What is your current hourly rate

Craftsman hourly rate Craftsman lesson: what does a craftsman cost?

Craftsmen are expensive - this is a widespread prejudice. What many customers do not know: With an hourly rate of 60 euros, electricians, painters & Co. often just cover their costs. An example calculation shows how the calculation of a craftsman's hour can look.

Max Frehner

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A craftsman's hour costs on average between 40 and 60 euros. Sales tax is not even included in this. For some customers this is too much. The bricklayer, plumber or hairdresser is quickly accused of charging excessive prices.

The opposite is often the case. "Most craftsmen are too cheap", says Rolf Koch, management consultant at the Mannheim Chamber of Crafts. 58 percent of the craft businesses in the Rhein-Neckar district would only pay the basic contribution from the Chamber of Crafts. That means that they generate a commercial income that below 24,500 euros lies. "That's just not enough," he says. Especially since the region is considered to be economically strong, so there is purchasing power. "It certainly doesn't look any better in the east," he estimates.

Explain how the price for a craftsman's lesson comes about

It seems paradoxical. Customers complain about expensive hourly rates, and tradespeople actually have to increase their prices. It is therefore important that companies advertise for greater acceptance. " If you show the customer how the prices are made up and how much the craftsman actually has, he usually shows understanding ", says Koch. Most of them are simply not aware of the costs that the company has to cover with its hourly rate.

Several chambers of skilled trades now offer their member companies flyers on which an example is outlined how a craft hour is put together. Anyone who comes to Koch's company advice service will also receive one - and he will encourage them to do so Flyer to pass on to customers who are surprised at the supposedly high hourly rate.

What does a craftsman cost per hour?

"In principle, calculating is nothing more than knowing the lower price limit", explains Koch. Where this lies depends on several factors. The hourly rate depends, among other things, on the Trade, the Qualification of the employee, the type of work and the Location of the company. A vehicle painter requires more than a hairdresser, customer service is more expensive than assembly, and operational overheads are higher in large cities than in the country.

Koch provides the following sample calculation for an average metal construction company with five employees in the Rhein-Neckar district on:

"The company cannot use this, otherwise the boss will have to eat less", Koch explains his calculation. The calculated hourly rate would be just enough for the example company to survive. "If you want to build up a little more equity, you have to count on the profit," he says. The calculation does not allow scope for price reductions.

How can it be that there is always someone who is cheaper?

In the above calculation example, the bottom line is that the company only has one euro. Despite the low profit margin, there is almost always a competitor in the market who makes the job cheaper. How can that be?

"Unfortunately, these are often cheap residents who pay their employees poorly or who do not provide social benefits appropriately," says Koch. The lack of payment is then usually reflected in the quality.

"But there is always someone who calculates wrongly from an economic point of view", says the management consultant. A craftsman who sets his hourly rate too low can hardly keep his business in the long term. Customers should think twice about whether they really want to award the contract to a provider that is clearly below the others.

It becomes frustrating for the client especially when it comes to Warranty case comes, but the craftsman is already insolvent. A case that Koch regularly has on his desk. "Ultimately, the customer looks into the tube", he says.

Calculating the hourly rate: Companies make these mistakes

"Many companies are not aware of their real costs", says Koch. Entrepreneurs, in particular, often fail to see how high the cost of living are and how much they have to put away for retirement provisions and social security. Reserves for vacations and bad times would also like to be forgotten.

It is also important for the imputed entrepreneur's wages whether the business owner lends a hand himself or is completely tied to his desk. "If the Work performance of the boss cannot be offset employees have to pay for the entire entrepreneur's wages, "explains Koch. But companies also make mistakes in other parts of cost accounting, for example because they do not take into account the imputed rent or the return on equity.

In the individual consultation, Koch goes through the individual cost factors and compares them with the average figures of comparable companies. The management consultant also covers them again and again Cost guzzlers that let the profit shrink. As an example, he cites carpenter, the very "machine in love" be. The degree of utilization of individual machines is often so low that a purchase is hardly justified. He advises them to cooperate with other companies.

Craftsman lesson: How can handicrafts enforce higher prices?

Many craft businesses had to increased costs in recent years accept. For raw materials and energy, for example, but also in recruiting. The shortage of skilled workers in the craft is forcing companies to invest more money in finding new employees and to pay more attractive salaries. The bureaucratic effort is also increasingly preventing the self-employed from doing value-adding work. All of this causes costs that have to be passed on proportionally to the customer.

Koch therefore advises companies to set their own hourly rates if possible annually questioning. The amount by which the hourly rate can be increased sometimes depends on the trade in which the craftsman is active. "The situation is currently so good, especially in the construction and finishing trades, that price increases can usually be easily implemented," says Koch. In other areas such as building cleaning or hairdressing, this is more difficult. Nevertheless, the following applies: Those who offer quality should also be paid for. A well-founded hourly rate can usually also be enforced. "Craftsmen have to be able to sell themselves," says Koch.

If the market does not provide higher prices, it must screwed to the cost otherwise the company cannot survive. Here it often helps to break up old structures. Typical revenue killers are, for example, discounts and rebates. But undefined responsibilities, free additional services, unstructured document management or underutilized machines also reduce the return on investment. In order to find out in which areas the costs deviate from the average of comparable companies, Koch recommends using the advisory services of the chambers of crafts.


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