How do you guys cost your jobs?

[Mark.W]

Hey Guys,

Just wondering how you guys are costing and marking up your jobs.

What I am currently doing is a 20% markup on materials and 20% on labour, and then with regards to Overheads I have a formula as follows:

Eg:
If I require £900/month to keep my business afloat and there is on average 21 working days in a month, I divide 900 by 21 to give me a daily O/H cost of £42.85.

I then work out how long the job is expected to take and multiply it by my hourly rate/daily rate.

So I end up with...

Materials incl Vat +20%MU
+ (Labour + 20%MU)
+ O/H

These added together give me my sell value.

It seems to work for me just wondering what you guys are doing?

Cheers
Mark

 

[MDJ]

Double whatever you pay yourself and 10% on the top, for example if you pay yourself 15 quid an hour then charge 31.50, regarding mark up, it depends on the cost of materials, if you supply 2ks worth of materials you may struggle to win work with 20% of that amount on the top, but smaller amounts 20% sounds good to me.

 

[Mark.W]

Agree on the the 20% markup on larger jobs. I tend to do the markup on a per job basis. I used 20% in a general sense. Thanks for your input though.

 

[Octopus]

£900 of overheads per month - that sounds a lot.

Mine are around £550

 

[buzzlightyear]

£900 of overheads per month - that sounds a lot.

could you pass the cap round for me.

 

[buzzlightyear]

what is your day rate or h/rate ?

 

[telectrix]

£900 of overheads per month - that sounds a lot.

Mine are around £550

mine are less that. £250/month for van (inc.fuel). £20 PL insurance. £20 moby. £50 other expenses. totall. £340.

 

[Gavin John Hyde]

Whilst i think it is good having these sort of base line prices you will charge there are times where say if you are left with an empty day with no job lined up it can sometimes pay to do a job for slightly less on the labour costs too pay yourself something plus cover the days over heads and materials. it could lead to future work or referrals...
if you turn the job down as its lower than what you would normally charge then its lost turn over and a happy customer lost. Im not talking big jobs here quick little ones like cooker connections, change a light pendant to a 3 bulb job....

 

[MDJ]

Don't forget holiday pay and sick pay, you need to factor that in as well as some money to buy a new van one day, plus tyres MOTs etc, it is suprising what you need to allow for hence 110% on your rate.

 

[Octopus]

My calculations assume I can get paid work for 220 days of the year....

 

[buzzlightyear]

My calculations assume I can get paid work for 220 days of the year

no month is the same .you could be working one week and not the other .

 

[Octopus]

no month is the same .you could be working one week and not the other .

You lost me..... My business plan, for the year "assumes" I can work 220 days per year - I've not had an "unplanned" day off for about 7 years.

 

[buzzlightyear]

You lost me..... My business plan, for the year "assumes" I can work 220 days per year - I've not had an "unplanned" day off for about 7 years

not you ,you silly sausage .looking at your 7 year stint .you can now take weeks holiday .remember this all work and no play makes jack a dull boy.

 

[Mark.W]

£900 of overheads per month - that sounds a lot.

Mine are around £550

Hi Murdoch,

That was just an example. My Overheads come in at £635 pm.

It was more the formula and calculations I wanted to get across.

 

[Mark.W]

what is your day rate or h/rate ?

I charge £22.50 for domestic and £35 for commercial. Day rate is £250

 

[buzzlightyear]

I charge £22.50 for domestic

try£ 30.00 p/h .if I was you .you run a business
not a charity .

 

[Mark.W]

try 30.00 p/h .if I was you .you run a business
not a charity .

Even for domestic?

 

[Octopus]

I charge £22.50 for domestic and £35 for commercial. Day rate is £250

So when working on domestic you work over 10 hours per day?

 

[Mark.W]

What are everyone else's rates? and do you charge differently for Domestic and commercial?

 

[buzzlightyear]

Even for domestic?

yes.

 

[Octopus]

Even for domestic?

If not more and the first hour should be higher.....

 

[buzzlightyear]

my rate is £30.think about it scams, van, insurance etc...

 

[Mark.W]

So when working on domestic you work over 10 hours per day?

I tend to use the £22.50 for the smaller jobs, but if its a larger job like a re-wire where I'll be there for say 8/9 days then I price it on a day rate. In hind sight I may have been wrong in doing this.

 

[Mark.W]

my rate is £30.think about it scams, van, insurance etc...

I put the scams, van etc in my O/H calculation, that why its slightly higher than everyone else's.

 

[Octopus]

I tend to use the £22.50 for the smaller jobs, but if its a larger job like a re-wire where I'll be there for say 8/9 days then I price it on a day rate. In hind sight I may have been wrong in doing this.

So if you manage 5 x small jobs in 1 day (allowing for travelling and getting parts between jobs, you will gross £112.50 - that's no way enough given you then need to deduct about £31 overheads - which makes your 8 hour day, out and about worth a paltry £10.18 per hour

 

[Octopus]

I put the scams, van etc in my O/H calculation, that why its slightly higher than everyone else's.

Those ARE overheads.

Everything that isn't resold to a client is an overhead ....

 

[buzzlightyear]

half a days rate 4 hours £125.00 . 4/125.00=31.25.

 

[Mark.W]

Those ARE overheads.

Everything that isn't resold to a client is an overhead ....

yeah I know, what I'm saying is I have a separate line in my costing for overheads, I don't include the overheads in my labour rate.

I do my labour rate and then add on my overheads etc.

Does that make sense.

Here's a typical eg of my costing sheet.

Cost of Materials Incl Vat 249.26
+ MU @ 20%. 49.85
= Material Sell 299.12

Labour Rate @ £22.50/hr
16 Hrs 360.00
+ MU @ 20% 70.00
= Labour Sell 432.00

Overheads
Fuel @ 0.69 p/mi
19 Miles 26.22. (Based on 2 days travel return trip)
Other (Insurance etc) 85.71
Total Overheads 111.93

Job Sell 814.05

0% Contingency -

Customer Pays 814.05

 

[Octopus]

why are you putting mark up on labour .......... unless you employ sub contractors?

I think your model is too complicated ........

 

[Mark.W]

why are you putting mark up on labour .......... unless you employ sub contractors?

I think your model is too complicated ........

Not sure that's what I've alway done. Seems to work so far, I win about 70 - 75% of my jobs.

 

[Octopus]

I know my overheads, I aim for 220 days per year ....... My "hourly" rate includes my overheads, so all I have to think about is the number of hours a job will take!

surely simplifying things would make it easier, and quicker to do quotes ?

 

[Mark.W]

I know my overheads, I aim for 220 days per year ....... My "hourly" rate includes my overheads, so all I have to think about is the number of hours a job will take!
surely simplifying things would make it easier, and quicker to do quotes ?

Yeah I agree, it does seem to simplify things , and this exactly the advice I was after. This is why I asked how everyone else costs their jobs. Cheers

 

[telectrix]

£40 a call-out... small jobs @ £30/hour after 1st 30mins. larger jobs, if above 1 day then £25/hour. anything i can't write on a beermat, then a written estimate/quote.

 

[Octopus]

My first hour charge has been £50 since 2011 ..... for small jobs

 

[Mark.W]

I think I am just very "Bullet pointed"

I like to see on paper, what I have earned, what my O/H costs are, what my materials cost are etc.

If I was to add my O/H into my labour costs I wouldn't really know what to pay myself and I think that may come with time.....

 

[Octopus]

If I was to add my O/H into my labour costs I wouldn't really know what to pay myself and I think that may come with time.....

I use Quick Books, so at the end of every month I can see to the penny how much profit I've made, and precisely what my overheads were .....

BUT as we all know overheads vary per month so budgeting and having spare cash in your business account is very important.

 

[telectrix]

say you want wages of £15/hour..... work out the cost of tour overheads per week ( e.g. £200), then divide by 40. thats 200/40 = 5. so you charge 15+5 =20/hour.

 

[buzzlightyear]

when a customer ring up and they say what is your h/r none .
I charge by the job.

 

[buzzlightyear]

we need to adopt what they do in Spain ,charge to see the job ,before they start it .

 

[Mark.W]

I use KashFlow, which is nice for quoting, invoicing etc. Looked at Xero but not really looked at Quick Books. I've only been Self Employed since May last year, before that I was always on the cards, so this is a good learning curve for me, and your advice and knowledge is much appreciated. At the moment my O/H vary from £400 to £900pm because I've had van signage, clothing etc. I think once that all settles down I'll have a better understanding of my monthly O/H's.