kbdesigns said:

Maybe this will help. To figure out what to charge, figure out what your annual salary needs to be. Divide by the number of hours a year you want to work. For 8 hr days x 5 days/week that = 1920. Subract any vacations. Divide annual income by the number of hours you plan to work per year and that will give you an hourly rate. So, if you need to make $60,000/yr - and plan to work 40 hrs a week = 1920 hrs - 2 weeks vacation = 1520 hrs. 60000/1520= 39.48. So your hourly rate is $40. Add any materials (+markup) and transportation. By doing a sample you can determine how long it will take you

Kathy-

Not to be harsh, but posts like yours are what get so many guys to go out of business when they don't charge enough. First off, 8 hours/day, 5 days a week is 2080 hours a year, not 1920. Then you take 2 weeks out for vacation (80 hours) and somehow lose 400 hours to get to 1520. Hmmm....

But the bigger bust in your formula is that you say "$60,000/1520 = $39.48, so charge $40/hour". Did you forget about the employers contributions to taxes (7.65%, or $3.06/hour), or are you not paying taxes? What about workers comp premiums? General liability premiums? License costs? Vehicle costs? Tools/supplies? Legal/accounting fees? Or, most of all, what about factoring non-productive time? No one in the construction industry actually "works" 8 hours per day, unless they're putting in another 20-30 hours a week selling, doing paperwork, and running the business. In reality, your 1520 is probably a good number for the actual "productive" hours someone can expect to bill for in a year, but that's not what you were conveying.

Using your quick and easy formula, you'll either end up bankrupt, or giving the free faux finishing seminar at Home Depot before long. Again, not to sound harsh, but it just drives me crazy when people throw numbers out there- too many of the readers around here don't know any better and will end up getting burned.

Bob