How to Charge More as a Contractor: 7 Ideas 

I'm the version of you that did the auto mechanic/ parts store route. If you are a half way decent mechanic who treats people right, people will pay. They will line up, wait a month, yes sir no sir and be happy if you only slightly over charge them. Us in the biz don't live in the same world they do. We are scarce wizards. I'm a mildly decent parts changer and people think I'm friggin Norm Abrams over here.

Well said Michael. 36 years as a carpenter and I've never advertised or have been on any social media. Feel blessed for that as advertising can invite alot of wasted time with tire kickers that never end up doing anything to their homes.

We need guy's like you teaching courses, talking on a podcast or write a book.

Right there with you brother, put out a good product make a great living

Hey, me too!

Look up “bulletproof handyman” if you haven’t already. I’m a specialty contractor but I still get value from some of the things he says. I think you will get something out of the channel too

I started out mine about 2 years ago. One thing I learned is to be deligent in making sure you cover everything in your estimate and add extra for profit and something bad situation. You will be tempted to add on little things here and there by the clients request and they expect to be free or cheap since you're already at it, that's where you will begin to lose your money and time. Be clear and tell them that you will run the estimate and get back to them. Don't do it on the spot.

Get it boyz!!🤙🏼

lol thats why you have a 4 year wait list. Thats crazy, I'd never wait more than 6 months.

If you're not willing to charge your client higher than your estimate, you shouldn't be charging less. You're effectively working on a fixed price contract, but only when it benefits your client.

I agree with Dave. You shouldn’t have to eat the extra cost when you rip open a wall and find the mold or the leaks or whatever you could not reasonably have been expected to anticipate. But you can have laid the groundwork with your client that you will need to charge more if something like this happens.

Aim for 70-80%

@rangerousdave I give a very detailed estimate of what I'm going to do, what I'm not going to do and what ifs, when the money is due and final payments and whats expected of both parties. I learned my lessons but I never go and ask for more money on things that aren't covered in my estimate.

And charge enough that you can warranty your work with no questions asked, even if you do lose money. Never sell your reputation for $250

Bidding cost a lot!!! I am often shocked at how much or how little work contractors put in.

I know the feeling, I've done that to myself a few times. I just grind through it and learn my lesson. Not sure how long you've been on your own, but I learned the only way to survive is I must include overhead on top of the project total before quoting.

Probably most if not all of us have been there on multiple occasions. I pray that you would come through this better than ever brother!

It’s always interesting how “all jobs aren’t good jobs” can be hard to see sometimes (-8

iirc he actually does have that video. It's called Hiring a Contractor: 9 Things You Should Know

I can start tomorrow morning. Really bad news. I might be able to fit you in the winter. Really good guy.

@@Prodmullefc And also a a book to purchase

Communicate what you want as early as possible. Try not to change your mind 25 times throughout the course of a project. Pay promptly. Contractors want to get it right the first time just as much as you do.

I do shared your experience and it is a terrible feeling at the end of the day where you know you didn't make as much as what you should get. It's a discouragement for sure but live and learn and grow. Learn to say no is a step too.

I build IT systems. The idea is to build long term relationships. I have contracts that have been running for years with just change order after change order. The core contract has been done for years. Often, a new contract takes way too much time and paperwork. A change order might only take a local managers sign off, not involving several corporate depts. The government calls them indefinite quantity / indefinite delivery contracts. They are a beautiful thing if you actually serve your customer well.

Some contractors,will intentionally bid lower on jobs, bomb w/ change orders that wind up sometimes really hammer ing project cost. Calculating insane profit for them. Instead of including there nominal margins w/ original bid. I call it predatory bidding because they victimize clients delays,or plain job progression ceased until they uuhmmm, correct issues. Which in turn puts trades behind. There are legitimate offsets on projects that may not forseen or correctly planned, installed.lnspectors definitions of what is & not acceptable.very broad brushstrokes for them. Jurisdictions Remember code is absolutely minimum requirement in that particular area what ✅ here may not there. Some time you have to give them the knowledge that's holding up your part of job. The scouts teaching scout master how to start a fire so you can get merit badge. 43 yes. in const. seen a lot of WOW moments of being impressed & disbelief

@@kelturner5452, You are absolutely correct, I thought about including the fact that some contractors will low ball a bid, sometimes under costs and then once they have the job and are building it will start saying “That’s not my job” to all different aspects of the contract. They’ll come with their hands full of change orders, this is one of the problems with government contracts, where low bid wins. The other commenter here Bill_N_ATX, makes a very valid point, Build long term relationships, this is what you want to aspire to, when contractors just call you to do a job you haven’t even bid on. They call because you do good work, on time, and you end up doing all their work. You know what you’re getting with them and they know what they’re getting with you, jobs get done and everyone makes some money. Just don’t get greedy on them, if you lose some money on a job, you know you’ll get more jobs with these long term relationships. Good luck out there and be careful!

I did the same, with the exception of repeat customers who already know my worth. Total game changer, and now I have time to do the work for my favorite clients, and time with the family at the end of the day instead of giving someone my free time at dinner hour.

@@Wallymakesstuffexcellent concept!

I only got chewed out for telling a potential client that I charge for estimates once, and was relieved! (Dodged that bullet)

Cool, I am a carpenter in Alabama as well looking to get a homebuilder license myself.

Amen David! Couldn't agree with your comments more. This is the secret to success, glorify our Heavenly Father and everything we do. We're working on God's house!

Could you please share how you calculate it?

Your post reminds me of an old saying: The business of business is business.

I try to keep the final payment at $5k or less, which is the small claims court max in my state.

Staged payments are a must. And, the balls to walk at the first time they balk at paying. Respect must exist on both sides of the project.

Yes... good movie .. my line 220-221 whatever it takes .. Another classic , older from the 40's .. Mr Blandings Builds His Dream House (Cary Grant)

“Aren’t you going to offer me a drink?” “Oh, yes! What was I thinking? It’s almost noon. You must be parched!!”

Bingo! 10-15 minutes of due diligence online and some carefully asked questions will weed out 90%+ of the poor quality prospects.

@@BRLnSEE Exactly

How did you find contract dev work? What 2 things did you dislike about it the most? I’ve been thinking about doing it myself for awhile

@@floodo1 Mostly, the work found me, as I'd already built a reputation in the industry, and particularly in my fairly narrow niche. I *tried* finding new work at times, but that never seemed to go anywhere. In one case, I found where someone was trying to hire a bunch of hourly workers for something where I knew I could build tools that would greatly increase such workers' production rate, so they could pay me a bit to build the tools, then save a lot more than that on reduced manpower to get the work done. I described that to the hiring manager, with references to my prior work, but didn't get any response. As for what I disliked about contract work, the big thing is the unreliability. When you're between contracts, you may have no idea when the next one will be available. That depends a bit on your particular field. Mine was narrow enough that jobs came up infrequently, though when they did, very few people were qualified to do them. So if you need a steady income, that could be a problem. OTOH, once you get started contracting, you can stuff away a lot of money, living way below your income, and have that to fall back on while between contracts. The irregularity can also mean that you're just about to go on a trip, and get notice that someone wants you to do some work for them. Sure, you could turn down the work, or delay until after your return, but if you want a better reputation, you put your plans on hold and do the new contract. The second-worst thing about contracting is paying taxes. You have to pay taxes quarterly, *estimating* what you'll earn over the course of the year. You definitely don't want to underestimate, and send too little money in. AIUI (talk to a qualified tax attorney), even if you make all your money in the second half of the year, you need to send in taxes for the first two quarters as well.

Oh, one more thing about the taxes. When you're a W2 employee, the federal government lies to you about how much of your income you're paying in "payroll taxes", the income taxes that they don't want to admit are federal income taxes. Half of those are paid by your employer, on your behalf. But your employer isn't paying that out of the goodness of their hearts, and if you're contract (1099), they won't pay it. So instead, the feds require you to pay that "other half" yourself. You need to consider that when you set your rates.

@@BruceS42 lol they make you pay "the other half" because that is the medicare and social security portion it is folley to go into business as a contractor without understanding basic tax law imo. Many people do it but at their own peril

@@floodo1 It looks like you misunderstand. Social Security and Medicare taxes ("payroll tax") are, for W-2 employees, split into two halves. One is deducted from the employee's paycheck, and you'll see those line items. The other half is paid by the employer, but of course they see it is part of the cost of employing you. This is a sort of scam, to make it look like those taxes are half what they really are. When you do 1099 work, the scam is revealed, and you have to pay that hidden tax yourself.

One way to look at it is, the people I want to work with are the ones that know the lowest bid is usually for crap quality or by someone that doesn’t value their own work. The part where he said refer bad clients to your competitors says it all haha good riddance if you’re into low balling

yup but you will still get cowboys

Excellent presentation especially explanation of overhead & profit.

Wheat from chaff…. Not Shaft

I agree, that's why I will put the cost of the extra on the invoice and next to it N/C (No Charge)

That’s also a really good move @@BOXERS2233