Hi All,
Just looking for a reality check here as I’ve been in business for about a year and am still struggling with estimating the amount of time it takes to do things:
I just completed a customer’s 9′ x 8′ bathroom remodel from soup to nuts by myself:
Here are the high points:
-I demolished the old bath/shower area, installed concrete backer units and tiled from the existing tub to the ceiling;
– corrected badly out of wack subfloor and did structural work on joists below subfloor due to water damage; leveled the existing tub
-demolished the room’s walls and floor
– floated a reinforced mud floor in preparation for tiling, then tiled floor.
– wainscotted the walls
– installed new 3 piece built up baseboard all the way around
– installed vanity and new door
– installed medicine cabinet and light above medicine cabinet
– installed ceiling fan and vented to outdoors
This project took me 5 weeks (I had told the customer I thought I could do it in 3!)and my labor charge has come to $5,000 at a rate of @25.00 per hour or $1000 per week. The customer is very happy and I feel good because the job turned out nice. I’m just wondering if I’m in the ballpark compared to what other guys/companies would have charged for labor. I worked hard, didn’t have to back-track much. Just wanted to know if this was a reasonable amount of time/money for a bathroom remodel of this basic scope.
Thanks,
Dave
Replies
There is a world of information left out here
But to my thinking;
The amt of time seems high but I haven't seen the job and amt of work involved
the hourly rate seems low but I don't know what area you are in or your overhead costs.
So between one and another and a sense of costs from past jobs - sure, you're in the ballpark. The important thing is if the customer and you are both happy you are both hitting home runs.
Excellence is its own reward!
Dave-
Can't truly comment on the number of hours, as I haven't seen the full extent of the job. At first glance, though, it sounds a "little" long for me.
I can comment on the price though- if you're billing your time at $25/hr, and you've got insurance, a truck, tools, gas, cell phones, accounting costs, licenses, etc., you're lucky to be netting $15-$18/hr before taxes. pay the tax-man both halves of social security plus income tax, and you're pulling in maybe $10-12/hr net. If you're happy with that, go for it! I just hope you're not thinking "I'm making $52,000 a year as a remodeler", when in reality, you're "making" more like $30,000/year.
Bob
As mentioned above, there is a lot of info missing, but...
On the face of it, I think you are cheap. As Bob points out, billing at $25.00 per hour is not the same as making $25.00 per hour.
Did you really only work 40 hours per week? If so, I commend your discipline.
If you have the skills to do well all of the work you described you are really cheating yourself at $25.00 per hour.
No question about it, for me one of the hardest parts of doing this is looking someone in the eye and telling them I am worth fifty bucks an hour. Sounds like you're not too eager to do that yourself. (I still haven't managed it, but I keep getting closer).
What was the total cost of the bath? Would another $3,000 ($40 per hour) really have made that much difference??
Rich Beckman
Another day, another tool.
We do lots of baths and kitchen remodels. The smallest of baths, 5x7, complete rip, complete rebuild, midrange components, 10 full work days, on average approx $13,500 I have done a 5x7 bath as stated on my own except help with demo in three weeks including full tile to ceiling."One measurement is worth a thousand expert opinions"
Guys,
I want to thank you all for your feedback.
Just thought I'd flesh out my background a bit more. I live in Baltimore with my wife (no kids). Just turned 50 this year. Wierd to see it in print, (50 as applied to me!) but actually I'm very fit and a very high energy person. I decided at 49 to leave my job in the tech world. I was a multimedia developer for a company called Lippincott Williams & Wilkins. The reason I left was simply that I needed a change. I was just tired of being in an office environment - and the other employees were getting younger and younger too! The best part of the day was the commute and that's because I cycled to work 20 miles round trip....Anyway, you get the picture, basically a case of office burnout.
I'll mention the other thing. In late December 2001, I donated half my liver to my wife's husband who was very ill with Hepatitis B. I bounced back quick - he took a little longer but as of now he's doing great. So burnout coupled with a life-changing event I think gave me the impetus to try and live every day as fully as I could - and that meant, as I've said before, getting away from that computer terminal!
I'd done a lot of renovating, furniture building, home repair in the years before leaving my day job and that coupled with the fact that both my wife and I work and live within our means made it possible for me to make this transition. I don't regret it for a minute I can tell you. In fact, my wife has gone half time at the College of Notre Dame of Maryland, where she serves as Director of Service Learning, to find more time to pursue interests of her own (she's a terriffic pianist) and she teaches piano now to youngsters from our home. We're both finding it quite rewarding to finding a way to make it on our own.
I know the 25.00 per hour is low. You folks are absolutely right, After taxes, insurance, overhead I am making a fairly modest wage. I need to make that mental adjustment where you say to yourseld, " I'm worth more, and based on my actual costs of doing business, I therefore need to make more. As opposed to " Gee, I'll do a great job on your bathroom at half the price another high end company would be able to do it for".
Anyway, enough rambling...just wanted to say thanks again for helping me to see that I need to take this thing to the next level...
Sincerely,
Dave
Ooops!!! Just for the record, I DID NOT donate half my liver to "my wife's husband" - I dontated to my sister's husband. Just wanted to clear up that medical miracle quick...
Dave
Glad you cleared that one up............ I just about scratched a hole through my head
You should go and get yourself a GOOD estimating book. Your local bookstore should have them, expect to drop about $100.
You will never be able to make any "real" money working by the hour.
Figure just LAYING the tile should be 4-$5 @ s.f.
The labor price sounds a bit low to me and I am in central VA, prices are quite a bit higher in Baltimore, I have been known to do some work up there from time to time.
I am extremely pleased to hear about your decision to "grab life by the horns"
Charge an honest price, treat people right and be selective of who you do work for and you will exceed your expectations. I am just getting that last one down ;)
Edited 10/9/2003 11:31:36 PM ET by Carter
Yeah I know - actually my wife read the post and let me know that her husband did not receive his own liver...Anyway, your advice and philosophy sound right on to me. I'll be boning up with the estimating books this weekend etc., etc.
Are you, by any chance, the Dave Esposito, who, along with his older brother Joe, did the demolition work on the second floor bathrooms in my house on University Parkway? I'm Matthew Olshan, known on these boards as Olsh.
In any case, if you are one of the fabulous demolishing Espositos, Breaktimers should know that you are an incredidibly careful, fastidious, and thoughtful demolition man, the kind of contractor one would love to have in the house.
If your building skills are even remotely up to snuff, and my sense is that you are probably an overachiever in that area, as well, I think that you are charging too little for your renovation work. At least in this neighborhood of Baltimore.
By the way, after you and Joe finished gutting the room (assuming you're the person I think you are) I got to work. The list of chores was very similar to the one you describe in your post, including floor and wall framing, tiling a tub surround, wainscoting, Saltillo tile floor, etc. I also built a custom medicine cab, and threw in some handmade Mexican wall tiles for good measure. I'll try to attach a picture of how it came out.
But you should really value your work more highly, in my opinion.
--Olsh
I thnk the problem here is in working time and materials. I tried this, the problem is that customers can too easily identify with hourly rates. I realise it can be very difficult to bid on a job with a lot of unknowns, but nevertheless, if you can then you can usually get a much higher rate for your time. This idea works for me, but may not work for you.
Another problem with working T&M is that the first question most customers will ask is, "How long is it going to take you, and how much will the materials cost?"
John
I'll offer a dissenting opinion here Dave. I live in the Washington DC metro area (Northern Va) and I truly feel your rate per hour is spot on.
You're hired. I need a lolly column moved, my basement framed, a full bath installed, electrical work done, as well as plumbing.
Ok-ok, in all seriousness, $25.00/HR in and around Baltimore is a giveaway. If you are really as conscientious as a previous post suggests, and given how tragically difficult it is to find anyone to do work that exceeds "good enough", you Sir are worth at least twice. Consider that your local automobile dealership will extract well over $60.00/hr from your wallet to repair your vehicle.
Good work costs time, and time equals money. You can position yourself at the bottom and slap stuff together and make a buck, or you can position yourself at the top, guarantee and demonstrate good work and customer relationship skills, make a good living and enjoy the work more.
Anyone know of any GOOD framers in Northern Va?
Dan
What do you need done? I am in central VA but have been known to travel for good jobs.
Matthew, yes it is I, David Esposito the lesser, ; Joe and I still talk about the two demo's we did for you. Hey folks, Matthew is a novelist, and quite a remodeler himself. What a suprise to meet once again Matthew!
Dave
My wife's husband has my liver, too. Plus my heart, lungs, etc. I bet that's pretty common. <G>
(Not detracting, you did a great thing, but we all need a chuckle when serious topics come up!)
Hee hee, I like that one TenPenny. And if I can recommend a terrific Bond movie: "Liver Let Die" . My brother-inlaw and I created many bad puns, while recovering...
I looked at the liver statement as a brain teaser since there are so many of them floating around this forum lately. It teased mybrain until my hair was standingon end - then I scrolled to see the retractment, otherwise, I may have been up all night trying to figure out whither went the liver..
Excellence is its own reward!
Dave: I always estimate my stairwork in number of days instead of hours. I always add a comfortable cushion of time in my bids..and I also multiply my material cost by at least 1.5..but usually 2. This way if my project takes longer than expected..or more materials...I am covered. Have I ever taken longer than I thought or used more materials? Many times! But by following my bidding rules..I have always come out with a comfortable wage.
Also...the more uncertainty in a project...the more conservative I get with my bid. Sure I lose some bids once in awhile...but I try to be very selective on the level of work that my shop is at. I refuse to turn into a "two-step-stoop-shop" that demands lower rates.
What I need to make per day is confidential and it doesnt matter anyway as each persons business overhead and family situation is different. Some people may be comfortable making $100 a day.....others $500 a day isnt enough.
This simple philosophy as worked well for me over the years and I have never been out of work. My gut feeling is that if I am ever out of work..my time will be better spent out looking for the big fish to land and throw back the little ones.
Thanks for the immeadiate clear up, but I still read, and re-read that sentance about 5 times and had to think about it a while before moving on... lol
I'm with the others in thinking your labor rate is too low.
Seems to me some of the wiser ones here have said that you'll make about half what you're charging per hour. So if you were an employee of a construction company, would you do what you're doing foR $12.50 per hour?
I wouldn't.Finding an honest politician is difficult. Not nearly as difficult, however, as finding a black NASCAR driver
Finding an honest politician is difficult. Not nearly as difficult, however, as finding a black NASCAR driver
U know everyone has an opinion... and most want to take a stab at humor... and i know you think you are being "p c" but it's a spewing sack of crap....
Hmmm there are what?... 45 winston cup (nascar) drivers in the country..... and another 100 that could be if in the proper equipment... all the teams are owned by individuals... with huge capital investments.... It is about quality of the the driver in a top notch team as well as it is about PR and marketing of that driver and whatever brand happens back him... in the lesser teams it's very much about the driver quality and less about marketing ...unless the driver is picked by the sponsor (now called marketing partner)... Bill Lester (a blk driver happens to have a sponsor who is willing to pay an extra million dollars a year so that he can drive... (prob not enough to cover the torn up equipment) but it helps... maybe 1 new driver a year makes it into winston cup (soon to be nextel cup) each year... and it seems the more successful ones have come from a silver crown or sprint car in recent years... and come with and engineering degree.... and a racing background that goes back to their preteens...
I don't know how many blacks are in the NHL but based on the total number of players in most professional sports vs the less than 100 that make a living in nascar having even one in nascar is prob not a bad ratio...
have'n been around racing all my life, from karts at 12 to dirttrack late models, owning a race car design & fab shop... to doing the sponsor deals, the marketing and cross marketing for Busch and winston cup programs... i don't speak from inexperience... you have a sport that is very capital intensive from the very first kart or miget or motocross machine... it's just not a days of thunder deal... where a guy can walk up and get to drive someones 5 million dollar (min) capital investment (the last daytona tire bill i saw was 63k) I don't care what color the guy is he has to have a racing background... and seaching the country Dodge has found 1 blk guy.. thats right... ONE guy they they don't mind toss'n a few million out to see him drive and to say hey look at us we hired a blk guy.... was he the best un/under employed driver out there... Nothing against him but NO... but he was the best blk driver out there... hell he was about the only one and just about zero experience in the type
since there are now more Hispanics than blks in the US why don't you take up a new cause... btw there have been a few blk owned teams in recent years... none have hired blk drivers.... so gather up ur friends spend a year or so getting ready... drop 5-7 million of your own money... (thats enough to maybe make the race... maybe... chances are you'll go home before the race starts regardless) and go find yourself a driver... get one based on the color of his skin vs the skills he brings...
i'm sure the air is thin atop your high horse
pony
My tag lines are often quotes of what other people said, as was the case with that one. Some are humorous, some intended to be thought provoking, etc.
Don't take them too seriously. No way am I gonna wade through all that crap you posted over a tag line..........Guns don't kill people. Postal workers do
Boss
I thought about writing a long story on how offended I was with that tag line and the reference to the postal workers, then I remembered that I wasnt all that offended. :)
Whoa..
DAVEESPOSITO -"I know the 25.00 per hour is low. You folks are absolutely right, After taxes, insurance, overhead I am making a fairly modest wage."
Dave I would correct what you wrote there saying "I am making a fairly modest wage." to "I am barely making a modest wage." You absolutely need to reconsider what you are doing and what you are charging. I have a little Billing Rate worksheet that created as part of my own estimating system to help me set the correct rate to cover my costs and plugging your figure of $25 per hour into and reverse engineering that billing rate I would be paying myself a wage of $7.15 per hour after covering my fixed and variable overhead such as FICA Unemployment Health Insurance, Vehicle and Tool Costs. Figuring your overhead is going to be a lot lower that mine even after re-figuring the rate out again dropping a lot of the costs that I would normally want to cover such as health insurance etc. the best wage I can still translate that into is just $10.25 per hour.
While I am all for studying the estimating data books to at least help you begin to get a handle on where the market is I still think you need to study more than that. You really need to get a handle on what your real costs of doing business are and understand how you'll need to recover them. The estimating data books will give you average rates for tasks but they are still then again not your real rates. You need to figure out what your cost and rate is and then multiply that by the manhour productivity figures for the tasks that the data books give you to come up with your price.
And even then estimating is still not easy for someone like you who is just getting into it in that you'll make lots of errors or omission that will still have you not charging enough ( but hopefully you'll at least be charging more than you are now.
If I might make a recommendation go to the JLC site and read the free article they have there written by Shawn McAdden entitled Calculating Labor Costs from the
February 2002 edition of JLC and e-mail him and email him and ask him for a copy of his worksheet (quoting from the end of the article "Send requests for the MS Excel version of Shawn’s employee worksheet to [email protected]"). I think it one of the best if not most valuable articles that's ever appeared in JLC and thankfully it part of their free content and not just for JLC Plus subscribers.
If after plugging in all of your values and you do come up with a rate such as $40.13 per hour as in the example he shows and then think something like "I can't charge that, no one will ever hire me" remember and maybe you should drill this into your head that if you don't charge what the spreadsheet says you need to charge then something has to give somewhere and that's going to be your real world wage. You absolutely have to charge what it tells you or your are just giving your services away!!! You may end up higher or lower than that $40.13 per hour in his example but you have to trust what that spreadsheet is telling you.
Listen too if you need help with it e-mail me and I'd be glad to help you get it set up correctly and help you get yourself on a better track.
Glad to hear that "your wife's husband" is doing better now. Taking that literally would that mean they took half your liver out and then put it back in?
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Jerrald,
Yup to your many dead-on observations regarding my hourly rate. This first year I've been so focused on getting the work (and worried that if I charge too much I won't be attractive to the customer) that I haven't paid attention to the business end of things. So I picked an arbitrary number - 25.00 per hour - and went with that.
I have a van, a good set of hand and power tools, and a woodworking shop in my basement which I used to make a 2 sets of of kitchen cabinets this past year. But I really haven't to date taken any of my capital investment into account. I am organized, and I really try and give the customer the best service I can - I mean that I try to really take seriously the best interests of the customer. Now it's time for me to start paying a little more attention to my own best interests...
Dave
Dave
I read your post and took a double look at that wife's husband thing too.
But,
- and the other employees were getting younger and younger too!
Guess what, its the same in this profession to.
When I worked on my own, for the most part I got every job I bid on, didn't think I was making enough money though, a friend told me to increase my bids 15% and see what happened, he said if I continued to keep getting most of the jobs increase it again. Seamed so simple but maybe mentally I though that I had to bid low in order to keep getting the jobs. After a while and more confidence I was able to demand more. Sounds like maybe that's the situation that your in.
Doug
Doug,
I wrote the bit about the liver thing at about 10pm the other night; about an hour past my usual bedtime so I blame my mistatatment on tiredness and hopefully not incipient senility...
You know, you're absolutely right about confidence expanding one's ability to ask more for one's labors. It's hard early on though when you're so focused on doing the kind of job that will lead to referrals, but that being said, evolution is inevitable and I'm 'bout ready to take my game to the next level.
Sincerely,
Dave
Welcome to the business.
I echo the comments about your rates. The difficulty lies in making the transition to higher rates. Your existing customers may bristle at it. Cest la vie. If they are customers worth having, they'll know they had gotten a bargain before, and they will tolerate the increase.
T&M works well for me. It's true, though, it might be hard for some customers to swallow the concept of the hourly rate. It is not immediately apparent to most the extent of the overhead in tools to do complicated work, not to mention the other expenses as outlined by others here.
Good fortune.
5 weeks seems a bit long to be without a bathroom.
I don't know your building schedule, but sometimes the wrong order of doing work means 3 hours work and then wait for the next day, while a better order means 8 hours of work every day.
(I don't recall your exact figures but it seems your labor was $100/sqft. That seems more than materials and labor should cost. But who knows.)
GeorgeR - re: "I don't recall your exact figures but it seems your labor was $100/sqft. That seems more than materials and labor should cost. But who knows." While I am sure we are more expensive than Dave and I'm pretty sure the bathrooms we work on are higher end too the cheapest bathroom my company has been a part of in the last couple of years was $164 per sf and we have worked on one that came in a over 600. Bathrooms are amongst the most expensive average cost per square foot projects that you can do in a home. And even looking at one of the examples in my estimating data books the cheapest no frills bath they show (a standard 4' x 6' half-bath) they pegged at $2692. That works out to $112.16 per sf and that doesn't include the demolition and dumping of the existing bath room.
While you really shouldn't ever estimate or price work by the square foot (see The Hidden Danger s of Square Foot Estimating) Dave's 9' x 8' project at 72 sf works out to $69.44 per sf for the just the labor which leaves some headroom for the typical materials costs.
I do however feel that five weeks sounds way too long but Dave confesses to not having much experience at this so maybe he hasn't developed the correct workflow or is not working at a journeyman's or artisan's pace with all the tasks yet. But then again for $25 per hour that client shouldn't (and from what he says didn't) complain.
Now that I'm thinking about it while 25 per hour is way to low to be charging if you plan to make a business out of this since the project took him 5 weeks where I think a typical bath that size might take 2 to 3 weeks the total labor cost from the clients perspective while still a bargain wasn't that incredibly out of line considering Dave could be said to be performing the project as a "training exercise".
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Edited 10/10/2003 11:04:06 PM ET by Jerrald Hayes
Dave, you're my hero. I too am an office worker who would rather not be sitting at a computer terminal 40+ hours a week. And I cycle to work frequently, 28 miles round trip. 1568 total commuting miles last year. I'm 36 and as such likely not as financially secure as you. My wife and I do live within our means for the most part and hopefully will have our house paid off next year. After that I'll re-evaulate my situation and possibly get out of my current software development work. Although it's obviously difficult to convince myself (mostly my wife) to leave a job in the software industry which pays commensurate to 13 years experience and has all the benefits. I have one daughter for whom I need to build a college fund over the years.
I'm failrly handy now but I know I'm green. So I'm always trying to build up my experience wherever I can. I own an 1866 farm house that always needs work which I do myself (with help from a brother actually). I gutted my kitchen to studs and bathroom very similiar to you and get compliments on the work frequently. I've done several small jobs too. Slowly, I'm putting together a nice woodworking shop as well.
Anyway, I loved your post. Maybe I'll be at the point to follow in your footsteps in ? years. It's nice to be able to read posts like this on this board to get a preview of the situations others encounter before I do.
Gerald,
I have also known many people in your shoes. The way that I have seen them make the switch safely and comfortably is to build up a good referral base from working side jobs on weekends and evenings. Once your wife sees that you can make a good living with your hands she will not have a problem with the switch.
If you can work 4 10's at your current job that would leave you plenty of time to work on "the side".
I have known alot of fireman who have made the switch. They work very weird shifts.
As many others have said, there are several estimating books out there. Most will give you the time it takes to do work, as well as cost per hour for labor. Be sure you have either a book dedicated to your region, or that the book has a table of multipliers per region.
Most books also address the issues of overhead and profit as separate items. And overhead can cover an enormous amount of charges, unless you list them separately. Other posters have listed a few items to be included, but I did not see any mentioning bonding fees, workers' comp, health, life, and accident insurance, insurance on tools and vehicles, etc., etc., etc.