Smash your pricing & earn the money you deserve..
I thought about the name of this post for a while & eventually decided on name your price because I think as plasterers we all want to hear those words from our customers & we want to know our services are sought after & our plastering work is valued. I see alot of newly self employed plasterers asking what others charge & then using this amount to price their jobs, this is understandable when your starting out & I'll talk more on it in this post but with our eyes on the long term, getting to that place in our plastering career where we're asked to name our price I think this is a worthy place to be & something to aim at. So let's look at pricing & jump right in by asking how much should I charge?
This is a question that you will ask yourself alot when you are self employed especially in the early days but even after you've had years in the game it's still a question that will need your attention. In the blog post GOING OUT ALONE I wrote about how the fear of no work messes with the head & we end up telling ourselves that shit paid work is better than no work at all. In this post I want to delve into pricing up jobs & all that is involved in doing so. I want to look at alot of factors but also want to keep this as simple as possible while covering as much as possible.. lets get straight into things with your overhead because this will play a big part in how you price up your work.
Keep it simple. Your direct costs
Your direct costs include the materials you will need for a particular job, the amount of fuel & also labour. We will keep direct costs nice & simple.
If you employ staff these labour costs should be included.. for now we will assume you work alone. Let's look at a typical plastering job for example if you are pricing up to plaster a ceiling your direct costs might include:
PVA, plaster, fuel & your labour. Now the PVA the plaster & the fuel is an easy one to work out, although supplier costs can vary we can usually round up these costs & factor in any discrepancies. The bigger the jobs get the more generous your material allowance should be, simply multiply materials & fuel based on what's involved to cover run-overs & lags. Remember we are keeping this straight forward,only factoring in direct costs for a particular job. Now the amount of money you get for your work may change as you gain more skills or as your business grows so we'll look at our earnings next.
Wages aren't profit
I've said this before..Your wage isn't your profit. Your wage is what you need to eat & pay bills. At this stage of the costing up your wage will not include any profit it is strictly the amount of money you draw as wages (chargeable labour) to calculate this amount you will have to factor in a few things & also decide whether to charge fixed price or dayrate
*Location *experience *time
Let's look at the first one
Location.
Your location plays a part in how you price up your jobs & it boils down to supply & demand & the cost of living. If you live in a thriving city like central London for example your labour charge will be very different to if you live in a rural location with a low population. Charging central London prices in a small village in Wales will see you out of business as nobody will pay your asking price & charging village prices in central London will also see you out of business because your earnings will be less than your running costs so your pricing should be relevant to your location. Working out your labour charge will mean looking at your location & the demand for your services & working out an achievable rate, There will be a spectrum of low end to high end rates for plasterers in your area, There will be top earners & bottom earners you will need to decide where you fit in that spectrum but before you decide on this amount we need to explore some other factors which will impact your pricing.
Experience
Your skills..On & off the trowel..
Depending on where you are in your plastering career, your experience will be a fundamental part in how you price your work & what your customers will be willing to pay. It goes without saying that a plasterer who is skilled in multiple disciplines is able to charge a higher rate compared to someone who is only partially skilled on the tools. This is because hiring a fully experienced plasterer is less risky & they are able to solve more problems so from the customers perspective he or she is more valuable. As a skilled spread you will also be able to cast a much bigger net for work usually consisting of internal & external specialist work so it's a nice place to be. This being said, being skilled on the tools is only part of being a successful tradesmen & although it will determine good quality work these skills alone will not determine whether your plastering business is a success or not.. When it comes to pricing up your work & the many other business tasks that await, There are many excellent trades people around the world with decades of 'on the tools' experience but who struggle in business often because they have overlooked or lack essential business skills, Often these guys although brilliant on the tools are working for other spreads or bigger firms so the message here is just because you are good at plastering walls it doesn't mean you will be good at running a plastering business..When skilling up in your career, if self employment is a road you want to journey down it's important to also focus on your business skills especially if you plan to run your own show. If you are self employed then you are effectively in business & part of business ownership is entrepreneurial meaning the ability to pool resources & capital, A good business person will often source skilled labour on larger projects & not necessarily rely solely on his own skills..Having said this you should never take on work that you have no experience in because this will ruin your name if it goes wrong & your name is all you have in this game so use your initiative here & tread carefully.
Time
Earlier I mentioned time. Your time has to be factored into every job. Your time is gold dust when your running a business because everyone is going to want a piece of it & there's never enough if it to go around. Self employment involves a fuck load of plate spinning & time management. Getting this wrong will destroy your profit margin & your personal life, it will have the biggest impact on your business operations. When you are quoting work always get real on how long the job is likely to take ask yourself 'how long is this going to take me? Time on the tools, time off the tools time typing up emails time driving around quoting & time on the phone..all this has to be taken into account when you price your work. We'll dig into this more later on.
What's the going rate?
Taking on board location, your level of experience including business experience & looking at the above example not only from the plasterers angle but also the customers viewpoint, it's clear that when it comes to plastering there is alot of variation in quality. We have all seen the posts online of awful plastering work this is by no means a bash at learners who are advancing I am talking bad plastering resulting from a bad attitude charging big money & leaving people's homes in terrible conditions.. We have also seen exceptional work by highly skilled plasterers so it is only fair that prices reflect the level of finish & also customer service, There is no 'one price fits all' for plasterers. This is why asking the question 'whats the going rate' is wrong. It might give us a rough marker for a certain location however It's the wrong question to ask because every plasterer works to a different standard & works at a different pace..Think of it like this, If you are looking to order a skip to clear your garden.. Asking the question 'whats the going rate' is logical & sensible because a skip is a skip at the end of the day one skip is no better or worse than the next so you don't want to be paying over the odds for a generic item. Plastering is different, If you picked out a couple of random plasterers in a city, the first one might leave a job flawless, a job that might last 40 or 50 years but the next in line might leave a job below standard & prone to failure..The same goes with any service based business, hairdressers..cake makers.. whatever it may be.. When it comes to service based businesses like plastering, people will always pay for quality & certainty. Instead of basing your price off a going rate you should asses your price based on your capabilities, your business costs & the value you bring to the table, again we are not generic items so rather than asking 'whats the going rate' Look at the top earners & bottom earners & ask yourself 'What am I worth?' Remember that when you give a price to your customer this is your price it's not a generic price.
Calculating your worth
To calculate your worth you need to factor in the above elements location & experience but also you should look at what your business offers the market when you price your work. I talked before about undervaluing yourself & the damage it can cause. When you are thinking about your worth think about who you are & how that adds value to your work.
People choose you, not your price.
It's often said that 'People buy you, not your product' Are you likeable? Are you a good communicator are you punctual? That's valuable to your customer they will appreciate good communication & timekeeping during the job, Are you trustworthy well mannered & polite? Again if you want to become a full time domestic plasterer your customer will value these traits & it will impact their decision to hire you or not. Remember that you will be working in people's homes. People live busy lives today, Often customers are searching for a person they can trust to undertake the work during the day while they go to work & if they trust you then the chances are they will do business with you & will be happy to pay you a good rate. So think about how you as a person can add value to the job & how you can factor your strengths into your pricing strategy.
You've served your time so price that in..
Think of the time it has taken you to develop your skill set & to get your trade under your belt, You have no doubt put the effort into learning your trade you have made sacrifices & have perfected your finish to the best of your ability & you clearly are focussed on improving & developing yourself otherwise you wouldn't be reading this so you have to keep this in mind & never sell yourself short on your quotes. You should have certainty in your own capabilities & let this show in your price. Be confident in yourself & your customers will see this & they'll have confidence when choosing your business.
Bigger jobs & pricing from drawings
During your plastering career as time goes on & you build your name depending which market you focus on, you will often be asked to price larger jobs. When your business is young this can sometimes be overwhelming. When your in this position just remember a wall is a wall ! Breaking large jobs down into phases is the way forward here.
If the project is not yet built you might be asked to price your work from a drawing. Again at first this can be confusing especially if we are used to visiting the job site or quoting domestics. If you are willing sit down with a calculator & part with your time you can usually work out how many square metres are involved in a job & the spec will be included. I will often give a meter rate in this scenario. If the job is particularly big & is for a regular customer then you could consider hiring the help of a quantity surveyor who will crunch the numbers for you. When working out a meter rate you should never just throw in a random figure based off what others are doing, As discussed earlier they could work to a different pace & have different overhead to you. Instead you must calculate what you / your team want to earn per day & what you can realistically turn out meterage wise on a given day then look at this amount against the square meter price to see if the boot fits so to speak. Remember the achievable meters covered per day must amount to a decent days earnings for all involved. On rendering work or runs of board skimming for example it's a smart idea to crunch the meter rate + direct costs but then give the customer a fixed price to avoid any dispute on specifics.The message here is that meter rates should be based off your business dayrates & worked back from there & they should also include your indirect costs which we'll touch on shortly. In the past I have skipped these steps & made the mistake of putting in what I was told was a good meter rate on a big job but when the job was completed & I looked at my earnings over the time the job had taken me the numbers didn't impress at all. If it's a renovation project remember to also consider how much prep work will be involved in each job you price & factor this into the meter rate. When a meter rate is dictated to you by the customer, for example developers & construction companies always put this rate against your own rate that you have calculated you need for your business & if the amount is any less, explain this to the customer & renegotiate the rate to suit your overhead.
Is that your best price? Can you do it cheaper?
Avoid price matching & reductions as tempting as this is. When you reduce your price all this does is show your customers that you are plucking your costs out if thin air & your not really serious about how you price up your work. Instead you should view your price as a reflection of your business values & principles, these things shouldn't be altered easily, If you think you can trim the edges a little make sure you do this on your terms after all you have taken the time to put the price together for them they may not like the price but either way it's your price & you know your costs. When you are pressured to lower your price simply state that you have priced the job up accurately & this is your best price & state that you will honour this price with no hidden costs. Customers will usually respect this & the ones who do not are not worth your time.
Rejection. Be willing to take the hits
As a self employed plasterer you will need thick skin. Your prices won't always meet customers expectations & alot of the time your quotes won't even get a response. If you get ghosted, a polite reminder text or email to confirm whether your quote has been received is as far as your chasing up should go or you'll begin to reek of desperation. Getting blanked by your customers can be frustrating but this is part of being self employed & if you let it, this can be a bit of a head fuck.. especially if you have put time into pricing the job up, but never take this personally. It's their issue not yours. When customers fail to recognise the value your business can bring they will automatically reject your price by either ignoring you or telling you that you are too expensive. When this happens never pursue the customer or justify your price, Remind them of the value your business offers & tell them you've priced the job accurately. If this doesn't change anything Just simply wish them well & move forward knowing you gave your best price based on your running costs & the margin you deserve, any less & you'd only be cheating yourself. Instead of dwelling on rejection, take your attention off that job & focus on new opportunities to deliver quality work to customers who value what you can offer them.
Not all customers will appreciate or understand what's involved in delivering a quality job, some just want a cheap job, move away from this type of customer & focus on those who value you. Again, the right customers will always be happy to pay for quality. You will know if you fall into this category or not when you get job feedback. People will notice your work & it will be talked about & you will begin to build a reputation for being a clean spread. If you know in your heart you are good then your price should reflect this. So never lower your price & never dwell on the jobs that didn't come about, tell yourself that your business wasn't a good fit this time & keep moving forward.
Underpricing
Along with the pressure to reduce our prices we can also mess up by jumping the gun & going in too keen especially in the early days when we want to get the wheels turning & drum up business.. nothing wrong with the hustle but be generous with yourself when you are estimating how long the job will take you or take your team. being competitive & effecient is important but this can often lead to tight margins meaning jobs being rushed & running over which impacts profit so always allow yourself plenty of time.. more time than you think you will need, we have all had that nightmare job that took longer than anticipated & this changes the way we feel about the job, If there's money in the job we are calm & focussed. That's where we need to be.
Remember that when you look at a job you are essentially guessing how long the job will take you, you might be experienced & fairly accurate but ultimately it is still a guess & even the most seasoned of plasterers can get it wrong because there can be many unforseen elements which can effect how your job maps out including collecting materials, access, parking, suction, setting times & delays caused by other trades causing bottle necks on the job..even small things like customers wanting a 10 minute chat twice a day every day it can add up & eat into that time & you cannot predict everything. This means you have to be cautious that you don't shoot yourself in the foot by underpricing your jobs by giving yourself too tighter window to complete the work. Years in the game will give you an edge when it comes to pricework, The more jobs you do the better you become, like everything else it takes time & even when you think you've got pricework sussed you can get caught out so for every 5 days you price up put an extra days labour in to cover your arse.
Price work or day rate?
Taking the above points into account there is clearly a degree of risk & reward to pricework, get it right & you can generate serious profit with earning potential being high, Your time is flexible & you are able to use it to your advantage, pricing per job & turning jobs around effectively will mean there's more scope for growth.. but..get it wrong & you can be out of pocket or worse your lads can be out of pocket.. on large jobs getting the price wrong can lead to bankruptcy.. so, its obvious why many spreads avoid the drama & sell their services via day rate. This method of earning is reliable & consistent, splitting materials & labour & often charging labour only avoiding the uncertainties of pricework is a smart option, However unlike pricework, the downside to selling your services via dayrate or hourly rate is that it creates a ceiling on what you can earn per day, per week, per year.. it can also create some debate with customers on hours worked, arrival & finish times, lunch breaks & so on.. usually better suited to subcontractors working on dayrate can pin you down to one job per day leaving no time left to focus on other business tasks.. ultimately when you choose to sell your time you almost become an employee again which doesn't suit everyone. Taking on staff can also become more tricky if you are used to working to a dayrate with paperwork & admin increasing.. fitting in a full day behind the trowel when you also need to be running your business can be challenging.
How you price up work will come down to you & even pricework will need to be calculated using a dayrate margin + costs. Some jobs will be better suited to dayrate such as large scale commercial jobs where the risk is too great to attempt a fixed price day rate can work well & take the pressure off so be open to these two pricing strategies & use each accordingly. As plasterers we are no stranger to juggling set times & working against the clock but we are not so good at factoring in time off the tools in our business which brings me to my next topic
Indirect costs - The true price of self employment
We've discussed your direct costs, how location impacts price & how you charge for labour. Now let's look at the costs within your business. Costs we know exist but which we often struggle to calculate & factor into our prices. We can only really analyse these costs once we've had a few years to track them because they are accumulated annually not per job.. but in this blog I will use examples to help you work out your own indirect costs.
So what are indirect costs?
Indirect costs include anything within your business that costs you money that isn't directly associated with one particular job. Instead they are associated with every job.. Often referred to as overhead. Some examples include
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*Vechile maintenance ( MOT's, tyres, repairs..
*Insurance policies ( business insurance, van insurance, tool insurance)
*Accountant fees (Tax returns, NI contributions, bookkeeping & pensions)
*Tools ( replacement parts, maintenance & renewal)
*Marketing ( Van signage, websites, Facebook ads, trade association membership)
*Off the tools business tasks
*Mobile phone bills
*Waste management & waste carriers licences
*Holidays, & time off
*Stock items (Hardwear, protective sheeting etc
*Lock up rental
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You can see this list is extensive & I could go on & on but you get the gist. For example purposes I can tell you that in my own business these indirect costs mount up to around 10+ k per year. That's alot of money if your not factoring that into your prices.
So how do we offset this amount into our jobs?
Again this can only come about once you've done a couple years of tracking but it basically involves calculating the number of jobs you do per year then breaking that 10k down into a percentage of each job. So for example if you complete say 50 jobs per year you would divide 10k by 50 = 200. This £200 is then added onto each job. Doing this ensures that all of your business overhead is 100% covered properly & you are not using your own wages to pay for business operations.
To end this post we will look at some averages. If we want to succeed in our plastering businesses we atleast need to be meeting the UK average salary marker considering the graft that is involved & the hours we put into our businesses, Any less & the whole operation is just a wheel spinning saga & we'd be better off employed. In order for us to meet this marker while factoring in the indirect costs we listed I have calculated a day rate which will ensure we meet the UK average & a little more on top. An employee will naturally pay contributions from this average but doesn't have any of the associated costs of self employment so I figure this evens things up for us spreads.
so in the UK the average salary is around 26k according to this stat. Now an employee earning this money does not have any business overhead etc neither do they need to worry about money stopping when they are on holiday as usually they will be in receipt of holiday pay along with other job benefits such as pensions etc Now assuming the average plasterer has a good year in business & is off for 3 weeks of the year which Inc a 2 week holiday & some odd days off. Now he also has a week or 2 for Christmas with his family. Let's call it 25 days off. Now if he charges himself at £200 per day he has around 20% contributions leaving a net of £160. Now deduct the 25 days holiday 104 days for weekends this leaves 236 days of potential work each day ( assuming he is able to fill each & every day with paid work) he will pull in £37.5k roughly. Taking into account the 10k overhead will bring this down to £27.5k again were assuming averages here & also assuming a full a work diary apart from wkends & holidays. For a busy year on the tools I think this is a good starting point & will hopefully illustrate the importance of charging no less than UK average earnings is fair this example being at £200 per day labour. Again, location & experience must be looked at & this figure should be tweaked to suit the individuals circumstances it maybe that your overhead is less / more & so this should be used purley as a guide. Earlier I mentioned high & low end earners, £200 per day is fair but depending on where you are based it doesn't have to stop there. Get inspired by some of the work on Trowel talk & keep pushing to better yourself all the time & your earning potential will increase.
I hope this post helps you in your plastering journey.
Lastly. Remember earlier I said that wages aren't profit. This is what I want you to take away with you from this post. Again, wages are what you need to eat. Profit is what your business needs to sustain & eventually grow if that's on the cards for you. If you are self employed then start thinking like a business. Each job you do you should take a small piece of profit & get it banked. This capital stays in the business & used strictly for reinvestment purposes such as marketing campaigns, new equipment & machines, taking on staff & future growth for the business. Factor in the profit you deserve & watch your business excell. Start by putting 10% on top of your chosen day rate & start a profit account for your business.
Thank you for reading Name your price & please add your thoughts in the comments below
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