Hi,
In the past, when doing a complicated job too difficult to quote a contract price, I have billed for my time and material with no mark-up. I realize I am not charging enough for these kind of jobs.
I have an extensive reno of a high end exterior balastrade that requires this kind of quote and would welcome feedback –
specifically:how much do you mark up material?
what percentage do you add to time/material costs?
and,would ipe be suitable for an exterior balastrade and does it weather to a lovely silver-gray colour. I also hear it has a 50 year warranty on rot…Sounds to good to be true…
appreciate your feedback. I learn a lot through this forum
cheers,
silver
Replies
Ipe` does indeed last and weather well to a beautifull silver colour after a couple of years.
But you would hate having to do millwork on it. The mineral content along with a waxy sunstance is murder on tooling. The sulphur and other minerals is not pleasent to breathe, it dulls bits. The wax makes it and the sawdust sick to cutting teeth so they run hot and dull even quicker. You have to go slow, clean cutters often and budget for buying plenty of carbide.
I used to go with only aboput 8% markup over all costs with most of my overhead, insurance and labor burden worked into the hourly. It isn't enough. High end work means more demanding clients, site visits and phone calls. High end also means whatever the neighborhood will bear once you have the reputation.
You should search out some of Walt Steppleworth's articles
Excellence is its own reward!
Nice to run into you again, piffin
If I don't have the reputation now, I never will...it's the money thing I need to tune up. Your
reply helped...largely what the market will bear in my city is what it comes down to.
Regarding ipe,I can't thank you enough...hard to get that kind of info in a nutshell.
silver
Message challenged tonight:
What I wanted to say:nice to run into you again, piffin.
If I don't have the reputation now, I never will. Short answer sounds like as much as my local non-booming market will bear,which in this neck of the woods is roughly 45-50/hr,plus material plus 10%.
Appreciate the info on ipe-serious food for thought-good to know at this stage as I prepare a proposal. I have the project,just need a win-win proposal.
thanks muchly,
silver
silver... stoeppleworth advises markups of 67%.... but that is for bid work..
for T&M.. i've never had a problem charging 15% overhead plus 10% profit for everything besides direct labor.. make sure your hourly rate covers all burden, plus overhead plus profit...
then the smaller 15+10 will go straight to the bottom line..
15+10 is and has been traditionally accepted by the insurance adjusters for contracting, it's sort of my idea of the absolute minimum you should charge... and if your hourly rate isn't high enough you can still lose your shirt with the 15+10Mike Smith Rhode Island : Design / Build / Repair / Restore
Hi Mike Smith,
nice to run into you again as well. If memory serves me correctly, you're in Rhode Island.
Exactly what I was looking for Mike...too busy to do very much reading right now...but needing to make more coin per job. You gave me a few easy suggestions that I can work with..as I said, local market isn't booming so a lot of what Sonny and others have to say doesn't really apply to a non-booming market, in my opinion. I pretty sure he's in Cal.
thanks,
silver
Edited 5/19/2003 7:16:00 AM ET by silver
Sonny is from Naples, FL.
Jon Blakemore
Silver, I know this is a very late post, but I am in Naples, and it doesn't matter what market you're in or the state of the economy. do not base business decisions upon erroneous assumptions. Notice that even in lousy economies, millin dollar houses are still built - and bought, Cadillacs, Jags and Mercedes are still built - and bought, high end restaurants still exist and while selling their cheapest dinner at $25 - $50, and on and on.
Email me if you are still having problems in either selling, estimateing or whatever. A lot of I my advice to you would be items we've aleady hashed over here and I don't want to bore anyone else here.
Back in Michigan ina rural community of blue collar, white collar workers and farmers, I still continually sold roofing jobs at leat 20% over my competitors prices. Pretty much the same thing for decks bath ad kitchen remodels, additions, siding and window replacements.
The key is in "perceived value", not in our minds, but the customer's.
Mike,
You just nailed it in one swing.
skipj
got it the first time - or was it the second time?
LOL
If you are talking high end railings, look into Fypon.
I didn't mean that you should charge 67% markup when i said to read Walt S. What I meant was that he has good thought provoking stuff to say regarding the theory of pricing, as does Sonny Lycos in his more prolific moments.
I think the 67% is including overhead though. I believe the figure he recommends if you include the overhead (if you know it) in your labor burden, is more like 40%
That's the problem with getting people to understand markup, profit and all. Some guys will say they make a ten percent profit because they markup the materials by 10% when their actual overhead is, lo and behold, twelve and a half percent! How much profit are we making now boys and gurls? gotta price it all in..
Excellence is its own reward!
oops!
I meant to include an attachment of Fypon railing over Ipe` deck..
Excellence is its own reward!
Nice work piffin...my project is similar. What is Fypon and where do you get it from?
thanks,
silver
It is polyurethene foam formed in a mold with a PVC ro steel core for strength and to control shrinage. It comes with a primer coat ands still needs to be painted when installed but it will never check, split or rot like wood. It has a dnesity similar to white pine.
I went to the factory in PA before I started using it. You need to find a retailer who will order it for you. There was a rumor that HD was going to start stocking certain pieces of it but I tend to doubt that. It is a step above the typical HD customer, quality wise. The installation takes patience.
google and you can find the website and there is a catalouge online and maybe a dealer locator..
Excellence is its own reward!
oooouuuuh, that sure is purrrty!!Never be afraid to try something new. Remember, amateurs built the ark, Professional build the Titanic.
The Fypon people liked it well enough to buy the photo rights from me to include one of them in their next catalouge..
Excellence is its own reward!
Piffin
Just saw the pic of your railing, looks great!
Now, how do you order that stuff? What I mean is did you build the deck to the radius of the available fypon or do they radius it to your specs?
Thanks
Doug
The deck was already there. I reroofed it. redecked it, and built to railing to simulate older photos from her glory days.
Fypon has stock radii railings and they will custom build any radius for you but high dollars because they have to buld a form first. If I can't do it with their stock, I build my own from laminated red cedar (07-05).
I can order Fypon from my local builder's supply asa custom order. Fypon will send you the CAD CD and a catalouge or you can down load both from their site..
Excellence is its own reward!
Piffin
Thanks and that second pic is pure classic!
Thanks
Doug
Any chance they bought "curvedse"? I used that for a wallpaper until I crashed a hard drive.
That is one beautiful shot.
They got about three shots. Don't know which they will use..
Excellence is its own reward!
Can I get a good copy of se? I wasn't kidding, I loved that shot.
I could promise to be nice for like a week, maybe two. Nah, two weeks is pushing it. ;-)
It's in your e-mail box.
How's the Princess?.
Excellence is its own reward!
Thanks, when I run across a shot that is worthy, I will send it out to you.
Actually, I'll send you a not so worthy one, and owe you.
Princess turned 15, and all hell broke loose, but she is ok, and I'll tell her you asked.
Horrormones, man. They're more dangerous than dynamite and don't need special trianing to wield them..
Excellence is its own reward!
Piffin,
I have been away from the forum for about 3 months, (and everyone said I was addicted) but I was in HD yesterday and saw something that brought you to mind. Above the pro desk there was a fypon glossy poster, and I recognized the top photo as being your own. I hope I'm not rehashing a previou post about the pics... I used the search feature to check if anyone had commented but was not successful.
Are you getting royalty checks?
Jon Blakemore
Thanks for noticing. I sold Fypon the rights to use it. I have posted that photo here too. It will also appear in their newest catalouge. I didn't have a date when they would start using it.
The thing that suprises me is that a high end product like Fypon would be sold at HD. I commented to their rep that I wasn't sure if I appreciated being connected to that market with my name but the exposure probably adds to my "aura"
.
Excellence is its own reward!
Edited 10/4/2003 7:47:07 PM ET by piffin
Beautiful deck and railing job! Too bad the homeowners don't have a nicer view though! ;)
Where is that located?
Islesboro, Maine.
Excellence is its own reward!
Just read your post from May 18--It's a question I've wondered about a lot for myself.
My operation is pretty small, compared to what I gather from reading this stuff. But I operate almost strictly on what you call T&M; the only time I give a fixed quote is for in-shop work--custom doors, windows, furniture, etc.-- where I've done the design myself, and therefore the environment is totally within my control and there'll be no surprises unless I make a mistake (which shouldn't be the customer's problem).
My estimate form reads, in the fine print at the bottom: 'Please understand that an estimate is not a fixed price quote. Your final bill will be calculated based on hours actually worked and materials used. During renovation or remodeling work on any building there is always a significant risk of uncovering hidden problems which can augment the estimated cost of the original job. You should therefore consider an estimate as an indication of the minimum cost for completing your project. As a courtesy to you, all problems uncovered during the course of your project which could lead to a significant increase (more than 10%) over the estimated price will be presented to you as soon as possible. At that point, you will have the option of either abandoning the project or modifying it to include the additional work made necessary by the underlying condition of the building. In no case will you be billed except for work actually completed. Labour rates are $xx.00 per hour for skilled tradesmen and $xx.00 per hour for helpers or other unskilled labourers. Licensed personnel will be used where necessary as subcontractors. Materials, equipment rentals, fees, and subcontracts will be billed to you at our cost (gross) plus 5%.
After that I go on to talk about the weird sales tax situation here in Canada, but that's another story.
In effect, I charge materials or anything else I have to buy for the job at cost +5%, and I pay my guys $2.50 an hour less than I charge the customer for his time. This helps pay for the tools and putting new engines in my truck (Cripes, I'm gonna put the second one in in 6 months next week; talk about bad luck....).
I make most of my money on billing for my own personal time, when I get to keep all of that $xx.00 per hour.
I am frequently asked for a flat, or fixed, price for a job, or for a price per square. I don't refuse, but I explain to the potential customer that if I'm working on that basis, I'll have no incentive but to get it done as fast as possible--which means the little details that make the difference between an OK job and a really good one will get short shrift. I also tell him that if he insists on having a flat price quote, he'll probably cost himself money, because to cover my own butt, I generally bump up my mental estimate by about 25%. I say this quite honestly, and not agressively, and ninety-nine percent of the time, the customer agrees to T&M. Then if we do rip off his shingles and find a third of the roof deck and rafters rotted right out, he understands when the original estimated cost goes down the toilet. At least most of them do; I remember one job....
Hope this long blather was useful to you or somebody.
dinosaur
Votre chalet, c'est notre affaire/Your second home is our first concern.
Dinosaur,
I realize you were answering a question and not asking one but can you cover the true costs of your guys with a 2.50 an hour mark up? I mean here in the states my share of comp, taxes and the few small benefits I pay equate to $3 an hour all by themselves. Not to mention equipment purchases etc. I charge $40 an hour and my lead guy makes, including wages and bennys about 23. I do mainly small jobs so maybe there is some difference there and maybe the cost structure there is different. Just wondering. DanT
Dan--
Man, you're up early on a Sunday, unless you're in a different time zone than me. Nah, that wouldn't work; you'd have to be in the Maritimes to be later than I am here in la belle province, and you said you were in the 'States.
Can I cover the actual costs of my guys with $2.50 an hour...? You know, it's a good question. On paper, the answer is yes. I pay all my guys--and myself-- as if they were subs--'independent contractors' is the legal term for it here. They get checks or cash, depending, but no deductions for pogie, & so forth. They all prefer it that way, or they wouldn't work for me.
There's a couple of reasons I do it that way. The first is our unbelievably corrupt Commission de Construction de Québec, which is a private commission that has government 'assent' to act like they were a governmental agency. Their primary mandate is to insure that all construction workers are 'competent' to do the jobs they do--and the commission issues what we call 'Competency Cards', the equivalent of a license, without which you're not allowed on a job site. Sounds good so far, but wait.
To get a carpenter's card, last time I checked, you had two 'official' options: 1) you had to have a university degree as an Architect, plus four years verifiable work experience, after which you could apply for an apprentice card and then do 6000 hours and then write an exam; or 2) your FATHER had to have a license as an Entrepreneur Générale--General Contractor--and in that case, you were only allowed to work for your father as an apprentice for 4 years or 6000 hours or something along those lines.
The 'unofficial' way to get a card is the same as it always was--and you can probably guess what it is.
You won't be surprised to learn there's a serious shortage of licensed workers in this province.
About ten or fifteen years ago, the minister of something or other in the provincial parliament realized that 80% of all new-home construction in the province of Québec was being done by unlicensed personnel, and that of that number close to three-quarters of them were working 'under the table' and not paying income taxes on earnings or wages. He decided to call a spade a @#$%?&* shovel, and put through a new law stating that construction of single-unit residential housing could be done by non-union, unlicensed personnel. A week after the law went into effect, a couple of hundred licensed construction workers went to Québec City (the provincial capital) and caught the minister coming out of a meeting. Two or three of the guys grabbed him and slapped him around quite a bit, threatened his wife and kids and so on, and then bugged out.
The minister was interviewed on television, crying tears and shaking. Two days later, he withdrew the new law. The guys who beat him up were never even charged.
Yeah, I know. I didn't believe it at the time, either. But it happened. And the CCQ still exists and 80% of residential construction & renovation in this province is still done by unlicensed guys. Duhhh.
My best lead carpenter is a guy with both a General Contractor's license and a Carpenter's card. He also has door and window installation competency cards and I don't know what else. He's about 60-some years old, and he pushes me when we work together on a job. But he prefers to work for me as an 'indy' rather than as an employee for some large outfit, because I pay him better than union scale. I believe (and I haven't checked recently, so I don't know for sure) that union scale for a lead on renovation jobs is about $14,90 an hour; for new construction I think it's $18.xx. But the GC's here are charging $50 an hour, and pocketing the difference. Last year, I paid my carpenters $17,50 and my apprentices $15, whether it was renovation or new construction (I don't do much of the latter; with the size of my operation, I can't build more than one house in a summr anyway).
The second reason I operate the way I do, is that I do what I do because I like it, not because I can't do something else. Therefore, I'm not in it strictly for the money. I try to balance the benefit to my guys and myself with the benefit of providing good work to the customers, and the pride of leaving behind a beautiful job that we can all be proud of--and that should last for a hundred years or so.
So, back to the question: can I pay my expenses at $2.50 an hour over? Just barely, I guess. I ain't getting rich--but most of the guys that work for me need the money more than I do. So far, anyway.
If I knew how to put a picture into this post (can't figure that out; I'm new to this 'internet' stuff), I'd post a few shots of our jobs. If anybody can tell me how to do that, I'll be grateful.
Keep getting up early!
Dinosaur
Lache-pas, les gars! La bière, c'est bientôt!
Dinosaur,
Yep! I'm a morning person. I don't sleep much. I now sleep 6 hours or so a night which is the most ever in my life. Must be age. Wow, it is complicated up there. I don't even deal with building inspections here except for water heaters and well issues. As long as it works for you thats great but I would want to profit a bit more. That way I would enjoy it even more! Dan
I may very well have to 'up' my rates myself pretty soon, whether I want to or not. I consider myself semi-retired (at 51 years old) because I've managed to build a lifestyle that doesn't cost much to maintain and enables me to work at a 'job-job' in the winter and pick and choose my projects for maximum satisfaction in the summer.
But, someone said, all that's good eventually changes, and on May 5, after 13 happy years together, my wife had a nervous breakdown and stole our son. Now the lawyers have gotten ahold of both of us, and I don't know what the result is gonna be. It's hard, bro. I arranged my life so I could spend time with my child before we even had him--and it worked!--and now it's all going down the garbage disposal and I feel like I'm getting my fingers chewed off trying to pull it back out. I thought I was going to leave my boy behind me when I croaked as a testament to my love. Looks like I'll have to settle for a few well-built houses instead. I love the houses, but it's not the same thing.
Dinosaur
'y-a-tu de la justice dans ce maudit monde?
Dinosaur,
Yeah, been down the divorce/child now hates me road myself. Hope it works out for you. My second marriage and shot at fatherhood worked out fabulous. Wish I could say the same for the first time around. Oh well, can't go back. Good luck. DanT
Thanks, Dan. We go to court Friday. I'll need all the luck I can get.
Dinosaur
Regardez dans mes yeux, votre honneur--voyez vous la vie de mon fils la-dedans? Alors....
What a gut-wrenching turn of events. Never been divorced (thank G-d), and we have a passel of foster/adopted/biological running around. I wish you the best of luck. You are right about the lawyers, though; you will have to go back to work. The only ones who win are lawyers.
I review my rates every year. As my competency increases I am able to take on bigger projects and I know what I need to earn every year. My accountant has been great at helping me get my overhead priced out correctly and I have policies about the types of jobs I take on.
Again, good luck.Quality repairs for your home.
Aaron the HandymanVancouver, Canada
Terms
*Unless explicitly stated in each specification under “Description†above, quotation does not include caulking, filling, priming, sanding or painting or any work pertaining to paint preparation.
*Sight unseen problems discovered after work has started and not readily apparent at the estimating survey will be quoted on a Change Order. Examples include poor workmanship by others that impedes current work, pipes and electrical wire hidden behind sheetrock or rotten timbers not visible at the estimating survey. These are common examples, though not the only ones. The Change Order may be either a fixed quotation or a Cost+ quotation.
*Cost+ quotation means all work performed under Cost+ conditions will be billed to you at a rate of $55.00 per hour and all material and all subs as well as other miscellaneous expenses will be billed to you with a 33% return to me over and above costs.
Cool Brad,
that makes it easier for me to finalize a contract this week...We can work our butts off but the money is made in the contract.
cheers,
silver
Thanks and good luck.
Brad
It was useful to me, Dinosaur.
Thank-you,
silver
Dinosaur,
Just read the entire thread for the first time because I'm putting a proposal together for tomorrow...and had to read your post a few times.
- I've been through a divorce and haven't puked that much since...
It was one of the hardest times of my life.
I hope you have a strong network of friends and family who can help you...
...but all things will pass and I'm convinced it helps to keep the best for your family close to your heart...hard to say what it is I'm trying to say but something like good luck
best regards,
silver
Thanks man. Everything is everything.
Haven't re-read this thread myself for a while; seems like my pain kinda hijacked it, tho. The news since last post is that we've gone round one in court and I got the boy back home temporarily. We go back to court again in a couple of weeks.
In the meantime, me and the boy spend a lotta time hugging each other.
Dinosaur
'Y-a-tu de la justice dans ce maudit monde?
View Image
Evening Dinosaur.
Been a long week-6o 1/2 hours plus late nights in the shop trying to finish a cabinet job.
First time I've been back since last week-end.
Nice picture.I miss my kids when they were that age...hope all goes well
silver
Thanks. It's one of my favourite pic's--what he was doing when photographed was listening to a disc of Georg Freidrich Handel's music; I wish my old man could have seen that....
My little guy's sleeping like an angel in the next room now; today was Father's Day and I made him waffles for breakfast, then we packed a day pack and rode the gondola up the mountain where I work in winter as a ski patroller. We took off into the backcountry and hiked up to the top of a remote peak; then decided to hike all the way down the backside trail. I think we must have done close to 4000' feet of vertical and something like 10-11 km on trail. Not bad for a 5-year-old. Now he wants to go back this winter and ski the same route. If I can find or make him some telemark boots, he will, too. He skinned up Mt-Albert in Gaspé Provincial Park a month and a half ago, using standard XC three-pin boots with virtually no ankle support.
This coming Tuesday my wife and I go to mediation to see if we can figure out some way to settle this without the lawyers; I'm not too hopeful as all she's done so far is use the boy as a weapon. There's another court date on Thursday anyway.
Too bad the judges won't listen to a five-year-old; my kid would tell 'em in a New York Nanosecond how she kidnapped him, hacked off all his hair, and kept him prisoner for a month in a battered women's refuge under false pretenses. I feel the load now, because he's looking to me to 'rescue' him permanently, and I don't know if 'They' will let me do that. All I know is I've gotta keep trying.
In the meantime, we do our best, and spend a lot of time hugging each other....
Dinosaur
'Y-a-tu de la justice dans ce maudit monde?