[Blaster]

Originally Posted by donb1959

Blaster,
Ok, lets take your scenario, I know that each one of us has a differant operating expense, but here goes.

Ok, you charge $400.00 per day per man. Lets say you're like me and have 3 guys including yourself. Thats $1200.00 per day labor. So, youre qouting a job that you figure will take 4 days. 4 days @ $1200.00 per day is $4800.00. Lets tack on matierial to that figure and say 8 gals at $25.00= $200.00. So you will bid this job at $5,000.00 and that's not including a profit?

Here is an example and I am not claiming this is the right way to do it, that's why I am asking.

Say a 3 day stain job on an average log house for me.

2 guys $224.00 labor+$176.00 overhead = $400.00 x 2= $800.00x 3 days= $2400.00Labor and overhead add say $900.00 profit for me and say materials run $1000.00 The price to the home owner would be $4300.00 and that is a price I am told often is low.

Does that help explain where I am coming from?

Blaster

[Brushslingers]

Originally Posted by Blaster

Here is an example and I am not claiming this is the right way to do it, that's why I am asking.

Say a 3 day stain job on an average log house for me.

2 guys $224.00 labor+$176.00 overhead = $400.00 x 2= $800.00x 3 days= $2400.00Labor and overhead add say $900.00 profit for me and say materials run $1000.00 The price to the home owner would be $4300.00 and that is a price I am told often is low.

Does that help explain where I am coming from?

Blaster

Depends on the log house and the size... and the builder, here? You'd be laughed out of town unless it's a log house over 2000 square.

[Blaster]

I was figuring 3400 sq ft house as average and the figures were for an existing house, not new construction. I was figuring a wash and 2 coats stain.


Maybe I am lucky to be in Montana. I am told often by contractors how low the wages are here, and they would never try to run a business here. Maybe I should shut up or I wuill have all you guys moving here to make the big $$$. LOL Just joking

Blaster

[Blaster]

Hey I am almost at 20 posts I will soon be able to PM with you guys

Blaster

[Brushslingers]

3400 square, wash and 2 coats for 4300? Ok.. ya you want to move. Prices are relative to your location.

[R&S Exteriors]

Originally Posted by Paul Burns

Seriously, you made a mistake with your numbers, right?

I mean we pay our painters 200.00 per day or more plus labor burden.
Paul

You pay your painters $25.00 an hour? If so you must be a heck of a nice guy or you are working out of a high cost of living area.

Here in Pennsyl-tucky a good painter would make about half that per hour. That is probably where your numbers are off.

Every area is different.

Maybe Don has allot less overhead than you. Everyone is different

Maybe he has a gazillion other painters he is trying to compete against and you only have a few.

[George Z]

Originally Posted by donb1959

Blaster,
Ok, lets take your scenario, I know that each one of us has a differant operating expense, but here goes.

Ok, you charge $400.00 per day per man. Lets say you're like me and have 3 guys including yourself. Thats $1200.00 per day labor. So, youre qouting a job that you figure will take 4 days. 4 days @ $1200.00 per day is $4800.00. Lets tack on matierial to that figure and say 8 gals at $25.00= $200.00. So you will bid this job at $5,000.00 and that's not including a profit?

Don,
If that is what he needs to charge, that's what he needs to charge.
His rate likely does include wages, overhead and profit.

[George Z]

Paul, let try to keep this and all thread positive and not pick fights by being negative. Were all trying to move past the last few days.

Thanks.[/QUOTE]

With all due respect Nathan, there is something seriously wrong with these numbers and it is a recipe for going out of business.
Not the values these numbers represent, the methodology.
Whether you recover overhead hourly or per job, adding profit etc,
anyone following that advice is not going very far.
Maybe some people should read some of that Michael Stone information. Basic contracting economics are necessary.

[George Z]

There is a lot of wrong business practices going on in these recent discussions about hourly rates, overhead, profit etc.
I would encourage most painters here to check Nathan's post
about Michael Stone and follow up with reading some of his information.
I have to say Paul's pricing advice is financially sound.
No, I am not talking about regional differences, just his advice is sound.

[AAPaint]

Wow, thanks Don. I really appreciate your post!!! Same goes to all of you actually. All of these are good posts even though our numbers are not relevant to each other. None of us should expect that.

I must say I am happy to log on and hear THIS kind of exchange. The real meat and potatoes, the realistic steps people like me can take to go from point a to point b.

I didn't mention these things just for myself, although everything I mentioned pertains directly to me and my situation. I'm sure THOUSANDS will learn something valuable from exchanges like this....literally. Threads like THIS will bring more visitors wanting to register and join in because there is real substance here.

I have already learned in just one day so many things from so many people who have taken the time to address my concerns that I feel like I could start over AGAIN.......ANYWHERE, and make it work.

It's a dark tunnel sometimes, but if you just give people a hint at where the light is, their chances of finding it are that much better. Nobody gave away the farm, but what they did give really matters...thank you all!

[donb1959]

Originally Posted by George Z

Paul, let try to keep this and all thread positive and not pick fights by being negative. Were all trying to move past the last few days.

Thanks.

With all due respect Nathan, there is something seriously wrong with these numbers and it is a recipe for going out of business.
Not the values these numbers represent, the methodology.
Whether you recover overhead hourly or per job, adding profit etc,
anyone following that advice is not going very far.
Maybe some people should read some of that Michael Stone information. Basic contracting economics are necessary.[/QUOTE]
George,
Originally this post wasn't even about the numbers, it was in answer to a few questions that a fellow contractor had. But since I'm here...
I've been in business 3 years now, and have thrived. Recipe for going out of business.....how so? Whats wrong with the methodlogy? I charge by calculating a day rate. I figure how many days it will take on a given job, times how much I need per day, I add a % to that for markup, add in matierials with a markup. I'm a simple man, so please explain if you would what is wrong with that method of estimating a job?

[Steve Richards]

Originally Posted by donb1959

Recipe for going out of business.....how so? Whats wrong with the methodlogy? I charge by calculating a day rate. I figure how many days it will take on a given job, times how much I need per day, I add a % to that for markup, add in matierials with a markup.

I've been doing it just like that for 26 years.

I didn't get rich, but I'm still my own boss, and I take (lots of) days off to go fishing anytime I want.

[Steve Richards]

Sometimes I'll even take a day or two just to lay around on the couch.


Like today...

[realpurty2]

Originally Posted by George Z

There is a lot of wrong business practices going on in these recent discussions about hourly rates, overhead, profit etc.
I would encourage most painters here to check Nathan's post
about Michael Stone and follow up with reading some of his information.
I have to say Paul's pricing advice is financially sound.
No, I am not talking about regional differences, just his advice is sound.

George, I'm a firm advocate of Micheal Stone's practices. I've read everything he has to offer and have even used him as a consultant in the early stages and truthfully, I see nothing wrong with the "business practices going on" here when it comes to methods to determine an hourly rate.

What your seeing as "a recipie to go out of business", I personally see as one of many ways to verify the numbers. Analytics are the backbone of finances, it doesn't matter if your running a contracting business or if your selling retail items. Don's original post, I read as to say "Know your numbers, no matter what they are for your business." It doesn't matter if you use percentages of the gross price or break it down further into an hourly rate, the numbers should be the same. If not, there is a math issue somewhere.

Don also I thought was referring to his break even point, and he specified before profit. Depending on his market conditions, cost of living, and type of businesss, it is completely possible for $25 an hour being a breakeven point for a business with a very low overhead and in a low payscale area.

My point is, don't be so quick to judge that it's a recipie for self destruction for any business practicing that method unless you know every detail of how that business is ran. IF someone is working from a home office, paying the help $10 or less per hour ( and yes, depending on the area, that's possible and likely) and only carries the basic overhead expenses, a break even point could easily total $200 or less per day and not be detrimental at all. Those numbers are individual to the company, not standard for the industry so I wouldnt shoot someone down for posting what works for them when it's only intended to be an example in which to base your own numbers on.

Don.. I still think your common mistakes list is the best advice I've seen here in a while. It addressed issues that many many of us have all faced at some time or another.

[Nathan]

Originally Posted by George Z

With all due respect Nathan, there is something seriously wrong with these numbers and it is a recipe for going out of business.
Not the values these numbers represent, the methodology.
Whether you recover overhead hourly or per job, adding profit etc,
anyone following that advice is not going very far.
Maybe some people should read some of that Michael Stone information. Basic contracting economics are necessary.

My comment had nothing to do with numbers, it had to do with attitude and keeping this forum a positive place. Something that has not been taking place over the last few days.

[George Z]

I've been in business 3 years now, and have thrived. Recipe for going out of business.....how so? Whats wrong with the methodlogy? I charge by calculating a day rate. I figure how many days it will take on a given job, times how much I need per day, I add a % to that for markup, add in matierials with a markup. I'm a simple man, so please explain if you would what is wrong with that method of estimating a job?[/QUOTE]

Don, this was a great post, responding specifficaly to a fellow contractor. Great advice too. Maybe I didn't understand your numbers
and should have said something like: these numbers would not work for me. We have been in this board since about the same time and its
great to see how great you are doing in such a short period of time.

[donb1959]

George,
But you obviously saw something wrong with the method, or you would not have said so. I am not above gaining wisdom whenever/wherever I can. When I asked what it is you see wrong with my method, I would really like to know. Even if this has been working well for me, maybe there's something I can learn here.

[Guardi Pro]

Originally Posted by Paul Burns

Seriously, you made a mistake with your numbers, right?

I mean we pay our painters 200.00 per day or more plus labor burden.

I know that you must have just not thought it through or forgot a zero or something, right?

If everyone thinks that 200.00 per day per painter is the correct, or even close to the correct numbers to use, you are WAY off base.

I'm sorry and I am trying to be as polite as possible. If people follow those numbers, the advice does MUCH more damage than help,

Paul

Paul... I understand were your comming from, and the others. I would love to charge more than $200 a day. $25 / hour eight hour day for my self and partner. We are worth more due to the quality of craftsmanship we do among other things. But when you figure in over head, profit, material, difficulty factors in some cases the price adds up. Just the other day we bid on two interior jobs both simular but in diffrent areas of the county. Walls only. No doors, casings, trim etc... three bedroom, two bath, kitchen, livingroom, dinning room and hall way. Bid was $1760 that's low but we need the work. The other was same scope with for bedrooms three baths, Bid was a little higher. We lost both. We did follow up calls 48 hours after bid and owners said we were to high... They got someone else to do cheaper with two coats. How they are staying in business?? There is a ton of competition here. We try and sell our craftsmanship and professionalism. All bids are done off printer/ laptop, give customers our portfolio to review when were preparing proposal, ask them have we answered all of there questions etc, etc... still were lossing jobs. So I ask you this... How can we charge more than two bills a day??? We bid in all range of income areas. When you have vans full of immigrants advertising rooms painted for $99.00 it's tuff to compete. Owners around here want cheap no matter what level of income. So what advise can you give or the others from this site. I thank you or the others for any thoughts.

PS
we also advertise in the local paper, target with direct mailings that includes an exceptional flyer that list our services, and two pictures of very nice homes we have done that was transfered onto the flyer.

[Double-A]

Originally Posted by donb1959

Plus the fact that you really don't even want to be there rubs off on the prospect,...

When you find the right 2 [emplyoees] deliver on your promises to them. Make them feel in all ways like an essential part of your business.

Make damn sure you know all your overhead, have calculated it correctly, then bid what you have to to turn a profit...never vary!

Don, these three points stood out for me as being the most important. You have a great handle on what, in my opinion are the most important parts of running a contracting business.

These are three most common (and dangerous) mistakes contractors make.

1. Bad attitude.

They have an attitude that they are unaware of and it shows to their clients. I'm not talking about being rude or having bad manners, I'm talking about seeing your client as the enemy. If you don't love what you're doing, then everyone knows it. This can make your client uneasy and not interested in doing business with you, no matter what else you bring to the table. Learn to fake it until you make it.

2. Lack of respect for employees and their importance in the business.

Partner with employees. They are your most important asset. Don't treat your employees like commodities, treat them like friends and family. Care about them and pay them a living wage. Demand they earn that wage, and they in turn will respect you and your company and their work will show it.

3. The dog ate my homework.

Do your homework. If you don't dig into the real numbers it takes you to pay all of your bills, set aside some reserve operating moneys, pay everyone what they are worth and make a profit, then you're just working for the worst boss you can ever have. Yourself.

Nathan, this thread deserve a pin.

[donb1959]

Double A,
Excellent post. I can't tell you the things that I've gleaned from a couple threads that have begun in this forum during the past couple days. It really doesn't matter if we each agree, or disagree with each others methods, price, etc... The important thing is that the constructive post continue. I Love threads like these because folks get involved, and I can take what I need and leave the rest.

Talk about making folks lives better, you guys are my commrads in arms, and if folks keep contributing lives....given time can change. I'm a big believer in the ripple effect of life.