Touchy subject

[Reil]

Hello. I am a new member. I am much appreciative of having this forum literally at my fingertips. My question I guess is targeted toward licensed contractors in the NJ state region. What is the average hourly rate charged?....125./hr? I am just looking to keep my rates in line with other contractors in area. I'm not looking to take away work from others by grossly undercharging. I believe there is enough work out there for all of us licensed contractors. It is wrong for contractors to grossly undercharge for their work, thus taking the rest of the local industry down with them.

 

[svh19044]

It is wrong for contractors to grossly undercharge for their work, thus taking the rest of the local industry down with them.

Can you clarify this statement?

If a contractor is willing to do quality work, and still turn a profit all while grossly "undercharging", what is the problem? The truth is that contractor either won't last, doesn't do quality work, isn't legitimate, or really is a magician.

FWIW, your prices are in line. :thumbsup:

 

[Reil]

As a newer contractor I find it hard walking up to a guy in the supply house and ask what they charge. 125. is what I heard thru the "chatter". Just verifying.
Thanks.

 

[ceb58]

As a newer contractor I find it hard walking up to a guy in the supply house and ask what they charge. 125. is what I heard thru the "chatter". Just verifying.
Thanks.

Its been said thousands of times here " It doesn't matter what the other guy charges". What you charge is what it takes to cover your expenses and make a profit. Where someone may charge $125.00 per hr. you may need to charge $75.00 per hr. to come out the same. The "going rate" may be lower than what it takes to keep you going only sitting down and figuring out your cost to come up with your rate.

 

[brian john]

I knew a guy that charged $25.00 below what I considered the norm.
He was a one man show
Said he was happy with his income.
He said he could care less what others charged.
He has been around for years and has regular customers.
He was licensed and insured.

If you really want to know what others charge have your wife call them.

If you are residential, look into Flat Rate Pricing.

 

[Fulthrotl]

If you are residential, look into Flat Rate Pricing.

look into flat rate pricing, period.

http://www.barebonesbiz.com/

quoting stuff by an hourly rate just sucks,
unless there is NO other way to do it, 'cause
the scope of the project can't be defined.

 

[svh19044]

look into flat rate pricing, period.

http://www.barebonesbiz.com/

quoting stuff by an hourly rate just sucks,
unless there is NO other way to do it, 'cause
the scope of the project can't be defined.

I'm sure that you know the following, but to just reiterate...

While the vast majority of my jobs (and I believe resi as a whole) are quoted as flat rate anyway, if someone asks me to charge hourly, the job is going to be extremely close percentage wise.

In order to know your flat rate pricing, you should have a good idea of what your hourly rates need to be. Obviously some jobs will be more profitable based on the work. It is important to know how much you need to operate, and adjusting different jobs to match the criteria is a horrible practice. Fix the hour cost, estimate the job, and give the flat rate. It is important to know an hourly rate.

 

[kwired]

When you flat rate price a job don't you still estimate how many hours you expect the job to take and multiply that times a particular rate and plug that into the total price? Only difference is customer does not see the rate.

 

[No Limits]

When you flat rate price a job don't you still estimate how many hours you expect the job to take and multiply that times a particular rate and plug that into the total price? Only difference is customer does not see the rate.

I look at it the same as bidding a large commercial project. Your estimating software will assign a certain amount of time for a task based on a national labor standard which is usually longer than an average employee can perform them. When you do the project you want your guys to beat those times to increase your profit. When you flat rate residential work its the same. You are giving a customer a dollar amount instead of a time frame. You should have in your mind the time frame and beat that time to make a better margin. I like this much better, I remember before I started doing it this way years ago many more customer problems. I am a working owner so there are times I need to handle business on the phone while on the job. Since I started flat rate I have not had one customer say they want a discount because I took a couple of phone calls. Besides this is nothing new the auto repair industry has been operating like this for years and years so they can increase their profits. All of their repairs are based on "Book Time" why shouldn't ours?

 

[Fulthrotl]

When you flat rate price a job don't you still estimate how many hours you expect the job to take and multiply that times a particular rate and plug that into the total price? Only difference is customer does not see the rate.

yes, thank you.....

if i'm doing something hourly, then that customer is having a cow if i have to go to the wholesale house,
or anything else, for that matter, yada yada..... they become my supervisor, and if my bill reflects
things in an itemized manner, it gets ugly fast.

fein blades are $7 each.... $30 for carbide grit ones.....

put down $100 for 3 sawblades and watch them have a cow.

if i put a price on it, done done finished, walking away,
then all that disappears.

let's look at a typical service change.... $2,350

$500 or so for material, $500 for a day for someone to help,
and 4 to 6 hours..... trip to the wholesale house the day before, etc.
so.. that's $1,200 for less than a days work... $250 ~ $300 an hour.

that's about right.

put it down on the bill that way, and see how well it goes over.

 

[svh19044]

Based on your numbers, you are looking at about 15 man hours at $125 per hour for that job, not $3xx...which oddly enough, comes out right at your "profit".

yes, thank you.....

if i'm doing something hourly, then that customer is having a cow if i have to go to the wholesale house,
or anything else, for that matter, yada yada..... they become my supervisor, and if my bill reflects
things in an itemized manner, it gets ugly fast.

fein blades are $7 each.... $30 for carbide grit ones.....

put down $100 for 3 sawblades and watch them have a cow.

if i put a price on it, done done finished, walking away,
then all that disappears.

let's look at a typical service change.... $2,350

$500 or so for material, $500 for a day for someone to help,
and 4 to 6 hours..... trip to the wholesale house the day before, etc.
so.. that's $1,200 for less than a days work... $250 ~ $300 an hour.

that's about right.

put it down on the bill that way, and see how well it goes over.

 

[kwired]

I look at it the same as bidding a large commercial project. Your estimating software will assign a certain amount of time for a task based on a national labor standard which is usually longer than an average employee can perform them. When you do the project you want your guys to beat those times to increase your profit. When you flat rate residential work its the same. You are giving a customer a dollar amount instead of a time frame. You should have in your mind the time frame and beat that time to make a better margin. I like this much better, I remember before I started doing it this way years ago many more customer problems. I am a working owner so there are times I need to handle business on the phone while on the job. Since I started flat rate I have not had one customer say they want a discount because I took a couple of phone calls. Besides this is nothing new the auto repair industry has been operating like this for years and years so they can increase their profits. All of their repairs are based on "Book Time" why shouldn't ours?

The difference in the auto repair industry is every car of the same model left the factory the same with some slight differences for available options. There are even manuals that tell you the best way to take something apart or assembly procedures.

Every home, business, etc. is different. There will not be the same consistency to do the same install or repair in different homes as there is to do the same repair on two different cars - especially two nearly identical cars.

With electrical installs you can have some base prices but need to look at the project to plug any variables into the project, and there is still more likelyhood of something unexpected coming up than maybe there is for auto repair.

Not saying don't do flat rate pricing but pointing out there are variables. Most of the unexpected is usually somewhat minor and only lessens the profit by a small amount.