It is important to realize that there is not a one size fits all solution when it comes to pricing a painting project. Your company is unique, and therefore you need to understand what price is right for your business.

To do this you need to understand what costs your business has and how much profit you would like to make. One of the easiest and most accurate ways of doing this is by understanding the hourly rate you need to charge (including or excluding materials) and using this together with a production rate estimating system.

When you follow this approach, you'll gain valuable insights into the project's duration, ensuring accurate production planning. It'll also help you set the right pricing to ensure consistent profitability for your company. Check out the video below for an introduction on how to calculate your hourly rate:

This is the average price paid per hour to your production team to produce the project. This does not include any other staff that are not directly producing the project such as sales, admin, and management. This rate should include employer contributions for payroll taxes, employment insurance, paid time off, and any other benefits that would apply to the wages of the people doing the work.

Start by listing all your painters and how much you pay them per hour. Then take the average of these rates to find your average hourly rate.

EXAMPLE: Your company has 3 painters with varying skills, responsibilities, and wages.

This is the amount you are paying per hour on average for paint and sundries (small tools, supplies, etc). You can include this in your hourly wage or add paint and sundries on a project-to-project basis.

To get this number you will need to consult your financial statements. Take your paint and sundries spent for the longest period you have accurate historical financial information for and divide that by the number of hours worked by your painting team (only painters producing projects) in that period.

EXAMPLE:

In the last 3 months, you spent $13,932 on paint and sundries. Your painters worked 1440 hours in that period. So, you will divide $13,932 by the 1440 hours your painters worked in the year which gives you an average of $9.68/hour spent on paint and sundries.

Combine all your overhead costs, which includes payroll for all staff that are not directly involved in the production of the projects (management, sales, admin) and essentially everything but painters’ wages, paint, and materials. This includes your insurance premiums, rent, loan payments, marketing, vehicles, owner pay, etc. Once you have your total overhead costs, divide that number by the total hours your painters worked in that period. This will give you the total cost per hour you need to charge to cover your overhead.
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EXAMPLE:

Please note: this is over 3 months - The same period used in the previous calculation

3 Months Overhead Spend Expenses: $32,508

The profit markup refers to the amount of profit you would like to make from your work. This is an important number as every business must make a profit to operate successfully. Once you have decided on the amount of profit you would like to make, you can use the other hourly numbers to find your all-in hourly rate by adding all of the hourly rates together and dividing by 1 minus the percentage of profit you wish to make.

EXAMPLE:
​For this example, we will use a 10% profit margin

Pricing painting projects can at times feel tricky since ultimately it’s both an art and a science. However, once you understand the basis for your hourly rate you can start to feel confident with the prices you charge for your projects.

Now that you have broken down your hourly rate from your company’s historical information, it will give you the chance to make adjustments as your business grows, seasons change, and other factors that will affect your business. Pair this hourly rate with a production rate estimation system and PaintScout, and you will be able to build consistently priced painting estimates you can trust and get the profit you deserve.