Self Employed Tradesmen - How Do You Price Up Jobs?

[Louise07]

Hi, my husband is hoping to go self employed as a carpenter. He has always been employed as a carpenter so he has just turned up to the site, materials all there and gets on with the work, he has never had experience of pricing a job. Could someone help with how to price a job accurately and competitively whilst maintaining a profit. We know we need to take into account the cost of running the business - do you try to work that out as a daily cost? Do we price per hour or per job for labour? How do we break it all down if customer wants a written quote - do we have to show individual materials or just a lump sum for total of materials and lump sum for labour or break down into hourly rate? Not VAT registered so do we even need to mention VAT? Do we price to cover husbands N.I & tax - I should imagine that just comes out of profits? When it comes to the customer paying do we request a deposit upfront or just send an invoice after job completed - how long do we give them to pay? Sorry if this sounds really silly but it's all new to us and if we don't ask we will never know! Thanks for any help!

[ummmm]

Your terms are up to you.

Price for the job and take into account all overheads.

When I had my hall/stairs/landing/ceiling plastered, I was quoted for the job and asked to pay 'X' amount on day 1 that would cover the cost of his materials. The rest was paid when the job finished.

[Gizmonster]

I'm sure your husband will have a rough idea as to how long a job will take to do, so price up the materials, allowing for waste etc and I'd guess that a skilled tradesman should be charging roughly £150 per day ..... gives you a rough idea :)

[buildersmate]

You've a lot to learn. Perhaps start with smaller jobs (less risk).

VAT isn't an issue until annual turnover reaches around £70k.

Virtually all customers will want a price for the whole job but when one gets a reputation (for quality or delivery on time, whatever) some people may be willing to accept your materials quote plus labour at an hourly rate.

I could go on for pages and pages but will let others have a turn.

[magsmay]

Hi Louise

You do not need to mention VAT if you are not registered for it

You will have to do a self assessment tax return every year and it is wise to save around 15 -20% of your monthly income to go towards the tax you will have to pay in a lump sum on any profits

you will be advised to keep a profit and loss account - two spread sheets -one with all your INPUTS -These are your expenses incurred in going about your business -materials,fuel,tools etc. and one for your OUTPUTS -this is a record of all earnings. it would be wise to read up on HMCR site what you can calim for in Expenses

if you husband buys new tools to start his business -and a vehicle -he can claim back a portion of this as Tax deductable in the first year of trade.

You will price the job as a whole based on how much it will cost you in materiels and how long it will take you in man hours to do the job. The customer will either pay up front for materials before you start or you can ask for an amount on the day you start for materials.

It is wise on a big job to ask for payment in two or three amounts.

Don't expect to make a huge profit the first year as there are a lot of Inputs starting up a business.

HTH