Replies

1. 
   RW | Oct 27, 2002 01:07am | #1

   If you are going to sub it, find out the cost first and include it. If you aren't set up for a big project, often subbing it out is cost effective. You don't have the space or, as it sounds in this case, the inclination to do it, ask around. How to evaluate the finishing shop - that's the question. Samples of work would be nice. One on one talk to the head honcho to make sure you and he/she see eye to eye. Your gut after that should be a pretty good steer. Finishing isn't cheap, but you aren't either. If you're building quality, you and they are probably similar in shop charges as far as $/hr goes. The last time I had a piece finished by someone else, it was a built in bookcase / cabinet set (before it got built in) about 12'long, 7 1/2' h, and with a stepped base, so the bottom was about 24 and the top about 14. I provided it assembled in manageable pieces, sanded, and stained. They lacquered it and all the strips of molding that went with it (crown, toe kicks, fillers, etc) for $380. If you don't know who to ask, check the local paint stores.

2. 
   SgianDubh | Oct 27, 2002 02:59am | #2

   I think it's an excellent strategy if you can find a polisher that's able to provide the service and quality you require at a cost you're comfortable with. RW gave you some good things to look for in your search for a good subcontractor. You might need to be able to work together as a team. For instance, part of the job may require staining and polishing prior to assembly. After assembly, the job might need to go back for final finishing. You'll need to build into your estimate or bid the cost of moving the goods back and forth from your workshop to your subcontractor, and also build in a contingency for delays due to your subcontractors throughput and scheduling. 

   An example from my business might help. I typically sub-contract the supply of custom veneered panels including all materials and labour to a specialist. I can do my own veneering just fine, but I can't beat his ~$15 a square foot for zebrano/ maple on plywood price. I either collect the panels when ready, or he delivers. Whatever, it frees up my time to do other work, and I simply add his charge to my estimate (and later bill) and mark it up by 25% to take care of my management time and for my profit. (In my case 25% is my standard mark up for anything that comes into the workshop that I didn't directly work on, e.g., I buy timber at $100, and resell it at $125, even if I do nothing to it. The same with polish, hardware, etc..) Slainte.

   Some stuff I've made.
1. 
   RSRose | Oct 27, 2002 03:15am | #3

   Richard,

   "I buy timber at $100, and resell it at $125,"

   You are very generous.

   I've read analysis of costs of running a small business that advised that a markup of less than 50% on materials was far too low. The indication of a "healthy " practice (to the survival of the business) was a markup of 50-100% for all raw materials.

   Markup for outside services was recommended right where you've got it. (25-30%).

   R

1. 
   SgianDubh | Oct 27, 2002 07:27am | #5

   I'm not sure if I'm generous or not, Rich. A couple of years ago I had several mark ups that I used. To list them,

   I marked up solid timber by 100%, i.e., I bought at, let's say, $5 a board ft. and resold at $10 a bd. ft..

   I marked up board materials by 50%, i.e., I bought at $50 a sheet and resold at $75 a sheet.

   I purchased proprietary(sp?) at $1, and resold at $1.20, a 20% mark-up.

   All the previous subject to tax as required.

   The different rates reflected the amount of time, effort and expense I incurred in simply 'picking up the inventory.' For example, picking through and selecting rough sawn hardwood involved a significant expenditure of my time and overhead, e.g., running a vehicle. Board materials such as ply were easier-- just slide them off the top of the pile, and proprietory(I know I can spell that word, ha, ha) goods like glue, hardware, polish, etc., I simply open and use, after I've collected them.

   All those resale prices included collection of the goods and basic machining, etc.. For example, my 100% mark up on solid rough sawn timber included an allowance for my time and expense in buying the material, and then getting it squared up ready for joinery in the workshop. The 20% mark up on polish and other such goods reflected the fact that I didn't have to do anything but open the package and use.

   Well, over a five year period of keeping my books using a computerised accounting system, I was able to easily pull up a bunch of reports and do some analysis of my charging habits over that  period. I noticed for instance that I was not properly allowing the right amount of time spent on jobs. Take the 100% mark up on timber for instance. In the overall scheme of things, I was covering my backside, but because the tricky jobs of selecting, grain matching, rough sawing, jointing, thicknessing, stacking, clearing up, etc., timber for a specific project were not specifically itemised as a  labour cost with its attendant workshop overhead, I was underestimating my actual time on the job, and other things.

   I did some juggling of figures, and came up with a flat mark up 25% on everything I bought. I also came up with a labour rate for the basic machining to square of timber. The same for processing board materials. I now charge out basic machining of rough sawn solid timber at 15 board feet per hour. This is what I reckon I can do on average for all the tasks listed in the previous paragraph. I made some adjustment to my labour rate to compensate for various factors, and now I seem to have a very sharp idea of how long an actual piece of furniture takes to build. In a sense it's simple. I have 75 bd. ft. of rough timber to machine square prior to executing any joinery. That's 5 hrs. times my labour rate.

   Well, this has digressed from subcontracting out the polishing job which was the original question, so I'll end it here, but hopefully there's enough information in this for you to see where I'm coming from, and where I'm going with my pricing strategies. Slainte.Some stuff I've made.

1. 
   Bengst | Oct 28, 2002 02:23am | #6

   Don’t feel bad about digressing.  I found how you do your marks-ups very informative.  I have much to learn though before I can have a system as thought out as yours. 

    

   I did take that dining set job.  I talked to the client about subbing out the finishing and he was very pleased that I would think to go that route to ensure that his furniture is the best it can be.  I let him know about how much the sub contract would be, my mark up included, and get this, he said that his pockets were very deep, as if the four car garage didn’t give it away, and he would pay whatever it costs to get exactly what he wants.  Music to my ears!

    

   Jeffrey     

3. 
   gweisenburge | Oct 27, 2002 06:20am | #4

   Jeffrey,

   Until about four years ago, I finished everything I made, and I'm pretty good too. But as jobs got bigger, and finishing became more complicated, I began to sub out that portion of the job. Sometimes I include the finisher's cost in my bid, plus markup, but now I often just recommend my finisher, David, to my client, especially for built-in "furniture." Yet I still enjoy finishing small projects, like desks, chairs, and tables, especially when I get to caress oil into its surface.

   My biggest finishing problem is making the shop dust free.  Busy woodworking shops just aren't meant to be that way. Then there was the time I was spraying the final coat on about 50 doors when the maintenance guy began blowing leaves in the parking lot. But dust isn't the only problem. Since I don't have a spray booth, I can't legally spray solvent based material, and I think spraying is an essential method, especially when working commercially. I became good at spraying waterborne lacquer, which I can legally apply, but I think that stuff is still fraught with too many application problems.

   I now think I'm more cost effective giving most of the "polishing," as Sgian calls it, to David. He's good, because that's all he does, and he knows about the latest tools and material. I'm more cost effective working wood. If you choose to sub out your finishing, and you find someone good, like David and his crew, hang onto them.

   Gary