well put
Originally Posted by
Hank Knight
There are two ways to bill for you work: "Time + Materials": and "By the Piece" or "Fixed Price". When you go to the fine furniture gallery to purchase a hand made piece, it's price is marked on the tag. It's one fixed amount, not $X for Materials plus Labor at $Y/Hr. In that case, the profit is built into the total price for the piece, but the purchaser has no idea whether it took the craftsman 30 hours to build or 300.
If you contract to do a job on a time and materials basis, the hourly rate you bill for your work should take into account your skill/proficiency level and a reasonable profit. It's hard to separate these two concepts (skill level and profit) and most people just lump the two together, with the more experienced craftsman commanding a higher hourly rate.
In my business - law practice - I normally bill my work on an hourly rate basis. My hourly rate includeds my overhead and takes into account the fact that I've been practicing law for 30 years and it's higher than a first-year lawyer right out of law school. This takes into account that it will probably take me less time to complete the project than a less expereinced lawyer and (hopefully) I bring more value to the task by virtue of my experience. Sometines I sell my work on a fixed fee basis: I'll do this job for X dollars. When figuring what I'll charge for a fixed fee, I figure my hourly rate for the estimated number of hours it will take me to complete the project. If the first year lawyer is going to do the job, I figure more hours at his lower rate plus some of my time to review his work product. This calculation will give me a fixed fee for the job. Billing this way is something of a gamble. If it takes me longer to complete the project than I anticipated, I lose money. On the other hand, if I complete it in less time than I estimated, I come out ahead.
It's similar with selling a piece of custom woodwork. You can charge for it on a time and materials basis or on a fixed fee basis. If you're contracting in advance to produce the work for a fixed price, you're like me agreeing to to complete a project for a fixed fee. You're assuming the risk of unanticipated difficulties that will complicate the task, and might choose to build some cushion into the price for such contingencies to protect yourself. If you're pricing the piece after you've built it, there's less risk - you already know how long it took to build and what it cost you. But in any case, in charging for your work, you need to cover your costs then pay yourself for your time and your experience and include in your rate a reasonable profit for your work. That's why you're selling your work. Don't give it away.
My $.02
Hank
Well put Hank
Ive been making my living as carpenter working wood for 30 years
I charge by the hour for myself and employees and the rates are different with theirs being lower than mine. I make a profit on their labor
Either way workers compensation, taxes and profit are figured into the hourly rate.
However having said that I find it better to give fixed rates for each job and always up front.
Last edited by William OConnell; 12-06-2008 at 12:50 AM.
William
http://woodworkers.us
I never lost money on a job I didn't get