What's It Cost You To Operate Your Business For One Hour
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- Опубліковано 15 жов 2024
- Grab your What to Charge worksheet here:
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When he said "the guy who has no fuckin clue" i felt that on a spiritual level 💀
🤣🤣
I can't begin to say how much I love the brutal honesty that your providing in your content! I am a small time carpenter in southern Florida and am totally going to implement your suggestions into my company. Thanks man!!💯🇺🇸👍🏼🤙🏼🎣
how's it going? Any update?
Just opened my business and I've watched this video about 7 times already. What a banger!! This absolutely helps👊🏻👊🏻
Glad it helped! Thanks for watching.
We're out of the west coast. Sometimes ya gotta go even HIGHER!! Don't hesitate to go higher. Especially if hard to find the exact product, a harth a counter top...the exact tile!!! Each head ache...GO higher....or each potential head ache...hike it...hike it!!! OK, just had to add my 2 cents...... I also enjoyed the video.
Don’t see the work sheet
Bump for this content because I’m to broke to invest is some of the other great things you offer as I was a dumb ass not charging what I need to. Thank you sir. Your like my new coach!
For repair work on flooring I charge per man hour $50 per head. Typically, if I have 2-3 guys working on a job at 150$ an hour, the job ends up costing the customer a lot less than one man at $50 an hour. I always make sure to give the customer the estimate and make sure they understand it’s an estimate. We also keep track of the hours using an app. To show the customer. Based off of my experience I already know the type of hours we are pulling on a job. Small bathroom repairs take less than 30 hrs in one week. If I got 2-3 guys working that job ends up being about 1200
Man I hated it when people would ask me how much it would cost to replace a door or paint a room. They actually want a set price. I always told them it’s not that simple. Great video. As always- good content
You got that right.
My favorite is the over the phone how much does it cost to....
As if calling a store. My first one this year how much would it cost to paint the interior of a garage?
Ah, is it two or single.
I use to build custom book cases to entertainment centers. No one asked how much just what they were in need of.
So many people keep saying "just price whatever you think you'll get the hang of it." That advice is trash and the reason so many people have to close their business. This is great stuff! I know exactly how much to charge to meet my goals. THANK YOU.
Dude I freaking love your channel and knowledge! Your straight up and real!
I didn’t learn shit in college. Stupid business degree. This man deserves my 80k tuition.
It’s because your professor never owned a business
Where is the link to the bills worksheet. I clicked everything. Nothing takes me there.
Juat getting my momentum in the game and I gotta say, THANK YOU! Dig your style and the content! Much gratitude for your experience and time man.
I appreciate that Jeremy!
How things going 1 ur later ?
Mind blown. 🤯 great stuff!
Amazing info thanks for the quality advice and knowledge your a hero bro!
PLEASE READ: I want to say THANK YOU! 2 videos is all it took to help me understand the importance of your content. I wish I found this videos before. You have a grateful Low Voltage Contractor on me now. 😎🇺🇸
Wow, thank you Byron! Glad we could help.
The math isn’t calculating for me. If I have 3 field guys, the 1700 billable hours becomes 5100. When I use this number my daily rate at the end is lower. I don’t understand
Basically your overhead will be divided among 3 crew members cause you have more people working to bring in X amount.
Thank you for your video
This video definitely helped me understand better! I'm not the typical read from a book and learn type of guy.
Thanks 👍🏽
Glad to hear it Frankie!
I mean I've written down so many things , I can't watch "educational videos". Anymore. You shred brother, good to be back on and watching...Wes with GPSHAVASU
Thank you for your videos. Your information is greatly appreciated.
Tom This stuff is awesome, Thank you!
Glad it was helpful Stephen!
Great video, obviously everybody else’s number will be different but at the end it’s a good reference for us to follow. Boss move!
Boom!
So to clarify, as owner/operator put 100k salary under "overhead" plus included myself as an employe? so essentially drawing that salary plus the employee compensation. This part has been confusing to me when trying to figure out how much I should really be paying myself (generously)
Awesome video
Please where can I find that worksheet
thx im just learning this and this video was real helpful
thanks again
Glad it helped!
Simple and to the point! Could you please send me a link to the worksheet.
Gotta be dialed when it comes to financials and job costing
Thank you for your time .
My pleasure Markie!
Sure everyone has their own styles but its good to know others
thumbs up and subscribed. 🤙
Thanks for that information I was looking for long time, I ready down load the sheet..👍, I am like a lot of guy who knows how to do the job but not how much to charge .. thanks again
If you grow the company, increasing the number of employees with similar wages, the formula drops the total cost per man hour (J). What am I missing?
Great video ! Woman contractor here love the content had many laughs 🤪
Good stuff!
Thanks for the content & the worksheet, though I honestly thought you had this in an excel format (not a PDF) - I'll have to create my own so I can play with the numbers a lot easier
Love it. Love what you’re doing Tom. Nice job sir.
Much appreciated Aaron!
Amazing channel. Has help my business a ton
Happy to help Rob!
Mannnn, this is awesome and thorough. Major props!!!
Thank you ! Great video !
Glad you liked it!
Like your style bro !!!!
Time andMaterial
Don’t forget the gpm you add onto your material costs! This will get you past your net profit goal
Great video! Simple and to the point!
Solid video
There is no worksheet in the description.
0:57 timeout is on point! Love it
Great advice, but you missed one thing in your calculations..... Every single job I have done ALWAYS has some unforseen obstacle. I'm adding 20% to every job for those situations that are unknown ahead of time. For instance, today the electrician was working in the same space and he slowed us down by being in our way. This is only one example, but there are plenty more. Always add a 20% contingency.
i followed your example i did all my numbers i figured out my overhead for the month i went with that for the annual overhead. i went out to check out a potential project it was a full kitchen remodel along with some other things remodel the number was in the mid 30k...i don't think they were expecting that number. now where do i find the leads from?
GREAT ADVICE
Great stuff Tom! Appreciate all your doing! - You wouldn't be able to use this if you had guys working overtime correct?
Use our job costing sheet for that. To figure what you need to charge for a job if you know you will have OT. thecontractorfight.com/jobcosting/
Awesome man
I just want to make sure I completely understand what you are saying...
According to the math in this video that would be $91.00 per man...Per hour? So for two guys that would would be $182.00 per hour? Correct? Thank you in advance. I appreciate the video very much.
Yes. If that's what you came up with from the worksheet.
I was doing my calculations and I kept getting un matched figures unless, I was to add the 91 x2 workers, that would make sense, and in my case, its 26 x 10 workers.
I don't think so. If a task were to take 1 guy 8 hours to complete, then in theory, 2 guys should be able to complete it in 4 hours. You would not increase your hourly rate, because the man hours would stay the same.
@@watertiteman It seems like you misunderstood our question but thank you for your input.
Where is the link for what to charge worksheet?
Hey Tom,
Otis here, so, once you add the materials and get the total job cost with labor materials and overhead & profit do we still take that total and times it by 2 for the bid or estimate? Thanks in advance! awesome video!!!!
No… not if you did it correctly
@@contractorfighttv ok thank you again, have a blessed day!
where is the work sheet? cant find it on your website?
The link is in the description
Do you take into consideration the commute to jobs? Or you don’t charge that time?
Yes. That should be worked into job hours during your estimate.
Where’s the sheet?
At the end of the video, shouldn’t the amount be less because he is only sending one man to do the job instead of what his calculations came up with for two people? Anyway, great video and information. Appreciate it!
Awesome info! If you are using this formula for estimating projects, would you still add markup on the material?
Yes. This is just establishing your hourly bidding rate.
@@contractorfighttv Amazing. Thanks!
In 2023, I be charging: $400.00 per man hour plus materials, plus 1,000% markup on those materials. Plus overtime, plus 1,000% markup on the materials. But I’m also paying skilled labor $65.00-$80.00 per hour starting, plus overtime, plus CPA fees, plus workers comp, my direct cost is usually peanuts, plus insurance, plus Auto Fuel etc. My current direct cost and overhead without employees is: about $6K - $10K per month. With 5 Emloyees: It cost me the employer: 6 figures per month to run my construction company. Which means that my company needs to be growing at least $2.5 million dollars with 1 crew of 5 guy’s in order to have a 50% personal gross profit margin.
$65-$80 per hour where you do you live? California?
@@Lawnandgarden Denver, CO
In 2021, Denver, Colorado was listed as the 4th highest rent district in the entire country. That means that we’re up there with California.
Thank you!
You bet!
So if this was 2 years ago than what would it be now with all this inflation
All this numbers are correct except when Roberto, Xuan and Carlos show up and they do the job for $7.50 PH minimum wage and you wonder where all the clients at and why they are not calling back after they got your FREE estimate that served a benchmark for their future estimates...Contractor market is oversaturated and this numbers dont apply to every job types or specialty.
Don’t blame them just step your shit up bud.
What do you do when the GCs set budget only covers the labor and over head costs of your bid and the material cost are at 50k without any mark up. How would you negotiate that very real scenario?
Thanks for this equation.
That really helps.
I have a question on bidding by the hours.
When you bid. Do you calculate the fact your laborer will be more tired at the end of the day Into the equation?
Is there a video on that. All I can find on production rates and times is contractors on the texting forums.
Figure out the number of hours for the job and then add 20%. Also, there is an industry term called "tool time" which is the time actually spent 'on the tools'. Everything else is a waste in terms of getting the job done. Tool time is usually around 70-80 % of the time, hence the need to add 20% (at a minimum) for each job. Other factors include unknown issues that need to be dealt with. I hope that helps.
Where you mentioned using 1700 in the video and multiplying by 2.
Can I multiply the 1700 by 3 if we have a crew of 3?
Yes
How does this work if you pay commission pay?
So, this is a contractor's way of explaining cost accounting, nicely done!
If anyone needs simplification, just divide the overhead you spended last year by the billable hours last year & you'll get the hourly overhead rate.
On top of that you can add your labor hourly rate by dividing last year gross labor cost by last year billable hours & you'll get your labor hourly rate. You're welcome
Yep. All great ways to do it. The main problem is that 90% of contractors don’t have this info. They don’t track hours. Most don’t have a bookkeeper nor do they have a place to access this info. Which is why I’m in their grill all the time to get their shit together!
@@contractorfighttv Tell me about it!
I'm a freelance accountant & contractors are the ones in the most need for my services but also the ones who don't have the money to hire me bc profits get eaten away by overhead or not understanding the difference between markup & margin lol
I don't know how some of them are still in business
where is the worksheet?
Does this work for welding not just home construction
Yep
✊🏽🇲🇽✊🏽gracias por tu tiempo
One thing that I didn’t hear you explain is how it affects the numbers if I am one of the field employees. As the owner my salary is in overhead. So if I include myself in box A but then don’t have a wage to add in box F how does this affect the numbers?
Charge what you’d charge for that position in the field when it’s not you. And pay yourself owner’s salary
What the hell tom where is the link for the worksheet
This final amount… the cost for one hour… is this the number to charge per person in the field?
No. If you have 2 guys and it takes them one hour, then that's two man hours.
Hello when you said per man hour is that 91 for each person on the field? So will I charge 182 because there are two people out on the field?
Can’t find the work sheet
Fuckin AWESOME!!!! Straight and to the damn point man! Big cheers!
Appreciate that
IM SO CONFUSED
From San Juan, Puerto Rico!! Thanks for this great video. Fucking real!!!💪🏽💪🏽🙌🏼
Thanks Pedro
Some of this kind of went over my head towards your average wage per person.
If you have two people 25 + 20 = 45 but if you use a blend of 31.5 after your 1.4 multiplayer, how does that cover the cost of two guys doing the work you estimated 40 man hours?
Is there something I’m not understanding?
Because of you did your math 25+20X1.4= 63 then bill them both out at 31.5 how are you making money when their straight wage alone is costing you 45 before the 1.4?
The only way this math makes sense is billing each worker at $91/HR.
If you quote something @ 48 man hours but only budget 31.5 per hour in labour and you have Jim and Joe there making $45 per hour and it takes the 48 hours, you’ve lost money.
Unless you meant to say if you quote it 48 man hours but the job gets done in 24 hours because you have two people there?
I would appreciate your response!
Yes I had the same question.
@@michaelmead5880 Actually, if you quote something @48 man hours, and you send Jim and Joe, it should only take 24 hours.
Lmao @1:09 i had to go clear my browser history real quick
hi excuse me i have a question that $91 pay for just 1 person on the field and if i have 2 guys working on the field i need to charge the double? like 182 for hour? or im wrong i hope you can answer me and by the way thanks for your time and your value able information thanks a lot
When you do your math you will get an hourly number. Thats per person.
@@contractorfighttv thanks for take the time to answer me thanks a lot appreciate God bless you I ask you that because in the end of the video you say that cover for and you mention 2 people on the field that's why my confuse
Hey so once I finish and have my rates, I've come across a speedbump. When I do my calculations on a annual scale my rates cover overhead and an employee's yearly wage. But when I break down the amount of workable hours in the month, theres no way my average cost per one man hour can cover paying him on a weekly or monthly basis (the amunt of workable hours in a week or month) but my number line up annually.
If you consider billable hours 40 hours per week times 52 and that comes up to 2080. The percentage of 2080 that is 1700 is 82%. If my guys work 5 10s then I would assume I could calculate my billable hrs by this math which would be 50*52*.82* #of field employees?
I think you are missing holidays, vacation, sick time etc when you go with the straight 52 weeks.
I think you’re misunderstanding my math. I did not do a 52 week. I based it on 82% (.82) which should all you mentioned into account
Thanks
While doing these calculations on the worksheet I am technically one of the 2 field employees, SO my question is--- if my salary is included in the annual overhead costs (C) how do i adjust (F) to reflect my hourly wages IF i do at all???
Good question. Maybe im confused, but do these calculations charge for me, as employee, again for my salary, and another time for “profit goal”? So $100,000 of salary, $50,000 “profit goal”, plus my hourly wage, since im on the field as well?
Then you aren't running a contracting business, you're working in a contracting business.
Hire a second person to replace you. Keep your desired salary in the Net Profit. Factor what you need to charge to get there. Charge the customers. Get paid.
Not trying to sound like an ass, I've just been where you are and need to hear that before I did it. You're trying to own and manage your business not work for it. At least that's what I'm assuming.
@@SorryAboutYourMom You salary belongs in Overhead or Indirect Expense.
What if it’s just me and occasionally a part time guy?
How can I calculate it if there are no field employees, only subs? I get zero for billable hours so it jacks up all the calculations?
Our business model is subs only - no employees and from your awesome video, the owner salary goes into overhead so that puts a "0" in the calculations. What am I missing here?
So I tried it with just more people and it seems like I have to charge less with more people???
OH hourly rate will be less when spread out over more people. But you’ll only recover it if you fill capacity..
My brake even is 90 dollars for one hour so I charge 150 per hour
Your video was fucking hilarious man.
Hey!!!! Next video should show what kind of baby shark Voodoo you just used to be able to see that I had my porn screen minimized haha. Definitely subscribed after watching 2 videos. Thanks for the free
Tom, what if I'm doing Service work and only send one guy out on a call? Do I divide that 91.00 by 2? Thanks
What was your hourly rate calculated at? That’s what you charge per hour per guy
This is where I think there was a slight mistake. When Tom makes the calculations for that example he multiplies 91x 48 estimate hours. This calculation $4368 is based using just one employee in the field, but instead he mentions that would pay for two employees, which is wrong. The whole video is amazing, just this example might confuse us with this little mistake. Can you confirm this? Thank a lot!!
@@pedroperezsmith9917 91 man hours doesn't mean it's just one guy. The 91 hours is total hours on the job for whomever is working. You could have one guy work 40 hours, two different guys on site for 10 hours each and another guy on site for 31 hours which gives you a total of 91 man hours.
@@jeremystorm9101 bro you're so confused. $91 is the hourly rate buddy for one worker on the field and 48 hrs is the amount of time estimated for the job.
Hi tom, I’m own a small mini ex and bobcat service, is this formula just for the ppl in the field? Or do I have to charge extra for my equipment also? Thanks
your equipment should be in the overhead
How do I get the work sheet?
Have you thought about looking in the description?
@@contractorfighttvnot there
Here’s a simple cheat I learned. Charge material costs X4.
I learned so much in business school unlike some people. This is just one way to skin a cat. Also what about negotiation tactics? People are always looking to get a good deal on both sides.
Negotiation is handled in the the sales process. It's the job of the sales person to uncover the true motive of the prospect...when that is done right 'negotiation' is irrelevant.
Bill in at least 4 hour increments. If people look at how much their employees fuck off and screw up estimated man hours , the only place it can come from is profit.
Fucking catch up, Joe. Just pay attention.
If no one owes me shit, why are they always trying to give me more?