new business starting??

[MarkSB]

Well currently I am pouring concrete (patio's, driveways, ect.) and through work I have found a couple side jobs in landscaping. I did hardscape a couple years ago (brick patio's and retaining walls), and I really liked it. Last week, the place I work for did a stamped patio for a guy I went to highschool with; and I built the steps leading up to the patio door out of retaining wall block. It all looked great when it was done but I only charged him $250 + materials for it.

Now my foreman (and friend) wants me to do a brick walk and patio at his dad's house. The going rate for this stuff is about $13 - $15 per square foot where I live. I told him it would be at least $10 per square (900 square feet x $10 = $9,000). Then there's a back stoop that needs three steps up to a door. I called a local landscaping place and they quoted me $3000.

Material cost by my estimate is about $600 for the stoop and around $4/sq. ft. for the brick ($4200 total). Once I get done paying someone to help me, I could make $4K out of the deal. I'm not really the business type and I feel a little guilty charging a friend's father this much, but it's cheaper than any other contractor he will find and I am confident that my work is quality. I guess my problem is I really want to make a nice chunk of change here maybe for some start-up capital but at the same time I want to give the guy a good deal without shorting myself. What is fair? I was thinking of telling him $10-11K for a job that will cost me roughly $4200 and might take me 3 weekends to complete.

Thanks for any replies.

 

[MarkSB]

Maybe my question isn't quite clear. Should I charge based on a market value? That is how I would like to charge since it is the most profitable, it's just that it seems a tad steep. Is that greedy?

 

[Armistead]

I'm do mostly commericial painting, but also stamped concrete, patios, ect. Not sure where you live, but that is a higher rate for brick, but the market is what it is.

If the man question your price, he will probably get another bid. He may have already. If this is the market value, you have nothing to feel guilty about. However, in most markets, the markup is about 30% at the most with competitive bidders. If all can make 50% or more, others would bid less to get the work.

I do get jobs where I make a large profit, things may go well, ect. I also have customers that use only me. I could take advantage of them and mark things up, but I don't. Eventually, I would get caught. One thing we have to remember is in the end things usually balance out. Some jobs you do well, some you can break even or lose, so don't feel bad about the rate if you can get it.

The only problem would be if someone else comes way under your bid and does a good job. The man will probably feel you were trying to cheat him.
Just be sure of your market and what it allows.

People must also realize they're paying for a skill that took you a long time to learn...just as lawyers charge $300 per hour. They are not just paying for the job itself...there are years of training that go behind it.

Good luck

 

[BigV]

what I would do, is ask your client to get at least three bids for the job and then you will give him yours. Tell him how he can save money (not sure if there is a way to get away with alternative materials, use a little different design, etc...) and ask this person include these variances in his bid.

I'd be upfront and tell them that I expect to make money on this project (i.e. I'm not working for free) and I'd ask if this is ok with them?

Getting several bids will get them an idea of what things cost around there.

Also, I presume that you have all insurance, etc... There is a chance that your client can find someone without insurance who can obviously bid less than you probably can. I'd be willing to explain the advantages of using someone with insurance.

Making a profit is not the same as taking advantage of people. Even if you work for someone, they must make a profit to keep you employed.

I'd go so far and to say that you can probably get a better deal going here and there, but my price is such and such...

Many times, I'd rather not deal with a family or friend, because everyone expects you to give away your labor or material. I'm a part-timer in Real Estate sales so that's how I know

 

[Saucy]

I think you have more than a profit on the line here. You're reputation in that community and any future profits you may make are on the line as well. If the guy gets the idea that you're overcharging him, he is bound to say anything about you to his friends and neighbors. Then they speak to their friends and so on. What you are charging is more than double the cost of materials and there's no reason for it. I can see a grand in profit, maybe even two, but four is way too much, especially for only a few weekends worth of work.

 

[BigV]

I think you have more than a profit on the line here. You're reputation in that community and any future profits you may make are on the line as well. If the guy gets the idea that you're overcharging him, he is bound to say anything about you to his friends and neighbors. Then they speak to their friends and so on. What you are charging is more than double the cost of materials and there's no reason for it. I can see a grand in profit, maybe even two, but four is way too much, especially for only a few weekends worth of work.

If the 'going' rate is $13-$15/sq foot and he is charging $10 then he is in the right. I would still confirm the going rate, however.

I think in any business, you get the best rate by going directly to the workers. For example, if you go to the place that tints windows. The'll quote you one price, but the guy actually doing the work will get about half or 1/3rd of that price. The rest will go to the overhead.

It's possible that the OP does not have the same overhead as the rest, and that is why he can make handsome profit by charging less.

However, if the OP does not have the same level of insurance or use the same quality materials, then he would be wrong in charging almost as much as the competition.

 

[BigNorsk]

A lot of time people start out thinking that others charge way too much. However, when they turn it into full time work they find they need to charge just as much.

Start buying trucks, tools, put up a building, pay the insurance and so on and it adds a lot into the cost.

If it is your intention to go into business, that "extra" is what you use to build it.

I note you didn't mention your license or bond or insurance. Do you have those?

What if you build a step and as someone is walking down a brick is loose and pops out and they are injured. How are you going to take care of them?

By the time you have those things, you might find the going rate isn't so high.

Marv

 

[MyBlueDog]

Treat him like you want to be treated. Sounds like you are already. Go for it. And congratulations on being a skilled craftsman!

 

[siggy1969]

Giving a bit of a break IMO is good business.

You are treating them fair like others have said so you have nothing to worry about.

Congrats!

 

[jadekap]

If you are charging him LESS than market value, and you are doing quality work, then in my mind its a good deal for both sides.