No, I know what you said, a defined hourly rate is not a total cost for the job, where flat rate pricing is a fixed estimate price for the service call, in my state it is the law to present the residential customer with a total set price, for the project, before we start the work.
Second Guessing
- Thread starter Jerseydaze
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No, I know what you said, a defined hourly rate is not a total cost for the job, where flat rate pricing is a fixed estimate price for the service call, in my state it is the law to present the residential customer with a total set price, for the project, before we start the work.
growler
Senior Member
- Location
- Atlanta,GA
That sounds OK for a building project or remodel but I remember Celtic ( also from New Jersey) talking about a service call that took many hours and ended up being billed at close to six grand and I'm sure he wouldn't have quoted that price up-front.
How can anyone possibly know how long it will take to trouble-shoot a bunch of problems? I have found 4 problems in one hour and at other times had it take four hours to find one problem.
If I had to quote a firm price on trouble-shooting they would all be high to cover the un-expected.
It is all in the way you proceed with the call, it is done in steps on a troubleshoot, after the first step you have enough information to present a realistic price for the work, it is not guess work, we have reams of job actuals data to reference.
Rewire
Senior Member
- Location
- Lake of the Ozarks
do the math T&M $100.00 /hr for four hours= $400.00 ,I bid the same job at $600.00 and do it in the same four hours I have made $200.00 that I would have lost at T&M.So every T&M job looses money because completing the job faster does not gain you anything.
- Location
- Simi Valley, CA
Yeah, but you have that same risk with a bid, unless you are bidding way more than you think the job should cost.
Also, I bet does not understand how and why non productive hours, are applied to the estimates, he most likely thinks you are just asking for another $200 a T&M guy would of just lost that money, and never knew he was loosing
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Steve Beranek
Member
- Location
- St. Louis, Missouri
LOL, You didn't just loose that money, unless you overbid the project. Then you would have possibly lost the bid to someone who quoted it correctly.
Steve Beranek
Member
- Location
- St. Louis, Missouri
If you bid the job $600.00, you think it will take 6 hours to do the job, why would you finish the job in 4 ? *Job Security ?* Or finish in 4 and then they think you overbid the hours on all your jobs.
Steve Beranek
Member
- Location
- St. Louis, Missouri
You know that is pretty insulting. But when I came within a very low percentage in difference of the winning bids, and loosing bids, I feel pretty confident with my numbers.
mcclary's electrical
Senior Member
- Location
- VA
Well, how do you bill T&M jobs where 8 hours of work really took 12 including prep time. parts retreival, clean up time, permit retension??, if you bill 12 hours,,,,and the customer only sees you for 8, they won't understand. I do VERY LITTLE T&M jobs. I try and put a number on everything
Steve, I am sorry if you take that as an insult, but winning a bid does not assure you will make money on a project.
Steve Beranek
Member
- Location
- St. Louis, Missouri
This upsets me, I may not know everything, but I know estimating pretty good.
If it takes you four hours for travel, parts retreival, and clean up, on a 8 hour job. I'd comment, but thats a little much, maybe for a 40 hour job that would be resonable. If it takes you more than 30 minutes to move around on the job the customer should understand the billing, but if you start the job at 7 and leave at 330, my customers didn't like to pay me to drive from the shop to their job. Permits are done as a line item, I dont put these in my hourly bill, hourly bill is for what is done on the job. If I have to pick materials up ahead of time, have them placed in will-call within 20 minutes of the job, and pick them up in the morning. And are you telling me that you don't charge to clean up ? My crew left the job at 330 that means the job was spotless before that time came around. I am sure the customer will understand a half hour to pick material up on the way into work, if not have it rushed delievered and charge them cost+profit.
Ok, but for a difference of $400.00 to do the job T&M, and $600 Bid, you could loose the job by 33%, the customer may never choose you to even bid the job again.
And if you did it for $400 at T&M you should have made a 30 percent profit, at minimum your profit on T&M should be 20 just to cover office expenses, insurance, trucks, gas, permits, license fees, should I go on ? Of course I dont understand what type of fees are incumbered behind the curtain. But no you want to make 50%+ Profit ?????? Where do you work, and do you bid these types of jobs often, cause I could get a ton of business even being out of state.
I agree, bidding does not assure profit. T&M without a cap does. Therefor if you bid a job, and are 100% confident about the number you should be able to do that T&M not to exceed your bid amount. The hourly rate, and material with markup should be way more than your bid if you plugged your hourly rate in you bid, and your material price in. I'm saying my hourly rate in my bid x profit x markup is less than my T&M rate, so your making money eh?
growler
Senior Member
- Location
- Atlanta,GA
:grin:i like to put a number on everything also....i try to use T&M when i see what i think (through no fault of mine) could be a potential train wreck....it seems that when i am "running scared" T&M works for us as a safety valve...and most of my GC's understand they are only going to see my guys "working" for 7 hours and getting billed for 8....
One-eyed Jack
Senior Member
- Location
- Scotland Neck, NC
That sounds like Farmer reasoning. You can not lose money you never had. Farmer complains that he lost 50k this past year. How so he is asked. Well I made a 100k net last year and only 5ok net this year. Keep in mind this is "NET" He paid all his bills,his house payment,son and daughters cars,wife's car,fuel bill home ins,crop ins,fertilizer bill,etc. He still had 50k to put in the bank after ALL exp.paid and he LOST 50k????????
So a flat rate will cover all your expenses, no matter what?
Suppose you flat-rate a service call for $250, but it takes you 10 hours to just locate the problem. Did you make any money?
Rewire
Senior Member
- Location
- Lake of the Ozarks
It is the difference between thinking like a Technician and thinking like a business man.When you underbid your competitor by a thousand dollars do you think about the 999.00 you left on the table?If I am just paying the bills I am in big trouble.If I am clocking the same hours this year as I did last year and I have less income then I would say I am loosing money.
Rewire
Senior Member
- Location
- Lake of the Ozarks
If done correctly yes. Remeber flat rate is based on the next service call at 250.00 being done in 30 minutes.
Then that customer will say you're making $500 an hour.........
Rewire
Senior Member
- Location
- Lake of the Ozarks
so whats your point the price was set ahead of time the customer got his problem fixed if they are unhappy then they can call someone else next time.
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