How do you figure your hourly rate?

[One Tough Pressure 580]

It is often heard, that someone thinks they are worth so much per hour. But why? So in relation to pressure cleaning, how does one come up with their hourly rate?

What makes you better than the other washers out there, so you can go for top dollar in your bids?

[PressurePros 248]

I'll speak from my demographic.

1) High demand/low supply

2) Seasonal work

3) Most guys doing this have never heard the words: detergent, soap, or chemical

Fixed expenses and experience are the true markers for hourly rate. When you enter a market you research going rates and determine where you want to fall in on quality versus quantity. After that, your hourly rate will depend upon your experience, how low you can keep expenses and your equipment.

An example would be the first deck I ever did.. a 20x20. I didn't know about contractor chemicals or message boards or how to measure wood. Soemeone told me a buck and half a square foot so thats what I told the guy..$600 bucks. I spent $150 on Cabot's stripper, $210 on sealer, 4 hours to strip, 1 hour sanding and 6 hours sealing. I netted around $20/hr.

Today I wouldn't touch that same deck for under $850. With the right prices on chemicals, labor, and sealer and the use of sprayers and experience I can have that deck done to perfection in six hours. Experience and the right tools have allowed me to cut my time in half and increase hourly rates dramatically.

[baronas 14]

I dont do an hourly rate,cant imagine watching the clock instead of the quality of the job.Besides I cant do fractions so I would go crazy if a job went 7 minutes into an hour.

[PLD 14]

Profit vs. what the market will bear. If I could make $10,000/hr I would and not feel bad about it. Alas, I cannot. So I set my prices accordingly and work like hell to control operational costs to increase profit. Note: That does not mean simply slashing expenses. Some expenses (like those that create quality) actually increase profit margin and can severely decrease margins if cut. Others (like chems) increase expenses (labor) when cut.

I personally think that making money is pretty easy if you remember one KEY rule: The buyer sets the price in EVERY transaction. Find that price, and develop a means to deliver it at a workable profit. And never forget when you are the buyer (i.e. chems, equipment, labor). That is the only place you get to negotiate price and affect the bottom line.

[mtnframer 14]

alan

we mainly do wood,so our hourly rate is 50 per guy per hour plus material,and

we dont always back charge.nice people will get a freebie.

steve

[Beth n Rod 1,279]

Hourly rates can be figured at...

w/h=wage/hour(wage+employer contributions+insurance[avg/monthly], mh=man hours

twh=total wage hours, js=job supplies (anything you need to purchase for the job to complete the service including fuel, sealant, masking/tarps, tools, tape, etc.)

jc=job cost, oh=overhead (office costs, insurance, advertising, communications, fee's, taxes, rent/lease etc. accrued per monthly budget%)

nc=net cost, p%= profit percentage(how much you want to make after expenses), gc=gross cost

wh x mh = twh

twh + js = jc

jc x 45% oh = nc

nc x p% = gc

gc / mh = Hourly rate

ex:

$25.00 x 8 = 200.00

200.00 + 250.00 = 450.00

450.00 x 45% = 652.50

652.50 x 15% = 750.37

750.37 / 8 = 93.79/hour

To convert this to a sqft formula divide the gc by the # of sqft in the job and you have the price.

ex:750.37/450sqft = $1.66/sqft.

The figures above are arbitrary but still the formula works. You can figure out the costs per wash and the costs per seal and come up with the broken down sqft price accordingly.

As you may guess, the costs are unique to each business and are effected by its region, market, and demographics.

Rod~

[PressurePros 248]

The formulas are very effective for analysis for determining your true hourly rate. Like I said, experience is the biggest variable. If this job were to take you 11 hours you would not only have to charge $125 more than Rod, you'd also make about $15 less per hour. Good post

[Beth n Rod 1,279]

Does anyone figure a job in piece work format?

Say for example that you would pay a worker by the job instead of by the hour?

Rod~

[Scott Stone 604]

I am constantly analyzing my costs. I do various things, and sojme of them are a little more profitable and some are a LOT more profitable in order to be competitive. So when I am working piece work, like fleets, where I am getting X amount of dollars per vehicle, the goal is to make around $45 to $50 an hour per man. Obviously, when I am washing by myself I expect to make more perhour, since I have more of an experience factor on my side.

Every year, I analyze the expenses VS> the hours worked to amke sure that I am still profitable. My goal is to keep salaries at 25% of revenues. Sometimes it works, sometimes it doesn't. If Salaries for a particular job are going up, and I am not htere, you can bet that I will be out on the jobsite on the next scheduled service to see what kind of change I can effect to make it profitable. Sometimes there are extenuating circumstances, such as, if some of my belly Dump that we wash on a weekly basis are hauling Asphalt that week. That is going to automatically increase the time and chemical expense because that is a lot harder than just Road Grime.

What it boils down to is that I do a monthly analysis, since ALL of my accounts are on a scheduled, recurring basis. That way I needto know if I need to make a price adjustment.

Scott Stone