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Reply by Lee Barker

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Posted on Pricing Your Work

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Lee Barker

2163 posts in 1483 days


#1 posted 851 days ago

Hey Russ—

I’ll try to sort that out more clearly. It’s a classic run on sentence, that’s for sure.

The 25% markup on materials is for handling, driving to get them, sorting, stacking, shopping hardware on the web, that sort of thing. It’s the time involved in getting the stuff into a pile that will become the project.

Next is fixed costs. I figure this out by calculating what I would pay at the end of a month if I just came in and turned on the lights and flipped a few motors on and off and cranked the heat up for a while and heated some water and pressurized some air, being insured all the while. I divide that monthly figure by the number of productive hours I average in a month. This gives me the fixed costs per hour.

My labor rate per hour is a separate number, or at least starts out that way. What I bring to the table, in other words. What I need to live on plus something to reflect my experience and training.

I end up with those two numbers—fixed costs/hour and labor/hour—conflated, but I think it’s best to work them out separately.

So there’s the hard cost of the project: materials, fixed costs, labor. The profit figure then is a function of that total. If it’s 1%, I think that’s worthy and good discipline. There’s a number larger that should be your target, but because of the nature of craftsmanship the actual number will vary from project to project.

Please let me know if that helps or just confuses.

Kindly,

Lee

-- "...in his brain, which is as dry as the remainder biscuit after a voyage, he hath strange places cramm'd with observation, the which he vents in mangled forms." --Shakespeare, "As You Like It"


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