[Carl]

Everyone's % for markup is different. Mine is actually much higher than 75%. Why do you view it as 'inflated'?

When you do or sell something (ANYTHING) for only what it costs you that is called charity. It's perfectly fine to give to charity and to operate a charity. But I thought this contracting thing was about business. And business is about your making money. Everything in the world of commerce is marked up. It's really not anything new here.

If I apply my 'inflated' costs only arbitrarily or am willing to negotiate them then how I can I, in turn, pay for them without breaking even? Breaking even is a terrible business strategy. You should break even on exactly 0 things. You should make money on exactly 100% of things.

Well, it's fine how you choose to justify what you charge, what you mark-up, how you decide to do your costs for your business. But, if I don't do this the way you describe, it certainly doesn't mean I'm doing it for charity or that I'm doing anything for free. I mean really, it makes perfect sense to me that no matter what in my life, I'm going to have a phone. Why should I shove 13 dollars per day up the butt of my customer and call this fair business practices if I don't view it this way? And then you want me to add in the toilet paper as well? I'm certainly wiping my butt every day as well, regardless of whether I'm working or not....right?

 

[GreenGuy]

First, how do you know I am paying too much? Nowhere did I describe what my plan and options were. Don't tell me, PLEASE DON'T TELL ME, you're one of those dreaded 'I'm only looking for the lowest price' type of shoppers that everyone on here complains so much about.

What if I told you that $150/month pays for 3 phones w/ unlimited text/talk and 1 iPhone with tethering. Now I tell you that the other 3 phones I provide to my top guys so they have a company phone I can always reach them on? Now what if I told you the tethering service allows me to use my laptop anywhere I get cellphone coverage to use the Internet. To email estimates. To pay bills. To order materials.

Now what if I tell you I pay those 3 guys $0.25 less per hour than I would had they chosen not to accept the phones? That equals $30 per week/$120 per month that they've contributed to the company phone service that they're also free to use as their own. This makes my phone cost roughly $30/month. Just because now I've mitigated some of the cost it does not mean that ALL of the cost is not ALWAYS still present.

But regardless I'm sure you can see how there is a LOT of value (and opportunity for the company) in that $150/month. I'm sure you can see how a markup is MORE than applicable. And Im sure you can see how if everything were broken down this way you would have the opportunity to not lose money on anything and to hopefully make a lot more money.

The above scenarios are not true for me by the way. I don't have the guys and the 4 phones etc. But what is true is that if I'll never get to that position of having those employees, etc without applying that markup now. And to every job. Every time.

Your paying too much for a cellphone per month.

EXACTLY!!! While I've shown how I don't believe this earlier what you've said it brilliant. If I were to begin thinking I need to lower the price of my quotes because I was out of touch with the market one way I could do that would be by getting a cheaper phone plan. As I have passed that markup onto the customer I can now pass that savings onto them. So instead of looking to increase productions, reduce quality of materials, reduce labor force to lower my prices I can look to easier things I may be too top heavy on. This is how one keeps their overhead 'low' and it's the ONLY thing to look into if you'd like to charge less money.

 

[GreenGuy]

You're not counting all of your expenses then or you wouldn't be winning jobs.

I'm not sure I understand

 

[GreenGuy]

Well, it's fine how you choose to justify what you charge, what you mark-up, how you decide to do your costs for your business. But, if I don't do this the way you describe, it certainly doesn't mean I'm doing it for charity or that I'm doing anything for free. I mean really, it makes perfect sense to me that no matter what in my life, I'm going to have a phone. Why should I shove 13 dollars per day up the butt of my customer and call this fair business practices if I don't view it this way? And then you want me to add in the toilet paper as well? I'm certainly wiping my butt every day as well, regardless of whether I'm working or not....right?

If you weren't working I'm not sure you would still have a phone. But regardless why you should be shoving it up their butt is because it allows you to distribute your costs among all your customers in a tangible way. What that money is representing is your time and materials spent even being able to offer them that great paint job in the first place. So your free estimates are now paying you. So your time spent driving is now paying you. So your time spent on the phone talking to them is now paying you. So you can take that extra time on the job when you need to to give them that next level service. So you can toss in an extra 'for free' and not lose money. So you can get that overnight shipping because your dog ate all your business cards. So you can pay your employees more. So you can cover your bond on your next big job. So you can sponsor a little league team and buy their uniforms. So you can get a new phone twice in 3 days because yours got destroyed on the job. The list is infinite.

Yet, for as greedy as I obviously am, nowhere on there did I list anything for me. Everything I listed in fact goes directly back into providing the customer with exactly what they're paying for in the first place: that great experience with that great quality.

 

[RH]

I'm not sure I understand

If you are marking up 100% from what you believe to be your cost than you are not calculating your actual cost correctly or you would not be winning bids. I'm not aware of any industry that makes that kind of profit (maybe fireworks or ice cream?)

Your own pay should be included along with daily overhead (insurance, vehicles, rent, utilities, taxes, etc.) and of course paint and materials. If you account for every red cent than a 100% markup would price you out of work.

If you really are doing it right and still staying busy with 100% mark up than I'm moving to your city next year buddy!

 

[Carl]

If you weren't working I'm not sure you would still have a phone. But regardless why you should be shoving it up their butt is because it allows you to distribute your costs among all your customers in a tangible way. What that money is representing is your time and materials spent even being able to offer them that great paint job in the first place. So your free estimates are now paying you. So your time spent driving is now paying you. So your time spent on the phone talking to them is now paying you. So you can take that extra time on the job when you need to to give them that next level service. So you can toss in an extra 'for free' and not lose money. So you can get that overnight shipping because your dog ate all your business cards. So you can pay your employees more. So you can cover your bond on your next big job. So you can sponsor a little league team and buy their uniforms. So you can get a new phone twice in 3 days because yours got destroyed on the job. The list is infinite.

Yet, for as greedy as I obviously am, nowhere on there did I list anything for me. Everything I listed in fact goes directly back into providing the customer with exactly what they're paying for in the first place: that great experience with that great quality.

That sounds great! That is, until you have added into your costs everything you could think of under the sun, marked up and now your prices are so high you are sitting at home anyway...with no phone.

 

[driftweed]

Arguing over imaginary numbers is humorous. And since we can't use specifics, it's a waste of time.

Until we are allowed to compare each others balance sheet in gory detail, you might as well be talking about warp drive propulsion systems. It's all vague theory.

We wouldn't want the public to catch on though...

 

[MKap]

First, how do you know I am paying too much? Nowhere did I describe what my plan and options were. Don't tell me, PLEASE DON'T TELL ME, you're one of those dreaded 'I'm only looking for the lowest price' type of shoppers that everyone on here complains so much about.

What if I told you that $150/month pays for 3 phones w/ unlimited text/talk and 1 iPhone with tethering. Now I tell you that the other 3 phones I provide to my top guys so they have a company phone I can always reach them on? Now what if I told you the tethering service allows me to use my laptop anywhere I get cellphone coverage to use the Internet. To email estimates. To pay bills. To order materials.

Now what if I tell you I pay those 3 guys $0.25 less per hour than I would had they chosen not to accept the phones? That equals $30 per week/$120 per month that they've contributed to the company phone service that they're also free to use as their own. This makes my phone cost roughly $30/month. Just because now I've mitigated some of the cost it does not mean that ALL of the cost is not ALWAYS still present.

But regardless I'm sure you can see how there is a LOT of value (and opportunity for the company) in that $150/month. I'm sure you can see how a markup is MORE than applicable. And Im sure you can see how if everything were broken down this way you would have the opportunity to not lose money on anything and to hopefully make a lot more money.

The above scenarios are not true for me by the way. I don't have the guys and the 4 phones etc. But what is true is that if I'll never get to that position of having those employees, etc without applying that markup now. And to every job. Every time.

EXACTLY!!! While I've shown how I don't believe this earlier what you've said it brilliant. If I were to begin thinking I need to lower the price of my quotes because I was out of touch with the market one way I could do that would be by getting a cheaper phone plan. As I have passed that markup onto the customer I can now pass that savings onto them. So instead of looking to increase productions, reduce quality of materials, reduce labor force to lower my prices I can look to easier things I may be too top heavy on. This is how one keeps their overhead 'low' and it's the ONLY thing to look into if you'd like to charge less money.

Well I appreciate the response, but it wasn't that serious. I think your over thinking my post a little and wasted 20 mins of unbillable office time.
And no I'm not a low price shopper..I understand the concept of you get what you pay for...it's kinda what I do for a living. You don't make a living painting being the lowest bidder.

I get that if your a one man show then your overhead is different and need to charge more, with less people/no one else other than u producing the work.

From what I read it seemed to me you were marking up your overhead costs and making money charging customers on cell phones and Kleenex.
I'm probably wrong and just didnt get the way you explained it so mark it up to a misunderstanding.

 

[GreenGuy]

Well I appreciate the response, but it wasn't that serious. I think your over thinking my post a little and wasted 20 mins of unbillable office time.
And no I'm not a low price shopper..I understand the concept of you get what you pay for...it's kinda what I do for a living. You don't make a living painting being the lowest bidder.

I get that if your a one man show then your overhead is different and need to charge more, with less people/no one else other than u producing the work.

From what I read it seemed to me you were marking up your overhead costs and making money charging customers on cell phones and Kleenex.
I'm probably wrong and just didnt get the way you explained it so mark it up to a misunderstanding.

Lol. Exactly man. The one man show, especially the one whos just picking up sidework sparingly (me), doesn't have nearly the overhead the guy with the huge shop does. And it's all about the EVEN and appropriate distribution of your costs.

If my car payment broke down to $10 a day I wouldn't charge the full $80 for transportation for a 4 day job. I don't use my car constantly on the job. I'd break it down for the amount of time appropriate. So say for this job I use my car a total of 5.5 hours. Including my outrageous markups on the car it would be a whopping $6.60 they'd get charged. Wow. Pretty brutal. After my insurance and gas usage (and evil markup) they'd likely be at about $39. Total. For a 4 day job. That's what I would have to tack on for vehicle usage. Roughly $8/hr what I get paid to drive to and for their house, get gas etc. Does this seem unreasonable? Really? $10/day? Seems fair to me.

 

[PatsPainting]

Green - Sorry bud, I know you came here put a couple of quarters in and won a little bit, feeling good about yourself you decided to keep playing, now your in the hole trying to dig you self out and you just getting deeper and deeper in the whole. It's quite obvious you have no idea what your talking about. You drive a car, most here have trucks and vans, your post about Aura was silly, and your business skills are ridiculous.

You should have quite while you were ahead.

Pat

 

[RH]

so mark it up to a misunderstanding.

By how much? :jester:

 

[GreenGuy]

Green - Sorry bud, I know you came here put a couple of quarters in and won a little bit, feeling good about yourself you decided to keep playing, now your in the hole trying to dig you self out and you just getting deeper and deeper in the whole. It's quite obvious you have no idea what your talking about. You drive a car, most here have trucks and vans, your post about Aura was silly, and your business skills are ridiculous.

You should have quite while you were ahead.

Pat

Ooohhh. Mr Kitty have him some claws? Peer pressure and everything? Not in the 'write my proposals on a napkin' club because I don't drive a truck or van? A brand new CRV isn't good enough for a hack like me? Doesn't convey that professional image? Doesn't instill any confidence that maybe, since I can make a car payment on time and have good enough credit to buy one, I may also be able do be depended on to paint your house? You need mr dressed all in whites like Pat in his truck or van to help you out instead?

Maybe we don't want the same things out of life. Or have the same approaches to get there. Or share very many of the same principles. But we've all got needs. And I think you may need a drink.

 

[chrisn]

by how much? :jester:

150%

 

[thinkpainting/nick]

You're not counting all of your expenses then or you wouldn't be winning jobs.

It's no wonder we battle to make money .. It was so much better years gone by so much better. I can't stress enough take a business course learn what fixed and variable overhead is . Do you know your costs? Your break even numbers? Retirement account health insurance disability insurance what happens if you get hurt??? How do you arrive at this miraculous $25 dollar an hr number. Check these sites out for help.
http://www.proofman.com/ http://www.evergreentech.net/ I'm not bashing a guy trying to make a living nor do I disagree with Pat and Green on points made I'm always willing to learn but the more we know about the business side and estimating the better for us.

As for CP I plead the fifth sorry nothing good to say in my experience I have a former employee of them working for me know. I'm sure there are some good owners but I've not run into one.

 

[daArch]

In another thread, there was discussions about remaining respectful towards others, NOT making it personal.

The subject of overhead and how it is calculated and appropriated is important, let's not cause an important thread to be closed due to personal attacks.

Disagreements are good, but let's keep our opinions of others to ourselves.

This thread was starting to degrade. Let's ALL check ourselves.

thanks

 

[NCPaint1]

I'm sure glad you are not my accountant...

Pat

What's the markup % on hand cuffs?

 

[RH]

It's no wonder we battle to make money .. It was so much better years gone by so much better. I can't stress enough take a business course learn what fixed and variable overhead is . Do you know your costs? Your break even numbers? Retirement account health insurance disability insurance what happens if you get hurt??? How do you arrive at this miraculous $25 dollar an hr number. Check these sites out for help.
http://www.proofman.com/ http://www.evergreentech.net/ I'm not bashing a guy trying to make a living nor do I disagree with Pat and Green on points made I'm always willing to learn but the more we know about the business side and estimating the better for us.

Who said $25/hr? The only thing I've said is that if someone is adding 100% to what they think is their cost they are almost surely counting gross profit, not net.

 

[Bender]

Certa might be screwing over its subs (and its HOs) but its no different then hundreds of ignorant, wannabe '2 fukcs and a truck' outfits.

It sounds like they are charging a solid, competitive rate for repaints and what is wrong with a man who makes $15.00 an hour with 0 write offs wanting to hustle $25.00?

Jesus, you guys would bitch if I kicked you in the ass with a new boot

 

[TJ Paint]

This is better than ****.

 

[oldpaintdoc]

OPD,

seriously, I am happy for you that you have found a way to make what you need and free of stress. And I TOTALLY understand about not needing or wanting to grow. I'm not type A either.

just want to make sure all your numbers are in the right column and the appropriate minuses are being deducted from the appropriate pluses.

IF it were MY spreadsheet, I would take my yearly vehicle costs, divide it by the number of miles driven in the year and then calculate how much the CCP jobs cost me for vehicle operation (I record daily miles). I would do similar calculations for my liability premiums.

I know we all need vehicles, insurance, tools anyway. But, think of it this way, if we were not working, we wouldn't have those expenses. They are legitimate overhead that are rightfully allocated per job.

I know I get hung up on numbers, but it has made me understand what my REAL revenues are and has enabled me to understand what I NEED to charge per hour. It has also made me realize that I MUST charge more for jobs that are 30 miles away vs 5 miles away. I am not netting more on those distance jobs, but I do have to gross more.

I'm not challenging your process, just hoping you're fully aware of your numbers.

You are correct. My $25 hr is a gross #.

But hey I am happy and it sure bets working for the man! :yes::yes::yes:

I am loving living.