Page 1 of 1
Posted: Wed Sep 22, 2004 9:06 pm
by jones2004
Im from the North West and im trying to setup a business and would like to know what I should charge per hour for hard landscaping and drain repair work.
I will have all the equipment required for hard landscaping/groundwork and will also, fingers crossed have a jetter and drain camera for the drainage work.
Should I have two rates for the landscaping and drainage work?
Please could someone give me a general idea?
Many Thanks
Posted: Sat Sep 25, 2004 5:43 am
by 84-1093879891
Part of the joy in setting up your own business is deciding what to charge. There are 'going rates' for various trades, but they're not the same as the 'required rate' for any particular business.
First of all, you need a business plan. This will detrmine what oveheads and fixed costs you will need to cover as part of running the business. Business plans, especially ones prepared with some input from yourself, are a superb tool in helping identify SWOT - Strengths, Weaknesses, Opportunities and Threats - so, if you can, try to compile your own with help from your accountant and the small business adviser at your local parasitic bank.
On top of your fixed costs are your variable costs, such as wages, kit, repairs, materials - unlike your fixed costs, these items vary according to how much work you undertake.
So, for each job you do, there'll be five components:
1 - Labour
2 - Plant
3 - Materials ..... these 3 items are your variable costs
4 - Overheads ..... this covers your fixed costs
5 - Profit ..... essential to fund expansion of the business and the bar bill
Now, as I said, there are 'going rates' for the labour and in the NW of Eng-er-land a decent tradesman in the groundworks game should be earning at least 125 quid per day and you need to allow 50-80 quid per day for labourers. Bear in mind that a top tradesman, such as a fast and accurate kerb-layer, can earn 200-400 quid per day if he's shaping himself.
The costs for plant and materials are self-explanatory, so no need to prattle on about them.
The Fixed costs can be determined ONLY by you: How much are your insurance policies? Bank loans to fund plant and vehicle acquisitions? Professional fees, such as accountancy and <spit> lawyers? Cost of running your office/admin? Phone bills? Gas, lecky and council tax? Advertising?
And then your profit - again, this has to be determined by YOU. If you set it too high, you might not win any work; too low and you won't be able to develop the business. For small-ish, residential projects, a profit margin of 35-50% is not unusual, but for siteworks, that may need to drop to, say, 15-20%, but the overall sums involved are so significant. 35% on top of a 5 grand job isn't so much (it's 1750 quid, actually) but 15% on an 80 grand job is a nice healthy 12 grand.
So: the moral of the tale is that you have some homework to do. I would guess that your drainage work should be priced separately to your general landscape work, and for that you need to factor in what's being charged by the competition. If they're getting, say, 250 quid for a cctv call-out, then you might decide to ask for 230 quid, just while you get yourself established.
No-one can tell you exactly what to charge, not unless you pay them to work through a business plan for you. This is summat you MUST do for yourself, not only because there's only you with the data (at this point) but also because it gives you a tremendous insight into the running of your business.
I hope this has been of some help - it may not be quite what you wanted to hear, but it should push you in the right general direction.
Posted: Sat Sep 25, 2004 8:34 pm
by jones2004
Thankyou very much for the advice.