I think it's a case of economy of scale really. I believe Lee Pryor has a few vans on the road now and he probably has to pay his guys whether they are idle or working - so he might as well have them working even if it's a lower margin. Most of us sole traders will have our target turnovers of £x per year which will break down to £x per hour. It's necessary to charge a certain rate in order to achieve that. When employing though, it's about profit over and above operating costs. If the clear profit on a job is a measly £2 when employing, if your guys get through 3,000 jobs a month that's a 6 grand profit - with the ability to undercut if you want to wipe out the opposition. Most won't or can't do this due to the initial outlay or maybe because they want to keep life a bit simpler. Bank loans for small businesses have always been a bit tricky to get - especially without collateral - so it can be useful to have a source of private funding to get started. The prices quoted by the OP are doable if they are based on making a profit margin rather than securing an income. Also, those prices do not have to be sustained year on year. They only have to be carried by the higher paying work until the business feels secure enough to increase them.
This hasn't been an issue until recent times and the advent of WFP. Previously, this sort of stuff was more restricted to the commercial field. I expect to see more and more of this going on. I don't actually believe that it is necessary to cut your rival businesses throats in order to be successful. Although work is a lot tighter now, I am finding that there is still the opportunity out there to make a business. I also cover some of the areas covered by Pryors and I can think of a few of my customers who might go with his prices. However, most of my work is on a par with that type of pricing - or close enough that they may not wish to make a change (the devil you know can be worth a couple of quid over the devil you don't with many customers). It's just some of the larger jobs that I might be a bit concerned about. I can think of one of my jobs that I do for £65 (no conservatory). If someone wants to try it for £12 they will be cutting their own throat. £12 wouldn't even pay the wages for that (estimate 2 guys @ 1 hour each) never mind the other operating costs.
Good luck to him as long as he doesn't get any of my work
