Sick of T&M issues need help choosing Flat Rate

[Fulthrotl]

Iwire, I share your frustration. I think that non-Cali and east coast guys can't demand a decent hourly rate, maybe I'm off base.

it's not about geographic location. california has more out of work construction
workers than you can swing a dead cat at. untold amounts of them. all of them
willing to do what you are doing, for less than you are willing to do it for.

go look at craigs list for the LA area, under skilled trades. people are working for
$35 an hour here....

being honest, if you tell someone your hourly rate is $177 an hour, as some of the
flat rate guys on here are around that, then you aren't going to have much you can
say to them till the paramedics show up with the shock paddles.

besides, how much i make per hour is nobody's business but mine. does "per hour"
cover all the nonproductive labor that goes into making a productive hour possible?
yes, it does.

that rate covers all the "go fetchums" and worthless job bids, and everything else
that goes into operating a business.

the "cost" of me providing an hours worth of my skilled labor is about $125. that is
low. i have low overhead. most guys are probably $25 to $75 an hour more.

that covers my salary for the year, profit on my business, all the costs of doing business,
divided by the number of billable hours i can reasonably expect in a week, which is 32 x 50.

1,600. that is all there is to generate an income unless i hire employees.

add up all the numbers you spend in a year, not counting material, add 15% for business
profit, put what you want to have for an income on top of that, and you have a number.

divide it by 1,600, or whatever amount of hours you can reasonably expect to work... right
now, work is scarce, so you might have to spend more time looking for it, than normal, so
you might only work 1,300 hours a year.

do that math, and see what your number is. that is what you have to sell your hours at,
to earn your living.

and setting an hourly price at $75 an hour, i won't even make minimum wage.

and the thing about flat rate is, it's an agreement. if you don't put enough money in
the bid, you get to make up the difference yourself.

and the T&M not to exceed thing, in calif. anyway, means it's time and material until you
hit a cap, and then you don't get to bill any more... you still have to finish the scope of work.

otherwise, it's just T&M, with a pause while the customer reloads his money gun. dunno
how it works in the rest of the country.

 

[KVA]

it's not about geographic location. california has more out of work construction
workers than you can swing a dead cat at. untold amounts of them. all of them
willing to do what you are doing, for less than you are willing to do it for.

go look at craigs list for the LA area, under skilled trades. people are working for
$35 an hour here....

being honest, if you tell someone your hourly rate is $177 an hour, as some of the
flat rate guys on here are around there, then you aren't going to have much you can
say to them till the paramedics show up with the shock paddles.

besides, how much i make per hour is nobody's business but mine. does "per hour"
cover all the nonproductive labor that goes into making a productive hour possible?
yes, it does.

that rate covers all the "go fetchums" and worthless job bids, and everything else
that goes into operating a business.

the "cost" of me providing an hours worth of my skilled labor is about $125. that is
low. i have low overhead. most guys are probably $25 to $75 an hour more.

that covers my salary for the year, profit on my business, all the costs of doing business,
divided by the number of billable hours i can reasonably expect in a week, which is 32 x 50.

1,600. that is all there is to generate an income unless i hire employees.

add up all the numbers you spend in a year, not counting material, add 15% for business
profit, put what you want to have for an income on top of that, and you have a number.

divide it by 1,600, or whatever amount of hours you can reasonably expect to work... right
now, work is scarce, so you might have to spend more time looking for it, than normal, so
you might only work 1,300 hours a year.

do that math, and see what your number is. that is what you have to sell your hours at,
to earn your living.

and setting an hourly price at $75 an hour, i won't even make minimum wage.

and the thing about flat rate is, it's an agreement. if you don't put enough money in
the bid, you get to make up the difference yourself.

and the T&M not to exceed thing, in calif. anyway, means it's time and material until you
hit a cap, and then you don't get to bill any more... you still have to finish the scope of work.

otherwise, it's just T&M, with a pause while the customer reloads his money gun. dunno
how it works in the rest of the country.

You bill out 32 hours a week every week all year? You hiring?:lol:

 

[LEO2854]

I don't estimate $100 knowing it will probably be more. I will estimate $200 knowing it will likely be less. When that $200 estimate turns into a $125 invoice they are happy. If that $100 estimate turns into a $250 invoice (and there was no work outside of orignal scope) then they are not happy - and understandably.

If it is a written estimate it is likely to be more accurate. If they want to know a set price more time is needed to know what it will take otherwise a high number is needed just in case. Most cases I am talking about are small repairs or installation of specific items. New construction or major rennovations is a little different. 99.99% of those jobs I run into the customer does not even know what they want - a few basic things, yes, then you start mentioning optional items and they didn't even consider those prior to you bringing it up.

Around here I get plans for new homes or additoins handed to me all the time, and they want to know how much to wire it. No electrical detail at all on the plan. Those are times when you would just like to give them a price range of "anywhere between $5000 and 100,000 should cover it. Give me some details of what you want and I can get a little closer.

I don't estimate $100 knowing it will probably be more. I will estimate $200 knowing it will likely be less. When that $200 estimate turns into a $125 invoice they are happy. If that $100 estimate turns into a $250 invoice (and there was no work outside of orignal scope) then they are not happy - and understandably.

When i give an estimate " That will be the invoice" Unless thay add something after the fact.

If it turns into a $125 job then i make an extra $75 if it turns into a $275 job with out added work by the client then i eat $75 because i gave my word that it would be $200 people get angry when you give them an invoice that is higher than your estimate so unless they ad something then you must keep your word.

Around here I get plans for new homes or additoins handed to me all the time, and they want to know how much to wire it. No electrical detail at all on the plan. Those are times when you would just like to give them a price range of "anywhere between $5000 and 100,000 should cover it. Give me some details of what you want and I can get a little closer.

That stuff drives me nuts but you must get all the details before you can give a quote on jobs like that otherwise you can get taken to the cleaners.

 

[George Stolz]

It drives me nuts when guys like yourself make it sound like there is only one way to make money and that is to do it like you do it.

While that is not true at all, there are a million ways to run a business and all most all them can succeed or fail depending on everything from luck, to skill, to the weather, to the reliability of the vendors, to the needs of the customers and on and on.

This sums it up in a nutshell. Conversations like these are similar to what the UN would look like if they fired the interpreters.

 

[Sparky555]

Today I'm having a fight with a HVAC contractor. I quoted him $85 per man hour. Two of us did the job so I billed him for two men at $85 per hour, $170 per hour. I've done this for many customers successfully. He actually hired me because the flat rate guys prices seem too high to him. I was unlucky enough to do a job that was tough enough that it would have been a low or no profit job for the flat rate guys. There fore my invoice was higher then what the local flat rate guy would have charged. He thinks hes getting screwed. And the fight goes on.

So the HVAC contractor thought the flat rate guy's price was too high, now he's complaining you're too high. Maybe the problem is with the HVAC contractor and not a problem with your system. Some people complain because it pays well.

 

[rt66electric]

Talking after time is paid for.

Talking after time is paid for.

One of my biggest downfalls when I was working for the "BIG AD" service outfits is when--- I would bill the customer T/M I would recieve the check----- THEN the customer would ask questions, or, Bend my ear for 30 min. The dispatcher time vs my billing time would bere inconsistant. The Bosses wife would then grill me (accuse me ) like a cop-on-a-doper-dragnet-style. They were after as much money as the could get, as opposed to customer relations. I stayed there log enough to find another Job. If remember right, during the hiring interview, the shop funky asked the super for if they had another 4in K.O.. He said "no" I said "I have one" He said " show up at the jobsite monday". What was the original thread topic????