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Thread: A day rate....?

  1. #1
    Join Date
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    A day rate....?

    Thoughts?

    Video Link
    The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.
    William Arthur Ward

  2. #2
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    As long as the day rate covers all of the overhead, your labor and a return on your investment. Then go for it. But you do need to know those things.
    ++++++

    Some say the land of milk and honey; others say the land of fruits and nuts. All together my sort of heaven.

    Power is not taken. It is given. Who have you given yours to? Hmmmm?

    Carol Reed

  3. #3
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    Interesting concept, but wonder if you throw out your day rate versus an hourly rate, what the people's response would be. I believe his underlying theme of not hurting yourself, and it is tough to rate yourself. We often value others over ourselves. Thanks, was an interesting video.
    Jon

    God and family, the rest is icing on the cake. I'm so far behind, I think I'm in first place!

    Host of the 2015 FAMILY WOODWORKING GATHERING

  4. #4
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    Saw this on his YT channel earlier...

    I definitely agree with his theme about not underselling your skills. I have seen people argue about, and wonder about, pricing work since I first joined a ww'ing forum years and years ago.

    I've see a few people comment elsewhere in shock at his $500 price. But it sure does simplify things for the person preparing the quote.
    There's usually more than one way to do it...
    www.wordsnwood.com ........ facebook.com/wordsnwood

  5. #5
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    Quote Originally Posted by Art Mulder View Post
    I've see a few people comment elsewhere in shock at his $500 price.
    Just curious, was the opinion that is was to high or low?

  6. #6
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    Oh boy this kind of thing drives me absolutely bonkers.

    Last i checked we live in a fee market capitalist system. Even communist China does and they opted to adopt the same supply demand principles.

    Lets try settle this once and for all because this simplistic day rate nonsense can leave you with no income if you not careful about it.

    If there is interest i am prepared to put a post together with my version of how to run a small business.

    And dont tell me there is a difference with what i do and what i have done to doing a one man show woodworking or general handyman business.

    Business is business PERIOD. Daily rate logic does not fit with any business i know of in all my years of dozens of businesses and numerous industries.

    But i can show you how to get to a rate for different work you prepared to do and even in a business where there is a mix of work to be done.
    Such that you can secure work at a profitable level for each segment of business you choose to service.

    The key is planning, budgeting and being prepared to be a salesman and a marketeer.
    cheers

  7. #7
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    I think is it probably too low. The hourly shop rate would be $62.50 an hour for an 8 hour day. I was charging $65 an hour in the late '90's. I was $15 to $25 an hour less than my competition but I was working from my home. I had a 28 x 36' two story stand alone shop building on site. So no commercial rent to be paid. I have no clue what inflation has done in the last 17-20 years but it darn sure has not gone down! And keep in mind that all days have billable hours but the overhead continues. There is no simple equation here. Those who think he is too high have not done any homework on running a business.

    I advertised a shop rate, not to be confused with a labor rate. And then asked customers to compare other shop rates to mine if that was a concern to them. And if it was too much of a concern to them I didn't want them as a customer either. Actually sent one to a competitor and warned her what I thought she was getting into. She took the client, did the job, fought getting paid, and then asked me what she had ever done to me to deserve that. Last time I recommended someone else.

    This is a slippery slope and everyone has an opinion. If it is important to you, you will have to do your homework. You have to know what your real costs are - all of them. The only variables are your hourly labor rate and your profit (or ROI). What is the point of charging less than a living wage and/or investing money without a return on it?
    ++++++

    Some say the land of milk and honey; others say the land of fruits and nuts. All together my sort of heaven.

    Power is not taken. It is given. Who have you given yours to? Hmmmm?

    Carol Reed

  8. #8
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    Quote Originally Posted by Carol Reed View Post
    I think is it probably too low.
    Exceedingly rough math (for generic US not counting state):
    Figure 50% overhead (optimistic but play along), 14.5% self employment tax and an 8 hour day (since when has any self employed person only worked 8 hrs/day but still play along)
    we end up at around $26/hr - which is equivalent of a ~$52k/yr job.

    >>> 500/8.0 * 0.5 * (1-0.145)
    26.71875

    Quote Originally Posted by Carol Reed View Post
    What is the point of charging less than a living wage and/or investing money without a return on it?
    Hehe, its not just here either, I think its a suffering craftsman mindset....

    I was talking to one of my pro-brewer friends and while working as an employee commercially for the last ~6 years he's moved from wanting to run a small pub with 1bbl brewhouse to a small pub with a 7bbl brewhouse. Neither of those is sufficiently large to actually make a living on, basically they're overly large homebrew setups and you end up having to brew 2+ times a day at a cost that ends up being somewhere between slightly worse than if you just bought it commercially and on par. In essence you have to work really hard at a highly manual job with no real hope of ever making enough to get ahead. I said there was no way I'd even look at less than a 10-15bbl system to start and he made a comment about how i was just being greedy... sigh.

    And don't even ask about my dad and his rawhide braiding (pennies per hour? maybe?).

  9. #9
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    OK, first off, he is not talking about a day rate for a guy flipping burgers at a fast food place, he is talking about a day rate to figure out your pricing on things you build to sell, mostly. Look at his website to see the stuff that he builds and sells, successfully I guess.

    He has an interesting take, I think, on the basics, of course he is generalizing, for him to go into the pricing differences of each state and or county in each state would be absurd. I do think the main thing that I take from this is to not under price your work. I have an hourly rate (please remember I'm living in downtown Tokyo Japan) it used to be $50 an hour, but now I've made it $80 an hour, both of those rates are plus materials (which I make a 30% profit on) and expenses, like parking, gas, transportation and other things depending on the job, like having to rent a larger truck to deliver something because it won't fit in my van. I'm upfront with all of this and in the last while I've yet to have a customer baulk at the price, so it is obvious I need to raise my prices again, also I'm booked up for the next two to three months easily.

    I am not agreeing with the guy in the video exactly, what I'm saying is it is a different take, I'd not heard this before, so I thought it was interesting, and like I said, the biggest thing to take from it, IMHO is don't undersell yourself.
    Cheers!
    The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.
    William Arthur Ward

  10. #10
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    Quote Originally Posted by Stuart Ablett View Post
    Look at his website to see the stuff that he builds and sells, successfully I guess.
    s!
    Perhaps more interesting - look at his store. https://makesomethingstore.com/

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