Pricing Fitted Alcove Units

In summary we already established that, while there is a wide range of prices for a wide range of quality, the going rate from quality specialised providers is between £2k and £2.5 including painting, for a typical pair of fitted cupboards and shelves either side of a chimney breast.
This post is for anybody really interested in the details.  It may appeal equally to prospective customers keen to understand what they are spending their money on, or young tradesman learning the costs involved in this sort of work. In this post I will give examples of other companies’ prices, then I will go into more detail about my personal experience of pricing these projects.

Are we taking you for a ride?

Perhaps you have browsed online forums, and seen threads where non-tradespeople rant about how overpriced things are and what they should really cost based on a simplified assumption of materials + labour.   The prices they suggest may possibly be fair for the most basic work, but cannot be applied to jobs that are properly designed, carefully crafted and painted, using materials and fittings of appropriate quality, from a VAT registered business with overheads and wages to pay.
People who demand the cheapest prices actually fuel the market for dishonest or illegal traders, whose work they will then complain about!
Returning to our theme: it’s worth noting that the sorts of alcove furniture companies mentioned in the previous post who publish their prices online are usually at the cheaper end of this specialised market, because they have systematised their processes and assessed their costs in order to work efficiently. 

A sample of the specialists

I personally asked a few small independent specialists who don’t publish pricelists online what they charge.  They are all either sole trader designer/craftsmen or owners of very small businesses, who are part of a closed online forum I am also a member of.  Some charge a fixed fee but haven’t got around to putting it online, others just price each job individually.  Below is a list of their location and typical prices.  
York:  “£1250 for one alcove / £2200 for a pair, primer finish only.”
Norwich: “Between £2000 and £2500 for a pair, painted.”
Sussex: “2400 fitted and finished is a reasonable job if they rolled in day in day out…”
Hampshire: “£2400 for a pair, spray painted”
Hampshire (a different company, very high end): “I have found them to be a complete waste of time, any enquiries for alcove units go straight in the bin, we used to charge £1500 plus VAT and no one wanted to pay that”
London: “…Just got a job £3400 for some very basic sprayed alcove units. Fitted some traditional units last year hand painted for £4000 that’s in north London.”
I have not published their names (since they are bespoke designers and their actual prices may vary per job and over time), however if you see one in your area and would like their details, send me a message and I will be happy to put you in touch.  (I am based in Sheffield and usually only serve South Yorkshire).

Yes, But How are the Prices Actually Calculated?

Below I will give you an example of real costs.  I have personally designed, manufactured, fitted and painted dozens of these units.  I started out as a sole trader in 2009, trading as QDS Carpentry and Joinery.  We rebranded in 2016 as Freebird Fitted Furniture and became a limited company.  In my first few years of trading I was typically charging between £1500 and £2000 for this type of work (already more expensive than other one-man-band joiners) but barely covering my living costs, even with a workshop rent-free in my own garage.  When I costed the finished projects in retrospect, I often found I should actually have charged more.

An Example Project

We completed this project in 2013, for a living room on Ecclesall Road South in Sheffield.  I used solid wood for shelf lippings, frames, cornices, tops and doors (the woods used were tulipwood and radiata pine), with MDF for the carcasses (MDF is a good choice for paintability – I will expand on this subject in a future post),   I handmade 5-piece panelled doors with mitred mouldings and fitted them on mortised butt hinges, with each door carefully scribed to sit within a frame, and concealed magnetic catches.  It was all hand-painted with 2 coats of primer, 2 coats of eggshell, and a final touch-up coat brushed on site after fitting and caulking to the walls.  I charged £2000.

Costs Breakdown

Now the pricing structure gets a bit technical, but I said I would tell you so here goes:
In trying to get a handle on the real costs of trading I created an excel spreadsheet to calculate ‘chargeable hours’ for me and my apprentice.  I was working full-time on the business, but running a business involves a lot of unpaid time (quoting, marketing, planning, cleaning the workshop etc), so the ‘chargeable hours’ are the ones doing actual fee-paying jobs.  I also put in a reasonable allowance for holiday, like any job.  Aiming for a modest £25,000 wage per year at that time, my chargeable hourly rate came to around £20 per hour.  (If you think this is high for a joiner – which it really isn’t – you may be comparing it to someone who turns up to paid work 5 days a week mostly subcontracted, just covering basic costs of self employment, van and tools etc, but not really running a business).  On a similar basis, my apprentice’s chargeable rate came to £8 ph.  On top of this, the fixed costs of running the business were around £1000 per month.  I used an excel formula to break that down to an extra £4.44 per chargeable hour (other businesses account for that cost in different ways).  That gave me my break-even rates.
The job in question took me a total of 51 hours (£1020) from start to completion, and my apprentice 41 hours (£328).  To cover running costs I needed to add an extra £404 (91 total chargeable hours x £4.44).  Finally the materials cost was £350, making the total costs £2,102 (I had actually quoted £2,000, so that is what the customer paid).

Establishing Methods and Creating a Pricelist

At that stage I was not VAT registered.  You may also have noticed that I was making zero profit after wages and running costs, so it was impossible to grow the business.  Furthermore, because winning jobs at that value was rare back then, with jobs at even lower rates keeping me busy in between, my ACTUAL earnings were far below my target wage -in reality somewhere between £10k and £20k per year.
OK, so part of my problem was I was doing REALLY nice work, while my more business-minded competitors were focused on the profit!  At the survey visit, with no guarantee of winning the work, I gave plenty of time and attention to understanding my customer’s needs before designing in front of them in a 3D drawing program on my laptop (I had previously trained in Architecture at Sheffield University).
I was designing everything from scratch so each project was unique, and I was using plenty of solid wood, and choosing labour intensive methods of construction and hinge fittings to assure my customers of quality.  From the beginning I manufactured and pre-painted as much as possible in the workshop, to reduce time installing in my customers’ houses.  At the end of a job, I loved it when my customer said “wow, it’s even better than I expected!”.  
Despite the personal pain of these early days, I was establishing a reputation for future growth.
Since then my running costs have only gone up, as I have taken on staff, and I reached the VAT threshold, which sadly forces my customers to pay an additional 20%.  I had to distill and simplify my years of experience into more efficient techniques that I could repeat and teach to others.  I will elaborate on this in future posts, but I was careful not to lower the quality of our work.  In fact, by making things more efficient I was able to offer customers a better service, with a convenient ‘one day fit’ on all standard double alcoves, as well as reduce my costs and absorb the cost of VAT, to allow me room for profit while keeping our pricelist (at time of writing in early 2017) towards the lower end of the £2k to £2.5k range.  Our experience means we can offer customers a solution that ‘just works’ and looks great without any nasty surprises.
Experience has taught me that our current pricing structure is fair, both to you as customer, and to our business and our employees.

Alastair Johnson

Director, designer and installer at Freebird Fitted Furniture, Sheffield’s fitted alcove furniture specialists.  The mission statement of our business is ‘To improve quality of life for all involved.’  For more information on our vision and values, read this blog post.

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