Help Working Out A Day Rate

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You could do what some people who start up around here do.

 

Phone me up or email me pretending you have x amount of conifers to fell that are about x high and ask how long it would take, how many men would I be using, what equipment I will be bringing and how much I will be charging if it takes me a day.

 

ohhh,, what's your phone number?

[Tony Croft aka hamadryad]

depends on your location too, down here 20 m ins from central london we charge more than somone in the midlands for example, current market usualy dictates price, at the moment its cut throat everywhere!

 

dont forget to factor in depreciation of chipper and truck, renewing harnesses and ropes etc, that there should be at least five weeks of the year your not earning, and there will be others for weather, breakdowns etc, i reckon on a 42 weeks working propper then once you know the values of all in for the year divide by 42, then divide by five and you have your daily rate.

[MattyF]

A day rate should imo be between 40and 60 an hour and work out the job.....i hate pricing on day rate unfortunietly i have got known as having a cheap one so people just ring me and say they want a day...the far more profitable jobs for me are the ones done on price per tree....

[Tony Croft aka hamadryad]

working out a day rate for your business is simple business modeling, there is a basic format for evaluation and i will try and find it and link up to it, as well as finding my old business plan one.

 

With all the threads on this subject this might be worth working out as a model and making it a sticky thread so this isnt done over and over and over again!

[MattyF]

 

With all the threads on this subject this might be worth working out as a model and making it a sticky thread so this isnt done over and over and over again!

 

amen!

[Justme]

It is different for every single one of us. You need to work out your costs to do the job, and to live off, and that will give you your basic day rate, the minimum you need to cover your bilss, both work related and household, and then put something on top as a contingency, and then a bit on top for 'yourself'. As you can see the variants are massive, but only you can work out your own figures.

 

I have seen that method metioned on here a few times. I really dont get why your household costs should influence your daily work charges. They do affect if you should be self employed or not if you cant earn enough doing it but not the actual rates you set.

 

You could have two people doing exactly the same job in the same place but one has paid his mortgage & all his borrowings off & the other has huge debts. If they worked for someone they would not get paid differently. Its the same with being self employed, you set your price by working out your fixed costs (inc new tools, maintenance ect) per year divided by the number of working days & then adding in your variable costs (inc wage costs) per job, times by a profit multiplier & that is your rate. You should then have a wage & a business profit.

 

Your living costs might influence your choice to go self employed (IE if the business can carry the weight of your living standard) but not the rates you set.

[Tony Croft aka hamadryad]

The variables are huge, you may go out and buy a clapped out transit that does the job and costs you only what you want it too, whereas the other guy maybe sensible and factor in a new van every five to 8 years, his vehicle costs alone would be considerably more than yours. you might not bother with extra training and CPD, the other guy might well attend seminars and training that could easily add 2-3k a year to his costs.

 

on top of the business "break even Rate" he may be drawing a 50k a years salary, while your content drawing 20k, there is a huge difference in costs and therfore charges applied across the industry.

 

It really depends on wether you want to be making a living from it, or making a career of it. one has costs that the other does not.