You may have seen the article on news.com.au about tradies earning the big dollars, with the general gist of the article stating that tradesmen (and women) in Australia make big bucks!
They quoted a newly released tradie rich list which showed that removalists get paid the most
(a whopping $95.21 per hour) with the list going on to include other trades including Plumbers, Electricians, Handyman, and Carpenters all of whom earn apparently very large hourly rates.
If you read the article a bit more closely, the data comes from serviceseeking.com.au and it’s an analysis of 121,000 quoted jobs during 2018. Serviceseeking is a website where customers can post a job that needs doing and trades businesses can submit quotes – the customer then selects their preferred trade. So these rates are the quoted rates of trades businesses.
So here’s the problem — here’s what you’re up against as business owners, setting your prices and defending them to your customers who read these type of articles.
The article implies that individual tradies are earning $95 or $85 per hour, and doesn’t clarify some of the important home truths. Factors like it’s actually a well established trade business that is charging those rates and that the majority actually earns that hourly rate in a whole week.
This is breathtakingly misleading journalism and clickbait.
Sadly, it is these kind of articles that perpetuate the myth that tradies and trade businesses are charging lots (overcharging even), and getting away with it at the expense of the public. So, I want to point out what people really earn and what the costs involved with running a trade business are.
Mostly, so that when people confront you with these type of flawed articles, you can refute it confidently.
Here’s the point – Nobody is really making $95 per hour.
Some businesses charge that kind of money for their labor but there are good reasons why.
When a business charges for labour, that money has to cover a lot more than that person’s wages. There’s things like:
- Their super + sick pay + holidays + days rained off on top of the basic salary.
- The times when they can’t work (or can’t be charged to a job) — it’s different for different trades.
- If they’re working on your project for several months, you might expect they can spend the majority of that time charged to your job.
- If they do 2 or 3 jobs each day, they spend time travelling, buying materials, taking care of their vehicle and tools.
- Any required training — E.g. skill training, safety training.
When you look at the breakdown of costs, tradespeople work for a lot more than you think and a lot more than it would seem they get paid themselves.
I haven’t finished yet…
The business that charges those hourly rates to its customers also has to pay for:
- Admin staff — the nice person who answers the phone, raises invoices and processes your payments
- Vehicles for the tradespeople to drive around in (and fuel, insurance, repairs, tires, rego, maintenance).
- Business insurance, licensing.
- Marketing — so you can find them when you need them.
- A business coach (very important !)
- Rent, phones, internet, computers, tools.
- The salesperson’s time – We all love our free quotes, don’t we?
- Safety systems and training.
As a business owner or the salesperson for your business, you need to be able to explain that what you charge is barely enough to cover all these costs — which are necessary for your customer to have the experience they want.
If someone is charging much less, I always wonder what gives and who is missing out? As a customer, I’d want to know. You should be able to tell them why. And on top of that, the business needs to make a profit to compensate for all the effort you make, the stress you endure, the risk you bear (including from people not paying).
One of my major roles as coach is helping people understand this as they make the transition from sole tradie to employer and business owner.
- You need to charge enough or it won’t work.
- You need to understand why your prices are fair and defend them if challenged.
And mostly, you need to understand that most people and businesses will pay a fair price for a fair job. You just have to explain it.
Watch the full video here:
https://www.smallfish.com.au/tradies-toolbox/trade-jobs-in-australia/
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