# What to charge for a project



## Dad1279 (Nov 21, 2015)

I'm just starting out at doing projects for people other then family. I have no idea what to charge. I am building some 5'x9' builtin shelves that will have 2 drawers on the bottom. I will also be doing a reclaimed wood wall 10'x9' with some floating shelves. I will not be purchasing the wood and I don't want to go to high because it's a family friend. Does anybody have a suggestion?


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## hwebb99 (Nov 27, 2012)

I would go price how much it will cost to replace your wood and charge slightly more.


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## Masterjer (Nov 6, 2012)

You can also guesstimate how many hours plus materials you'll put into the project and charge on an hourly rate plus material costs.


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## epicfail48 (Mar 27, 2014)

Take whatever youd pay for it and add 50%


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## woodchux (Jul 6, 2014)

Check with a professional carpenter/cabinet maker in your area as to their "guesstimate" charges, and reduce the total cost (less the material) by 20%. Also give the client a time estimate as to when you can start and finish the project. Be safe.


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## mako1 (Jan 25, 2014)

I have owned several successful business in my time including a cabinet shop and construction company.If your plan is to start a business or make some money doing WW'ing none of the above advice will work
I price my jobs using a simple formula.
Labor + Material +Overhead + Profit = Price 
Don't forget to include incidentals in your material cost.


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## asevereid (Apr 15, 2012)

I agree with @mako1, but the overhead issue becomes muddled in woodworking projects. 
Where a contractor can put together a projection of how many hours, or projects billable for the year ; a woodworker doing custom projects may not be able to create those same parameters. 
So, what then? One can't lump all of the yearly overhead into a handful of projects.... Would one just create a feasible number to cover that cost? Or just try to determine the overhead per project?


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## hwebb99 (Nov 27, 2012)

I don't factor in overhead in selling stuff. For the few pieces as I sell that would be an huge amount tacked on. After all this is a hobby not a business. I can't factor in 15,000 dollars of tools plus the building to sell a few hundred dollars of stuff.


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## HalVT (Dec 31, 2013)

Thanks Dad1279 for posting this. I'm sure this will be a good discussion. I've been doing projects for others for about a year now. So far I've just been taking the material cost and doubling it. Most of my work has been for fairly close friends, and my logic was that I just wanted a self funding hobby. 20 plus hours in a project with a hundred bucks in material doesn't pull much profit with that formula, Especially since I don't consider expendables like glue, sandpaper, electricity, etc. but it kept me doing what I like to do without having to fork out my own money for the material. 

It worked well for me, but word is getting out and now I am beginning to do work for people I hardly know. I am now busier than I care to be, especially with people Christmas shopping and not realizing that it takes time to do this stuff! So my formula has to change too, thus I am interested in the responses you get, especially around the concept of overhead.

I'll risk taking it one step further by adding the question of when does a self funding hobby become a business and create the need to consider the IRS?


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## difalkner (Nov 27, 2011)

Dad1279 said:


> I will not be purchasing the wood and I don't want to go to high because it's a family friend. Does anybody have a suggestion?


Do they have a budget, an expected amount for the work? If it's a family friend then they shouldn't mind sharing that with you. 

Did they get a 'professional' price and are looking to beat that? If so, find out what that quote was and drop it to the point where they (and you) are happy.

Are they giving you the job just to help you get started in this venture? If that's the case then they're also looking for a little help from you on pricing.

How good are you at what you do, or will do? Will you be able to turn the jobs quickly or will they linger on for weeks and weeks? 

You want to make sure that 'family friends' remain 'family friends' but they'll soon be 'customers' and that's a different category than friends. 

I had a woodworking business for about 5-6 years designing and building custom furniture and doing restorations and I did lots of work for friends. I always gave them a better rate than someone just walking in off the street but I really paid attention to the timeline and usually went over the top on quality because they were more important to me as friends than customers. Make sense?


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## hwebb99 (Nov 27, 2012)

HalVT said:


> I'll risk taking it one step further by adding the question of when does a self funding hobby become a business and create the need to consider the IRS?


 Almost all self funding hobbies are still in the red when you factor in everything. I also have to drive to my shop, so I have gas money involved too. I think legally once you make over $600 you have to consider the IRS. I know I certainly haven't paid off all of my tools, materials, shop building, utilities, and still made $600. I worded that wrong. All of my tools and shop building are paid for, but it came out of my pocket.


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## handymanrichard (Mar 14, 2013)

I would charge $25.00 per hour plus only 20% mark up on materials, this because I am starting off.

I would maybe or maybe not slip in the time spent preparing tools, materials, construction design. This all depends on how efficient I feel I was.

Just starting off you have to build a name for yourself. As you do more building jobs you will become much more efficient, your time will be worth more. This confidence will also show when you talk to your customers.

This suggestion is geared more for general customers than friends. Friends require a bit more giving.

Good Luck!


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## mako1 (Jan 25, 2014)

HalVT said:


> Thanks Dad1279 for posting this. I'm sure this will be a good discussion. I've been doing projects for others for about a year now. So far I've just been taking the material cost and doubling it. Most of my work has been for fairly close friends, and my logic was that I just wanted a self funding hobby. 20 plus hours in a project with a hundred bucks in material doesn't pull much profit with that formula, Especially since I don't consider expendables like glue, sandpaper, electricity, etc. but it kept me doing what I like to do without having to fork out my own money for the material.


I don't think you are understanding this simple formula?
Labor would be your hourly rate.Lets just say $25 hr. on your 20 hour project.You mentioned 100 in material so will will use that.Next is overhead which as mentioned by another poster .It may be hard to figure because you are only doing several projects a year but it still needs to be figured in.Insurance,fuel,heat ,electricity are just a few of the things that make up overhead.
For the purposes of this post lets just call it $40.
Then there is profit.For any business to sustain and grow you must make a profit separate from your labor.This is money that goes into the business one way or another.Not to pay the bills .That is overhead.Profit is money for the business to use and grow.It should be anywhere from 10-20 percent.
So you have 20 hours of labor at $25 per hour. $500
$100 material 100
Overhead 40
Lets just use 10% profit 64

I see $704 for this job.How is this not a good gain on your $100 of materials and your time.
If I took others advice and doubled the material price I would be out of business in a day.There is no way in hell you can ever expect to maintain any kind of business with that kind of thinking.At $100 in materials doubled with 20 hours of labor you would be working for $5 hr. This won't even support your hobby.


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## Steve Neul (Sep 2, 2011)

You might call it a hobby but once you start charging for your work you've crossed the professional threshold. It's your call on the reclaimed wood but when you are charging for your work it's usually more labor intensive to use old wood than the materials are worth. As far as what to charge that could vary a lot depending on where you live. I wouldn't do it for any less than $20.00 an hour but that rate is cheap. I think if you have a reasonably equipped shop $50.00 an hour would be more appropriate.


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## hwebb99 (Nov 27, 2012)

I wouldn't pay a hobbyist woodworker $25 an hour. Either you are a professional shop or a hobbyist woodworker. The idea of a hobby is not to get rich.


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## mako1 (Jan 25, 2014)

hwebb99 said:


> I wouldn't pay a hobbyist woodworker $25 an hour. Either you are a professional shop or a hobbyist woodworker. The idea of a hobby is not to get rich.


 As a pro I would not go to work for $25 hour.Once you decide to start selling your work you can call it anything you want but you are still assuming the same liability as a pro and expect to make some money.
In the example I gave that came out to $5 that was the gross.You are still using your tools ,electricity,space,heat and comsumables.Your probably using your truck and gas to pick up material and deliver the finished product.Where does that leave you now.
That won't even come close to funding a hobby.


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## GeorgeC (Jul 30, 2008)

I do not know where DAD1279 is since he has not responded to any posts.

Regardless, how many of you read his original posts?

He said the customer was buying the wood. Most replies were referring wood/material cost.

George


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## GeorgeC (Jul 30, 2008)

Dad, since this is a hobby and you are basically doing the job for a friend, let your conscience be your guide on pricing. What is your time worth to you? 

Price your job so that you do not feel like you are taking advantage of your friend and so that you do not feel that you have been taken advantage of. (I know I should not end a sentence in a preposition, but I am too lazy to rewrite.)

This assumes that you feel confident in doing the job and will not be spending a lot of time learning/experimenting.

George


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## hwebb99 (Nov 27, 2012)

GeorgeC said:


> I do not know where DAD1279 is since he has not responded to any posts. Regardless, how many of you read his original posts? He said the customer was buying the wood. Most replies were referring wood/material cost. George


 He never said the customer was buying the wood. He said he was not buying the wood, big difference.


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## LostHasher (Oct 14, 2015)

This is a great thread.

I've battled with this for two decades now, mostly because I'm one of those annoying "jack of all trades, master of none" guys that never quit his day job and took the leap toward a single direction.

When I started in property management, I essentially worked for tool money. As a landlord, I researched going rates and undercut everyone by attractive percentages. That was successful until I did an emergency plumbing job and charged close to full rate... the guy spent $2,500 to fly to the U.S... just to "fire" me and paint some rooms. No joke. My construction job for a G.C. was the only easy one... hourly, no negotiation, no raise.

One thing no one has mentioned yet, at least for furniture/cabinet woodworkers, is the Ikea factor. 



Steve Neul said:


> It's your call on the reclaimed wood but when you are charging for your work it's usually more labor intensive to use old wood than the materials are worth.


The homeowner I'm currently working with insists on using as much reclaimed wood as possible. He'll even pay more for labor to do it. The tricky part is when old wood jeopardizes the integrity of the project.


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## GeorgeC (Jul 30, 2008)

hwebb99 said:


> He never said the customer was buying the wood. He said he was not buying the wood, big difference.


Please explain just how this "big difference" effects the cost for the original poster.

And, if he is not buying the wood and the customer is not buying the wood who do you think would be buying? And, how does this effect the builders cost?

Inquiring minds want to know.

George


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## hwebb99 (Nov 27, 2012)

If he already has the wood then he is not going out and buying wood. He could be picking up free wood. His family could have the wood. Until he tells us we don't know where the wood came from. He never said or even suggested that the customer was providing the wood.


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## Dad1279 (Nov 21, 2015)

Thanks for all the input on what to charge. I should be able to come up with a figure now. Sorry I haven't responded to any post yet but I was out the country and couldn't respond.


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## HalVT (Dec 31, 2013)

mako1 said:


> I don't think you are understanding this simple formula?
> Labor would be your hourly rate.Lets just say $25 hr. on your 20 hour project.You mentioned 100 in material so will will use that.Next is overhead which as mentioned by another poster .It may be hard to figure because you are only doing several projects a year but it still needs to be figured in.Insurance,fuel,heat ,electricity are just a few of the things that make up overhead.
> For the purposes of this post lets just call it $40.
> Then there is profit.For any business to sustain and grow you must make a profit separate from your labor.This is money that goes into the business one way or another.Not to pay the bills .That is overhead.Profit is money for the business to use and grow.It should be anywhere from 10-20 percent.
> ...


Oh, I well understand what you are saying, and agree totally when someone is trying to run a business as an income stream. Dad's original post was about doing things for friends, and my comment was based on basically pursuing a hobby without going broke- at least covering some of the costs. It's amazing how many "friends" you attract once word gets out that you do good work. My math was simply pointing out that I would make nothing with that formula, but it probably doesn't cost me any more than a couple of rounds of golf, my other hobby. 

I think I managed to hijack Dad's original post which was not my intent. I just wanted to add on the question of when you have to stop thinking like a hobbyist trying not to go broke and start thinking true business with the legal aspects.


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## GeorgeC (Jul 30, 2008)

hwebb99 said:


> If he already has the wood then he is not going out and buying wood. He could be picking up free wood. His family could have the wood. Until he tells us we don't know where the wood came from. He never said or even suggested that the customer was providing the wood.


It does not matter where the wood is coming from. It could be that Santa Claus is providing the wood. It does not enter into the equation. 

George


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