Thread: Newly self employed

That is not such a bad line of thinking, but let the client know that they are getting a discounted rate because it is quiet. Otherwise when you are charging full rate they think you are trying to rip them off.

Originally Posted by kyle_oneill06

Anyone here from the UK or better yet in Scotland give me a better insight to a more accurate hourly rate.

Hi Kyle. Mate I'd suggest that in addition frequenting this forum you also join the "Carpenters Talk Group" on Facebook, if you haven't already. This is an awesome forum but has a lot of hobbyists, who aren't employed in any form of trade and would be thinking about your question in terms of 20 AUD rather than 20 quid which is what you're talking about. The Facebook group has heaps of practicing joiners from Europe & UK, and there's a lot of real life commentary on there. Just be careful about posting really basic pricing questions on there, there's quite a few really sour guys on there that get very critical about quite petty things..........this forum is way friendlier!

What you should charge for your work is of no concern to me. It is between you and your client. I assumed at the outset you were talking pounds not dollars. So, unlike others, didn't feel the need to go into melt down. You have acknowledged the fact you are on the lower end of the scale, no problem. You need the work and that's the best way to get it. Your logic of increasing your rates as you become busier is sound. After all, this is the true justification for increase rather than slapping up prices just because you can. It never ceases to amaze me how some folk overvalue themselves, everlastingly justifying their exorbitant rates and discrediting their customers.
You sound like a fair minded fellow. I hope your journey proves pleasant.

Yes, getting busy first is most important!

A good job will get new clients by referral - the best kind!

I've unfortunately never been in a trade thus have never had to quote for my work, however i have worked in Market Analytics so thought i'd contribute my 2 cents.

If you have no evidence to justify why you charge the same or more as your competition, what incentive is there for potential customers to chose you over a more established tradesperson?

If you can justify it, then charge it, people will pay (within reason), if you can't justify it and are just starting out, then pulling the price lever is probably your best bet. The only thing to bear in mind is there is a fine line between pricing yourself low to gain business, and pricing yourself too low where potential customers see it as a trade off in quality.

Take a supermarkets homebrand as an example. A bag of brand name flour costs $3, Supermarket homebrand costs $1... there is a perception that the supermarket home brand is an inferior product so the consumer uptake isn't great when in actual fact they're made at the same mill and simply put in different packages... where as consumers are more likely to shift from one brand name to another to save 50c...

You need to charge enough to cover your costs and to give yourself money to live. work out what the minimum of that is (including a contingency) and start off with that. As you get more referrals, and you get busier, adjust your costs upwards. People will be aware of the quality of your work and reliability based on reputation and be more willing to pay a small premium for it.

Try comparing the standard rate in the market for you to have an idea.

Originally Posted by kyle_oneill06

Anyone here from the UK or better yet in Scotland give me a better insight to a more accurate hourly rate. I know 20 is low but my thoughts are get some work in while my diary is empty and increase when I can see that I have plenty of work ahead of me.
From what I have picked up in my local area I'm hearing of £25-£28 per hour. I'd be happy to pocket £500 per week after tax because that's all I really need but the rest is icing on the cake and would cover things like holiday pay and maintenance.
Or am I dreaming???

I don't know the UK tax rates, but CLEARING £500 GBP per week almost certainly means EARNING around £800 GBP.

assuming when starting out you average 30 hours per week (think of the average as being over 10 to 12 weeks), then at £25 per hour you would be earning an average of £750 per week and clearing something around £450 before overheads. Which is significantly less than your target of £500 per week.

Originally Posted by kyle_oneill06

Anyone here from the UK or better yet in Scotland give me a better insight to a more accurate hourly rate. I know 20 is low but my thoughts are get some work in while my diary is empty and increase when I can see that I have plenty of work ahead of me.From what I have picked up in my local area I'm hearing of £25-£28 per hour. I'd be happy to pocket £500 per week after tax because that's all I really need but the rest is icing on the cake and would cover things like holiday pay and maintenance. Or am I dreaming???Sent from my SM-T550 using Tapatalk

I live and work in the UK. I have 40+ yrs experience of being self employed/limited company.First things first. Call the HMRC and or visit an office and pick up their leaflets re self employment. You not only have to register but there are a number of schemes of Tax/VAT/NI which you will have to follow.Forget hourly rates for now. Simply decide on an amount you wish to earn per week and divide it by 40. £500 is low. Around me hourly rates are £35 to £75. Bear in mind though that some jobs will bear a higher rate than others.Have you got a workshop to work out ofHow much electric/gas/water will you use in £sHow about insurance of at least £1million, + public liabilityMachine maintenanceNew tools or extra tools fundTransport costs. I assume a car and replacement costsConsumables, screws/glue/stain/finishes/plaster / rags/micro fiber clothsHoliday payYou can add to this list easily yourself.Then put costs against each item for the year and divide by 46 (working weeks).Always take a 50% deposite prior to starting work. This covers material costs plus a bit. If the client won't pay this then they possibly won't pay up your final bill. See it as a client commitment.Finally try not to be too simple/naieve about it. Always have your interests at the front of your mind as well as being honest and having integrity.Good luck.Al

Quick update. Thanks for the advice, things as of now have been great. I have kept the mindset of clearing £500 after tax&NI as the rate in my area is either very secret or stupidly low. I've had 2 jobs in with a potential 3 ahead of me. Letting the client take care of any materials needed for the job and we do the labour.
So my first job I priced it on how long I thought it would take and guess what I've pretty much over priced and made a nice earner. Made me think if the client is willing to pay this rate then maybe I should reconsider my hourly rate.

Sent from my SM-T550 using Tapatalk

Bear in mind that some jobs will go the other way, takes longer than you think. Getting the client to supply the materials is a good idea, if something goes wrong with the material, it's not your problem.
Kryn

Agreed with the loss jobs. Sometimes the gods punish you. Grin and do your absolute best. Never compromise your quality.

Nor bitch about it to the client, they don't really care. Do a top notch job, thank them for the biz and say you enjoyed the work. On the next job, for they will come back, price properly and explain the last one was underpriced but you did it properly anyway. They are very happy then and become very loyal. They respect your ethic.

I've had it happen.

Originally Posted by KBs PensNmore

Getting the client to supply the materials is a good idea, if something goes wrong with the material, it's not your problem.

not sure I agree.

did client purchase the material on your recommendation or advice?

do you know how to properly use -- cut, fold, bend, install, etc -- the material purchased by the client?

it is pretty easy for the client to purchase a material unfamiliar to you or which in your opinion (or experience) is unsuitable for the job.

Purchasing material is best left in the hands of the tradesman. The client is usually no expert. Nothing worse than wrong orders or inferior stock. A margin is placed on the materials and you are covered for your time. You are eligible for a trade discount from your supply and a repeat or volume discount, as and when appropriate. Neither of these need be transferred to your customer. So there is a nice little earner and you haven't had to strike a blow.

Should materials be supplied by the client?

As the job is being done for the client and they are paying for it, then if the client wants to supply the material it is their right.

If the person doing the job supplies the material then they are responsible for quantity and quality, but it is also an avenue of increasing profit.

I will give you a couple of examples of what can happen when client supplies material.

Job 1/ Replace letterboxes using supplied materials. I had supplied an option where I supplied materials but this was rejected. No fasteners were supplied, the base for the letterboxes was a bit short so they ended up closer together than desired. Where the stick on numbers were meant to go was corrugated, so another location was used. If I had supplied all the materials (including the same boxes) I think I would have done a better job.

Job 2/ Replace curtain tracks. Client wanted to supply material based on what I thought was needed. One of the brackets came as a pack of two so ended up with twice the number required - easy fix - return. One curtain track did not come with screws. - Not a problem as I always have some screws with me (and often the supplied screws are soft and either strip or break). The other curtain track had a broken carriage and could not be used. This delayed the job while the client returned it and got a replacement. This delayed the job by a week as it required yet another visit to the job. Yes it could have happened to me that I purchase a faulty product, but then I would not be waiting on the client to obtain the replacement.

Job 3a/ Pet door. I prefer the client to provide pet doors as they know the size of animal that will be using it. Some doors are real easy to fit, others for various reasons a pain. This client had a fancy door that could read a microchip on the pet to let it in or out, also a timer so they could be kept in after a set time and let out in the morning. Unfortunately due to faults beyond our control I had to replace the door not once but twice due to faulty circuitry. This was on top of two visits to install through the wall as there was insufficient internal tunnel initially supplied.

Job 3b/ Pet door. This door was a pain to fit. Luckily I had installed this model before so knew what to expect. For some reason though the bolts did not want to go through the holes and into the nuts. Even with another pair of hands it took twice as long as I allowed.

Job 4/ Door and cupboard handles. Client supplied replacement door handles for bedrooms, toilet and bathroom for property which they were going to rent. Door handles were an entrance set so needed to return after they had been changed to a privacy set. Same client wanted cupboard handles changed. This required multiple visits as first there were insufficient handles, and then one of the handles was the wrong size. (Some of the joys of buying on the internet). I should mention here that I had earlier done some work for this client which involved fitting a bathroom vanity. (I did not do the plumbing though.) I marked the cabinet for cutting but prior to actually cutting just checked the basin and found the wrong one had been supplied. Came back a week later, different basin and cabinet!

Have fun and tread carefully.