Basement rewire pricing
- Thread starter Trovmar
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ItsHot
Senior Member
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- A little piece of heaven!
Burn Him
Burn Him
Burn him a new one!! Just for the fact that he is trying to set your price! If you do, he will still think more of you than if you do it for nothing!
Burn Him
Burn him a new one!! Just for the fact that he is trying to set your price! If you do, he will still think more of you than if you do it for nothing!
Dennis Alwon said:
You can loose with T&M, very easy if you don't know your costs.
When you charge using unit pricing, you established your price on cost plus profit.
I know more guys over the years, that lost money with T&M, then those that contract priced.
Remember a lot of guys never plan their business or get the cost figures for operating, the go in like a Bull in a China cabinet, if we can help a new guy from falling before he starts were doing something.
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Obviously you have to establish an hourly rate that takes your costs into consideration. That's a given. Once you have done that you can't lose.satcom said:
If you estimate by unit pricing without accurately assessing your costs you're going to have difficulties also.
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ike5547 said:
Sure...doing T&M you are limited to what you can make in a day... $ x hr = daily number..no more.
Doing in another way - flat rate, for example - allows for more billable "hours" in that same time frame.
You had a fan at T&M of $110/hr...3 hours later, you have $330.
You hang that same fan for $450 flat rate in 3 hours you have $450.
Do that twice in a given day...$660 vs $900.
$900 gets you a steak...$660 gets you a Double with Biggie fries and a drink.
Let's change the umbers a bit...say it takes 2 hours...T&M gets you $220, I still get $450. Do that 3x a day...$660 vs $1350. (I also get dessert and a cordial)
Doing T&M will always yeild you the same result...no more, no less.
Let's change them numbers again....You do it at $110/hr and all goes smooth..you get 3 done in 8 ($660)...I flat rate them at $450 ~ BUT, I run into a problem on the first one and only get 2 done in the day($900).
I still get a steak...you still get a Double with Biggie fries and a drink.
ItsHot
Senior Member
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- A little piece of heaven!
finally found it!
finally found it!
Keep it coming Celtic. I finally found the business school I need!
finally found it!
Keep it coming Celtic. I finally found the business school I need!
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Sounds rosy. In my market it would be very difficult to obtain repeat customers if I charged them $450 for 2 hours. People around here just aren't stupid enough I guess. You could end up flat rating yourself right out of business. You might be able to get away with 3 hours but you will still lose some business. An intelligent customer will realize he is paying you $150 per hour.celtic said:
I see some advantages to what your proposing however.
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Give this thread the heavy eyeball; Hourly ratesItsHot said:
A lot less than $225 per hour.celtic said:
I'm thinking more like 4 to 6 hours in San Francisco the land of lath and plaster.celtic said:
But I do not dismiss your opinion out of hand. I see some advantages. I'm just not sure it would work out well in this market.
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ike5547 said:
We have been flat pricing for years, with excellant results, the customers that complain are the ones no one wants as customers, we cater to customers that want excellant service, and over the years we have a great rate of repeat customers, and recommendations from existing customers.
cadpoint
Senior Member
- Location
- Durham, NC
You, Inc ISBN 978-0-446-57821-9
You, Inc ISBN 978-0-446-57821-9
The Heart of Every Transaction, Page 4-5
Inexperienced salespeople invariably start their pitches with the price of the product, then talk about the company. Only at the end, and perhaps not even then do they finally sell themselves.
Experienced salespeople proceed in the opposite direction. They sell themselves and their organization, then discuss the product. At the end--at the very end-- they say, "Now, let's talk about how little this costs, considering everything that you will get"
You, Inc ISBN 978-0-446-57821-9
The Heart of Every Transaction, Page 4-5
Inexperienced salespeople invariably start their pitches with the price of the product, then talk about the company. Only at the end, and perhaps not even then do they finally sell themselves.
Experienced salespeople proceed in the opposite direction. They sell themselves and their organization, then discuss the product. At the end--at the very end-- they say, "Now, let's talk about how little this costs, considering everything that you will get"
t&m can make you a living, if and only if:
your rate is based on your actual cost abd desired profits - but most are based on the "going rate", resulting in a loss every time the contractor works.....
and
you account, and bill, for every hour...
but in most cases, t&m is break even at best....
your rate is based on your actual cost abd desired profits - but most are based on the "going rate", resulting in a loss every time the contractor works.....
and
you account, and bill, for every hour...
but in most cases, t&m is break even at best....
Vinniem
Senior Member
- Location
- Central Jersey
Ouote:
I wonder if this GC has a permit for the job
Don't let him pressure you into doing the job without a permit just because he is your buddy.
I had a similar situation(neighbor who is a GC).
Did a job without a permit ( Rush job, favor to GC)
I compromised. Job went sour between GC and homeowner, everyone gets sued. No permit (electrical) payed 500 dollar fine.
Never do that again, friend or not!
If the GC doesn't do the job right, walk away!
Licenses take a lot of time and effort to get.(especially in NJ)
not worth losing it
I wonder if this GC has a permit for the job
Don't let him pressure you into doing the job without a permit just because he is your buddy.
I had a similar situation(neighbor who is a GC).
Did a job without a permit ( Rush job, favor to GC)
I compromised. Job went sour between GC and homeowner, everyone gets sued. No permit (electrical) payed 500 dollar fine.
Never do that again, friend or not!
If the GC doesn't do the job right, walk away!
Licenses take a lot of time and effort to get.(especially in NJ)
not worth losing it
JohnE
Senior Member
- Location
- Milford, MA
Maybe the GC in OP meant that the Unit price changes when the walls are open and not the Labor rate? He can't be so ignorant to think the labor rate would change. If he is, run away.
I have a commercial customer that want's me to charge him T&M with materials broken out. He compares my hourly rate to the plumbers, the HVAC guys and other contractors that come out. I've seen the invoices for the plumber and his hourly rate is $86. As long as I'm somewhere close to this he seems to be happy. I also make sure I do as much stuff related to the job onsite as possible. Paperwork, Invoicing and processing the payment by credit card over the phone while there. This is all billed including travel time.
Occasionally he asks for a fixed bid for a job. I did one the other day for him and the price was $1870.00. The materials cost me $150. I pushed it pretty hard, didn't take any breaks or a lunch and was able to complete it in 8 hours and collect my money the same day. If I were doing this job T&M I would have to milk it out for two days to get this amount. There would be no reason for me to push it hard and get it done sooner because I would just get paid less for doing the same job even though I was faster and more efficient. There's something just plain wrong with that. T&M is great if you're slow and inefficient.
I will take jobs like this any day over T&M jobs.
If you've been charging $80 an hour and you realize you need to start charging $100 an hour to make a profit it's hard to convince your customers that you need ot raise your hourly rate by $20. They don't care that your expneses have gone up. Their expenses have gone up too but they can't give them selves a $20 an hour raise and that's how they tend to look at it.
If you give them an upfront fixed price you can raise your rates and in alot of cases the customer won't even know you did it. Eight hours at $20 an hour comes out to $160 per day. A customer is far less likely to notice that than if you come to them and say I've been charging you $80 an hour but my expneses have gone up and I need to raise your rate $20 an hour are you ok with that?
With an upfront fixed price there's no need to tell them you raised your rate. They either except the price for the job or they don't.
Occasionally he asks for a fixed bid for a job. I did one the other day for him and the price was $1870.00. The materials cost me $150. I pushed it pretty hard, didn't take any breaks or a lunch and was able to complete it in 8 hours and collect my money the same day. If I were doing this job T&M I would have to milk it out for two days to get this amount. There would be no reason for me to push it hard and get it done sooner because I would just get paid less for doing the same job even though I was faster and more efficient. There's something just plain wrong with that. T&M is great if you're slow and inefficient.
I will take jobs like this any day over T&M jobs.
If you've been charging $80 an hour and you realize you need to start charging $100 an hour to make a profit it's hard to convince your customers that you need ot raise your hourly rate by $20. They don't care that your expneses have gone up. Their expenses have gone up too but they can't give them selves a $20 an hour raise and that's how they tend to look at it.
If you give them an upfront fixed price you can raise your rates and in alot of cases the customer won't even know you did it. Eight hours at $20 an hour comes out to $160 per day. A customer is far less likely to notice that than if you come to them and say I've been charging you $80 an hour but my expneses have gone up and I need to raise your rate $20 an hour are you ok with that?
With an upfront fixed price there's no need to tell them you raised your rate. They either except the price for the job or they don't.
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