[Fieldsy]

This is all a bit new, so no flaming...lol

Would really like some info/advice on this if poss with regards to those who employ. We are currently receiving options for commercial work, pubs, restaurants, community housing etc.....  I currently work in a partnership and we both know how much we can earn for an hourly rate on domestic work, we all know it can be approx in the region of £25 - £40 an hour depending on proximity of work.

With regards to commercial, how do you price ?, do you price according to the rate you know you can earn domestic or price according to how much you want to make out of your employee ?

For example;

 1) Lets say a commercial job is 8 hours work, and you as the owner of the business are going to do the work, do you price ( 8 x  domestic or more ), as this is the minimum you could earn if working your normal day on your own doing domestic

or....

2) Do you price the same job with a lower rate if your employee is doing the job, for example , you pay your employee £10 ( this is just an example rate)  an hour, you charge £20 an hour, so make £10 on your employee.

Example 1 : You are charging £25 - £40   x 8   = £200 - £320 respectively
Example 2 : You are charging £20                x 8   = £160

You are more likely to get the job with the lower price ( employee cleaning)

The reason I'm asking is, we were doing some site work and charging what we needed to earn on our daily rate to warrant doing the work ourselves. ( instead of our domestic)

We were going to another site, but have now been replaced as the site manager has said another cleaning company are putting prices in 12 -15% lower than ours. We now know that the company are using employees to do the work, so in effect can charge a lower rate as its not the actual business owners doing the work.

Sorry if thats all a bit confusing, but it seems that if you put a price in as a sole trader/partnership, you can't compete with people that employ. We are on the verge of employing someone so would like to know what route to go down when pricing.

There doesn't seem to be a definitive answer, as you could end up doing the employees work one day and getting bugger all na hour for doing it....lol

Thanks for your replies

[KS Cleaning]

The time you pay your overheads you will be left with no profit if you are only making £10 an hour on your employee

[Fieldsy]

The time you pay your overheads you will be left with no profit if you are only making £10 an hour on your employee

That was just an example, what I'm trying to say is, what is the difference in pricing a job,  if any, between going and doing the work yourself or sending an employee.

[8weekly]

Generally I find the opposite effect. The sole trader is cheaper because he doesn't have the overhead of paying someone.

[alanwilson]

I'll advise as best I can. I have employees, on site and 2 lassies in the office.
I pay a basic of £80 a day to onsite staff, after fuel, van costs etc etc I allow £100 cost per day per staff. As they work 44 weeks a year but I have to pay them 52 weeks this means I need to allow an additional 15.5% for holiday pay - I add another 4.5% for sickness etc. So in reality the daily basic is £120.
I have 11 men on site who also need to cover the admin costs of the 2 girls in the office - same rate of pay as the guys, without the additional van costs etc which further bumps up the basic of each guy to £127.50 per day.
I then base our pricing on getting 7 hrs work per day, so as you see I'm already at £18.21 an hour cost (assuming no problems)
I won't say what rate we base our pricing on but I hope this helps.

Also you need to add on cost of office/workshop and water charges etc etc. Ours are £1200 a month before water charges.

[Splash & dash]

That's very good and sound advice put in a simple way thoroughly agree

[alanwilson]

Thank you very much Reflections

[NWH]

So Alan I take it you are looking in getting per man what he's costing
You overall per day-week.

[alanwilson]

Hi NWH

That's a common pricing strategy for many different types of business, where wages = 33% of cost, 33% on equipment etc and 34% profit.

You wouldn't be far away at that, although it does depend on volume of work being offered, location, payment terms etc.

We have government work that pays in 14 days, payment is guaranteed and the volume is quite high (frequently doing the same jobs), so for this our pricing is low, I might only break even on some of it, some of it I may make £7 per hour per man. But because of the volume, I do ok out of it.

Some of our other work is less frequent, longer payment terms (longest is end of month plus 90 days!!) so for this type of work where my outlay is relatively high, I have to ask a higher price - as high as £90 per hour per man, however it may only be 2 hrs work per quarter.

Swings and roundabouts, you have to find the balance.

Hope this helps