Im thinking of increasing the daily rate on our labour charge in 2015.
The reason being we are fortunate to be mostly more than 3 months booked in advance, we have a great reputation in my area and to be honest for the work we undertake I still struggle financially.
What do you think is a fair rate for a 3 man team (myself 20yrs experience, my son 3 yrs just completed his training and now capable of undertaking 90% of the work we do and a laborer)
We have a large bank of tools and machinery so never need to hire. Unless its an excavator.
We undertake all aspects of garden work including hard and soft. I also design the gardens and present free cad plans.
Whats fair guys?
Views: 2166
Replies
Gareth
You really do need to sit down (away from the phone and distractions) and work out what your business is costing you to run, what you need from the business and what profit you need to make.
Once you know these critical figures you then need to convert that into a day or hourly rate based on what potential output you have (look at previous years to ascertain how many days/hours worked).
Have a read of this: http://www.landscapejuice.com/2007/02/what_should_i_c.html
If you prefer to charge by the day and not by the hour then you need to make the conversion.
I always aim for a minimum £300 per day regardless what we do. That is based on me and one worker. If its a smaller job I aim for £30-£40 per hour - I find I can beat most competitors on one off jobs working off this hourly rate.
I work out I earn around £150'ish per day through the year.
£150.00 per day, working say 230 days per year will give you £34,500 per year and as long as there are no overheads coming out of that, would seem a OK.
You could always look at the percentage rise in other areas, such as inflation or minimum wage and raise your prices accordingly? Working out what you want and need should be involved too to make sure you don't underprice yourself - have you looked at benchmarking and competitor labour rates for your region? :)
I will do as you suggested Phil and go through my costings etc. Perhaps something I really should have done years ago
Hi Gareth I know I'm in a completely different area to you, but we operate as a team of 3 and for that team the day rate is £400 minimum, thats for 2 skilled guys and 1 labourer. we usually price work by m2 or linear m so its even more in the long run. I have to price at that to cover all overheads and make enough profit to survive/expand. I price on not working for 12 weeks of the year too, as this then includes all public holidays and having awful weather in the winter.
A fair bit of our work is priced by the meter.
We have just completed a shrub cutting contract for a housing association, around 15,000SQM priced at 0.33p per meter. To stick to the daily rate we had to do around 1000sqm per day.
Im going to try to increase the daily date this year to £350 if poss as im still told im too cheap, especially on our commercial work.
As with all of these discussions regarding pricing, it is very area dependent. We have always worked on sustainability - ie building a business that virtually runs itself. Just putting prices up because you 'feel' you are undercharging or 'someone has told you that you are too cheap' is a bit 'finger in the wind'. I have seen many, many ladscapers and garden maintenance teams come and go like annual planting. They get a foothold, make a big splash, but soon wither and disappear.
Are you VAT registered? Because 300 a day keeps you just under but 350 a day should take you over the threshold. Going over is not looked upon lightly by HMRC if you dont register
-
1
-
2
of 2 Next