about it other than he does very well for himself. I can't imagine lumber being that bad but I guess it is.

Mike


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## mahlere (Aug 6, 2006)

JamesDibben said:


> The 35% is overhead and the 20% is profit margin for a total of 55% or 1.5. I actually do the 'divide by 45%' trick to come up to $518.08 as my charge for this 10hr job that my employee goes and does for me.
> 
> Does that help?


it's not a 'trick', it's basic accounting...it's the difference between markup and margin...if you don't do it, you are lying to yourself....



katoman said:


> James, thanks for that. The great thing about this thread is the exchange of how others do things. Using your example here's how I would price that job -
> 
> One man 10 hrs. at a cost of $30/hr. (that's $20x1.5) = $ 300.00
> 
> ...


$360 * 20% = $72.00

$360 - $72.00 = $288.00

so, you are giving up all your profit without even knowing it...

$360/0.8 = $375.00

$375 * 20% = 75.00

$375 - $75 = $300....

one way you earn a profit, the other way you look at your P&L at the end of the month/year and say "what happened?"


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## Jeff G (Apr 5, 2010)

mahlere said:


> see Rory, dead already...now, talk about the proper way to read a level, and you'll be at 10 pages in a day, and it will live for a month...


I can assure you that the information contained within this thread is *NOT* dead, as I for one will be benefiting from it from here on out. And I know I can't be the only one. Isn't helping someone out (especially during such a time that we are currently living under and so many folks are struggling immensely) enough to warrant posting in this thread? 

I may be one of the few here (although I seriously doubt it) who will definitely do whatever I can to help someone in need out. These are not normal times we are living in and in my humble opinion, it calls for me (and anyone else who is willing and able) to pitch in to help those of us who are struggling right now. I'm just not getting all the pessimism. Or at least posting here. What are you accomplishing by doing so? I would suggest it isn't anything positively helpful.

Edited to add: I just wanted to mention that I am eternally grateful for those who took the time (and I know it does take time to respond with some of these posts here) to post valuable, helpful information. I thank you kindly!


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## CookeCarpentry (Feb 26, 2009)

mahlere said:


> see Rory, dead already...now, talk about the proper way to read a level, and you'll be at 10 pages in a day, and it will live for a month...


I think this is a combination of many things.

1. The guys that know their numbers, don't want to post in a public area.
2. Guys that don't know their numbers, and don't want to admit it.
3. Guys that "think" they know their numbers, and just because they can buy a new tool on Friday, think they are successful, and therefore think their numbers are a top secret thing and want to keep others out.


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## Cjeff (Dec 14, 2009)

I am glad we can help each other out.
My take on it is that many contractors are skilled tradesmen first and business is what we do because we have to.
I for one did not go into 'Business' to go into business.

I became a carpenter then by default really went out on my own and now find i do not have the business knowledge needed and now am trying to learn.

I think many will continue to fumble with little business knowledge as they run their businesses. For whether we like it or not each one of us out on our own are running a business, and it is largely up to us whether it succeeds or fails.

As a Solo guy I need to know:
1. How to do the work
2. How to run the business
- Financial
- Promotional/advertising
- Sales

I am sure there are more.

My experience and expertise is in #1 I now need to learn #2, really should have long ago.

I feel many won't but you are right if we can help each other and some others along the way that's all cool:thumbup:


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## Jeff G (Apr 5, 2010)

Cjeff said:


> I am glad we can help each other out.
> My take on it is that many contractors are skilled tradesmen first and business is what we do because we have to.
> I for one did not go into 'Business' to go into business.
> 
> ...


And being a "solo guy" myself, I can relate to everything you've said. I know how to do the work, and at an exceptional level of quality with a focus on customer satisfaction. It may sound silly to some here, but I am committed to improving the lives of my customers by providing quality services, products, and solutions that earn their trust and build lifetime relationships. Even given this, I am nowhere close to where I need to be.

The most critical area I need to improve immensely in is the business/financial aspects. And the help I've received since I've stumbled upon this site a few months ago has been tremendously helpful. And I hope I am able to continue learning from reading any and everything from those who are willing to share their experiences and knowledge in an effort to help those of us who are passionate about learning more concerning improving and growing our business.


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## mahlere (Aug 6, 2006)

Jeff G said:


> I can assure you that the information contained within this thread is *NOT* dead, as I for one will be benefiting from it from here on out. And I know I can't be the only one. Isn't helping someone out (especially during such a time that we are currently living under and so many folks are struggling immensely) enough to warrant posting in this thread?
> 
> I may be one of the few here (although I seriously doubt it) who will definitely do whatever I can to help someone in need out. These are not normal times we are living in and in my humble opinion, it calls for me (and anyone else who is willing and able) to pitch in to help those of us who are struggling right now. I'm just not getting all the pessimism. Or at least posting here. What are you accomplishing by doing so? I would suggest it isn't anything positively helpful.
> 
> Edited to add: I just wanted to mention that I am eternally grateful for those who took the time (and I know it does take time to respond with some of these posts here) to post valuable, helpful information. I thank you kindly!


No offense taken. You are new, so you aren't jaded yet. I personally have spent hundreds of hours over the last 5-6 yrs trying to help guys learn to run a better business. I've posted here and several electrical sites. 

But after all the time and effort, you get tired of getting the same dumbass response "can't charge that much here". 

So, I stopped posting. And now, I don't even try to help the dunderheads. But guys who want to learn, I'll offer all the help I can.


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## Cjeff (Dec 14, 2009)

Unfortunately many won't take good advice, we would rather whine then do anything about it.

Maybe you could add to this discussion. I know I am not where I need to be. I need to take steps to get there.


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## rbsremodeling (Nov 12, 2007)

mahlere said:


> No offense taken. You are new, so you aren't jaded yet. I personally have spent hundreds of hours over the last 5-6 yrs trying to help guys learn to run a better business. I've posted here and several electrical sites.
> 
> *But after all the time and effort, you get tired of getting the same dumbass response "can't charge that much here". *
> 
> So, I stopped posting. And now, I don't even try to help the dunderheads. But guys who want to learn, I'll offer all the help I can.


That just comes from being an old miserable bastard.. :laughing:

There are guys listening and learning and I know they appreciate the input you provide.. :thumbsup:


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## Jeff G (Apr 5, 2010)

mahlere said:


> No offense taken. You are new, so you aren't jaded yet. I personally have spent hundreds of hours over the last 5-6 yrs trying to help guys learn to run a better business. I've posted here and several electrical sites.
> 
> But after all the time and effort, you get tired of getting the same dumbass response "can't charge that much here".
> 
> So, I stopped posting. And now, I don't even try to help the dunderheads. But guys who want to learn, I'll offer all the help I can.


I may be new at starting up a business (and all efforts to do so beforehand with the focus of establishing such on a proper footing and a good understanding of all that's involved and required), but I'm not new to this industry. As a matter of fact, I have been in it for over 30 years now working in a multitude of positions such as laborer (way back in 1975), and since then everything from lead carpenter to project management. So yes, I completely understand your references regarding those who are unmotivated in achieving loftier results. But for those who do, this place surely serves as an exceptional resource in moving onward and upward.


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## Jeff G (Apr 5, 2010)

rbsremodeling said:


> That just comes from being an old miserable bastard.. :laughing:
> 
> *There are guys listening and learning and I know they appreciate the input you provide..* :thumbsup:


Man, I can't even begin to tell you how appreciative I am for all the help I've gotten from reading through most everyone's posts through out this forum.


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## mahlere (Aug 6, 2006)

rbsremodeling said:


> That just comes from being an old miserable bastard.. :laughing:
> 
> There are guys listening and learning and I know they appreciate the input you provide.. :thumbsup:


Good thing I'm not an old miserable bastard, imagine what I'll say when I am?


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## kevjob (Aug 14, 2006)

Listen to Rory and Chris Wright. These guys have been doing this for a long time at a PROFITABLE LEVEL. I took their advice and yes I lose bids but the ones I get are now actually profitable. Just because you have work lined up thru November doesn't mean you will make money. As far you can't charge that here BS... if you are price competing, acting like a knucklehead, don't have a professional proposal and cant sell why you are more expensive than the other guy, then no you cant charge that here....

Also if you continue to use 20% markup you will never make any money ever and those that say we are ripping people off, show me a profitable business that marks up 20% and I will listen. 

Falling on deaf ears I know.


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## BamBamm5144 (Jul 12, 2008)

Maybe one big problem is that everyone spends too much time worrying about what others are going to price at and they let that affect their price.

I received a call to price a small repair on about 40 feet of fascia and a downspout. I charged my price (around 350) and didn't even think about anyone else. If I would have, I probably would have priced it cheaper because that seems like a lot for not even an hour worth of work but on the other hand, it is what I need to stay profitable and make money. If I would have went lower, or I would be working towards is bankruptcy and I see no point in that. In the end, I got the job.


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## Cjeff (Dec 14, 2009)

Actually when I was managing a lumber yard the mark-up on lumber was 20%. Hard a hard time explaining to the owner that when we gave a 10% discount on it we were not making 10% only 8% That 2% makes a lot of difference on a million dollars, 20,000 to be exact.

Most other things were marked up 50 - 100%, Hardware and paint being very high mark-ups.


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## WNYcarpenter (Mar 2, 2007)

This information is extremely useful to me! Thank you. I have nothing to add, but I plan to make the leap sometime.

I have one question.....what do you pay yourself?

Say I'm bringing home $500 a week as an employee. I'm getting by, but I could do better with more.....Would I go about breaking down my personal finances as described (what it costs me to live) then tack on 15% profit and call that the amount needed to cover myself?

I'm getting by at $500wk and would be comfortable with that for a while, but if I go out on my own and start making money, I might want to give myself a raise...


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## WNYcarpenter (Mar 2, 2007)

I want to add, My employers don't flaunt their $$, and I appreciate that! They drive modest vehicles, have modest homes. They bring home a normal paycheck on payroll, and after 35 years I'm pretty confident they won't need for anything.


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## rbsremodeling (Nov 12, 2007)

WNYcarpenter said:


> This information is extremely useful to me! Thank you. I have nothing to add, but I plan to make the leap sometime.
> 
> I have one question.....what do you pay yourself?
> 
> ...


Invest in this..

http://www.markupandprofit.com/markup_calculator.html

*And buy these two books..*

The paper Trail By: William Asdal

Mark up and Profit By: Michael Stone


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## rbsremodeling (Nov 12, 2007)

If you get the book and software, they will help you to plan your leap..

It will be easier to answer those questions, because you will know the right ones ask..

If you need help with anything along the way just post up questions..


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## Cjeff (Dec 14, 2009)

If you are just starting out you will have additional start up costs.

If you can make it on 500/week. maybe pay yourself that for a while.
If you are making more you can re-invest in the company. Tools, advertising, and so forth.


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## mahlere (Aug 6, 2006)

see rory, casey stengel was right


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## mahlere (Aug 6, 2006)

Cjeff said:


> If you are just starting out you will have additional start up costs.
> 
> If you can make it on 500/week. maybe pay yourself that for a while.
> If you are making more you can re-invest in the company. Tools, advertising, and so forth.


set your prices to pay you $2k a week...otherwise you'll never pay yourself $2k a week...


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## JumboJack (Aug 14, 2007)

mahlere said:


> set your prices to pay you $2k a week...otherwise you'll never pay yourself $2k a week...


What if he's only doing 2k a week in business?


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## rbsremodeling (Nov 12, 2007)

CookeCarpentry said:


> I think this is a combination of many things.
> 
> 1. The guys that know their numbers, don't want to post in a public area.
> 
> ...




*My name is Rory and I use to be a Fucck up..*


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## mahlere (Aug 6, 2006)

JumboJack said:


> What if he's only doing 2k a week in business?


then he didn't work enough hours...and that's ok, so he pays himself less that week..but when he generates enough hours, he'll pay himself $2k a week..

quick example 

monthly expenses

truck - $400
Insurance -$200
rent - $1000
Utilities - $500
Advertising - $1000
Salary - $8000

Total Monthly expenses - $11,100.00

Billable hours - 160

$/hr to break even - $69.40

Now, if he sells 160 hrs at that price, he pays himself $2k/week

if he sells 100 hrs at that price, he pays himself $960/wk

if he sells 50 hrs at that price, he pays himself $92.50/week...

now, if he prices himself to pay himself $500/week, here is the difference...

Total month expenses are now -$5,100.00
or $31.90/hr

if he sells 160 hrs at that price, he pays himself $500/wk

if he sells 100 hrs at that price, he pays himself $22.50/wk

if he sells 50 hrs at that price, he pays himself -$376.25/wk...

the only way to pay yourself $2k/week at this point is to work 640 hrs/month, or piss off your customers by raising your rates after you've already trained them to think you're cheap...

So, you price your services to cover your costs, plus allow you to afford whatever you want to buy...if you sell your target hours, you're golden, if not, you still cover your costs and pay yourself...

so, that is how you price your services to pay yourself $2k a week...

edit to add - oh, you don't have rent or utilites, because you work out of your garage - well, how the hell are you ever gonna afford a shop if you don't get your customers to pay for it?


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## mahlere (Aug 6, 2006)

rbsremodeling said:


> *My name is Rory and I use to be a Fucck up..*


glad to see you are no longer a fucck up...gud too no...:laughing:


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## JumboJack (Aug 14, 2007)

mahlere said:


> then he didn't work enough hours...and that's ok, so he pays himself less that week..but when he generates enough hours, he'll pay himself $2k a week..
> 
> quick example
> 
> ...


Wow.I'm glad you took the time to write the above novel.But what if he is doing everything he can to bring in business and right now 2000k (or whatever amount) is the best he can do?
I'm sure he is not paying himself 500.00 a week while doing a ton of business.
And maybe he is great full to be able to do that.

Should he and others like him just close up shop because they are not doing numbers like you think they should?

And maybe he does not need and or want to work out of a shop.I know many,many successful contractors that don't own/rent a shop.


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## mahlere (Aug 6, 2006)

JumboJack said:


> Wow.I'm glad you took the time to write the above novel.But what if he is doing everything he can to bring in business and right now 2000k (or whatever amount) is the best he can do?
> I'm sure he is not paying himself 500.00 a week while doing a ton of business.
> And maybe he is great full to be able to do that.
> 
> ...


you really don't get it, do you?

it's not my numbers, it's whatever #'s the contractor wants...ever hear the phrase, and the variations, "Act as if..." "Dress as if....", etc...

you never want to get a shop? then price to cover your mortgage...want to run 3 trucks? price for it...want to buy a vacation home? price for it...

there are no successful businessmen who don't plan...there are some incredibly lucky contractors who succeeded despite themselves...

but pick whatever #'s make your skirt blow up...but don't price for yesterday, price for next year...

our only source of money (in many cases) is from the customers of our business...if we don't get them to pay us enough to buy our wife a mercedes for our 25th anniversary, where will we get the money from...

would it be better to get into a quagmire of working 40 hrs a week to earn $4000/month and never have time, energy or resources to change it? or to work 20 hrs a week to earn $4000/month and spend the other 20 hrs reaching your goals?


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## JumboJack (Aug 14, 2007)

mahlere said:


> you really don't get it, do you?
> 
> it's not my numbers, it's whatever #'s the contractor wants...ever hear the phrase, and the variations, "Act as if..." "Dress as if....", etc...
> 
> ...


My point is that what is important to you might not be important to someone else. Believe it or not but money is not the most important thing to everyone.


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## mahlere (Aug 6, 2006)

JumboJack said:


> My point is that what is important to you might not be important to someone else. Believe it or not but money is not the most important thing to everyone.


and to this i call bull****...money is what makes it possibly for all of us to do what we really want...

but this part


> Believe it or not but money is not the most important thing to everyone


 is precisely the reason to plan better...because what you are really saying is that money is not important enough to work overtime for...

but there is not anyone on this site, or that i've ever met, save the Dali Lama and a few monks (though not the ones in Los Angeles) who wouldn't want to have more money to do the things they really enjoy in life...

So, rather than working 50 hrs a week to pay yourself $1000....plan a plan to work 20 hrs a week and pay yourself $1000...then you actually have both free time and money to do something with that free time...

i didn't mean to imply what was important to me, was important to anyone else...matter of fact, i didn't even say that...i was simply making an example...

don't you understand, it doesn't matter what you want in this world, it costs $...some guys need $5000/week to make them happy, some need $1000...but if you don't know what you want, or how to get it, you are just stuck in a quagmire and will never really be satisfied...


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## mahlere (Aug 6, 2006)

probably the simplest way to explain it is- 

you either build a business to afford you the life that you want, or you live however your business lets you...


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## Cjeff (Dec 14, 2009)

What my company makes is not what i make. Pay yourself a wage and use the extra to get set up in business. Then when you are set up and your input costs are lower you can raise your wage


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## JumboJack (Aug 14, 2007)

mahlere said:


> but this part is precisely the reason to plan better...because what you are really saying is that money is not important enough to work overtime for...


If 2k (or what ever amount ) without working overtime for is enough to live comfortably on then yes I think there is something more important than money...It's called family.

And ..."Plan to work 20 hours to pay yourself ***x.xx instead of 50"?
Maybe where you live you have so much work that you can magically make that happen.


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## mahlere (Aug 6, 2006)

Cjeff said:


> What my company makes is not what i make. Pay yourself a wage and use the extra to get set up in business. Then when you are set up and your input costs are lower you can raise your wage


nope...your input costs will never really lower, unless you are on the decline...

but even at that, if you don't plan a way to generate $5000/month, regardless of how you split it up, how will you make sure you can generate the $5000/month you need?


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## Mike's Plumbing (Jul 19, 2010)

For those starting out.

When I started I just got some work and tried to keep the ball rolling. Common sense tells you to charge a certain amount per hour, it's not as if we can charge $500 an hour or something. For most things you can get pretty close by guessing and talking to other contractors.

When I started I didn't care about expenses, If your not working and collecting money it doesn't matter how how decide to break up the math.

Steady work when starting out is the first issue, getting organized is the second. Once time went by I started to watch and track expenses, and I also started to pay more attention to what I was charging.

Once I started to pay attention to the details I also started to develop a system. As each month rolled past I kept changing my system ever so slightly improving it over time.

Most things come down to experience and making a few mistakes. Even if you start out and make some mistakes in how you estimate expenses I doubt it will be your biggest problem, getting consistant work and maintaining cash flow tend to be larger problems at first.

It's true that I didn't understand the real price of poker starting out, and I underestimated expenses big time, but who cares?

The simple fact is I didn't have a clue because it was all new to me. I was just smart enough to know that everybody was bidding at or around a certain dollar amount per hour. As long as I hit that number, estimated the hours right and figured out materials I let the chips fall where they may.

Once you gain experience you will understand how to adjust the numbers and set goals for profit and sales etc.

I came close to loosing everything when I started but that was mainly due to getting enough work. 

Guess all you want, you will be wrong. If that hammer isn't swinging you not making money.

Right now I set goals every month but that's after a ton of experience and mistakes.

Mike


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## jimAKAblue (Aug 15, 2010)

mahlere said:


> and to this i call bull****...money is what makes it possibly for all of us to do what we really want...
> 
> but this part is precisely the reason to plan better...because what you are really saying is that money is not important enough to work overtime for...
> 
> ...



A simpler way to say all that is: "Be careful about what you wish for....you might get it!"


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## mahlere (Aug 6, 2006)

JumboJack said:


> If 2k (or what ever amount ) without working overtime for is enough to live comfortably on then yes I think there is something more important than money...It's called family.
> 
> And ..."Plan to work 20 hours to pay yourself ***x.xx instead of 50"?
> Maybe where you live you have so much work that you can magically make that happen.


jumbo...:laughing:


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## Jeff G (Apr 5, 2010)

mahlere said:


> then he didn't work enough hours...and that's ok, so he pays himself less that week..but when he generates enough hours, he'll pay himself $2k a week..
> 
> quick example
> 
> ...


I'm very glad to see that you finally joined in the fray here. Excellent insight, and thanks a million (hopefully I'll be able to get that to ya soon) to you, Cjeff, Rory, Mike, well, to everyone for sharing!!


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## mahlere (Aug 6, 2006)

i'm already regretting it

rory already got cussed out


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## JumboJack (Aug 14, 2007)

For the record I am not disagreeing with anyones methods of calculating their prices.
Just the idea that some would tell another how much money they should make.Or try to make.


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## Mike's Plumbing (Jul 19, 2010)

When I look at what everybody posted and I look back at the things I did right in business and the things I did wrong I think everybody has valid points. The number one goal should be to try and improve month after month.

Mike


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## Irishslave (Jun 20, 2010)

I'm reading these pricing formulas for success, and it's a given that prices should increase as they haven't for years at least not in my market while everything else has. People here seem to think the Repair and Remodeling industry should have a price point/Wal-Mart business model. The original posters discovery of his true costs is an eye opener for a lot of people when they sit down and fiqure out where the money goes. It also explains why a lot of people have closed their doors in the last few years. The challenge by the gentleman from NJ is also an edifing concept and maybe on the backside of this downturn I'll be able to do just that. You have to be able to pilot your ship through rough water and having assests or savings always helps, but you have to be profitable to begin with to build assests/savings.


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## rbsremodeling (Nov 12, 2007)

allz I need is a pack of cigs, a redbull in the morning and the playboy channel at night.. 

Can you show me how to cover those in my overhead?


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## Mike's Plumbing (Jul 19, 2010)

Now your talkn' my language!


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## angus242 (Oct 20, 2007)

rbsremodeling said:


> allz I need is a pack of cigs, a redbull in the morning and the playboy at night..
> 
> Can you show me how to cover those in my overhead?


Take the challenge and you might upgrade to Swisher Sweets, Monster w/ginseng and a Penthouse :whistling


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## mahlere (Aug 6, 2006)

JumboJack said:


> For the record I am not disagreeing with anyones methods of calculating their prices.
> Just the idea that some would tell another how much money they should make.Or try to make.


then let's make one thing abundantly clear right now...

i'm not telling anyone how much to make

but whatever you want, you better figure out a way to get the customer to pay you enough..

i will say this though, if you have no desire to make more money in less hours on your own, then go collect a paycheck...


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## mahlere (Aug 6, 2006)

Mike's Plumbing said:


> When I look at what everybody posted and I look back at the things I did right in business and the things I did wrong I think everybody has valid points. The number one goal should be to try and improve month after month.
> 
> Mike


actually, the #1 goal should be to learn from the other guys fuuck ups...


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## Jeff G (Apr 5, 2010)

Mike's Plumbing said:


> For those starting out.
> 
> When I started I just got some work and tried to keep the ball rolling. Common sense tells you to charge a certain amount per hour, it's not as if we can charge $500 an hour or something. For most things you can get pretty close by guessing and talking to other contractors.
> 
> ...


Getting consistent work and maintaining a suitable cash flow are some of my fears when starting up. With limited funding in my pockets, and loan/s for start-up expenses becoming non-existent, I don't want to just jump right in only to subsequently fail due to the lack of foresight and proper planning. So I'm seemingly only left with taking baby steps (for lack of a better term) at first until some point I am able to acquire the capitol needed to spring into action full-force (proper advertising, marketing, tools/equipment that I not only lust after but are needed to increase productivity and/or ability to strive for excellence, etc, etc, etc). 

But in all honesty, I'm just not clear on the best path to take due to the economy. I am fearful of things getting worse than they are right now, but I don't want to let this freeze me in my tracks from accomplishing my lifelong goal and dream of running a successful construction company. I dunno, guess I'm doing more thinking out loud than actually asking a more pointed question. Though I am wondering if you had any suggestions for me given all the concerns and issues I just mentioned? And in your opinion, am I being anywhere close to realistic in starting up a remodeling firm during such a time as we are currently living under with banks clamping down tighter than a new boot when it comes to loans?


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## mahlere (Aug 6, 2006)

rbsremodeling said:


> allz I need is a pack of cigs, a redbull in the morning and the playboy channel at night..
> 
> Can you show me how to cover those in my overhead?


I got you covered[/URL]...who's lookin' out for you now?


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## mahlere (Aug 6, 2006)

but...apparently you are 1 step ahead...(btw- throw a line item in for a haircut)


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## JumboJack (Aug 14, 2007)

mahlere said:


> then let's make one thing abundantly clear right now...
> 
> *i'm not telling anyone how much to make*
> 
> ...


:laughing:
I rest my case.....:laughing:


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## Cjeff (Dec 14, 2009)

Jeff G said:


> Getting consistent work and maintaining a suitable cash flow are some of my fears when starting up. With limited funding in my pockets, and loan/s for start-up expenses becoming non-existent, I don't want to just jump right in only to subsequently fail due to the lack of foresight and proper planning. So I'm seemingly only left with taking baby steps (for lack of a better term) at first until some point I am able to acquire the capitol needed to spring into action full-force (proper advertising, marketing, tools/equipment that I not only lust after but are needed to increase productivity and/or ability to strive for excellence, etc, etc, etc).
> 
> But in all honesty, I'm just not clear on the best path to take due to the economy. I am fearful of things getting worse than they are right now, but I don't want to let this freeze me in my tracks from accomplishing my lifelong goal and dream of running a successful construction company. I dunno, guess I'm doing more thinking out loud than actually asking a more pointed question. Though I am wondering if you had any suggestions for me given all the concerns and issues I just mentioned? And in your opinion, am I being anywhere close to realistic in starting up a remodeling firm during such a time as we are currently living under with banks clamping down tighter than a new boot when it comes to loans?



Advertising may be a key for you, as well as running a good business and doing good work. Figure out a niche market if you can for your area. 

For me it is renovations, repair, roofing. People always need roofs and repairs no matter what.

Advertiseing does not have to be expensive. Use facebook (see the thread on it) (I do not yet but am looking at it), letter your vehicle, even if not new keep it clean, not a rust bucket, yard signs (anyone remember the thread for cheap ones?) Get involved in things that will advertise your name. Maybe by just helping for the day. (I did a ceiling in a museum at cost, wages only no OH or profit. I have got 3 good paying Jobs because of it) 
Do you have kids? They play soccer or something? use your work truck and have it sitting at games while you watch, People will ask questions, work will come.
I have even wondered about parking a work vehicle in a noticeable spot and leaving it for a while (like a day or something) and picking different spots. Kinda a rolling billboard.


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## Mike's Plumbing (Jul 19, 2010)

Jeff G said:


> Getting consistent work and maintaining a suitable cash flow are some of my fears when starting up. With limited funding in my pockets, and loan/s for start-up expenses becoming non-existent, I don't want to just jump right in only to subsequently fail due to the lack of foresight and proper planning. So I'm seemingly only left with taking baby steps (for lack of a better term) at first until some point I am able to acquire the capitol needed to spring into action full-force (proper advertising, marketing, tools/equipment that I not only lust after but are needed to increase productivity and/or ability to strive for excellence, etc, etc, etc).
> 
> But in all honesty, I'm just not clear on the best path to take due to the economy. I am fearful of things getting worse than they are right now, but I don't want to let this freeze me in my tracks from accomplishing my lifelong goal and dream of running a successful construction company. I dunno, guess I'm doing more thinking out loud than actually asking a more pointed question. Though I am wondering if you had any suggestions for me given all the concerns and issues I just mentioned? And in your opinion, am I being anywhere close to realistic in starting up a remodeling firm during such a time as we are currently living under with banks clamping down tighter than a new boot when it comes to loans?


The best time to start is now, forget the economy fear is always the road block. Start building relationships and collecting tools etc. 

I was once down to less than $10 bucks in total cash. My wife amost left with the kids because of pure stress. My home was foreclosed and the bank came and got both vehicles. Trust me, you can do it!

Mike


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## Jeff G (Apr 5, 2010)

Thank you Cjeff. :thumbsup:

All great points, and I will put them to use!

But my apologies for the thread jack of sorts. I wasn't really thinking and just blurted right out something that came into my mind after reading Mike's post.


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## mahlere (Aug 6, 2006)

JumboJack said:


> :laughing:
> I rest my case.....:laughing:


nah, it doesn't matter the $ amount...but if you don't want a better life, why go through the headaches of running your own business?


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## Jeff G (Apr 5, 2010)

Mike's Plumbing said:


> The best time to start is now, forget the economy fear is always the road block. Start building relationships and collecting tools etc.
> 
> *I was once down to less than $10 bucks in total cash. My wife amost left with the kids because of pure stress. My home was foreclosed and the bank came and got both vehicles. Trust me, you can do it!*
> 
> Mike


Wow! That is amazing how you apparently persevered through some pretty tough obstacles. Very inspiring for me not to give up, particularly when things are all pointing in the wrong direction. 

Thank you kindly Mike!


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## JumboJack (Aug 14, 2007)

mahlere said:


> nah, it doesn't matter the $ amount...but if you don't want a better life, why go through the headaches of running your own business?


That's my point.Who are you to say what a better life is?If someone runs their own business and makes a living they are happy with what does it matter to you?As long as they are following the rules why should you care?


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## Jeff G (Apr 5, 2010)

JumboJack said:


> That's my point.Who are you to say what a better life is?If someone runs their own business and makes a living they are happy with what does it matter to you?As long as they are following the rules why should you care?


Forgive me if I'm wrong in poking my head in here for a minute, but it seem to me that mahlere was only providing examples for the principles he was outlaying for the benefit of others. I didn't perceive it in any manner that he was defining what comprises an acceptable income level for those of us whom have chosen to be in this business.


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## Mike's Plumbing (Jul 19, 2010)

Jeff G said:


> Wow! That is amazing how you apparently persevered through some pretty tough obstacles. Very inspiring for me not to give up, particularly when things are all pointing in the wrong direction.
> 
> Thank you kindly Mike!


Ha, that's nothing.

The thing to remember is thousands before us had to go through tough times as well. Nothing worth having comes easy. I learned to enjoy the pain and now I thrive off it.

My take home pay as a foreman was $39.00 on the check when I went on my own. When I look back it seemed like I would never make it becuase everything I took in went back out in materials. I felt like I didn't make 2 bucks an hour.

Every week my wife would cry and the kids were scared. She would beg me to get a job....but I didn't, I just knew I could do it.

I remember praying that customers wouldn't call me for service calls the whole week one time. My truck had the gas light on Sunday and we had no money...nothing. We had no milk for the kids, and almost no food. All week we did nothing but play tables games and pray, our vehicles never moved from the driveway. TV was long gone by this time. I couldn't get any calls because I had no gas and no materials left to do the work. By Friday the electric company shut off the electricity. I borrowed money and sent my wife and 3 kids away to a relatives house for the weekend. I spent the weekend by myself with no electricity, doing nothing but reading books and thinking. I couldn't afford internet so that wasn't an option either. At night I read with a flashlight my marketing books trying to find out what I needed to do. I was really freaking out.

I got paid finally and went to pay the electric bill. Then they said I had to wait to Monday for the power to get turned on. I remember feeling so guilty holding this money knowing my wife and kids were away, I refused to spend a penny for food on myself, I didn't eat a thing for a couple days.

A lot of this was the result of a couple GC's not paying for 90 days etc, just part of the lessons of life. This went on for months and months.

Right now my income far exceeds my wages and everything is going well. My little company is average and not great. My goal is to reach the "great" stage.....it's not easy to break away from average.

Looking back I laugh about it but I also feel for people who are struggling, I guess I understand it now better than I ever have.

I could tell you about my mistakes but that wouldn't help. Experience is the best teacher, failure is opportunity.

Can you do it? Do you have the guts? Of course you can! And of course you do! If you think about going on your own often it's just part of your genetic makeup, some people have that itch and have to answer the call I guess. 

Just never ever give up. You can do it. 

Get the book "think and grow rich" I have been reading it non stop daily for so long the pages are all falling out. Over and over I keep reading. Everything in it it 100% true.

Mike


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## Jeff G (Apr 5, 2010)

Mike's Plumbing said:


> Ha, that's nothing.
> 
> The thing to remember is thousands before us had to go through tough times as well. Nothing worth having comes easy. I learned to enjoy the pain and now I thrive off it.
> 
> ...


Once again, WOW!

But you know something (well of course you wouldn't), I have been going through somewhat similar experiences recently due to not being paid (with the exception I apparently will never see the money due me). LIfe can sure throw us some lopsided curve balls. But I'm with you, even though life can wear on us pretty solidly, I will never give up my pursuits. For I know, that I know, that I just know that I can do it, and it is what I'm supposed to be doing (if that makes any sense)!

You have been a tremendous help for me. Not only in this thread, but many others you've posted in as well. Thank you!

And once again, my apologies for getting us off topic. 

Now, back to our regularly scheduled program......


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## mahlere (Aug 6, 2006)

JumboJack said:


> That's my point.Who are you to say what a better life is?If someone runs their own business and makes a living they are happy with what does it matter to you?As long as they are following the rules why should you care?


it's all relative...but if you want to go work for yourself, work more hours, and make less money than working 40 for someone else, well, i'd reckon that's the definition of crazy...

i'm not saying what a better life is...i'm saying that there is not one contractor in the world who went out on their own with the intention to work 2x as many hours for 1/2 as much money...but many find themselves there really quickly...


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## mahlere (Aug 6, 2006)

Mike's Plumbing said:


> Ha, that's nothing.
> 
> The thing to remember is thousands before us had to go through tough times as well. Nothing worth having comes easy. I learned to enjoy the pain and now I thrive off it.
> 
> ...



how great would it have been to never have gone through all this?


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## Jeff G (Apr 5, 2010)

mahlere said:


> how great would it have been to never have gone through all this?



I'm told it builds character.:wacko:


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## JamesDibben (Apr 5, 2010)

Mike's Plumbing said:


> The best time to start is now, forget the economy fear is always the road block. Start building relationships and collecting tools etc.
> 
> I was once down to less than $10 bucks in total cash. My wife amost left with the kids because of pure stress. My home was foreclosed and the bank came and got both vehicles. Trust me, you can do it!
> 
> Mike


Wow, that is amazing!

Once you work for yourself it's hard to go back, isn't it.

We just finally short sold our HUGE home earlier this year. We had already moved out as of November of 08. What a nightmare. I've found that I wasn't alone.

Plenty of hard working people have lost their homes. Makes it hard when you are around people who don't know what happened and they are going on about 'those dumb people who purchased more than they can afford and now want tax dollars to fix their life'.

I never wanted that and I bet you didn't either did ya Mike? We aren't afraid to take our lumps when life starts swinging the hammer back at us.


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## JamesDibben (Apr 5, 2010)

Okay, so maybe we are afraid but we sure didn't look to anyone else to fix our lives.


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## Cjeff (Dec 14, 2009)

I have gone through 3 really hard times in my life.

The first one I was single and had to go to Salvation army for food. Boil in a bag steak is gross no matter how hungry you are.:sad:

The other 2 i was married, the first time with no kids the second time we had 1 kid.

Looking back they were all because of circumstances, but yet how I handled them is where i fell short.

The one time I was subbing to a GC doing insurance claims. We had done work and lost money big time, partly our fault, partly the GC. Homeowner was wack job too. Then no work for a while. And I being a 'company man' did not look for other work. Now looking back I should have. My fault.

Even in bad times we can do the best in the situation. We may have to cut back, refocus maybe even work for less, dare I say it? But that should not be our first option. 

I have read of the troubles you in the US face. People living in motels and tiny houses, even of car parks for people living in cars. I feel for you. 

Even now if I was without work for more than 2 months I would be in trouble. 

As an employee we get Unemployment Insurance (in Canada) if we are laid off, I guess I need to add that percentage into my calculations so up go my rates again. I believe it is 4%, i'll have to look into that.


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## Mike's Plumbing (Jul 19, 2010)

I don't regret it because it made our family stronger and a lot more respectful of what a dollar means. I wouldn't wish it upon anybody but in a small way I feel a business owner when starting out should go through a period of sacrifice. It makes you a better business person.

After having gone through it I view the entire world much different. I used to waste money non stop and never had any value attached to things. Now, my favorite thing to do is give money to different charities in town, I really enjoy this. I can't give away what the big guys do but I still enjoy knowing I helped somebody. No doubt this recession is hard on people but It's also a good thing, and many positives can come of it.

On the business side of things I think it makes you a better marketer, a better worker, and a better business accountant. All good things

Mike


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## Mike's Plumbing (Jul 19, 2010)

Cjeff said:


> I have gone through 3 really hard times in my life.
> 
> The first one I was single and had to go to Salvation army for food. Boil in a bag steak is gross no matter how hungry you are.:sad:
> 
> ...


Just be sure to save money, it's not easy but that's what gives you power in the long run. Cash is king!

Mike


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## Cjeff (Dec 14, 2009)

I have retirement in place and a couple of months savings but beyond that I is hooped:blink:

Yep gotta start that now!!!


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## rbsremodeling (Nov 12, 2007)

karenwest said:


> well have u guys come across a B2B portal that gives free service and is an integrated portal where *RFIs and RFQs can be created and can be sent to multiple contractors?
> along with this comparing them on the same platform for efficient comparison and time saving?*
> 
> would appreciate the help
> ...



Looks like Karen is on a spamming spree..


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## Mike's Plumbing (Jul 19, 2010)

Karen, I'm not sure why your double posting this on multiple threads but maybe you should start a seperate thread. I have no idea what a portal is except those little round windows on big boats.

Mike


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## Mike's Plumbing (Jul 19, 2010)

Oh, I didn't realize that was spam. It did seem weird though, I just though she was an motivated woman.


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## CookeCarpentry (Feb 26, 2009)

JumboJack said:


> That's my point.Who are you to say what a better life is?If someone runs their own business and makes a living they are happy with what does it matter to you?As long as they are following the rules why should you care?


JJ - I know what you are saying, and I see how other's comments may seem like they are telling one what to charge (maybe they are?). In addition to a small number of threads (besides this one) where this same issue has come up.

Before anyone can determine what to make or charge, they need to determine what they define as success. And mahlere did touch on this.

To some guys it may be sitting behind a desk, writing $3 million in work each year, running multiple crews, etc. To other guys it may be working independently as a one man show, providing a comfortable living for them and their families.

Both have their advantages and disadvantages. 

I know where I am at right now, in order to make significantly more money, I need to transition from the field to the office. BUT, that is my definition of hell, not success. I enjoy being in the field, I need to be in the field, I have to be in the field.

So I focus on cutting costs where I can, more profitable bidding, making the most of my time in the field and in the office. I realize I will always work more hours than most, but overall I still make more per hour than I did when I worked for someone else. 

Just my opinion, but I don't think a self-employed person can work less hours and make more money, it's all about flexibility. And that is where I find my happiness and success. 

Flexibility - if I want to meet my wife for a long lunch, no problem, just means I work later that day. If I was not self employed, this could never happen. Overall, I get to choose when and how my free time is spent. I don't have more of it, but just like my time in the field, my free time is more productive and better utilized.

Again, just my .02


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## mahlere (Aug 6, 2006)

damn you rory...you broke this thread again


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## jimAKAblue (Aug 15, 2010)

*Office work?*

"I know where I am at right now, in order to make significantly more money, I need to transition from the field to the office. BUT, that is my definition of hell, not success. I enjoy being in the field, I need to be in the field, I have to be in the field."

Why do all tradesmen think that they can't hire someone to handle the office duties? 

What things in the office are we talking about? Bookeeping? Accounting? 

The office doesn't make anyone money...it drains it. So, why would a competent tradesman want to replace himself with a less efficient worker and then sit at a desk and do bookwork? 

Can you explain which element of the office work you are speaking of?


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## J F (Dec 3, 2005)

A little off topic, but welcome to the forum blue, I missed your intro somehow. I was on BT since '99 mostly reading (and messin' with bosshog with john deere images :shifty...and of course jumped ship when all the "changes" took place.

Good to "see" you. Hope things are treatin' ya well in tx with the roofing biz.

J


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## jimAKAblue (Aug 15, 2010)

*Thanks JF*

Thanks JF.

I never ventured into the farm threads. I liked messing with Boss's head to regarding trusses LOL. He hated when I could prove that floor trusses were a loser for the framers (in most cases). 

What was your name in BT?


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## J F (Dec 3, 2005)

JF, Jay123 (I think, after the powers that be deleted the one account. :laughing

I use chief architect quite a bit and posted in those types of threads when they came up, mostly just read...for 8 years :blink


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## jimAKAblue (Aug 15, 2010)

LOL...you are probably smarter for just reading! 

Are you using CA 3 yet? I stopped at ca xi. I haven't poked into that program for more than a year and I'm sure I'd be lost if I did. 

By the way, I've opened an office in OKC now. I'm officially a scumbag stormchaser LOL!


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## J F (Dec 3, 2005)

:thumbup: 

:laughing:

Good for you man, I've watched your travails over the years on BT and am glad to see your persevere...not much of a surprise.

I've got X3, but haven't tinkered with it much, the upgrades weren't a bid deal for me personally as I do all interior stuff, but I always stick with the updates...you wouldn't be lost, just swearin' a little more than normal for a couple of weeks. 

(sorry for the hi-jack)


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## jimAKAblue (Aug 15, 2010)

Thanks Jay.

I do remember you piping in a bit in those threads. 

Is X!!! that much better? There were a lot of things I liked about CA and just as many as I hated LOL! Do you also use SU? I never did get the hang of that program. I can play with it but I can't use it as a tool for much of anything. I did design some pretty snazzy tool inventions though. Too bad no one needs tools anymore!

Don't worry about the HI Jack. The thread was on it's final leg already.


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## CookeCarpentry (Feb 26, 2009)

jimAKAblue said:


> "I know where I am at right now, in order to make significantly more money, I need to transition from the field to the office. BUT, that is my definition of hell, not success. I enjoy being in the field, I need to be in the field, I have to be in the field."
> 
> Why do all tradesmen think that they can't hire someone to handle the office duties?
> 
> ...


Estimating, invoicing, sales follow-up, etc.

Already have a bookkeeping company, and an accountant.


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## jimAKAblue (Aug 15, 2010)

I understand why you need to do more followup on the sales and I understand why you can't if you are out in the field. If I'm only selling, the followup is easy. 

It sounds like you need sales help. They would do all the selling, followup and estimating. Well,...almost all the estimating unless you have some excellent systems. 

The invoiceing can be dumped on the bookeeper, unless it's your wife LOL...she don't want more work! 

That will be $500 for the consult...thank you! Send it via paypal. :laughing:


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## CookeCarpentry (Feb 26, 2009)

jimAKAblue said:


> I understand why you need to do more followup on the sales and I understand why you can't if you are out in the field. If I'm only selling, the followup is easy.
> 
> It sounds like you need sales help. They would do all the selling, followup and estimating. Well,...almost all the estimating unless you have some excellent systems.
> 
> ...


Right, agree completely.

The problem (for me, at least) is a sales person will now be viewed as a "face" of the company - which I am egotistical and want that to be me. Also, quality of leads/jobs are a concern as is determining how they are paid.

And the invoicing.... my bookkeeper does not invoice as part of her services, so that would entail hiring another person or switching companies, neither of which I want to do. Regardless, invoicing is a small amount of time (and worth it). It is the estimating, proposal writing, and follow-ups that eat time away.


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## rbsremodeling (Nov 12, 2007)

CookeCarpentry said:


> Right, agree completely.
> 
> The problem (for me, at least) is a sales person will now be viewed as a "face" of the company - which I am egotistical and want that to be me. Also, quality of leads/jobs are a concern as is determining how they are paid.
> 
> And the invoicing.... my bookkeeper does not invoice as part of her services, so that would entail hiring another person or switching companies, neither of which I want to do. * Regardless, invoicing is a small amount of time (and worth it). It is the estimating, proposal writing, and follow-ups that eat time away.*



I honestly believe that most contractors can benefit from using some type of estimating/CRM software.

Unfortunately the most difficult part is finding the time to learn it and finding a software that works the way you do..

But if you find one that suits your the way you operate (less our bad habits), it can reduce estimating and billing time dramatically..

Using software not only speeds up the estimating process, but can also reduce errors and increase the profitability of the bids you provide..

My second thought is I think billing should come from the owner/with the oversight of an accountant to help understand how and why you need to bill x amount of dollars a month based on the work schedule and your cash flow projections..

I do not think anyone should be billing for you, but they should help you understand the process of when and how much you need to bill based on your situation..

As your business begins to grow, just billing out draws based on performance is only one side of the equation, you will also need to start to learn to bid for business cash flow and company expenses

my 02.cents..


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## Jeff G (Apr 5, 2010)

rbsremodeling said:


> I honestly believe that most contractors can benefit from using some type of estimating/CRM software.
> 
> Unfortunately the most difficult part is finding the time to learn it and finding a software that works the way you do..
> 
> But if you find one that suits your the way you operate (less our bad habits), it can reduce estimating and billing time dramatically..


Could you please elaborate on finding software that suits the way we operate? Also, do you have any recommendations for such software? I've had a small amount of exposure to Xactamate, and Timberline. So small actually that I'm not even sure of the spelling of each. But they were pretty powerful programs, yet somewhat cost prohibitive for a small start-up such as myself.


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## rbsremodeling (Nov 12, 2007)

Jeff G said:


> Could you please elaborate on finding software that suits the way we operate? Also, do you have any recommendations for such software? I've had a small amount of exposure to Xactamate, and Timberline. So small actually that I'm not even sure of the spelling of each. But they were pretty powerful programs, yet somewhat cost prohibitive for a small start-up such as myself.



Depending on the type of business you run, for example a full scale remodeling remodeling company V.S. a handyman operation V.S. a Service business like an Electrician. They all have different business models 

The way you estimate and bill for your work will most likely vary based on the type of work you do..

Even guys that do similar work estimate differently, one guy may do bids base on hours of work, plus materials, some do S.F bids plus material allowance others to Time and material, others pull numbers out their ass..

So there is a wide range of methods on how bids are factored..

I have bought and used just about everything out there and have come to realize no one software will fit for every business but should be based or structured around the way you operate your company to make it easier for you to implement..

If it is not easy for you to utilize the average contractor will not use it..

A good software company will ask questions up front and determine if their software is a fit for you or can be tailored to suit your needs and requirements..


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## CookeCarpentry (Feb 26, 2009)

Rory - what are you using now?


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## Mike's Plumbing (Jul 19, 2010)

Jeff; Just keep it simple when you start. It works great, is mobil, and cordless.


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## CookeCarpentry (Feb 26, 2009)

Mike's Plumbing said:


> Jeff; Just keep it simple when you start. It works great, is mobil, and cordless.


Mike - not arguing with the method, but don't you think at a minimum it should be tracked in an excel worksheet?


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## rbsremodeling (Nov 12, 2007)

CookeCarpentry said:


> Rory - what are you using now?


I rather not say, I am working with a software developer on a few products that will be launched at the Baltimore remodeling show next month..

So that would make my answer appear to be biased and probably against the site rules soon..

I am going to check with the mods or Nathan soon to see what I need to do, so I don't break any rules..

But if someone explains what type of work they are in and why or what they would like the software to help them with.. I would be happy to recommend a software (s) to them and explain why I think it would be a good fit for them..

Also I like I said before every some software is not for everyone and would prefer to recommend one that I think the person would get the most value out of..

Similar to us as contractors we don't work well with some clients and some clients will not work well with us..


Soooooooooo all of that to ask what do you want software to do and how much do are you willing to invest in it??

*Should we make a new topic or add to another software thread????????????*


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## CookeCarpentry (Feb 26, 2009)

rbsremodeling said:


> I rather not say, I am working with a software developer on a few products that will be launched at the Baltimore remodeling show next monthg..
> 
> So that would make my answer appear to be biased and probably against the site rules soon..
> 
> ...


New Thread - this one has been derailed so many times already...


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## rbsremodeling (Nov 12, 2007)

CookeCarpentry said:


> Mike - not arguing with the method, but don't you think at a minimum it should be tracked in an excel worksheet?


Yes, you should have a way of tracking you sales, profit, loses,cost, pricing and marketing information even if its just using an excel sheet to start..


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## B4T (Aug 27, 2010)

To price my electrical work I use the *going rate* method when ever possible.

Everything in an electrical job gets broken down into a component and I assign a price to it that is in the ballpark of past estimates.

I have had a high rate of success doing this. :thumbsup:


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## Mike's Plumbing (Jul 19, 2010)

CookeCarpentry said:


> Mike - not arguing with the method, but don't you think at a minimum it should be tracked in an excel worksheet?


 
I do, in fact I'm a big fan of excel. My wife is the master at excel and if people really understood the power of it they would never use software because it will do anything and it's the ultimate in customization.

I was partly having fun with Jeff....once again.:laughing:

But really when I started out I was as sharp as a bag of wet hair. After about 6 months I finally understood what I wanted to do with software. 

Long story short, I would buy a great book on excel, read it and practice making imaginary stuff for 3 hours a night. In 2 weeks he would be a pro and never look back. 

If I had to do this all over again I would of done things so different when I started. When I worked for a plumbing company that would of been the time to develop my brand, my marketing, my website, and the financials. Do all this stuff ahead of time while your collecting a check I say.

Mike


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## Jeff G (Apr 5, 2010)

Mike's Plumbing said:


> Jeff; Just keep it simple when you start. It works great, is mobil, and cordless.


Sadly, this is precisely what I've been doing most of the time. I hope one day to become a more "high-tech red-neck!

But I gotta add, that I use the calculator quite frequently when doing stuff like figuring rafters (incredibly easy and faster than any method I've found), stairs, and such and so on.


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## Jeff G (Apr 5, 2010)

Mike's Plumbing said:


> I do, in fact I'm a big fan of excel. My wife is the master at excel and if people really understood the power of it they would never use software because it will do anything and it's the ultimate in customization.
> 
> I was partly having fun with Jeff....once again.:laughing:
> 
> ...


This is what my current intentions are and what I'm working towards. It's just that I need to collect more checks whilst doing it. :clap:


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## Jeff G (Apr 5, 2010)

rbsremodeling said:


> I rather not say, I am working with a software developer on a few products that will be launched at the Baltimore remodeling show next monthg..
> 
> So that would make my answer appear to be biased and probably against the site rules soon..
> 
> ...


Would you mind if I sent you a PM about this?


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## jb4211 (Jul 13, 2010)

480sparky said:


> I'll throw my 'business cost list' up, and you can modify it as needed since it's written for an EC:
> 
> *Building*
> Building
> ...


 
OMG...I might try getting my city job back.


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## J F (Dec 3, 2005)

:laughing:


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## Mike's Plumbing (Jul 19, 2010)

Ha! Yeah, doesn't that list make you want to throw-up and become a fork lift driver in a brewery or something?

Everytime I see that list show up on a thread I get grumpy.


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## mahlere (Aug 6, 2006)

Mike's Plumbing said:


> Ha! Yeah, doesn't that list make you want to throw-up and become a fork lift driver in a brewery or something?
> 
> Everytime I see that list show up on a thread I get grumpy.


sadly, as soon as you get a couple of employees, a lot of those items start to apply to you:laughing:

funny thing about building a monster is, you gotta keep feeding the monster


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