If you are
new to this industry and out bidding jobs please stop and do some research!
Just because you were
making $12 an hour at Home Big Box does not mean that is how much you bid per hour on a job! You will be broke, out
of business and selling your Hoover on Ebay in less than a year. Only the Jani-fries can get away with this.
You are starting a business! This means you will have direct and indirect overhead, insurance,
vehicle, supply, equipment, marketing, advertising, adminstration and office costs just to mention a few items. All
of these need to be accounted for in your pricing. If you charge $12 an hour, the first $2.50 will cover those items
and I haven't even mentioned: TAXES
A common mistake new service business owners frequently make is forgetting to
take taxes into their calculations when pricing jobs or setting rates. Every dime you make is subject to tax: federal,
state and sometimes local. Unless you keep very accurate records and receipts for your business you can end being taxed
in the neighborhood of 39% of all the money your business makes.
Here is a Tax Insight: If you worked for
someone else, you had social security tax deducted from your paycheck and your employer matched that amount everytime.
If you work for you---YOU HAVE TO PAY BOTH!!! You're share and the employers share.
Knowing your tax rates
for your business is essential in establishing rates that allow you to pay staff, pay suppliers, pay taxes and still have
enough to hit the drive thru at McDonald's.
Staying with the same hourly bid
amount of $12 an hour and deducting business operating expenses and taxes, your hourly earnings are now below Federal Minimum
wage $7.19 per hour. Is that really worth staying out cleaning toilets for?
For more information
on Federal Taxes and how the IRS can actually help you, click here: www.irs.gov
Want some more help? Click here.