Help pricing a project

[MavDog]

Looking for a little help here with pricing a project I am building for a customer.  I am not a professional, I just do projects on the side for people.  That is why I am looking for some help.      I do have a lot of experience though with projects I have done for myself and other people.  I have done a bunch of projects but I always feel like I am not charging enough. 

This project is for a bench seat with a hinged lid.  It is going in the customers lake house.  The interior of the house is pine boards and very simple.  The bench seat will be made from pine similar to the material on the wall and they are going to finish it to match.  I have come up with about $200 for materials (pine, plywood and hardware).  I was planning to charge them $600 to build the unit and sand it so that it is all ready for them to finish.

[attachthumb=#]

I know that if a professional were to do this it would cost more because they have other expenses to figure in and their hourly rate would be more than mine, and rightly so.  I know this is a tough question because everyone charges differently.  I am just looking for comments as to whether that is a fair price for someone doing projects on the side.  I am just looking to make some money on it to add to my tool fund but want to make sure I am giving them a reasonable price, not too cheap and not too expensive.  I know they have more projects they want me to do so I want to make sure my pricing structure looks acceptable.  Thanks for any help you can give me.

 

[pugilato]

I too would be interested to know... for example, should materials be marked up?  After all, you are spending time and money buying the materials, picking them up, etc.  How much do you charge for labor? 

 

[jonny round boy]

Can't help on the pricing, but I do think that 24" plus the top (so likely 25") is a tad too high for a bench seat. Unless your customer is a pro basketball player... [big grin]

 

[Wood_Junkie]

Almost every contractor we've ever had work on our houses adds 10% to matierals cost, basically for handling, taking on the cost/charge, financing the purchase (so to speak), or whatever. 

Additionally, it might just be the business profit that has to be built in.

 

[tiralie]

Hey MavDog:
I always ask myself a couple questions when I price a job. Here are some of them.

1) Do I really want to do this job?
You are in a good position. You don't need to do this project to survive. You have some pricing flexibility (lower and higher) that some "pros" don't.
Sometimes you just want to work with a particular client (friends or colleagues) . Sometimes you want it because the project is really interesting. Sometimes it's because you have to (you need to pay the bills) or you think the first project will lead to something else or better. I think low balling to get a project is problematic. Future pricing is always going to be measured against the first price.
Sometimes you just want to do it at any price other than a loss.

2) Who am I competing with?
If you are competing with someone who has more experience and is pricing in your ballpark you need to sell hard (see #4). In this case you are probably competing with your customer because this is a fairly simple project and your client may be able to do it so you are really competing against how much value your client places on his time.

3) Where did this business come from?
In this case I am assuming someone you did some work for previously recommended you. In that case the client knows more about you than you do about them. They know you are doing this part time and you will be cheaper than someone doing this full time. In other words they are looking for a low price and hoping you can provide it. Sometimes asking the question "what is your budget" even if they "um and ah shucks it" will give you a better idea than not asking.

4) What value can I add to this project?
If my only value is how low a price I can provide then I better be the low cost producer and extremely efficient. If people are coming to you because you are the lowest price around then you need to keep your costs down and efficiencies up.
The reality for me is it's part of my job to show them the value I bring but if price (see above) is paramount then no amount of talking is going to get me a premium price.

5) Can I work with this person?
While I like to think I can work with anyone who asks me for something, some folks are just difficult to work with. They are not trying to be a PIA, they are just difficult. That's who they are, or they have a set of conditions that make it impossible to do you job the way you think you should.

Lastly, fair is a relative term and doesn't really enter into the equation. What a pro. would charge and what the conditions for their pricing is also irrelevant. Unless you are selling yourself as a pro and the client knows this then they are expecting "working on the side" pricing which translates to lower than a pro would charge pricing. There are a lot of different kinds of customers, the kind of customers that find you are looking for what you provide at your price.

If you are achieving your objectives (getting some more tools), not pissing off your family because you are always working then your pricing is right for you.

It's really your job to figure out if the client is prepared to pay more or less.

I hope this helps.

Tim

 

[Kevin Stricker]

The key question to ask yourself to determine a fair price is how long will it take you to build.  Make sure you factor in the time to design and source the materials.  Then break out the cost on a per hour basis and see if it feels right to you.

For one offs I will sometimes bump up the time estimate by up to 50% because I know I am overly optimistic at times.  I also find that if my materials are over 25% of the cost of the project I am usually underbidding the job/underestimating my time.

Just an FYI, I wouldn't touch that job for $600 based on the design you have. 

 

[MavDog]

Hi Tim,

Thanks for all the great info.  Your questions are very helpful.  Yes I want the job because I like to build things.    I am not competing with anyone on this.  This is business from a friend that I have done other projects for.  They have always been happy with what I have done for them.  Yes I am sure that part of that is the price I charge but they are always pleased with the quality of work.  The value that I am adding is a quality product for a price that fits into their budget for their second home.  I know that I can work with them because I have never had an issue in the past.

They have hired professionals before to do finish work on their house so they do know that custom work costs money.  My problem is that I have no idea what a pro would charge for this.  To me it seems like a fairly simple project and I am figuring I could get it done in a weekend start to finish.  Thinking about this a little more based on your comments I should probably be charging more that I was initially thinking.

 

[MavDog]

Hi Kevin,

Thanks for the info.  This was very helpful  I wasn't figuring in the time that I spent with them talking about and working on the design and the time to get the materials.  That is a good point to include that time.

Based on your comments about materials being under 25% it sounds like this should be more in the $800 to $1000 range instead.  That seems like a lot to ask them for but it does sound like a more realistic price.  I can start with that price with them and see how that fits into what they were looking/expecting to spend.  As I mentioned above they have hired before for finish work so I don't think the price will shock them.  They know I do quality work so I know they don't have any questions about what they would be getting.

 

[WarnerConstCo.]

Almost every contractor we've ever had work on our houses adds 10% to matierals cost, basically for handling, taking on the cost/charge, financing the purchase (so to speak), or whatever. 

Additionally, it might just be the business profit that has to be built in.

There is a lot of time and effort that goes into sourcing, pricing and ultimately picking up/having materials delivered.

If I don't charge for that, I just donated a lot of my time.

finished project, ready for a finish coat, dropped off on site, I would be double your price.

Anything less and it would not be worth turning a tool or machine on.

 

[kdzito]

Can't help on the pricing, but I do think that 24" plus the top (so likely 25") is a tad too high for a bench seat. Unless your customer is a pro basketball player... [big grin]

A typical bench seat height is 18" high.  

 

[kdzito]

Almost every contractor we've ever had work on our houses adds 10% to matierals cost, basically for handling, taking on the cost/charge, financing the purchase (so to speak), or whatever. 

Additionally, it might just be the business profit that has to be built in.

There is a lot of time and effort that goes into sourcing, pricing and ultimately picking up/having materials delivered.

If I don't charge for that, I just donated a lot of my time.

finished project, ready for a finish coat, dropped off on site, I would be double your price.

Anything less and it would not be worth turning a tool or machine on.

Amen, my brother Warner on charging for the Project Management fee. 

 

[MavDog]

Yes I thought 24" was a little high.  That is what they originally asked for but when I told them to look at it on a tape measure they agreed it was too high.  18" sounds a lot better.  [smile]

Yes I know I should be charging for the design work and getting materials.  I will add a little to the price for that. 

Thanks for all the great input that every one has been giving me.  I really appreciate it.  It is helping a lot.

 

[mastercabman]

I have done a few of those!  $600.00 is pretty good for labor.I would add for picking up and delivery.
Also 18"-20" is the ideal hight for a bench seat.

 

[Chris Hughes]

When I first started to build furniture I relied heavily on Pottery Barn for design inspiration and pricing.  That was about ten years ago.  I still look at what other are charging as well as having a better idea of how long particular pieces take to build and finish.

As for materials, we charge 15% for our mark up.  We have built specialized relationships with various supply house not only for lumber but for hardware and finishes as well.  Those relationships add value by allowing us to secure premium materials without sorting.

 

[Flatsawn]

Mavdog,

You should copy and frame the advise you just received from Tim Raleigh.
I was going to highlight his advise about pricing too low. Once you do that it can't
easily be undone but now I see a few posts down you admitted that's exactly
why they chose you.

If you now take the number from Warner they will feel slighted.

We all like to build things (for some odd reason) but you are now forced
to work for $1 an hour for these people even when someday you feel
a bit slighted yourself at that pay scale.

 

[gbruzze1]

Will you also be installing, or just dropping off?

Sent from my DROID2 using Tapatalk

 

[Electric Trim]

Find something comparable on Potterybarn.com.  The do a decent job on building furniture and custom built ins that I build are usually pretty close in price or a little more.  Subtract a little from what you find for not finishing it.

 

[WarnerConstCo.]

17 bucks an inch.

 

[Ken Nagrod]

17 bucks an inch.

How long will it take you to produce my 1" long bench seat?  I have a 20 so I'll expect $3 change.

Depending on how my current job is going, I might splurge and go for 2".

 

[WarnerConstCo.]

17 bucks an inch.

How long will it take you to produce my 1" long bench seat?  I have a 20 so I'll expect $3 change.

Depending on how my current job is going, I might splurge and go for 2".

I can run that board through my planer in a few seconds that wide too, so that sounds like good money. [big grin]