This article is for Commercial Painting Contractors (NOT domestic painters) who price their projects to bills of quantities or their own measures against 'all-in' painting rates (£/m2, £/Lm or £/nr.) and understand that tenders have to be 'tight' and margins low in order to secure a project.
When calculating painting rates to use when pricing a bill of quantities or your own measure, your rates will be based on your overall daily painter charge (£ per painter per day you need to cover basic pay, travel/fuel/parking/accommodation costs and company overheads and profit) plus materials.
Given the above, there are FIVE basic factors you will need to consider in order to ensure you submit your most competitive painting rates and therefore overall tender submission:
1. The basic rate (prime labour cost) you paying you 'subbies' or direct labour.
2. Your material prices ?
3. Project Overheads (E.g. fuel/travel/parking/accommodation costs)
4. Your Company Overheads and Profit % (OHP).
5. Are you V.A.T. registered ?
Let's look at each of these factors in turn:
1. The basic rate (prime labour cost) you paying you 'subbies' or direct labour.
Basic labour rates or (prime labour cost) vary according to where your business is located in the UK. In some areas you can get 'subbies' for £100-£110/day, others £120/day and others £130-£150/day.
You will know your area and what you can 'get subbies for'. Your overall daily painter charge on which your painting rates will be based, must include for this amount.
2. Your material prices ?
Unless you have a 'direct' account with the paint manufacturer such as Akzo Nobel (Dulux/Armstead); PPG (Johnstones) or Crown, you will not be on the 'best' material prices. This is clearly a disadvantage when trying to submit your most competitive tender. In order to get your most competitive material prices you have to do a bit of 'leg work'. Firstly, call your local supplier and ask to speak with the branch manager. When you speak with him, tell him you are pricing lots of commercial painting projects and you are looking to get the 'best' material prices in order to improve your chances of securing a project. Ask for the contact number of your local AREA REP. DO NOT ask the branch manager for material prices. He can only give you discounts to a certain level. The AREA REP can offer you more discount. Speak with him!
3. Project Overheads (things like fuel/travel/parking/accommodation costs).
You wouldn't use the same painting rates for a local job as you would that involved 2hrs travel/fuel for your painters. So, your painting rates will need to include for these costs on a project by project basis. The way this is incorporated into your painting rates is by adding these daily costs into your overall daily painter charge on which your painting rates are based. For example, say we had a job that was 1.5hrs travel from our base. We would probably pay each painter: £10-£15/day travel which would be added to the overall daily painter charge on which our painting rates are based. In terms of fuel. Let's say we were putting £20.00/day fuel into the vehicle, but there were TWO painters in the vehicle. This means that the amount we would need to add onto our overall daily painter charge would be: £20.00 divided by 2 = £10.00 per painter per day.
4. Your Company Overheads and Profit % (OHP).
Your painting rates will need to cover things like: Your office costs, your own time if you are 'off the tools', office staff costs, public and employers liability insurance, vehicle costs, telephone costs, IT costs etc. This is included in your tender by adding a percentage (usually 28%-30%) onto the prime daily labour cost (shown in 1.). So if your subbies were costing you £130/day, you would add say 30% onto this to allow for Overheads and Profit) = (£130.00 + £39.00 = £169.00/day)
5. Are you V.A.T. registered ?
I know this might seen a strange one, but very small commercial painting contractors who are only just trying to break into the commercial painting market, may not be V.A.T. registered which is a disadvantage compared to V.A.T registered painting contractors. Why? Because you will have to base your painting rates on material prices that have V.A.T. added. This means that your tender is automatically based on material costs which are at least 20% more than your V.A.T. registered competitor. If you are looking to break into the commercial painting market, you will definitely need to get V.A.T. registered.
To help you with calculating the overall daily painter charge on which to base your painting rates, see the worked example below:
1. How much are you paying your subbies per day ?
In this example, let's say we are paying our subbie £15/hr x 8hrs. = £120/day
2. Company Overheads and Profit Allowance.
Your painting rates need to cover things like: Your office costs, public and employers liability insurances, vehicles, telephone costs etc.
This is normally factored onto the labour as a percentage addition onto your prime labour rate. Normally this is 28%-30%.
This example is based on 30%. E.g. £120 x 30% = £36.00
3. Are you paying any extra per person per day for travel time?
Up to an hour, I would say no, but over an hour you may think of adding say £8-£10 for each hour of travel.
In this example, let’s say we are not paying our subbie any extra for travel.
4. Are you giving your subbie any extra for fuel?
Remember, this allowance per person, per day. So if giving a subbie £10/day for fuel, but there are two subbies in the van, the fuel cost per person, per day would be:
£10 divided by 2 = £5 per person per day.
Total Daily Painter Charge £161.00 per day
Your painting rates for this project would be calculated on this daily painter charge.
For more advice or to talk about our QUICK PAINT RATE painting rates calculator, call us on:
Office: 01782 835764
Happy Tendering,
Mark (Painting Estimator-panddonline)