# Just made a delivery and I am wondering how I did



## krisrimes (Jun 17, 2011)

So I would like your opinions on how I did with this deal. I was contacted through craigslist about some bar stools I had listed. When I got in touch with them, they had already decided they did not want to go with what I usually make because they looked too rustic. In all fairness I have made a couple of deals with local establishments for these bar stools, but I don't particularly care for them either. I asked them if they would be willing to let me come up with an alternative. They liked what I came up with and ended up ordering 24 of them from me. When I originally started this deal, I figured it would take me 2 hours per chair to get them done. I know that my time was way over that, but I honestly did not track them. My total cost for materials was roughly $640 and I charged the customer $115 per chair, which included delivery about an hour and a half away. The way I came up with what to charge was using the 4 to 5 times the material cost. I put the number somewhere in the middle and shot the quote off. I also paid my brother $10 an hour to help me and the last time I looked, I owed him for 30 hours. Some of my $640 cost was clamps and router bits that I needed to do the job, so I don't really know what to think about that. I figured them into the cost per chair, but now I have them to use on future projects. I read somewhere on here to factor these types of things in, but I didn't factor in the cost of the saws I used to cut the wood with or the routers I used. Anyway, I figure that I walked away when all was said and done with somewhere around $1800 for 2 weeks of weekend and evening work. I feel like I did well, but I am still learning how to estimate jobs. I hope no one is offended by the fact that I used the numbers in here, I guess I am just looking for ways to improve and I wanted to be open about how I did it. Thanks for any insight.


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## firefighterontheside (Apr 26, 2013)

Personally I would not charge for tools that I needed to buy for a job. I figure that by taking a job on I am saying that I can do the job and am fully equipped to do it. If not I buy that tool out of my own money. Although I certainly can see some sort of charge for facility costs such as wear on tools, electricity, etc. I always keep track of my time because I feel like its the only way for me to learn to bid projects based on as estimate of my time.


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## SteveKnnn (Mar 25, 2013)

Whether to charge for new tooling (bits etc) I think depends on the likelihood of using it again. A new saw blade, no; a 1/2" straight router bit no; a unique profiling bit that you need for one job only -yes.


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## ZiggyZ (Nov 14, 2011)

I started a part time built in cabinet biz several years ago and still make (luckily) small mistakes when estimating. It takes time to get it right and there is always a learning curve when doing new projects especially. I typically charge for materials + my time + enough to cover electricity and consumables for my projects (blades/bits, etc).

I will charge for specialty router bits or other similar accessory that I will not be able to use in the future such as an odd profile or one that will be unusable at the end. Otherwise, I charge a percentage for such items and always inform my customers in these situations.

I find that my jobs are successful when my customers and myself are happy with the project and I've made enough to make it worth my while. $1800 is all relative. That may not be enough for a full timer but for people like you and I who do it part time, perhaps it is. If you enjoy it and are happy with the money you received for the time you put in, then good for you!

We all get better with estimating as we go based on experience. Keep up the work and things will become clearer to you.


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## pintodeluxe (Sep 12, 2010)

All that matters is an acceptable price and good work for your customer. 
I think you did just fine.


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## OnlyJustME (Nov 22, 2011)

I don't make $1800 in 2 weeks at a full time job. I think you did good.


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## Puzzleman (May 4, 2010)

For more information on pricing, check out Huff's blog on pricing. quite detailed and insightful.

As far as your numbers go, I suggest tracking all of the hours you spend on a project. This includes non-shop hours as well. This includes getting materials, discussing with customer and delivery time (there and back). If you are not tracking hours used, they have a tendency to creep way up there without being aware of it. I learned this the hard way. Don't need anything fancy. A basic spreadsheet or lined paper will work.

Congratulations selling another idea to the customers when they didn't like what they initially came for.


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## firefighterontheside (Apr 26, 2013)

Good point, Puzzleman, I don't charge for time spent at my kitchen table making scaled drawings of something I'm about to build. I usually do that in the evening when I would otherwise just be wasting my time watching TV, but if I were to want to support my family doing woodworking I could not afford that free time. I don't always charge for my time for shopping, but I always add fuel costs which can add up for me as nothing is close. I don't add anything for things like electricity or wear on tools, but I need to. I've been thinking about making that charge a percentage of hours spent in the shop.


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## Fishfreak911 (Jul 14, 2010)

I am finding this post very interesting. Thanks for posting it! My 2 cents-I don't charge for drawings/design either as that is part of my allure, plus, I can use that for future sales while sharpening my abilities in design, customer, service, and woodworking. In other words, I am somewhat learning on the job, and count that as cost of doing biz. Maybe others don't see it that way, but it works for me, and it makes me happy!


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## Puzzleman (May 4, 2010)

Huff has a 5 part blog discussing the very things you are talking about. The series will help you determine an easy way to figure your costs and expenses. This results in an easy way to bid on jobs profitably.

Here is a link to his blogs. Huff Bloghttp://lumberjocks.com/huff/blog


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## huff (May 28, 2009)

Krisrimes,

As a hobbyist, it sounds like you did good walking away with nearly $1,800 for a couple weeks working nights and week-ends and it sounds like you are very comfortable with your pricing and final figures and that's all that matters.

If you're happy with your pricing and final figures, then it doesn't matter what anyone else thinks, but if you have some doubts then there may be a few questions you need to ask yourself.

Will you price your next job using the exact same formula and does that give you the confidence to sell your work knowing how you came up with your quote and you will make money?

*Materials;* Did you have an accurate total of your material cost or was that based on the receipts you had when you finished the job and not figuring in the materials that you may of already had on hand like glue, screws, sandpaper, filler, finish or anything else you didn't buy.

BTW; clamps and router bits and any other tools should be figured into profit (profit is how a business is able to maintain, upgrade and grow). How you figure that in doesn't matter, so I think you did fine doing it the way you did for this job.

*Time;* This is where I don't think you're being very honest with yourself. Even after the job is complete, you seem to have no idea the total number of hours invested.

Tracking your time on every job is crucial. Not only can you honestly know if you made any money on the job you just completed, but it will help you figure time for jobs in the future.

Did you consider the time for marketing, talking and selling the customer, the time spent redesigning your original bar stool to the one they wanted? Did you figure the time you spent going to get materials, the time spent doing a cut list, the time spent getting more tools and supplies, (whether going to get them or spending time ordering them)? Did you have to make more than one trip for materials or finishes?

You stated that the last you checked, you owed your brother-in-law for 30 hours. Was that the total and accurate time or did he feel sorry for you and didn't keep track of all his hours the same as you not keeping track of yours?

Did you figure delivery time? 1 ½ hours each way, plus the time it took to unload, talk with the customer, get paid and drive home?

Did you figure any time for clean up, shop and tool care?

Did you figure any expense for operating your vehicle? If you delivered your 24 bar stools in your Prism, then I'm sure it didn't take much gas, but I would guess that you used something a little bigger and not quite as good on gas.

I'm not trying to be harsh or sarcastic, but facts are facts and if you really want to know how to price then base your pricing on facts. Everything else is just pulling figures out of your butt crack………and if that makes you feel good, then that is how you should price.

*
Here's where the business has to separate from the hobbyist.*

*Liability insurance; *Have you considered what would happen if your brother-in-law cut his fingers off while helping you and couldn't work for 2 or 3 weeks? Would he still love you and be glad to sit home and not get paid or maybe even lose his job? What about product liability? You're building bar stools and selling them to a business establishment, so what happens if a 250 pound "Bubba" comes in and flops down on one of your stools and rocks back on two legs and it collapses and he's rushed to the local hospital to have a broken rung removed from this butt cheek?

Sure the establishment has liability insurance and will probably be covered when Bubba sues them, but what do you think the insurance company will look at? YOU; you're the manufacturer that built the faulty stool. Can you afford an attorney to defend you and prove that it was Bubba's fault and not because you built an unsafe stool?

Insurance is not cheap, but it's a necessity if you are in business, (not unless you're willing to loose your home and anything else you may own)

Last but not least; are you going to claim that $2,760 as income? You may consider that as a hobby, but you may have a harder time convincing the IRS selling 24 bar stools to a business establishment and advertising on the inter-net that it's just a hobby. And it may be even a harder sell to your State Dept. of Revenue if you live in a state that has a sales tax and you sell 24 pieces of furniture without collecting sales tax. (Just things to consider in the future if you really are selling your furniture)

I know a lot of woodworkers operate that way and get away with it and I'm sure they will all come to your rescue if you every get audited and have to pay back taxes, penalties and fines or you get sued and about to loose everything you own.

I'm not trying to scare you, but operating a business is a lot more than just throwing a price out to someone and walking away with $1,800 and thinking that was a lot of profit for a couple weeks of working nights and week-ends.

Again, if you're a hobbyist, then it doesn't matter! Anything other than a hobbyist is something else and only you can decide what works for you.

Like I said in my series on pricing; there's no golden answer. (Just food for thought).

Good luck.


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## huff (May 28, 2009)

Jim,

Thanks for the reference to my blog, I was writing the same time as you were posting. I'm not trying to start an arguement with anyone, but just want to help woodworkers figure pricing if they are not doing it just as a hobby.

Jim, I'm working on a series on marketing and sales and could sure use some of your help. Interested?


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## krisrimes (Jun 17, 2011)

I appreciate all of the comments so far. I will not get offended by anything that gets said in this post. The reason I put it all out there for the world to see is because I wanted opinions. I know that in the end, I just have to be happy with the deal and it doesn't matter what anyone else thinks. I am in the process of setting up an LLC to cover my butt and yes, I will be claiming the money made on my taxes. I know that I screwed the pooch by not keeping track of my hours. I did consider all of the material costs including what I had on hand. I am kind of with Greg on some of the time aspect. Yes I had to come up with an alternate design for the barstool, but now I have another product to offer. I had all the intenetion in the world of keeping good track of the hours I spent on this, the problem that I ran into was a time crunch. The establishment gave me a deadline that had to be met. After working my day job, I would come home and go out to the shop and work until 11 or so and by then I was wiped out. I guess there is always next time.


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## huff (May 28, 2009)

krisrimes,

You're on the right track. Since you only worked a couple weeks on this particular project, you may be able to sit down and think back on each day and remember pretty close on how many hours you worked on the project.

Your wife and brother-in-law can probably help also. My wife keeps better time of my hours in the shop then I do (especially if it's after hours). lol

It will really be helpful to know when it's time to price another project.

When I first started my business, I actually kept a time card on each project I was working on so I could not only keep track of my overall time but also how long it took me to do certain phases of a build or finishing. At first it was a pain in the butt, but it came second nature after a little while and ended up doing it for the first couple years I was in business. It really helped me understand where all my hours where going.

Good luck and keep up the good work.


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## cabmaker (Sep 16, 2010)

Kris, you asked how you did on this Job. It doesn't sound like you netted 1800 on this two week job but there would certainly be nothing wrong with that.

To know how you really did one needs to ask , did the customer get what they paid for or a little more ?

Is the customer happy, and are you happy with your performance ?

Will the customer be spreading the good news about you ?

Get all that in order then we can talk about the money.

JB


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## krisrimes (Jun 17, 2011)

JB - that is a good point. They did mention that if this went well, they may be looking to replace some chairs they have at a different section of the property. I guess that I will have to wait and see what they decide to do about that. I would hope that they are satisfied with what they got.


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## AandCstyle (Mar 21, 2012)

Dang!!!! I am extremely impressed that you can make a chair in 2 hours. I recently completed 4 chairs and estimate that it took me about 60 hours per chair.


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## krisrimes (Jun 17, 2011)

Art I was no where near 2 hours per chair. That was a foolish guess on my part.


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## OnlyJustME (Nov 22, 2011)

It was a bar stool right? no back on it? so not as time consuming as a chair with back.


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## krisrimes (Jun 17, 2011)

Yes they were bar stools and yes they had backs on them.


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## OnlyJustME (Nov 22, 2011)

ok then, rock on for making that many in that amount of time. very impressive indeed. Any pics or project posting of them?


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## shawnmasterson (Jan 24, 2013)

This is very similar to how I funded my tools in my shop. When I first started out it was to get tools, but it became the funds to rebuild my home once I was tooled up. pricing is so hard to figure and varies greatly from one area to another. I agree with the everyone is happy side as long as it doesn't devalue the market. As for the LLC and liability, I have heard of people working on a strict cash only basis. No paper trail when people want to get sue happy. I know I left a lot of money on the table in the past. I never figured on hand supplies, or power. As for detailed bids you will eventually tire form designing projects and figuring materials for jobs that never happen. When I have a project I usually figure it at $35 per hour for me and $25 for a helper. I look at it from a take it or leave it stand point. I know my work is of the best quality I can produce, and I stand behind it. Often I tell people that going the T&M route is better for their pocketbook, because if I have to figure a hard bid I will make sure I come out on top.


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## BentheViking (May 19, 2011)

I used to work for a guy who always made a point to add in the cost of a new tool (or at least part of the cost) on every job. Granted we were doing things like all the wooden sash windows for a whole house so it was much larger jobs. His thinking was that if you made sure that you were always putting money into a tool budget then it wouldn't hurt so bad when you had a something need replacement.


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## Puzzleman (May 4, 2010)

James 101, I do not calculate drying time into my labor calculations. While one project is drying, my time is spent working on other projects. That time is applied to where my labor is actually being used.

What is does do is to make you schedule the finishing work as to how it works into the work flow. For example, I would put first coat of paint on a board in the morning. While it is drying, I will work on other projects. After an hour or so, I return to put the second coat of paint on. Then work on completing other projects. At the end of the day when I am lacquering other projects, I lacquer the painted board. It is still wet when I leave for the night, so it drys overnight.


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## Puzzleman (May 4, 2010)

Huff, sent PM.


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## SCOTSMAN (Aug 1, 2008)

This is a good deal, but if you charge too much then you won't get the orders. Also no repeat orders or maybe even complaints, so it seemed like you did a fair job .I too agree with not buying tools for the job if you don't have the tooling then technically you cant do the job and shouldn't apply to do it so this should be a thought onto whether you should pass it on it seems like you did ok this time but I personally would not do this if the customer finds out ,then they have a right imho to be aggrieved just like you would if the shoe was on the other foot. However enough of the lecturing have fun I am glad it worked out ok. Alistair


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## krisrimes (Jun 17, 2011)

I guess that I should have explained a little further about the tools and bits that I purchased for the job. I spent somewhere in the neighborhood of $60 on clamps at harbor freight, and $20 on a decent round over bit. I didn't feel like it was too much to add a little over 3 dollars per chair. Technically I could have done the job with the clamps I had on hand, I just never could have met the timeline they laid out. One of the most frustrating things I have found so far is working with customers who drag their feet on a decision and then I wind up having to rush to get it done when they need it. I do appreciate all of the comments.


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## Puzzleman (May 4, 2010)

When someone makes an order or thinks about making an order, I let them know upfront how it will take to make it. I have found that when I rush an order, it seems like a mistake gets made. Then the time to fix the mistake. If I had just done in the regular time frame, I wouldn't have had a problem.

Letting them know that I need 3 weeks to make an order, they want the order in 4 weeks from now, then they need to make a decision this week. If they make the decision late, the order might be late.

If they lightly complain or plead for me to get it done in time when they dragged their feet, I politely let them know that if they want the quality they expect from me, then let me do it the time I told them earlier. I do build extra time into my schedule, so I might get it done earlier but I don't tell them that.


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## OnlyJustME (Nov 22, 2011)

On a previous job i had installing canopies we had a 12 week lead time from the time they signed the paper work to do the job and give us the down payment. They would screw around with the paper work for weeks before we finally got it back and then they would expect the canopy in 4 weeks to install it. We'd tell them again it's a 12 week lead time to have it manufactured and delivered and they would say it's been 8 weeks why won't it be ready? our deadline is in 4 weeks. then we had to explain to them again that they didn't turn over the paperwork 8 weeks ago.

I worked with one guy who would tell people that a mistake on their part didn't make an emergency on his part.


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