I get it. Got a lot of comments. I got some DMs.
People ask me all the time, “How much to charge for moves?”
Well, no worries, my friend. No worries.
We’re going to clear it up.
What is the Wirks Formula?
I got this formula on how much to charge for your moves from my good friend and mentor, Eric Wirks. Eric works showed me this.
I am now officially calling this the Wirks Formula.
If you want to use this formula to figure out how much you should charge for your moves, we’re going to use the Wirks Formula.
Let’s get into it.
All right, so let’s clarify this a little bit more.
First of all, this example that I am using, this formula that I am using, is for three men and one truck. That’s the formula I am using..
However, this does work for four guys, three guys, whatever, right? You might have to make some slight adjustments. I’ll show you where to make those adjustments.
And if you’re using an extra truck, you need to figure out how to increase it with an extra truck, as this does not cover extra trucks necessarily.
The Wirks “How much to charge” Formula Explained
(TP/P%) * T&I% = Hourly Charge (HC)
First of all, as I said in a YouTube video, your payroll should only be 30 to 40% of your hourly figure.
Ideally, you want to get it down to like the 30% mark and no more than the 40% mark.
For this example, we are using the ideal scene. However, your income is going to be predicated based on this. Does that make sense?
Now, if your payroll is 40% of your hourly figure, you’re going to use this and that’s going to teach you how to use it.
If your payroll’s at 40%, you want to bring it down to its 30%.
You’re going to have to make some adjustments to bring it down there as best as you can, right?
That’s your ideal goal is to get around 30%.
If you can even get lower than that, like 25%, which would be astronomical, like I don’t know anybody that has done this, but if you can get close to that, congratulations!
For labor only, you don’t have to do it as much.
You can actually increase your payroll between 40 and 50% to still be profitable.
That’s for labor only, right?
Different objectives here.
But you could do it from 40 to 50. Let’s go to the figure.
TP is total payroll.
Total payroll for that job.
In this case, we have three people. Between the three people, it comes out to $45. We’ll go onto that later.
For this example, we’re saying it’s for three people, adding up to $45.
Now, whatever your payroll is, is what you’re going to use.
Now, that payroll does not include any taxes or anything like that.
We’ll go over that in a second.
In this thing, it’s just a total hourly base pay that you pay your guys. If you pay your guys 10, 11, 12, that’s what we’re going to use and that’s what you’re going to add up into this figure.
It’s total payroll divided by the percentage of your payroll per hour.
TP / P% = X
That’s what this says.
This is your hourly percentage. Make sense?
Insurance percentage = Taxes + Workman’s Comp + SSN + Insurance
Then you’re going to add your percentage to your… This is your insurance percentage, right?
What does that include?
That includes workman’s comp, social security, taxes, all other insurances, right?
Things like that.
That’s going to go into that figure.
All of that goes into that figure.
Workman’s comp, your social security, all the taxes that you have to pay are going into that, right there.
All of them.
You have to figure out what that percentage is.
In this example, we’re using 15%. All right?
Using the Wirks Formula
You’re going to get this formula right here.
Once you go, the total payroll divided by percentage, plus the interest percentage, equals your hourly charge.
Now that we got that, let’s do the actual example.
In this example, our hourly charge is $45 for three guys.
Three guys divided by 0.3, that equals 150 here.
And then we’re going to add 15% and that comes out to 172. That’s what that comes out to.
Now, you go, “Jae, that’s really high” for three guys and a truck.
Actually that’s not high, especially in this economic climate that we currently have.
Ending in a 7 or a 9
However, what you have to understand is, and I said this before in the last video, in the marketing jargon, we want our figures to end in either a seven or a nine.
Psychologically, that seems to work best.
If it’s 172, we could always round up, but then you’re talking 177 or 179 per hour. That might be a bitter pill to swallow.
Use seven or nine. With this example, we’re going to actually go down.
We’re going to estimate downward there, and we’re going to put 167 to 169.
That is our ideal goal.
Here’s how the formula works.
When you have parenthesis on an equation, if you’ve gone out to algebra class or any kind of higher advanced learning class for mathematics, you understand when you have parenthesis, you do that particular equation first, then you do your addition and subtraction after that.
Step one, 45 divided by 0.3 comes to 150.
That’s where I got the 150 from, right?
Step two is now we’re going to take that figure of 15 and we’re going to add our insurance percentage, which is, in this case, 0.15%.
150 plus 15% comes out to 4172.
We round down so that it ends in a seven or a nine, becomes $167 or $169.
That is how you use this Wirks Formula.
Summing Up – Pun Intended
Hopefully this clarified this a little bit.
Some people were getting confused at how to actually do this.
They didn’t realize that the parenthesis is a mathematical way of saying you do that first, then you do this, right?
That’s why step one this.
Step two, the total of this plus that. All right?
That’s how this mathematical equation works.
Using this formula will get you your hourly charge.
Now, what happens if you only got two guys and a truck?
Well, then your total hours will be for two guys. Let’s say they’re getting paid… One is getting paid $14 and one is getting paid $15.
If you’re paying people that low in this day and age right now, yeah, you’re not going to keep them. But for mathematics purposes, we’re going to use it.
Obviously that’s going to be $29, so 29 times 0.3.
Now, again, what about the hourly percentage?
Again, if you’re at 0.3, awesome.
Most of you are going to be probably between 0.3 and 0.4.
If it’s two guys, you’re going to take your 29 divided by 0.35, hypothetically, and that’s going to give you your figure.
Then that’s also going to adjust this figure too, so you’re going to have to figure out what is your average percentage over all the long distance between each of those jobs.
And if you don’t know that figure, get with your CPA or your accountant and get that figure, right?
Get a CPA or Certified Accountant
Get that figure from your CPA or accountant. If you don’t have a CPA or accountant, time to get one.
Time to put on your big boy pants and be a real business and get a CPA or an accountant, right?
Unless you know how to do it yourself, then do it yourself.
You can do it yourself, but you’re wasting a lot of time and money doing it yourself.
You’re in business to be in business, not be in business to have a job.
Stop doing somebody else’s job.
Get yourself an accountant, get yourself at a CPA, and get this figure done and do it right.
Stop wasting time on jobs that you don’t have any business doing if you’re in a legitimate business.
Adding a Truck to the Formula
But Jae, what about the truck?
And I told you earlier, this does not include the truck, but obviously you’re going to need to add the extra expense towards the truck.
When you’re doing your estimate or whatever, just add the next truck, the gas and insurance and whatever, add that up.
Do that over the different times that you estimate the job.
If it’s eight hours, great.
What is the average over those eight hours of the cost of the truck?
The cost of the truck is a hundred bucks, right?
Then that’s what it is, whatever that percentage is, and then you’ll add that to that figure.
Just add that and that gives you your hourly figure. All right, guys?
It’s not hard.
It’s not rocket science.
However, you should get professionals to help you with this, but this should be able to get you going right now.
Thank you, guys.
I like you.
I love you.
Go and do something great today!