billable hours

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Depends on the type of work you do. I have some employees (report writerreviewer and super/estimator) that have almost no billiable hours, most service tech are 100% billiable (with the exception of some of the "SPECIALISTS"). I have always found that once you train an electrician as a SPECIALISTS and all of a sudden he is to good for "THAT" type of work (anything except his speciality). My time is about 10%-15% billable at a much higher rate.
 
Residential service techs average 4 billable hours a day due to driving, set up and so forth. So there is a need to charge more to offset that factor when billing out. For new construction and remodel work commercial or residential the factor will go up to around 7 hrs of productive time per man per day so charging with that in mind when bidding is also recommended.
 
macmikeman said:
Residential service techs average 4 billable hours a day due to driving, set up and so forth. So there is a need to charge more to offset that factor when billing out. For new construction and remodel work commercial or residential the factor will go up to around 7 hrs of productive time per man per day so charging with that in mind when bidding is also recommended.
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Our residential, commercial service electricians will AVERAGE 4 billable hours a day, we do not train an electrician as a specialists, some companies hire a service tech with a narrow scope of electrical knowladge, and train them in marketing, and basic repair skills, the new construction, or remodel work will produce about 6 hrs of productive work on average, depending on the job conditions, and length of job.
 
satcom:

I have trrained all my tech, as well as sent them to school. My techs specialize in generator service, ATS maintenance and service, battery installation and maintenance, Infrared, grounding inspections, power quality, ground fault (repairs, inspection and testing) and electrical testing of all types(circuit breaker, transformers, relays, cable and fault locating), and problem solving of all types.

So my employees must be specialized. We do a ton of overtime, and every second of that is billable, minimum 4 hours or minimum 8 after four hours, plus 1 hour travel each way for T&M and all employees get 4 hour minimum on any contact job and 1 hour travel on contract jobs. With the large amount of OT we do we fell we must compensate them for their time away from home.
 
growler said:
Here is a good article on billable hours. He even talks about how to handle the dreaded refund.

http://ecmweb.com/ar/service_secrets?
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This is the reason we use a contract price or flat rate whatever term you like, "His customers were happy because they didn?t have to check their watch wondering if the tech was driving up the bill, and his techs were happy because they didn?t have to deal with sticker-shocked customers at the end of a job. But most of all he was happy because he could set prices that helped him plan for profit."
We have been using pricing sheets for years, they are a good guide to pricing in the field, and all the sheets have adjusted actuals updated on a regular basis, our schedule software makes for fast quotes and follow up workorders, the billed hours vary, but 4 is a pretty good average.

Brian,

You are working a nitch area and using T&M, so all your hours are billed, with residential, commercial, service work we use a contract price to assure a profit.
 
satcom said:
. . . with residential, commercial, service work we use a contract price to assure a profit.
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How do you assure work doesn't exceed the estimated time? What happens if the job you quoted, expecting it to take 4 hours, ends up taking 8 hours?
 
larry,

that does happen on occasion, but more often than not, you'll figure 4 and be done in 3.

if you figure 4 and there is extra work that pushes it to 8, then you bill for it.

if you figure 4 and you or your technician screws up and pushes it to 8, why should the customer be penalized?

and if you have no idea how long it should take, you should be working for someone else.

good luck.
 
I had a job we figured for 5 days, our electrician located a spare conduit in the deck saved 3 days labor, the customer (long time regular customer a real PIA) wanted a refund. I agreed if she would let me bill for jobs I under estimated the time. She paid for the 5 days.
 
Brian,

People are people...unfortunately most people simply look out for themselves and care little for anyone else.

Unfortunately, too many contractors go above and beyond looking out for their customers. Ask yourself this...if you go out of business tomorrow, what will your current customers do?
 
LarryFine said:
How do you assure work doesn't exceed the estimated time? What happens if the job you quoted, expecting it to take 4 hours, ends up taking 8 hours?
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You look at your history of accurately predicting the amount of billable time and adjust how you estimate. The purpose of an estimate is establishing a cost for the customer and expected revenue for the business.

In my biz, for some odd reason, the correct answer is to double the original estimate and add some fudge factor, typically in the range of 20 to 30 percent. The reason is that the person doing the estimating, and the people doing the work, often aren't the same. Or information that's required to accurately estimate isn't available at the time of the estimate. For example, if one has to bury conduit, they don't know the soil conditions, or they are unaware of a piece of usable conduit that's already in place.

I live about a mile from a fault line (the Balcones Fault Line, for anyone who cares). East of the fault the soil is either clay or a mixture of clay and limestone. West of the fault the soil is either limestone or a thin layer of soil on limestone. Not knowing which side of the fault a customer is located on could have a huge impact on time required to dig a trench.
 
The reason is that the person doing the estimating, and the people doing the work, often aren't the same.
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Julie: Another factor is you have to bid to the slowest employee, while one tech may be able to do a job in 6 hours another does the same job in 8, You may not always be able to send the fastest tech. Additionally if a tech takes 6 hours to complete a job, what are you going to do with him/her in the last two hours of the day? He wants and expects 8 hours and the contractor would lose any profit in 6 hours if you pay 8 hours. So estimate 8, to be safe or better yet 10 hours, to cover the supply house mess up (2 trips to the supply house to get the whatever they forgot to put in the box and you did not check for all the parts).
 
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these days, unless you are in a specific niche, good luck billing that way T&M.

try sending a guy to a customers office to run some circuits and install outlets, have them finish in 5 hrs and try to bill the customer for 8.

but, flat rate, or up front pricing, allows you to figure in for 8 and be covered.
 
emahler said:
and if you have no idea how long it should take, you should be working for someone else.
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A lot of old work falls under this category. I often have no idea what I will find until I open things up. I used to quote fixed prices, but I got burned too many times by surprises lurking behind the walls and ceilings. Let's not forget all the wasted time dealing with homeowner GCs who schedule me to trim out their basement, only for me to show up and find the tape-and-mud crew doing their thing.

Now I only do upfront pricing when I know for sure that there will be few or no surprises. I'll quote a fixed price for a panel swap or service upgrade, but for most of the other work I do (remodel and repair), I go with T&M. As a result, my EC business is now making decent money for the time I put into it.
 
jeff43222 said:
A lot of old work falls under this category. I often have no idea what I will find until I open things up. I used to quote fixed prices, but I got burned too many times by surprises lurking behind the walls and ceilings. Let's not forget all the wasted time dealing with homeowner GCs who schedule me to trim out their basement, only for me to show up and find the tape-and-mud crew doing their thing.

Now I only do upfront pricing when I know for sure that there will be few or no surprises. I'll quote a fixed price for a panel swap or service upgrade, but for most of the other work I do (remodel and repair), I go with T&M. As a result, my EC business is now making decent money for the time I put into it.
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We give a contract price on old work, it is how you present the contract that makes the difference, you can't go in with one bottom line price, on old work, as you said "too many times by surprises lurking behind the walls and ceilings" but you you do need to know how to estimate remodel, and repair work, T&M billing for residential service work usually ends up with a customer asking how long will; it take, or they just wait until your finished and say something like if I would of known it cost this much, I would not have had you do it, or a dispute on payment can arise, with a contract or up front price, they know going in what the charges will be, IMO contracting means just what it says, you offer a contract set price for your work.

The estimating, and marketing skills are key to running a good business, working T&M you may as well work hourly for someone, your not going to build much of an asset base with T&M unless you are able to charge rates that are way up there, and every hour is 100% productive.

We have so many guys out there with great electrical skills, and with just a little investment, in learning the estimating and marketing skills they could bring up their bottom line, and improve their customer base.

In my state, we MUST give the customer a contract price, on jobs over $300 so contract pricing on remodel, and repairs, is not something new to us.
 
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Fair enough. But how do you give someone a contract price when you don't know what's lurking behind the walls?

One example I remember vividly was a kitchen remodel I did a couple years ago. Upon opening the walls and ceilings, I found lots of buried j-boxes that were connected to circuits all over the house. I couldn't just leave them as they were, and rewiring everything to code took a lot of extra time that I didn't anticipate upfront. Fortunately, I was working T&M on that job.

Last week I spent a day rewiring a lighting outlet and changing out a bunch of receptacles. It wound up taking more time than I expected because the existing wiring was not done to code and had to be traced/redone before I could do what I thought would be a simple swap job. Homeowner agreed to T&M upfront, and he wasn't a bit hesistant to pay me when I gave him my final bill.

The only way I could see giving someone a fixed upfront price on a remodel job is if they gutted the place first so I could see what I was dealing with, or if the scope of work spelled out in the contract was very limited and included clauses like "doesn't include dealing with surprises."
 
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