How To Price Carpentry Work
You may have to price carpentry work. As a carpenter when doing carpentry work you are a service provider. Rather than selling a product that you can touch or hold, like a hammer, you are selling your service and time. Everyone who provides a service gets paid for only one thing, the amount of time it takes to do the work. While you also charge for the materials that you use to do the job such as lumber or tile, your greatest value lies in the skills you have learned in the carpentry trade. Just like accountant’s lawyers, or computer technicians, you need to decide how much those skills are worth and convert that to an hourly rate for your services.
Some carpenters avoid the hourly rate approach and simply say, “Ill charge as much as I can for each job and this will give me as much profit as possible.” This sounds good, but it doesn’t work. Why not? There are two main reasons
1. If you don’t look at the time involved, it’s tempting to accept jobs where the highest possible price is still too low to make it worth your time (profitable).
2. If you don’t consider what you are charging per hour, you can’t compare jobs on the basis of profitability (how much will you really earn rather than how large is your bill). The job that seems to pay the most money when you consider how much you earn per hour.
Its not surprising that if you speak with carpenters in various parts of the trade you’ll discover that those who price there work on a hourly rate basis have the highest annual incomes. They don’t take unprofitable jobs, and they choose between jobs in a way that provides them with the best ones in terms of profit.
Q: Why not take the “highest-paying” carpentry job?
· You don’t know what your hourly rate will be.
· You can’t compare jobs on the basis of profitability.
· It doesn’t take into account general overhead expenses and expenses related to the particular job.
PRICING YOUR CARPENTRY WORK INVOLVES FOUR BASIC STEPS:
1.Determine an hourly rate using the hourly rate approach described below.
2.Estimate the number of hours a particular job is going to take
3.Multiply the number of hours by the hourly rate.
4.Add the cost of carpentry materials and other expenses involved with that job.
USING THE HOURLY RATE APPROACH
To use the hourly rate approach to price carpentry work consider these things
· How much do you want to earn per year?
· How many hours do you want to spend each year working?
· What are your expenses in running your business (general overhead)?
· How much time will a particular job take?
· What expenses should be charged to that job (variable expenses)
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