How much to charge

[Pazza]

A question for everyone. The age old topic of how much to charge. My work has evolved recently and I have gone from building everything on site ( kitchens , wardrobes, bookcases ,doors , fireplaces. Etc) to Mainly working from home garage workshop , for manufacturing and onsite installation. I have increased my rate to cover overheads but seems not to be that beneficial. I’m not looking for actual specifics ,as rates vary on location. I’m just asking has anyone had this experience and is there any advice.

 

[Jacob]

£200 per day often gets quoted for competent crafts trades operators.

If you make stuff simply to sell then look first at any equivalent stuff for price hints. Market price is key, not just cost of making plus small margin for profit.
If you are not sure what to charge always charge more!

 

[rogxwhit]

I'd say that if you're working out of your garage your overheads aren't significantly different to those when doing site work.

So across the board you could be charging £20 - £30 an hour, let's say, loosely, depending on what area you live / work in. One might assume that to justify the going trade rate for your area, you are methodical but brisk and don't hang about on the job ...

 

[niall Y]

The cost of running my one-man workshop, before I retired, worked out at about a third for labour, a third for overheads, and a third for wages. If you are working out of a garage at home, your overheads should come to a far less .. You can look upon this as a grace period, while you learn the business, build up a client base, and sort out costs. You are then at a sort of cross-roads, where you can make a decision about whether or not to take on a pukka workshop ( with all the extra cost that this entails) or whether to keep things as they are . Things to bear in mind when costing - Charge the hourly rate for your area -The customer should not have to pay for your learning curve. - You are not a registered charity. - If you do decide to charge less it should be for a sound business reason
Best of luck

 

[Jacob]

.........The customer should not have to pay for your learning curve. - .......

Well somebody has to so it might as well be the client!
Biggest risk for beginners is undercharging. If you have charged enough you have a margin for things going wrong ("contingencies") and can spend more time on the job if necessary.
Competitive quoting is a trap too. Don't bother if they are comparing prices, or just keep it high and let some cheapskate do it instead.

 

[thetyreman]

£35 an hour absolute minimum, charge what you're worth, don't think £10-£20 is PH enough, it never is, you can never start charging more once you charge less and you have to work 4 times harder for the same amount of money.

 

[niall Y]

Well somebody has to so it might as well be the client!
Biggest risk for beginners is undercharging. If you have charged enough you have a margin for things going wrong ("contingencies") and can spend more time on the job if necessary.
Competitive quoting is a trap too. Don't bother if they are comparing prices, or just keep it high and let some cheapskate do it instead.

In my best panto voice I would have to say..."Well, he's not very nice, is he, children?"

 

[Pazza]

Thanks guys for the input. All comments appreciated.
Your confirming my own thoughts it’s good to know I’m heading in the right direction.

 

[RobinBHM]

A question for everyone. The age old topic of how much to charge. My work has evolved recently and I have gone from building everything on site ( kitchens , wardrobes, bookcases ,doors , fireplaces. Etc) to Mainly working from home garage workshop , for manufacturing and onsite installation. I have increased my rate to cover overheads but seems not to be that beneficial. I’m not looking for actual specifics ,as rates vary on location. I’m just asking has anyone had this experience and is there any advice.

Have a look at Peter Millard videos on this

 

[Pazza]

Will do thanks

 

[Jameshow]

Also it depends on where you are?

London /SE are going to demand more than SW / wales / north.

Also if what you doing commands a premium.

Do you have a niche?

 

[Doug71]

Think this is a good video explaining what you need to charge, bit of an eye opener (and it's three years out of date now)!

 

[Pazza]

All good stuff. very clear info thanks

 

[TRITON]

Don't work for peanuts.

Or jellybeans.

 

[mikej460]

or Boris Johnson

 

[TRITON]

Think this is a good video explaining what you need to charge, bit of an eye opener (and it's three years out of date now)!

Thank god im a hobbyist. That looks a horrendous state of affairs, and at minimum wage its worse, especially compared to people in management roles being paid(paying themselves) hundreds of thousands.

 

[TFrench]

In my best panto voice I would have to say..."Well, he's not very nice, is he, children?"

You're not in business to do freebies. I'd say Jacob is spot on. Different industry but I've just priced a job that requires us to have confined space training. Client will be paying for the course, plus 3 man days to account for the time we've lost where we should have been doing something productive.
I've also found over the years that charging a proper rate keeps the "trouble" customers away.

 

[ian33a]

Try to differentiate yourself from your competitors by offering a unique selling point and ensure that this USP is something that customers value. This allows you to set or gradually increase your prices while still keeping your order books acceptably full.

Your USP could be a niche product which has demand but which the rest of the market has missed or passed over. Equally, it could be the way that you offer your services - visibly better customer service, being an example.

Yes, at the start, most people need to offer cheap prices in order to establish a customer share. The trick is to find a way to increase your prices over time while not loosing your loyal customers (and hooking more as you go) If you remain cheap, the only people you are delighting are the bargain basement customers at the bottom of the food chain. You will always get customers who complain but, if you have a reasonable contingency in your pricing, you can cover issues which come along and this tends to delight customers because they feel that they are getting good after sales service. Delight means people will come back and pay what you deem fair rather than what they think is fair.

Also remember that there are two sides to running a business : one side is the amount of money that the customers pay you and the other is what it costs you to run the business. The trick is to maximise (to a point which doesn't burn you out) the customer revenue while keeping your operating costs as low as possible. Guess who get the difference? You do ! - and if you are really smart, you can minimise how much of that you give to HMRC as well.

 

[clogs]

I had an engineering workshop with 5 men.....
spent all my time keeping them busy.....
I worked on the assumtion....that, 4.5 days a week work paid the bills, accountant, wages, rent, phone etc etc...
the other 1/2 a day and Saturday morning was my pay....
After getting broke into and everything gone....I QUIT....
Worked out the back of a Transit van......
earnt more money for less hours and stress.....
best earner was to buy and live in a fixer upper and then move on....it filled in the non working hours nicely...

 

[clogs]

I had an engineering workshop with 5 men.....
spent all my time keeping them busy.....
I worked on the assumtion....that, 4.5 days a week work paid the bills, accountant, wages, rent, phone etc etc...
the other 1/2 a day and Saturday morning was my pay....
After getting broke into and everything gone....I QUIT....
Worked out the back of a Transit van......
earnt more money for less hours and stress.....
best earner was to buy and live in a fixer upper and then move on....it filled in the non working hours nicely...