New In Business

[Chickadee]

My Dad was recently made redundant and while looking for work started doing odd jobs on other peoples boats and loads on mine. He played with the idea of going into business properly and after finding out that there is a real need for what he does i'm glad to say he finally has taken the plunge. He has been doing his first proper paid jobs this week.

 

Anyway the only problem he has is he doesn't know how much to charge for his time. We have only had a small amount of work done on our boat that wasn't done by him and that was gas related so that wasn't much to go on.

He will be doing all engine, plumbing and electrical work as well as things like windows and wood work etc.

 

Has anyone had experience of having work done on there boat by an outside party? How much would you pay per hour for such a service?

 

Sorry for coming back on with another random question.

[Chickadee]

Just wanted to say if anyone wants to PM me that would be cool. I don't want to step on anyones toes putting this thread up.

[Hobson]

Most odd job folk charge by the job not by the hour.

 

- Hobbs

[Chickadee]

Most odd job folk charge by the job not by the hour.

 

- Hobbs

 

How do you know what to charge by the job then? The work he has been doing at the moment has been several jobs at once so they agreed on a price working on how long it would take him to do all the jobs plus parts. Most other service people seem to have an hourly rate.

[bargiepat]

Quote:- " He will be doing all engine, plumbing and electrical work as well as things like windows and wood work etc. "

 

Luckily apart from welding I do all my own jobs, but your Dad does need to get some form of insurance to cover him working on other peoples boats and charging for work done. If anything goes wrong while he is working he could get sued especially if there was an electrical fire.

Good luck and as you say he should get plenty of jobs on and around boats.

Regards, Patrick.

Edited September 13, 2008 by bargiepat

[Hobson]

How do you know what to charge by the job then? The work he has been doing at the moment has been several jobs at once so they agreed on a price working on how long it would take him to do all the jobs plus parts. Most other service people seem to have an hourly rate.

 

That's why you tend to find specialists in each field: they know from experience what they can do in what timeframe and how much the parts will cost, where to source them at the best price etc.

 

If you are general, non specific fixer then you need to be sociable and flexible enough to quote for a job and know that you are being reasonable and that you can finish it to budget.

 

Its why tradesmen, good tradesmen, have years of experience and can simply walk in and decide whats wrong in minutes then quote accordingly.

 

My best advice is to be sociable and forthright first and forget about hourly rates, negotiate a fee based on what's required. You will get more work and more repeat business in my experience.

 

Sadly most people are only after the quick buck these days and it shows. Call out fees etc are for cowboys - but that's just my opinion.

 

EDIT: Yeah you will need public liability insurance, unlikely to need VAT but I'd register with companies house as a Ltd. company just in case. It also makes trade accounts and business banking a doddle. Personally, I always worked cash in hand and if I broke something, I covered it. But I never did more than engines and I made sure I had a good relationship with everyone I worked for - none of that 'I'm a tradesman and I'm on the clock' crap the middle classes seem to expect. There's always a cup of tea and a chat and a mutual evaluation prior to anything else - and yes I have turned down work from people I didn't like.

 

- Hobbs

Edited September 13, 2008 by Hobson

[stort_mark]

... but I'd register with companies house as a Ltd. company just in case.

Errr......why?

 

It also makes trade accounts and business banking a doddle.

It does?

 

none of that 'I'm a tradesman and I'm on the clock' crap the middle classes seem to expect. There's always a cup of tea and a chat and a mutual evaluation prior to anything else - and yes I have turned down work from people I didn't like.

Do you subscribe to Stereotypes Weekly or do these gems just roll off the tongue?

[Hobson]

Errr......why?

 

 

It does?

 

 

Do you subscribe to Stereotypes Weekly or do these gems just roll off the tongue?

 

Bad day?

 

1. Ltd. company has many advantages over Sole Trader status. If you mean why as in, why bother being legit then you answer your own question there!

 

2. Of course it does? Since you fail to expand on your objection, I am assuming you are drunk, bored or just a troll?

 

3. Ahhh you must be a one of the 'on the clock' kind of people. You wouldn't get it then ..

 

All in all, if you have nothing to add but objectionable outbursts, why add anything?

 

- Hobbs

[stort_mark]

Bad day?

No, not really. 6 hur flight and jet lag but OK

 

1. Ltd. company has many advantages over Sole Trader status. If you mean why as in, why bother being legit then you answer your own question there!

If you are a sole trader, as this person clearly is, then sole trader would be better.

 

2. Of course it does? Since you fail to expand on your objection, I am assuming you are drunk, bored or just a troll?

No it doesn't. Banking and doing your accounts is no more difficult for a sole trader or partnership than for a limited company. You're just talking rubbish.

 

3. Ahhh you must be a one of the 'on the clock' kind of people. You wouldn't get it then ..

Yes, I suppose I must be. 'On the clock' is a way that most ordinary people can get some kind of indication of what is being done. It's not perfect, but it is a good general indicator. Actually I was more irritated by your use of "middle classes" as some kind of derogatory put-down for people who are no - nudge, nudge - in the know. So no, I don't get it. Thank God.

 

All in all, if you have nothing to add but objectionable outbursts, why add anything?

Objectionable is precisely what your nonsense constitutes, except you are giving it in response to a valid and interesting question. The person you are giving all this guff to is intending to make their livelihood out of this work and deserves better advice than you are providing. So no, I'm not a troll nor making pointless outbursts - at least demonstrably no less than yours.

 

 

 

My Dad was recently made redundant and while looking for work started doing odd jobs on other peoples boats and loads on mine. He played with the idea of going into business properly and after finding out that there is a real need for what he does i'm glad to say he finally has taken the plunge. He has been doing his first proper paid jobs this week.

 

Anyway the only problem he has is he doesn't know how much to charge for his time. We have only had a small amount of work done on our boat that wasn't done by him and that was gas related so that wasn't much to go on.

He will be doing all engine, plumbing and electrical work as well as things like windows and wood work etc.

 

I reckon there is definitely a demand for this kind of work (I am hopeless at even minor technical stuff). Some good advice has been given in this forum but there has also been some rubbish as well.

 

There are a lot of good books written for small businesses and sole traders, and it wouldn't help to read some of them. It can be difficult to tell what is good advice and what is not here!

 

Lloyds Bank used to have a Small Business Advisor in many branches and they provided a lot of free information and I remember (many years ago) they had an information sheet that included costs per unit for many jobs (including hourly rates). I know that some consultancies use a rule of thumb that assumes 50% billability, so work out what is needed per annum (including salary but also all the bills for tax, office costs, etc) then work out how much needs to be earned if only 50% of the time is productive.

 

The issue about lump sum rates is important because even if you are thinking in the cost per hour, customers want to know the maxiumum charge at the outset. So being able to price by the hour and then quote a lump sum is essential.

 

Good luck with it!

[wotnot]

I ran my business as a sole trader and I think your dad needs to consider all his costs:- vehicle, fuel, tax, insurances, depreciation etc. plus down time to work out how much to price a job.

 

For example if your dad spends an hour and a half travelling time and spends an hour doing the actual job for say £20 he is only earning £8 per hour gross (before any expenses are deducted). In addition if he also does free quotations then they have to be factored in as expenses somewhere as they are not going to be free to him.

 

With regard to insurance I'd be careful to establish what public liabilty actually does and does not cover. In some cases it does not cover the actual item you are working on such as an engine which if you damge so badly it needs replacing (unlikely I know) you may not be insured.

 

With regard to the previous comments about being VAT registered or not there are merits on both sides and I would suggest he takes advantage of a free consultation with an accountant (many do to drum up business) before deciding.

 

Hope this helps.

Edited September 14, 2008 by wotnot

[Troll]

Bad day?

 

1. Ltd. company has many advantages over Sole Trader status. If you mean why as in, why bother being legit then you answer your own question there!

 

2. Of course it does? Since you fail to expand on your objection, I am assuming you are drunk, bored or just a troll?

 

3. Ahhh you must be a one of the 'on the clock' kind of people. You wouldn't get it then ..

 

All in all, if you have nothing to add but objectionable outbursts, why add anything?

 

- Hobbs

 

 

JUST a Troll? Huh.

 

Anyway since I have been bought into it my advice re priceing would be to follow others in the trade....ie/

 

Pluck some figures out of the sky, then treble them

[stort_mark]

JUST a Troll? Huh.

 

Anyway since I have been bought into it my advice re priceing would be to follow others in the trade....ie/

 

Pluck some figures out of the sky, then treble them

 

And say you can turn up sometime between 8 and 12 or 1 and 5.

[kerching]

Hi Chickadee,

It,s a difficult question to answer as to what your dad can charge as he appears to be an odd jobber rather than being a tradesman (no disrespect), it really depends what he is happy with. As a tradesman plumber working on land in the north west i look to earn about £35-£45 per hour on my private jobs but i,m a bit of a soft touch so if the customer is elderly, infirm or whatever i tend to charge less.

 

I try to avoid giving a firm price as you never know what you find once you start the job, especially in plumbing, as the man who did the initial installation may not have known what he was doing.

 

Third party insurance is a must and is quite a considerable amount if he is doing any hot work (soldering, welding, etc ). Also he could be on dodgy ground if he goes around doing electrical work when not suitably qualified and something goes wrong.

 

I wish him all the best it can,t be easy being made redundant and fair play to him for giving it try. So long as he does a good job he should be ok.

[Rick-n-Jo]

You could do a lot worse than Business Link, much better than the banks hardly impartial advice.

Free advice, and a vast amount of info available both face to face and online.

 

http://www.businesslink.gov.uk/

 

pretty much all you kneed to know is in there if you take the time to dig for it.

 

Good Luck

[Dave Hannigan]

And say you can turn up sometime between 8 and 12 or 1 and 5.

 

That's a bit precise- tell em Thusrday, but not which Thursday

[Hairy-Neil]

JUST a Troll? Huh.

 

Anyway since I have been bought into it my advice re priceing would be to follow others in the trade....ie/

 

Pluck some figures out of the sky, then treble them

 

 

And say you can turn up sometime between 8 and 12 or 1 and 5.

 

 

That's a bit precise- tell em Thusrday, but not which Thursday

 

And he'll need to practice the sharp intake of breath.....

[stort_mark]

And he'll need to practice the sharp intake of breath.....

...and then "Who sold you this then? Bloody cowboys!!"

[homer2911]

Bad day?

 

1. Ltd. company has many advantages over Sole Trader status. If you mean why as in, why bother being legit then you answer your own question there!

 

2. Of course it does? Since you fail to expand on your objection, I am assuming you are drunk, bored or just a troll?

 

3. Ahhh you must be a one of the 'on the clock' kind of people. You wouldn't get it then ..

 

All in all, if you have nothing to add but objectionable outbursts, why add anything?

 

- Hobbs

 

Oh dear - got a real hang-up concerning what you think constitutes 'middle class', haven't you? Add to that your prickly reaction to some fairly reasoned argument - 'I am assuming you are drunk, bored or just a troll' - and you have a recipe for getting shot down in flames on a regular basis.

 

Beware of generalisations.

[Amduck]

My other half started out as a sole trader and is now limited (in a business sense ), and also went VAT registered before he actually had to (it's based on turnover) so that's my qualification for saying the following:

 

I would suggest that the main danger for your dad might be undercharging. As someone has said, don't forget to factor in travelling time and down time into the amount you'll have to earn, and the time you'll need to spend on paperwork/accounts etc. You need to think about how many charging hours you can fit into, say, a week and then go from there.

 

Limited companies are useful if you might have liabilities you can't cover - for example, if you order expensive parts or equipment and then don't sell them on, or earn to cover, but if you don't envisage this (e.g. if you'll work on the basis of buying things and getting paid as you go along) then there might not be any need in the first instance. Some customers feel that it gives legitimacy though.

 

As for VAT, you can claim back VAT on things you buy, but you will need to charge your customers VAT too. I would think that for what your dad will be doing you won't want to. We were advised that it's easy to get in, but very hard to get out of, the VAT system. My OH only did it because most of his customers could claim back the VAT themselves - on the occasions he works for non-VAT registered people he tends to absorb the VAT within the price quoted.

[WJM]

A Limited Company separates you the person from it, the business. This can be important. A sole trader carries their liabilities personally, that is, whatever happens, happens to the person. If you go bust or get sued the person takes the damage personally (loose your house, become a bankrupt). A Limited Company isolates the person to some extent, the business collapses and your responsibility is limited to whatever you agreed prior to the collapse, or the company gets sued and you can remain untouched personally. You do carry responsibilities as a Director of the Ltd Co but your exposure to risk is less than as a sole trader.

 

 

 

 

"he doesn't know how much to charge for his time."

 

Simple - work out what it costs to run this business per year, add in the amount of profit you need to make for it to be a worthwhile undertaking. Then work out how many chargeable hours you expect to do in that year - then divide!

 

 

 

 

"How do you know what to charge by the job then?"

 

Time plus parts!

 

 

 

 

"Lloyds Bank used to have a Small Business Advisor in many branches and they provided a lot of free information"

 

The last person I would ask for advice on running a small business is a young chap who's entire career has been spent working in a relatively minor role for a colossal multinational. Do not fall for this crazed stereotype perception that Bank Managers know lots about running a business - they dont, if they did they would be doing it for themselves. Get small business advice from people who run small businesses .

Edited September 15, 2008 by WJM

[Bullfrog]

I've been a sole trader for 15 years.

 

My accountant, who I trust completely, advised against going the ltd route - too much paper-work. Other peoples business can be different. In terms of "legitimacy" people can read this completely wrong. Ltd means "limited liability" ie the directors cannot be pursued to recover bad debts. As a sole trader I am personally responsible to my creditors right down to losing my home in the worse case.

 

As for VAT registration there are strict rules about when this is necessary, mostly based on turn-over. Once again the advice would be if you don't need to do it don't, it's shed loads of admin.

 

I cannot recommend strongly enough, find an accountant you can trust, and take his advice.

 

Good luck

 

David

Edited September 15, 2008 by Bullfrog

[Machpoint005]

A Limited Company separates you the person from it, the business. This can be important. A sole trader carries their liabilities personally, that is, whatever happens, happens to the person. If you go bust or get sued the person takes the damage personally (loose your house, become a bankrupt). A Limited Company isolates the person to some extent, the business collapses and your responsibility is limited to whatever you agreed prior to the collapse, or the company gets sued and you can remain untouched personally. You do carry responsibilities as a Director of the Ltd Co but your exposure to risk is less than as a sole trader.

 

...Except that if you want to raise finance (eg bank overdraft) a director of a Ltd Co will still have to find personal guarantees or security - so the house would probably still end up be at risk anyway.

 

Ltd vs. sole trader (or partnership) is often misunderstood - it's purely an economic consideration, in the real world. The accounting requirements are different, and you have to work out whether it's cheaper to pay personal income tax or corporation tax - there's a crossover point. As a start up I'd be surprised if it was worth incorporating: we've been trading for 20 years as a partnership (and making a good living) but it's still only marginally worth going limited - so we haven't.

 

But do Consult Business Link - as others have said.

 

I'd just suggest that the charge-out rates must include all the things that have to be paid for - including tax. Don't register for VAT unless you expect to exceed the threshold, or if you expect to buy lots of stuff for the business on which you can reclaim the VAT (you can't if you're not registered).

[RLWP]

I've been a sole trader for 15 years.

 

My accountant, who I trust completely, advised against going the ltd route - too much paper-work. Other peoples business can be different. In terms of "legitimacy" people can read this completely wrong. Ltd means "limited liability" ie the directors cannot be pursued to recover bad debts. As a sole trader I am personally responsible to my creditors right down to losing my home in the worse case.

 

As for VAT registration there are strict rules about when this is necessary, mostly based on turn-over. Once again the advise would be if you don't need to do it don't, it's shed loads of admin.

 

I cannot recommend strongly enough, find an accountant you can trust, and take his advice.

 

Good luck

 

David

 

I would agree with this. It was several years before we registered as a limited company, and we did this on the advice of our accountant. Likewise with VAT, tax returns, company secretary, shares, P60s and so on. This is all in a very small business.

 

I'm not very impressed with BusinessLink. If you like, take one of their free business interviews but my experience of them was very poor. For instance, the first thing they recommended was that we joined a particular trade organisation. Good advice - we had been a quality marked member of that organisation for a year and had told the adviser that!

 

Richard

[WJM]

"...Except that if you want to raise finance (eg bank overdraft) a director of a Ltd Co will still have to find personal guarantees or security"

 

 

 

Not true - as a Director of a Limited Company, you can offer a specific asset as security, and if the bank call the asset in that is all they can take. As a Sole Trader or a Partnership, the bank can take and take and take till they have recovered everything - that can involve taking everything you have. The word 'limited' explains it all.

 

As a director of a Limited Company and you know exactly what your exposure is - and that does not have to involve your house or your boat, just those things that you are comfortable taking a risk with.

[Troll]

God, I never thought there was so much involved being a handyman, No wonder theres plenty of call for it