Bit of quick advise on Biz Plan

hi Folks

had some great advice from everyone lately, but im working on setting up at the min and am working on business plan that I will be submitting to someone.

 

Im concentrating on mainly maintenance at the min with some small hard landscaping and possibly trying to build a name for pond construction and maintenance but in the biz plan Ive been chargeing out my labour at £11.50 regardless of job.

 

Obviously for any real clearance jobs Id like to charge more - harder work and more waste etc but how would you show this, i.e additional income charged per jobe etc?

 

Many Thanks

CJ

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PRO MemberPermalink Reply by Adam Pilgrim on March 28, 2011 at 23:46

CJ - I would strongly recommend always charging more than £11.50 per hour. There was a handy rate calculator knocking around on here, some one may know where to find it - results may surprise you! If you input your vehicles, advertising, insurance costs etc it works out for you how much you should be charging... Don't forget the price of diesel!!

Also I try to charge by the job where possible, find it makes book keeping easier.

Permalink Reply by CJ on March 28, 2011 at 23:54

Cheers for that Adam, ive been searching for the calculator will keep looking, i was thinking in terms of £11.50ph for standard lawn cuts and tidy ups then extra charges for full on tidy ups & basic hardlandscaping etc.

 

May be I need to rethink in terms of biz plan, im trying to present financials as easyily as possible as Im trying for some minor funding.

Permalink Reply by CJ on March 29, 2011 at 0:00

Found calculator, yip would be under by about £4-£5, but at early stage maybe need to aim for middle to help win cutomers.

 

Permalink Reply by Fenlandphil on March 29, 2011 at 6:10

I would use the calculator price to price up your jobs based on the hourly rates you have arrived at as being profitable. £14-£15 per hour.

When you make a mistake on a job, as you will do from time to time and have underestimated how long it will take you but are on a fixed price, your hourly rate will perhaps drop to £11 or £12 per hour or maybe less. If you have estimated your costs on £10 or £11 per hour and end up in the same situation your rate may well end up at £5 or £6 per hour. Don't forget you have got to live during the winter when there isn't much work around and you will either have to build up funds to see you through or have an alternative source of income. 

CJ said:

Found calculator, yip would be under by about £4-£5, but at early stage maybe need to aim for middle to help win cutomers.

 

Permalink Reply by Richard Boyd on March 29, 2011 at 6:56
It may be worth costing on a break even basis and then adding in a profit margin, if you do this for each aspect then you can react quickly to any future changes. That way you know if a job is worth taking, you have wiggle room, easy to sub contract out...

PRO MemberPermalink Reply by Phil Voice on March 29, 2011 at 7:47
Permalink Reply by Mark Watson on March 31, 2011 at 15:24
CJ -Don't make the mistake of undercharging to get business in the initial stages,in my view it will cause you big problems later on. You should stick to £15/hour minimum for maintenance and 20-30 quid an hour for real tough "grunt work"-hard landscaping is skilled and hard work so I charge 25-30 pounds an hour, although the pricing is per job not per hour. Where are you based ?  All  the best! 

CJ said:

Found calculator, yip would be under by about £4-£5, but at early stage maybe need to aim for middle to help win cutomers.

 


PRO MemberPermalink Reply by Chris Auld on March 31, 2011 at 18:08
Cj when i started up 4 years ago i decided to charge £10 per hour which at the time i thought was great as i was only getting paid £5 an hour by my current employer. After a few months i realised i wasn't really making any money so i raisede it to £15 per hour. Dont under sell yourself, £11.50 is not a fair charge for a professional.
Permalink Reply by CJ on March 31, 2011 at 20:34

Folks thanks for your advice,

I have come down to chargeing £12.50 per hour on general maintenance jobs as in standard lawn cut and tidy ups etc, other jobs will be priced accordingly obviously more for kerbing, clearing, fencing etc.

I dont think Ill get any more around here for general maintenance and will only price my self out of it even in more affluent areas based in NI.


PRO MemberPermalink Reply by Rowly Hill on March 31, 2011 at 20:51
From an experienced business persons point of view perhaps so Paul but I feel your opening sentence is a tad harsh and unwarranted as CJ is starting up after all. Apart from the those three words sound advice as usual.

Paul @ PPCH Services said:

Pure naive stupidity, You want to be charging on a fixed price per job basis not an hourly rate and what this equates to per hour should be substantially more than £11 ph.

 

Charging a low rate to get started is madness and will only set your business back, you will not have the capital to expand and will just get the wrong sort of customers.

CJ said:

Cheers for that Adam, Ive been searching for the calculator will keep looking, i was thinking in terms of £11.50ph for standard lawn cuts and tidy ups then extra charges for full on tidy ups & basic hardlandscaping etc.

 

May be I need to rethink in terms of biz plan, im trying to present financials as easyily as possible as Im trying for some minor funding.

Permalink Reply by CJ on March 31, 2011 at 21:03
Points all well recieved, possibly looking at £12.50 starting point and altered dependant on job even for general maintenance jobs but for business plan side of things 12.50 works as a starter.
Permalink Reply by Andy Thorne on March 31, 2011 at 21:48

Another thing, to follow on from all that Paul says, that I 100% agree with, is that you need to accept that you will not get every job that you quote.  I run on about 50%.

This means that half (sometimes more) of the time I go and quote and don't get any work.  This is ok as I am charging a sensible amount that covers all problems and eventualities, as mentioned in posts above.

You need to consider all the extra, 'unbilled' time spent on business - accounts, business plan!, repairs, maintenance of machines, sorting insurance, training.....it goes on and on.

 

You cannot run a successful business just thinking about time spent on the tools.  If you do, you will fail - I promise!

 

Pricing by the job is IMO the only fair way to price jobs for customers, otherwise they actually don't know what the cost of a given task will be.

Without pricing by the job you cannot make extra money for effeciency savings, speed or extra effort that you expend.

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