[Pondman Paul]

I'm have a small construction company consisting of myself and 2 of my best friends that have a combined 45+ years of experience. I pay my guys $1,000 a week each and their worth it. I also give them bonuses when we hit the numbers on our projects.

What is the going labor rate for highly skilled craftsmen? I'm in southern New Hampshire seacoast on the Massachusetts border. houses are valued at 500k up to 1.5 million. We specialize in high end construction.

I pay my guys $30.00 an hour so what should I be charging this year? I'm thinking between $55 to $60 an hour.

Pondman Paul

[Stuck in NH]

There are many threads related to this available by using the search function.

That said-

What do these 30/hour guys actually cost you after W/C, FICA, & benefits?

I fear that you are using the shotgun approach. Blow enough money into the estimate & hope for the best.

You might check out one of the sponsors, Compass Systems.

[Dale Wiley]

Send me you re mail and I will send you a spreadsheet that will help you calculate your rate.

You going to be way above the rate you are looking at.

$ 90 per hour does not seem out of reason here.

[Pondman Paul]

Originally posted by Dale Wiley
Send me you re mail and I will send you a spreadsheet that will help you calculate your rate.

You going to be way above the rate you are looking at.

$ 90 per hour does not seem out of reason here.

Thats sounds so high!

paulgiff2@yahoo.com

[Pondman Paul]

Originally posted by Stuck in NH
There are many threads related to this available by using the search function.

That said-

What do these 30/hour guys actually cost you after W/C, FICA, & benefits?

I fear that you are using the shotgun approach. Blow enough money into the estimate & hope for the best.

You might check out one of the sponsors, Compass Systems.

My guys are sub contractors. I just got my business started and recuited 2 of my best friends who I've worked with for years.

Pondman Paul

[Nebraska]

The first test the IRS would use to guage if they are subcontractors would be if they are using their own tools, vehicle's, equipment..

[Pondman Paul]

Originally posted by Nebraska
The first test the IRS would use to guage if they are subcontractors would be if they are using their own tools, vehicle's, equipment..

They use their own tools, drive their own cars...

I'm trying to find out what I need to do to become a real company with workmans comp, taxes ect..

Feel free to educate me on how to become a real company and what the cost is of doing so. I started a thread asking all these questions in the new business section. Any advice would be welcomed.

[johnkeegan]

The IRS is concerned with much more than if they drive their own cars and have theirr own tools. It's more important if you set their schedule or they do. If they come and go as they please and can freely work for others any day they choose they would be considered subs. But if you pay hourly and they report to you on a daily basis the IRS considers them an employee. Half the contractors I know play this game and it's all fine... until they audit you.
Also if one of them gets hurt on the job and suddenly has no income, don't be surprised if someone convinces them to go to worker's comp and file a claim against you (at which point they will audit you for all past payroll not claimed as well). Yeah, I know they're your best friend... but when the rent, mortgage or car payment is due and there's no income, priorities set in.
There also is the problem of liability insurance. On your yearly audit your liability insurance company will want to see if you have any subs and it they have their own liability insurance. If not, you must pay it for them. Not as devastating as the two previous mentioned penalties for inappropriately classifying an employee as a subcontractor... but still something to consider.
Again, many people play this game and don't get caught. At least learn the rules first before you decide to take the risk.

[Pondman Paul]

Originally posted by johnkeegan
The IRS is concerned with much more than if they drive their own cars and have theirr own tools. It's more important if you set their schedule or they do. If they come and go as they please and can freely work for others any day they choose they would be considered subs. But if you pay hourly and they report to you on a daily basis the IRS considers them an employee. Half the contractors I know play this game and it's all fine... until they audit you.
Also if one of them gets hurt on the job and suddenly has no income, don't be surprised if someone convinces them to go to worker's comp and file a claim against you (at which point they will audit you for all past payroll not claimed as well). Yeah, I know they're your best friend... but when the rent, mortgage or car payment is due and there's no income, priorities set in.
There also is the problem of liability insurance. On your yearly audit your liability insurance company will want to see if you have any subs and it they have their own liability insurance. If not, you must pay it for them. Not as devastating as the two previous mentioned penalties for inappropriately classifying an employee as a subcontractor... but still something to consider.
Again, many people play this game and don't get caught. At least learn the rules first before you decide to take the risk.

John,

I'm looking for what is needed to bring these two guys into my company. I'm set up as a sole propritor now but want to change that but I don't know how.

I know NOTHING about running a company, all my experience is designing and building and customer relations but the business end is lacking big time.

I'm trying to learn what it will take and what it will cost to have actual employees. I just got my "business" off the ground but I have much to learn and that is why I'm on this site right now.

I was kept in the dark about how to get my own business started by former employers and for good reason. I know how to bid, design, build but not actually run a company, which is why it took me 20 years to finally take the plunge and go on my own.

Can you direct me to how to find out what it takes and the cost of becoming a real company?

Payroll, workmans comp, taxes are what I need to learn about.

I'm willing to do what it takes but don't know where to begin.

I never wanted to be the owner of a company, I just wanted to be taken care of and build awesome things without the headaches of being a businessman but that never happened.

I was content until I started doing the designs and proposals and learned what my old bosses were charging for me when I was making peanuts.

Fear of not knowing how to take the first step in owning my own business stopped me for years but I finally decided to do it anyways. Where do i start?

[johnkeegan]

If it makes you feel any better, my bet is 95% of us were in the same boat as you when we started. As you said, we started doing this because "we like making beautiful things." However, you're smarter than alot of us (myself included) because you've sought the appropriate info early on. You'll be way ahead of where we were.
Having said that, I'm not the best "numbers" person on this forum (check with Rick and Dale) but in my opinion if you really want to do it right and you know that you're not a "numbers person" delegate it to someone who is. On the tax side get an accountant or tax person and on the payroll side use a service such as Paychex, they handle ALL the payroll B.S. and if you want to incorporate hire a lawyer or your accountant may handle it. As far as worker's comp, you can have Paychex (or whoever) handle it or you can go through a seperate Insurance company, maybe even your current liability company. In my case, I joined a "safety group" with an insurance company that caters to landscapers and it's saved me thousands on my rates.
That should keep the government off your back as far as employee issues.
As far as learning the numbers of your own business so that you're ACTUALLY making a profit and not just THINKING you're making a profit, that will take a little more effort on your part. Best advice is to contact someone such as Rick or Dale and hook up with the Compass system.
P.S.- Congratulations on potentially avoiding all the dumb ass mistakes I made over the past 20 years... while you go back to work and enjoy making ponds.

[Pondman Paul]

John,

Any idea on how much cash doing it right will cost me up front?

Are we talking $1,000-$2,000 or is it considerably more?

[Matt Kulp]

Paul,
As far as up front cost, I don't know of anything that will cost you up front except registering your business with the state. Go to your state web site and look for the info on starting a bus. Most of the state web sites will have information on this, and I am guessing will also have the capability to register online. Workman's Comp is paid just as your liability insurance is (monthly, quarterly, etc...) and is based on the amount of payroll you are looking to supply. Payroll taxes and other taxes will be given to you by your state. The easiest way to handle this in the beginning is to consult with a good accountant. You may need to pay him a retainer in the beginning, however most will give you a free consultation to learn about your situation and so that you can interview them. If you are going to do bus. under your own name and ss# then you can probably get things going pretty easy. If you are going to register a fictitious name and get an EIN# then you should go to an attorney to help with that.

The start up cost for the issues above will not cost you more then 500-$1000.

[Dale Wiley]

This brings up the basic differences in all of us.

There are those who are numbers, operations types. (me, Rick, etc) and there are those who are truly artisians, who have my respect and envy, since it comes naturally to them.

Those artisians are usually not real in touch with the numbers and operations. This is just fact. I have worked and continue to work on the design portion of the business and can hold my own. If I needed to do a lot, it would be hired out in a heartbeat.

You too need to look at hiring out what you need to do to set up your business.

Business Attorney, CPA, banker, insurance agent are all members of the team. CPA is a place to start. It is going to cost you more than $ 1,000 to do this right, You will need to set up some corps for asset protection, etc.

Do not try and reinvent the wheel. Do not try and get everything you will or possibly need here. Get that professional help to start with.

I am going to caution you about a couple of things, and it is no flame on , just what I have seen.

You said it is all about the art....it is from a marketing standpoint and creation aspect. However, the art has to pay the bills, and how you make the art will determine how you pay the bills. From the looks of your pictures, and your descripitions, you should be able to command top dollar.

Do not let non existent, flawed or compromised business practices diminish your art, by not charging enough, not having enough protections, by not planning for the future of your company, yourself, and your employees.

Good Luck ... I wish you the best.. !!!

[Pondman Paul]

Thank you all for the advice. I'm going to try to get my guys set up as employees and do this right. If I can get this done for $2,000 or less than I'm going to do it now rather than wait.


Still need a high end labor rate for bids I'm working on. I'm going to go with $70 an hour unless somebody here can explain why I shouldn't. I'm open to considering suggestions and my proposal needs to finished by Thursday. I know I'm worth whatever I charge.

Dale is anyone charging $90? I know I'm worth $90 for what we create but thats aweful high isn't it?

Can you email me that spreadsheet so I can see where I need to be rate wise?

paulgiff2@yahoo.com

[Pondman Paul]

My stone masons just finished this 14' fireplace. Thats what we do in the winter, fireplaces and wine cellars with stone veneer. My guys ROCK!