Trades person overheads?

[DavidWH]

What overheads can a trades person expect to pay?

I've had some work done on the house, and the tradesman quoted £230 a day labour, with me supplying the materials.

Their final bill came in with an additional £6.50 on it for some adhesive they needed.

This is not a complaint about the trades, and I'm happy with the work they've done, and the price quoted and paid.

It was a conversation with a fellow business owner, who said "we're in the wrong business" that got me thinking.

We both supply B2B customers with bespoke products (signage & print). We both have workshops paying rent, electricity, water, telephone, internet. We've both invested £10,000+ in machinery. Add to that £1000+ in stock of media and materials, along with van, fuel & tools.

You would assume our overheads would be higher than those of a trades person?

My mate, more than myself feels he can't charge these kind of prices. I experience it myself where a customer expects to pay £150 for a bespoke sign designed, supplied and fitted.

How do you educate the customer, and start to push up the value of the work? Ideally across an entire industry?
It seems most trades all along the same prices, and whilst you find the odd one who's a little cheaper, I've not come across the huge variance like we do in our industry. So where does this 'standard' come from?

 

[intheTRADE]

I work with trade and home service businesses everyday and the standard simply comes from their years of experience, the quality of their work, the area in which you live and that of the particular trade they are practicing - plus all their expenses as you mention

You will never find a good tradesperson who offers rock bottom prices. Was the £230 per day labour for just one person doing the job or was it a 2 man job? If it was 2 then that price is £115 per person per day which is actually relatively low. If it was just one person then, as stated, you are paying for their expertise

Also think about what work you were having a done. Was it a new kitchen, boiler, bathroom, windows etc? the work they do will last for years and years (hopefully) so the charge to do it seems fair.

Of course, as you say, you can shop around for quotes but anyone offering rock bottom prices and immediate availability I would stay well clear of

My cousin is a plasterer and he has not once advertised anywhere online or done any sort of marketing in 20 years but yet he is booked up for the next 6 months. I couldn't even call in a family favour for him to do our landing - his quality and experience has led to repeat business year on year purely from word of mouth

 

[Financial-Modeller]

Generally speaking, a tradesperson can only sell a day's labour once per day.

You can sell more than one sign per day.

As you scale up, your overheads will be amortised / spread over more than one customer or product.

 

[DavidWH]

You could sell one more sign a day, but if it takes 4 hours to design, produce and manufacture the sign, you're at 1/2 a day £115 using the trades rate. Yet most customer won't pay that for 'just a sign'.

@intheTRADE my example was 4x internal door cases. They quoted £85 a door to hang them, which again seems to be the going rate.

I've had the house rewired, new boiler, double glazing, roof, and they're starting the bathroom today, so got appreciate what you're saying but the rates being charged are all around the same. When you think most our signs are to last 3 years minimum on a lease vehicle, but we've signage out on the road not nearly a decade later still looking good.

I've a school friend who's a plasterer too, and he's the same, booked up for months.

I was speaking with my friend who's a mechanic and they're the same, customers complain about his hourly rate, like they think the garage and equipment are all free of charge.

 

[JEREMY HAWKE]

If your not getting what you want then as the business owner its your job to do something about it

 

[DavidWH]

If your not getting what you want then as the business owner its your job to do something about it

I have! I've concentrated on a specific area, and increased my prices in that area.

Just how you can't compete with the £5.99 Yodel service, you're in a different market.

It just frustrates me that as an industry there are people still charging £15 and hour to the customer.

 

[Gecko001]

I have worked for both the general public and B2B and have found that suppling to the general public is much harder than supplying to B2B. You get more non-payers, more complaints, more claims for damages and basically more hassle. You also get less repeat custom from the general public. So the trades person has to build in a little to to the price when they work for the general public. However, £230 a day is far to much in my view.

 

[swankypants69]

If I am buying a sign, which I do a few times a year from our local graphic design company, I don't get a breakdown of the hours that have gone into to it, so I have no idea of their day rate/hourly rate, nor do I particularly care. I get a price I say yes or no, always yes to be honest as I need the sign

At £230 a day, less four weeks holiday say, thats about 55k per year (less diesel, less tools, less tax, less NI etc etc etc), it isn't an outstanding living, especially depending on location

"People still charging £15 an hour" means that they are paying someone a lot less to do the work, or perhaps even outsourcing it to someone big?

 

[JEREMY HAWKE]

I have! I've concentrated on a specific area, and increased my prices in that area.

Just how you can't compete with the £5.99 Yodel service, you're in a different market.

It just frustrates me that as an industry there are people still charging £15 and hour to the customer.

If they want to earn minimum wage thats up to them I dont care what they do

In this game you need to know how to find the customers that dont use Yodel and make your business appeal to those customers . I would say this goes for any industry !

I have been going along time now there is no time for playing games with people that dont have the budgets or dont understand value so I understand the tradesmen s and women that charge £230
I especially understand a group of joiners in London that charge £400 a day and I say good luck to them .

We are one of the riches nations in the world businesses and the self employed should not be mugging themselves

 

[swankypants69]

The value of tools that a time served joiner will have built up over the years is immense also

 

[The Byre]

The trouble with being a sign-maker is all the other sign-makers. Too much competition!

The same goes for wedding videographers, demo recording studios, taxis in small towns, PR agencies and a whole host of other businesses that have low barriers to entry. Your biggest problem is the £10,000 for machinery. If it were £1m and only very few people could make signs, your rates would look very different.

I ran a recording studio in the Eifel region (Germany) in the 70s and 80s. I had the only 24-track machine for about 100 miles. It cost more than a new car. I could charge the equivalent of (in today's purchasing power) about £500 a day and we had customers backed up. Today, all you need is a laptop, a £1,000 mixer and a £1,000 converter box and some mics. As a result, every musician I know has their own studio and only city-centre studios costing millions are still viable.

Building trades are different because there are no sexy university courses in being a plasterer or a plumber. It takes years of experience to be a good plasterer - that is the bottleneck.

We have a surfeit of architects, designers, draughtsmen and all the other intellectuals that fanny about with Autocad - and a dearth of brickies, roofers, chippies and all the other trades that actually build and/or renovate buildings.

The root cause is the twisted and thoroughly dishonest educational system that produces about 2,500 graduates every year with a degree in how to record rock bands when there are only some 50 commercial recording studios, most of which are struggling to stay open.

 

[DavidWH]

Thanks for the replies.

£200 a day is the going rate locally, try and find any trades person locally who's charging less. I was happy to pay the £30 extra as they squeezed the job in at short notice. I'm not complaining about the prices they're charging.

@The Byre you're right the barrier of entry is low in our industry. I could pop down to B&Q and buy some hand tools, watch some youtube videos and claim to be a joiner? I've seen some pretty poor signage from some signage companies, it's just churned out rubbish.

I don't give a breakdown of our charges, but I do work on an hourly rate, if it's going to take 4 hours to install, an hour to design, and 2 hours to manufacture, it's 7hrs labour + materials. Even at a modest £35/hr it's £245 in labour alone.

@swankypants69 we got shut of some inhouse production and outsource some aspects to 'the big boys' but even so there needs to be enough meat in the job to make it worth while. No point making £5 an order (unless you're doing 100's a day)

@JEREMY HAWKE my friend asked me how I make it pay, and I replied I don't entertain the 'cheap' end of the market. Still get enquiries where they expect champagne with lemonade budgets.

My friend uses two subcontractor installers, they're at £200 each a day, so £400 for a team of two. Even passing that onto the customer at cost you get laughed at, and they're not the most expensive team out there.

 

[MBE2017]

I mentioned in a previous thread when helping a friend start a sign business, he came up with his price, specials done with no deposits etc, and he struggled. When asked to help, I suggested doubling his prices, and to take 100% of the money up front, which he stated clients would not accept.

On a busy market we split it 50/50, him at his prices, me at my suggestion. I outsold his orders, plus had all the payments up front, no debt or changing of mind to worry about. Obviously not everyone agreed to the prices, but I didn’t want every order, I wanted the good profitable orders.

He changed to my suggested rates that evening, and last I heard he was doing well. Point being, most business owners have pre conceived market rates, better to let the market tell you than make assumptions.

 

[estwig]

£6.50 for some ****ign adhesive............What is it, gold-plated!!!

 

[DavidWH]

@MBE2017 that's exactly what we're doing.

Generally we're not touching the <£200 vehicle signs, and are typically £250+, I've just quoted a job now @ £900, and the customer was recommended to us by two other sign companies

I wish every sign company would put their prices up.

The other problem other smaller companies have is, they're flitting from signs, to vehicles, to t-shirts, to stationery, and the wheels soon fall off.

We get notification of a 7% increase from a supplier, and you see smaller companies complaining, just pass it on. There's a huge reluctance and fear of increasing prices.

@estwig I've not idea, I was laughing with my mate saying we'd get told to sod off if we added anything 'extra' to the price, even car parking!

 

[MBE2017]

@ DAVIDWH All your problems are suffered in every industry and service, ignore, work on your own business. I know many watch competitors like hawks, personally I ignore them and prefer they watch myself. If I want £50 for an item and a competitor sells it for £30 do I lower my prices? No, I just keep selling and wait for them to realise either they are making little or no profit, or that they could be making a lot more.

Everyone has to find their own way, but your last comment, not being able to charge any unforeseen extras, when did you last exactly try? I used to charge for any incurred parking fines, rarely used, but if a client had nowhere else to park and they wanted a job done, they paid.

 

[DavidWH]

@MBE2017 I actually stopped doing 'signage' and concentrated on the vehicle signage, but not full wraps for this exact reason. Turning up to install a sign, and they're either not on site, or the fascia is rotten, etc. Too many headaches. They've spend £1000's kitting out their shop, and left the sign to the last minute, with naff all budget left.

In all honesty we were dealing with more start ups back then, and probably not the ideal customer.

I've unfollowed most of the competition on social media for the reasons you said, I don't really care what is happening locally and get on with my own stuff.

That said, it's still frustrating when everyone seems to be happy to earn next to nothing. Seems many are sign makers first, business people 2nd. Where as I try and be the business person first, and sign maker 2nd.

As you say though, we've customers who appreciate we just get their job done, and do it right with no issues down the line.

 

[The Byre]

I could pop down to B&Q and buy some hand tools, watch some youtube videos and claim to be a joiner?

Not if you are going to be commercially viable! A wild guess at a budget for a joiner able to make a decent window would be about £1m for the tools, plus a building to put them in. (CNC router, hydraulic presses, thicknesser, framing jig, format saws, etc.)

A site carpenter just needs a few thousand for decent hand tools (Paslode nailgun and some cordless stuff and a portable mitre saw) as most framing nowadays is done in a factory. Nobody expects a site chippy to rock up with a £100k CNC machine in the back of his van!

you're right the barrier of entry is low in our industry.

Up to anything small, yes. But try getting a printed movie backdrop or a ceiling printed - or just a large lightbox made! The world of theatre and movie set design is filled with all kinds of funky objects that require decent machines to make them - that can be anything from printing the theatre curtain itself to printing the sets.

And the good part is, one can charge real money for such projects. When you see a set interior in a film and there is a building opposite, that building will have been printed on a giant sheet.

And then there's the world of trade fairs and the projects they require . . .

 

[Paul Kelly ICHYB]

As per an old joke, you are not paying for the 10 minutes it takes to do the job, but the 20 years of training and experience to be able to the job in 10 minutes!

 

[Gecko001]

The low costs in the in sign business must be historic. When I started 25 years ago, I got two sign boards made. I was amazed at how cheap they were. Those were signs that were done on the latest computerised equipment of the day. I remember handing over a floppy disc of the art work at reception. BTW that was really high tech then.

 

[DavidWH]

We've a company near us who make TV sets, they also manufactured their own automatic gates such is there manufacturing capability.

Even the BIG players, who have invested £100ks, if not millions, there's still those whos prices are stupidly low and rely on volume.

I would imagine those who specialise in TV and theatre won't be producing site hoardings for £60 a sheet.

Best thing we did was find our Niche, rather than trying to be everything to everyone

 

[DavidWH]

Add to that, I think half the problem is people look at the material costs alone.

A mug costs £1.00, a bit of paper, a bit of ink, and 3minutes in a heat press and its heated so, if you sell it at £2 you've made £1.00.

It doesn't work like that. I think as an industry we simply don't value our time.

A graphic designer will charge to create a logo, yet most signmakers will chuck free artwork out the door in the hope someone likes it.

 

[UKSBD]

One of the biggest overheads for the self employed tradesman charging you for a days work are the days that he is not working.

They may have lots of work on now, but there may be periods when they don't (especially if weather and other trades reliant)

 

[estwig]

I don't think I've seen so much sympathy for builders!

I deal with 'em everyday, most of 'em would steal your grannies false teeth......to buy a pint!!!

 

[DavidWH]

One of the biggest overheads for the self employed tradesman charging you for a days work are the days that he is not working.

They may have lots of work on now, but there may be periods when they don't (especially if weather and other trades reliant)

The same is true for us though. We don't have full days every day.

 

[Scubadog]

What overheads can a trades person expect to pay?

I've had some work done on the house, and the tradesman quoted £230 a day labour, with me supplying the materials.

Their final bill came in with an additional £6.50 on it for some adhesive they needed.

This is not a complaint about the trades, and I'm happy with the work they've done, and the price quoted and paid.

It was a conversation with a fellow business owner, who said "we're in the wrong business" that got me thinking.

We both supply B2B customers with bespoke products (signage & print). We both have workshops paying rent, electricity, water, telephone, internet. We've both invested £10,000+ in machinery. Add to that £1000+ in stock of media and materials, along with van, fuel & tools.

You would assume our overheads would be higher than those of a trades person?

My mate, more than myself feels he can't charge these kind of prices. I experience it myself where a customer expects to pay £150 for a bespoke sign designed, supplied and fitted.

How do you educate the customer, and start to push up the value of the work? Ideally across an entire industry?
It seems most trades all along the same prices, and whilst you find the odd one who's a little cheaper, I've not come across the huge variance like we do in our industry. So where does this 'standard' come from?

Wow....that's cheap!

We would charge nearer double that plus vat!

Fixed costs are nearer £30k per year before we have paid salaries

Just to cover a staff member on 30k salary the recharge rate is £240 a day.....that's literally just salary, nic and pension. No van, tools, training, insurance, workshop, membership fees, ect ect ect ect ect ect

 

[DavidWH]

Wow....that's cheap!

We would charge nearer double that plus vat!

Fixed costs are nearer £30k per year before we have paid salaries

Just to cover a staff member on 30k salary the recharge rate is £240 a day.....that's literally just salary, nic and pension. No van, tools, training, insurance, workshop, membership fees, ect ect ect ect ect ect

Interesting comparison, as we have fixed overheads too, yet the guy I had out didn't.

I think the same occurs in our industry there are people working from their bedrooms, subcontracting work out, then people with staff and overheads, and it skews the prices.

 

[Scubadog]

Interesting comparison, as we have fixed overheads too, yet the guy I had out didn't.

I think the same occurs in our industry there are people working from their bedrooms, subcontracting work out, then people with staff and overheads, and it skews the prices.

They have fixed overheads.....they just don't know what they are

 

[Lucan Unlordly]

Add to that, I think half the problem is people look at the material costs alone.

A mug costs £1.00, a bit of paper, a bit of ink, and 3minutes in a heat press and its heated so, if you sell it at £2 you've made £1.00.

It doesn't work like that. I think as an industry we simply don't value our time.

A graphic designer will charge to create a logo, yet most signmakers will chuck free artwork out the door in the hope someone likes it.

You appear to be making a lot of assumptions to set a general 'bar' in order to make a case as to why you are unable to charge higher prices? Yes, some folk will have the mug analogy outlook but not all. Yes, some signmakers offer free artwork, not all.

It sounds to me like you are crying out for some sales training, particularly when it comes to 'cushioning the cost' when quoting.