Moving from Day Work to Work Packages
You might be used to working on a day rate. That means you get paid for your time. But many main contractors want fixed price quotes for 'work packages'. This means you agree a total price for a specific job. You need to know how to price these jobs correctly. If you don't, you could lose money. This guide helps you move from day rates to package work.
Understand the Scope of Work
The 'scope of work' is key. It tells you exactly what the client expects. It lists all the tasks, materials, and deadlines. Think of it as your instruction manual.
Read every word carefully. Look for details. What specific tasks must you complete? What materials do you need to supply? What quality standards apply? Are there any specific access requirements? Check the site address and start date.
Look for what's not included too. Sometimes, the scope assumes you know things. Ask questions if anything is unclear. Get answers in writing. This stops misunderstandings later.
Pricing Your Work Package
Breaking down your costs helps you build an accurate quote. Don't guess.
Labour Costs
Your labour is often the biggest cost.
- Hours: Estimate how long each task will take. Be realistic. Add a bit of extra time for unexpected issues.
- Rates: What do you pay yourself and your team per hour? Include all costs. Think about National Insurance contributions and pension contributions. You also need to factor in holiday pay.
- Finding Labour: If you need more hands, you can find skilled tradespeople on live jobs or trade pages. Get their rates upfront.
Material Costs
List every material you need.
- Quantities: Work out exact amounts. Add a percentage for waste. This covers offcuts or breakages.
- Quotes: Get at least two quotes from suppliers. This ensures you get a fair price.
- Delivery: Factor in delivery charges.
Plant and Equipment
Do you need to hire special tools or machinery?
- Hire Costs: Get quotes for plant hire. Include delivery and collection.
- Your Own Tools: If you use your own tools, factor in their wear and tear.
Other Subcontractors
Will you use other trades for parts of the job? Get clear quotes from them. Add their cost to your package price.
Overheads and Preliminaries (Prelims)
These are the 'hidden' costs. They aren't directly linked to materials or labour for one task. But they are essential to getting the job done. Don't forget them.
- Site Setup: Fencing, temporary power, welfare facilities.
- Insurance: Public liability, employer's liability.
- Admin: Your time spent on paperwork, emails, phone calls.
- Fuel and Transport: Getting to and from the site.
- Consumables: Blades, screws, dust sheets, cleaning supplies.
- Waste Disposal: Skips, waste carrier fees.
- Supervision: Your time managing the job.
Prelims can add a significant amount to your quote. Estimate them carefully.
Your Profit Margin
This is what you earn after all costs are covered. It's not greedy; it's essential for your business to grow. A good profit margin allows you to invest in new tools, training, or cover unexpected issues. If you don't add profit, you're just working for wages, not building a business.
LabourBase AI: Your Quoting Options
When you use LabourBase AI, you'll see options for quoting.
- Fixed Price Quotes: This is what we've mainly discussed. You give one total price for the whole work package. This is best when the scope is very clear and unlikely to change.
- Day Rate Quotes: Sometimes, the client might ask for a day rate. This is common for smaller jobs or when the scope isn't fully defined. You quote a daily rate for your labour and potentially for any plant you bring. Materials are usually paid for separately by the client.
Choose the option that best fits the job's description. If the scope is vague, a day rate might be safer. If it's detailed, a fixed price shows confidence and helps the client budget.
Three Common Quoting Mistakes That Erase Your Margin
Even experienced contractors make these errors. Avoid them.
- Underestimating Time: You're keen to win the job. You think you can do it faster. Then you hit snags. Bad weather, unexpected site conditions, late material deliveries. All these eat into your time. And time costs money. Always add a contingency to your labour estimate. A good rule of thumb is to add an extra 15% to your estimated hours.
- Forgetting Prelims and Overheads: This is a big one. Many small contractors focus only on labour and materials. They forget about skips, fuel, office costs, and their own admin time. This means you're paying for these things out of your profit. Or worse, out of your own pocket. List every single overhead item. Even small ones add up.
- Not Including a Profit Margin: Some people feel uncomfortable adding profit. They worry it makes their quote too high. But if you don't add profit, you're working for free. Or you're working to cover costs only. Your business won't grow. You won't have a buffer for problems. Decide on a fair profit margin for your work. Don't be afraid to charge what you're worth.
Review and Submit
Before you send your quote:
- Double-check everything: Have you included all materials? All labour hours? All prelims?
- Read the scope again: Does your quote cover everything in it?
- Check your maths: A simple error can cost you.
- Clarity: Is your quote easy to understand? Does it clearly state what is included and excluded?
A well-prepared quote protects your business. It shows you're professional.
Practical Takeaway
Always read the full scope of work, break down every cost, and make sure you include your overheads and a clear profit margin.