A PLUMBERS GUIDE TO WORKING OUT YOUR PRICE..HOW MUCH DOES A PLUMBER MAKE? ALL IS EXPLAINED!

Welcome Back YouTube now you might remember the video I did a few weeks ago where I was running around doing jobs and I was revealing how much I was charging now said in that video I'll do another video explaining how I came about my hourly rate so we're going to have a look at some of the factors that I'll took into consideration when I'm working this [Music] out [Music] now the examples I'm going to give you are just examples they're not gospel there's going to be things in there that I might miss out or I should add anything like that it's just to give you a guidance so don't take it as gospel it is just to help people out so first thing we going to look at is your outgoings now this is going to be how much it cost you to run your business let's take us few examples what day-to-day stuff you're going to be spending money on the first thing you're going to think about is your Workhorse the van and you're going to use be using that every day so that's going to need fuel it's going to need insurance and it's going to need an MRT Tax Service things like that advertisement now obviously you need to get your name out there and let people know that you a plumbing and heating company willing to do work in area so you need to budget for advertisement one good thing to speed up your business and make your day-to-day running easier e software now we use a couple of different ones we got QuickBooks that helps us keep up to date with our books and gas engineer software and that's got all our certificates on it helps do quotes invoices stuff like that so when you're doing your business plan take in consideration software there something else you might want to consider easier gas sa if gas engineer now if this can apply to all trades the formula is going to work out the same but cuz I'm gas engineer I'm was going to do this based on a gas engineer so I obviously needs to do your gas safe registration every year and every five years you need to retake your exams and you want to keep up to date with the latest training you might want to go on some courses so take that into consideration when your budget you're going to also need other insurance is for your business like public liability sick pay you might want to get some insurance so you from off work you get paid sick pay so them type of insurances you need to take them in consideration as well uniform and tools now when you made it on the job you want to look smart you want to look presentable you want to be L gold up uniform we know it gets a battery and it can get dirty so you need to replace that from time to time and your hand tools and your P tools if one of them breaks or you lose one or you just need to invest in some new ones that needs to come into consideration as well let's put tools and uniform on there office and admin now this can be PayPal for your printer your printer your computer stuff like that just anything you use in the office you need to take that in consideration now it might not be a big budget because we're mainly out on the road but it's still cost you money so get that in there another one that I'd strongly recommend is a website and that's going to cost you every year or every month to run and maintain so you can see now we've got quite a good list now if there's anything of Miss State on there that you think should be added just drop it in the comments and say this is just a guide so let's all work together and try and help each other out so there you go there's your list and what you got to do now is consider how much these things are going to cost you every month so you feel it's going to differ from person to person if you've got a small radius you're not going to be spending that much on fuel but if you leave in the sticks and you got to do a lot of traveling your fuel could be a lot more same your insurance and tax and MRT depends on your van insurance is depends depends what levels you take out tools it depends what tools you use so what you want to do is go through all these and work out how much you're going to spend each month on each one so the C safe one that's a yearly thing all you can do is divide that by 12 so if you go pay for every year divide it by 12 that will give you your monthly cost so once you got your monthly cost for all these you should come up with a number now the number we're going to Bas it on today is this 800 £1 per month it's going to cost us to run our business now what we need to do is get that from a monthly into a weekly just times it by 12 divide it by 52 and that'll give you a weekly so done the calculation and it comes to £185 per week well come to about £184 something but we just rent it up1 185 so it's going to cost our business £85 per week to run so now we know how much I B going to cost let's have a look and put some money in our pockets and paying ourselves a wage so when it comes time to deciding how much you want to pay yourself let's just take the industry standard so 35 to 40K per year as a gas engineer so for this example we're going to go to the top end 40K a year so we're going to pay ourselves £40,000 a year so what a lot of people do they'll take 40,000 they'll Divo that by 52 and I say oh that's how much I need to pay myself per week well not really you need take some factors into consideration what about holiday you need some time off you can't go flat out 52 weeks a year so how much holiday you going to take if he working for a company the standard is going to be 20 days plus your bank holies so you get 28 days off so after this example we're going to be nice we're going to give ourselves two extra days we going to give 30 days holiday 30 days holiday is 6 weeks so we need Take 6 of 52 that'll give us 46 so instead of 52 we need to divide that by 46 so we taking holiday in consideration but what about the days where you doing your admin when you doing your books doing quotes invoices what about the day when your van just looks like it's rolled down hill backwards you just need half a day just to get in there and sort it out to make yourself more efficient that's still part of your business you should be getting ped of that so you want to take that into consideration so what we're going to do is give ourselves 20 days over the year for this works out to four weeks now down from 46 it's 42 so now we can work 42 weeks a year instead of 52 get to 42 so if we take all them factors into consideration so your wage plus your cost so 40,000 by 42 plus the cost from earlier 185 per week your business needs to pull in £ 1,140 to cover your wage and cover the cost so we got the wage we' got the cost so that is our week now what we need to earn per week but there is something a lot of people forget to add into this that's your profit now unless you a nonprofit organization your business needs to make a profit to reinvest in the business so let's do this again but add some profit into there very important you add profit a lot of people forget it so what we're going to do is add £10,000 a year profit now some people might say it's too high some people might say it's you can put your profit to whatever you want to make on your business but this example we're just going to put an extra 10 grand onto the air so we took our wage just added 10 grand made it 50 instead of 40 run all them calculations again it comes to one person £375 per week that's how much you need to earn to pay yourself a wage cover your cost and make a profit so now we've brought that down into per week we know how much we need to make to make a profit make a wage and cover our cost we need to work out how much we should be charging per day and per hour so to work out your day very simple divide by five and per day based on them calculations that will come to 275 per day but now we need to work out the a rate so a lot of people now they'll take that and they'll Avid that by eight no so well 8 hours in a day that's how much should be charging wrong you can't do eight flat hours a day cuz you got travel to consider time to go to the merchants if you need to pick up parts especially if you running around doing jobs all day so you can't just work flat out 8 hours a day that's what your day rate comes in if you want to block work say a day a job that's going to take two three days you can put it in per day if you want to but if you're working out early you can't just evoid by eight you need to take time is consider duration so how many jobs can you get round in a day including travel well again it depends on your area if you've got a lot of distance between your jobs you early you might only fit in 5 hours a day but if they're nice and condensed and close you might fit in six to seven so let's get smack in the middle between five and seven say six we can work six hours a day including travel and popping into the merch that so we got to do instead divided by 8 divide by six and that'll give you per hour that'll give you £45 there we now per week we need to earn 1375 per day it's 275 per hour is 45 to do 6 hours of work in that day now work how much you want to be making a week a day and an hour how you going to P your jobs you're going to do on price work or we going to do it on the ERA this is where it gets complicated the more experienced you are the quicker more efficient you are at your job you can get round jobs quicker than Master Engineers would so for example the three port valve that takes um inexperienced engineer at 2 hours it might take you 1 hour so are you going to charge less than the less experienced engineer just because you can do it quicker it don't make sense does it you're being punished being fast and efficient so that is where price sometimes comes into it but if you're going blind into a job say it's a water League concealed water League that's where you a Le can step in and guide you cuz you don't know how long it's going to take sort that leak out it could take you an hour could take you four hours if you go on early you know you business going to make enough money while you on that job now some people do have the ear rate but they they'll start with call out so they might say well our Callet fee is £80 and it's £45 an hour after that that's just to cover your travel to the job that's what a lot of companies do you'll always find their callate rate is higher than their hourly rate so I might say it's £80 to start with for the first hour then it's £45 an hour after that then if they can get done within the era it's all the p is £80 but any additional era custom then is £45 that them numbers can be anything you decide whatever your figures can do take that in consideration price or era just to make it more complicated the one thing that i' would advise you to look at as well and I explain it to you is something called a burn rate let me explain what that is burn rate is how much money your business can burn through if everything go down here so if you laid off work or you got no work or something bad happens to the business you need some kind of backup where you business can survive so let's just say you must work for two months if you've got three months reserve of money that your business can burn through you okay if you've got no burn rate and you got off work for a month it could your business so when we first started we decided three months we wanted three months Beyond Us in the bank so everything went downhill couldn't work I knew the business could survive for three months paying myself a wage and paying all my outgoings so all I did talk my weekly and times it by three months you can do whatever you want you can do two months three months 6 months if you want but for a small business it's hard to get that kind of money behind it and just leave it there so I'll do take in consideration a burn rate now we touched on earlier profit don't be scared of profit every business needs to make a profit now you do get customers sometimes question how much you charging well the got understand you business got to make profit what's the point in you just making a wage you could go and work for somebody for a wage and for all that you get your phone I didn't even put that in earlier phone you get your phone paid for fan paid for insurances tax pension it's all sorted for you the jobs just come in you start at 9:00 you finish at 5 jobs are good in you can just go to work for a wage you need to make a profit you need to make more than industry standard I believe as well if you can just go Ahad to get a job 40,000 a pound what's the point in paying your sell £40,000 run your own business it's stressful It's s days a week honestly a business running a business is 7 days a week if you think you're going to run your own business and have time off whenever you want it's all going to be great you're not going to work on weekends think again trust me you am you're going to be doing stuff on weekends that you don't want to be doing when you should be spending time with the family so I'm just going to give you some examples where I'm based in the Midlands the average day rate for gas engineer around here is 250 to 350 an average service Round Here cost you anything between 55 and 90 per hour round a people normally charge between 60 and 90 big swings for your minimum to your maximum that's just the average that fair the people people charge around here and say if you in London then price is going to be higher than that but it don't matter what other people I'm charging it really don't well if it costs you to run your business pay yourself wage and make a profit that's how much you you need to charge people's alads are going to be bigger or smaller than yours just concentrate on being you don't worry about what the competition are doing you just need to work out how much you need to earn and so with my example it come in smacking smack in the middle 275 yeah we we we closer to this end we am to be honest with you we've got a bit more aage and we am that registered so we have to take that into consideration as well and don't forget you're not going to be earning this per day out of that you got to pay tax everyone has to pay tax whether you a limited company or you just s Trader you got to take tax into consideration corporation tax stuff like that like I mentioned earlier that you'd have to add that on so use two 50 per day if you was back registered that would turn into 300 just be careful of that as well that doesn't go on your profit that goes on your turnover how much you turn over per year so that's materials and how much you charging customers that can really sneak up on you so keep an eye on that because you can't get a penalty if you go over the freshh and you T declare that has come up pretty quick on us I think we was back registered within the first 10 months of opening the business yeah keep an eye on that as well there you go hope that has helped you out give you a bit of guidance on how to work out your ear in your day right now that isn't gospel no there's going to be things in there that you need to add in or take out or adjust that's just give you an idea of how to work it out and what to take into consideration so how do you charge for your jobs do you do it early do you do it price do you think their numbers worked out or do you think there should be different Saras in there let me know in the comments try to help each other out cuz that is one thing that people do struggl when the first start is working out how much charge so I hope that's helped you out if it has look at subscribing give us a l give us a comment and I'll see you on the next one have a good one

Channel: Blue Bulldog Plumbing

Views: 14,465

Keywords: how much a plumber costs, Plumber, Plumbing, Pricing, Plumber prices, Business, How to work out how much to charge, Gas engineer, Gas, Gas man, Profit, Wage, how much can a plumber make, how much does a plumber make, how to price a plumbing job, how much do plumbers make, how much to charge as a plumber, how much can a plumber amke, how much does a plumber amke, how much doens a plumber make, how much doens a plumber amke, how much do plumbers amke

Id: jRStfvRLL-E

Length: 16min 11sec (971 seconds)

Published: Sun Sep 24 2023