[Libertine]

As a new contractor i've slowly been learning to calculate jobs based on a sum of estimated time and its been going pretty well, although i will occasionaly lose some time (money) doing things over because of screw ups, etc. I have bid $3,780 for this job and they asked to pay time and materials because im painting sections of the exterior, rather than the whole thing...(?) I basically bid this job at 45 per hour including materials, but i think i'll be on it a bit longer and i don't want to hose them. The prevailing wage for a journeyman painter in Seattle is 35/hour. Hell, 35 bucks an hour sounds fantastic! ...but am i missing something?

 

[AALory]

I really don't know if anyone can answer your question without knowing what your costs are. 35 bucks an hours sure sounds great, but what does it cost you to work one hour? Many shops must charge 45 an hour because it costs them 35 each hour to go to work. It is easy to monitor and control the numbers coming in, but the numbers going out are very tricky. All the luck to you...and the rest of us.

 

[PressurePros]

The actual number for a business owner's salary is about 30% of gross. So if you are billing at $40/hr you are actually making about $12/hr. You may end up stuck painting all day, estimating all night, just make ends meet and never be able to get out of the field performing the work if you are billing at $40/hr.

 

[slickshift]

1) I'd tell them to take a hike
If they are trying to pick and choose pieces out of a $3700 job, you're just in for a mess of crap with these people. Wanting to pay hourly and them wanting to buy materials "to save money" are red flag #2 and #3. Dollars to donuts they don't realize it's going to be (probably) half prep work and I'm sure they didn't even think about (or know) how much sundries cost. Big chance they just buy a quart of cheap crap paint and say "here...go to town", and then get pissed when you spend half a day sanding and haven't opened the can yet. This type of arrangement tends to lower your (and our) status from Craftsman to Labor Monkey With a Brush. I'm not saying there's never a time to do T&M, I'm just saying this isn't it. Don't worry about losing the "work", really, think about it...tightwads are not (should not be) your target customer.

2) Realistically, when you factor in everything, regardless of how it looks to your average paycheck collector, I can't figure out how even a low overhead one-man show can operate successfully and grow with T&M billing @ any less than 35 an hour (per man hour). On the higher side I know some that do $55. $35 sounds great but after you figure out everything overhead wise, even with low overhead, are not "making" nearly that amount as a tech doing the work. Your "paycheck" would be somewhere south of 20 bucks an hour. How far south depends.

 

[vermontpainter]

Slick's red flag points are duly noted here. I have a customer who purchased a 4000 s.f. home this spring and basically gutted and customized it - acting as their own GC. In January I gave a healthy five figure estimate. We went back and forth for over two months before she asked if we would do the work t&m, as she was sure it could be done for less than my estimate, especially since they were going to be GC-ing themselves and would have complete control over every aspect of the job - and it certainly would be complete within a 2 month timeline. I agreed to do the work t&m and gave her the terms under which we would work that way, the most critical being that I would invoice weekly and she would pay weekly.

Well...needless to say, here it is June, and the house is not finished. There are no kitchen counter tops or backsplash, no master bathroom at all, lots of missing trim elements preventing rooms from being final coat painted. We have another couple of weeks to go, the end cost will double the fixed price I had estimated, and we have been paid every week for every hour of work. I am really, really glad I did this one t&m, because I had no idea exactly how chaotic and out of sequence a project can go with a homeowner at the helm. Ironically, the customer is kind of munching the humble pie. She is happy with our work, and every step of the way, I have pointed out the issues that have caused us to work out of sequence, and therefore driven up our costs.

 

[PressurePros]

Scott, she watched all those episodes of "Flip That House" and "Property Ladder". Of course she knew what was involved in GC'ing. It had to be you (and the other "subs") faults.

 

[vermontpainter]

Scott, she watched all those episodes of "Flip That House" and "Property Ladder". Of course she knew what was involved in GC'ing. It had to be you (and the other "subs") faults.

"Her" lead carpenter took the bullet in the chest for not working his crew fast enough. He was fired before they realized how long it would take to replace him. The drywall taper walked when he saw that they had hung way more rock than he had priced to tape. The floor guys walked and were begged to come back. We just kept plugging away t&m...:whistling2:

In reality, the problems were things like the carpet being installed before the crown molding, the stair balusters mounted before the floor guys sanded and finished the nosings and treads, electric switches, plates and fixtures before finish paint, final coat on floors before carpentry or paint were finished, multiple plasmas mounted to the walls before floors, carpentry or paint...you get the picture. What a circus. They make it look so easy on HGTV.

 

[Brian]

We just kept plugging away t&m...:whistling2:

Scott,

You know I'm not a fan of T&M, but this is one case where my hat is definitely off to you. Had you done a fixed price, you would be getting screwed. As it is, nobody is getting screwed.

I agree with the other comments that $35 an hour is way too low.

One thing that often gets overlooked is replacement cost. By that I mean replacement of the existing job. Even if we assumed a wildly best case, someone charging $35 an hour is probably not going to pocket $25 an hour. But let's say he does.

When he finishes the job, what does he do? Typically, he will scramble to find more work, perhaps spend a little on marketing. But he will likely have down time. So that $25 an hour is now offset by many hours at $0 per hour. If he spends anything on marketing, that also eats into his $25 an hour.

My point is, if you look at 1 job as an isolated event, $35 an hour might sound good. But if you look at it in the full context-- i.e., part of that $35 must pay for obtaining the next job-- it can present a much different picture. And from my experience, anyone taking such a myopic view will, in the long-term, make a fraction of that $35.

It's great to make $35 an hour. But if you sit at home the next week, it really isn't as good as it might seem.

If a farmer sold (or ate) all of his corn, he would have nothing to plant the following year. He sets some aside as his seed corn. Painting contractors must do the same thing.

Brian Phillips

 

[vermontpainter]

Scott,

You know I'm not a fan of T&M, but this is one case where my hat is definitely off to you. Had you done a fixed price, you would be getting screwed. As it is, nobody is getting screwed.
Brian Phillips

The homeowner only screwed herself, and sheepishly kind of knows it now. She came into it confident, having claimed to have done several houses over the years...This one must just be an anomoly.

However, much of this thread addresses the one man show working for $35/hr...in my case I might have 5 painters on that job at a solid hourly rate. A rate of $35 might be deceptive for a one man show. As to Ken's point about 30% of gross, if the OP was doing business on a slightly larger scale and had several painters locked in at that $35/hr, wouldnt it then become a better situation?

 

[Brian]

However, much of this thread addresses the one man show working for $35/hr...in my case I might have 5 painters on that job at a solid hourly rate. A rate of $35 might be deceptive for a one man show. As to Ken's point about 30% of gross, if the OP was doing business on a slightly larger scale and had several painters locked in at that $35/hr, wouldnt it then become a better situation?

The more people you have in the field, the less your hourly rate can be (this is a very general rule). The reason is that overhead and profit are now spread over a larger number of hours. If your overhead is $5,000 a month and you have 120 man hours (one man), you need to charge $41.67 just to cover overhead. Add 2 people and that drops like a rock to $13.89.

So yes, if the OP had several more people in the field, $35 an hour might be a decent price. I say might, because I doubt that that would still be high enough, but it would be a lot closer to where it should be.

From my experience, a 2 or 3 man shop cannot make anything close to decent money charging less than $40 an hour, and even then it requires a very lean and efficient business.

Brian Phillips

 

[NEPS.US]

I think T/M is attractive to small companies that are unsure on bidding. A one man or a partnership may like $35 per hour because they know it is guaranteed money. Any one that is booking steady T/M work is not worried about marketing or general overhead but worried about when rent is due.

I have a development that I do T/M work for their warranty and maintenance work. I also have contract bids for the exterior and interior NC painting. The T/M work is nice even if it is a break even because it locks my company up with ALL of their painting needs. I also do work for a couple of property management companies that are strictly a 35 per hour t/m. Not the greatest but the owner has a 120 lot subdivision on the board right now and I'm thinking of future work. Not all work has to be highly profitable "right now". Some of my t/m work can be classified as future marketing. The little extra monthy cash flow doesnt hurt either.

 

[vermontpainter]

Great posts, guys.

 

[Brian]

I think T/M is attractive to small companies that are unsure on bidding. A one man or a partnership may like $35 per hour because they know it is guaranteed money. Any one that is booking steady T/M work is not worried about marketing or general overhead but worried about when rent is due.

I have a development that I do T/M work for their warranty and maintenance work. I also have contract bids for the exterior and interior NC painting. The T/M work is nice even if it is a break even because it locks my company up with ALL of their painting needs. I also do work for a couple of property management companies that are strictly a 35 per hour t/m. Not the greatest but the owner has a 120 lot subdivision on the board right now and I'm thinking of future work. Not all work has to be highly profitable "right now". Some of my t/m work can be classified as future marketing. The little extra monthy cash flow doesnt hurt either.

I think these are very good points. But for the typical contractor T&M won't work like it does for you and Scott, because they look at the short term-- this particular job.

In other words, the typical contractor is trying to hit a home run on T&M. You 2 are hitting singles with T&M, but you are doing it time after time, with maybe a double or triple sprinkled in. That approach can work.

Brian Phillips

 

[painterdude]

If you're starting out and are not familiar with new construction, especially when the owner is the one hiring, be advised as you've found out that other "tradesmen" are not as dependable as you. I found out that in Florida after working in N.Y. that the work ethic was not the same. And that was 20 years ago. I leaned quickly not to do new cons't. especially high end. Too many times showing up and nothing ready. good luck in this economy. pd

 

[vermontpainter]

Brian

You're right, the t&m game is about consistency - lots of singles, stolen bases and sac flies - manufacturing runs and playing solid D. You always are putting the bat on the ball, and rarely strike out. There are no homeruns. That would go against the very nature of the game. Its not for everyone, but can be a valuable tool in select circumstances.

Lately, I have been doing more on the fixed contract price side and enjoying some of the thrill that goes with that. They are definitely two different styles that can be effective.

 

[Brian]

Brian

You're right, the t&m game is about consistency - lots of singles, stolen bases and sac flies - manufacturing runs and playing solid D. You always are putting the bat on the ball, and rarely strike out. There are no homeruns. That would go against the very nature of the game. Its not for everyone, but can be a valuable tool in select circumstances.

Lately, I have been doing more on the fixed contract price side and enjoying some of the thrill that goes with that. They are definitely two different styles that can be effective.

Consistency is the real issue. No matter how you do it, have a plan and do it consistently.

There are lots of ways to win a baseball game, or any game for that matter. While I don't regard business as a game, there are also a lot of ways to win at that too.

Sometimes we do hit home runs. I have a regular gig that is a home run every year. But the rest of the time I focus on the fundamentals-- singles, walks, taping the opponent's signs (no reference to the Patriots intended), etc. Home runs are sexy, but most home run hitters also strike out a lot. And that's dog ugly.

I like sexy, but I dislike dog ugly even more.

Brian Phillips

 

[vermontpainter]

I like sexy
Brian Phillips

Quote of the day

 

[NEPS.US]

Quote of the day

I just can't imagine Sexy and Bian Phillips in the same thread together.... gives me the creeps!

 

[vermontpainter]

I just can't imagine Sexy and Bian Phillips in the same thread together.... gives me the creeps!

I think he has surprisingly good taste! He just doesnt show his cards very often!

 

[crow]

Well to get back on track, I do allota hrly work for regulars, I dont really care to cause I can make more by sf., after painting and addin up the till I relized I paint way to fast for hrly. (compared to sf. ) Okay man you guys can get back to your sexfest.