How We Price Our Work
Pricing involves closely guarded mathematical formulas passed down from the sages of old that normal men cannot hope to understand and are only disclosed in hushed corners in dimly lit woodshops… Just kidding scroll down for the answer.
If videos aren’t your thing I explain everything in the text below. Unfortunately inflation is a thing so we’ve had to increase our labor charges since making this video. But we’ve also become more efficient with our time.
Our Pricing Formula
When you contact Dailey Woodworks to build that piece of furniture, dining table, dog kennel, built-in bookcase, or any other project you’re dreaming of your estimate will be based on this formula:
Labor $100/hr + (Materials*1.5) = Your Quote
Now I will explain the “Why” behind our pricing
There are all kinds of pricing theories out there, I’m not going into all of them. I came up with this formula after a few years of trial and error, listening to dozens of business books on Audible, participating in a paid coaching program for other skilled trades business owners, and talking with other professional furniture and cabinet makers.
Labor
“But I only make $40/hr at my job why are you charging $100/hr!?” Well first off that $100/hr doesn’t make it to my personal bank account. Running a business involves:
Employee Labor (The time we are actually producing your work)
Non-Billable Labor (Cleaning the shop, maintaining equipment, writing this blog post)
Taxes and Insurance (If I wouldn’t go to jail, I’d skip the taxes part)
Overhead (Shop space, utilities, maintenance, bookkeeping, Admin, etc.
Profit (This is used to buy new and better equipment to improve our work increase capacity to lower costs, and yes profit in the form of a nice vacation for my family every so often.
Materials
“Why do you mark up materials!?” All businesses mark up materials in some way. I mark up materials 50% this means if materials for your project cost me $100 I’m going to charge you $150. Now I’ll explain why.
First, there are always consumable costs associated with a project.
We’re going to use glue, sandpaper, nails, etc on your project. I could count out every nail, weigh the ounces of glue I use and make sure I factor in the 3 1/3 pieces of sandpaper I used. These costs have to be accounted for somewhere either through higher labor or marking up material. I choose to mark up.
Second, there are incidental costs associated with a project.
Sometimes, my lumber supplier sends me bad stock that I will not use on your project. When that happens I have to get in my truck drive to the lumber yard and exchange for better material. I’m not going to charge you for that time but I have to account for the fact that sometimes this does happen.
Third, sometimes we just mess up
Yep, even I in all my greatness (read sarcasm) will cut material the wrong size, write down a measurement wrong, or not order enough material. I know this comes as a shock. When that happens, there are some words said that are not suitable for little ears, and we get it taken care of.
That’s all there is to our pricing formula.
My goal with this post was to be as transparent as possible so you know what to expect and understand why your project ends up costing what it does. Thanks for reading and I look forward to building something beautiful for your home.
