Do you do partial/full day rates?

J

JoeNorm

Senior Member
Location
WA
Within working T&M is it reasonable to use partial and full rates? Often a job takes six hours with another half hour driving. Is it justifiable to charge for a full day in that case?
 
ramsy said:
Would like to know how that works out?
Click to expand...

When I get a service call, I have a "Diagnostic" charge. When I discover the problem I will give them an estimate for the complete repair. If they accept it, I will credit the diagnostic fee.
 
I have a mechanic that works on my equipment in the field. I get charged by the hour including travel. If it’s 6 hours, I get charged 6 hours, not 8.

You should be able to make productive use of those 2 hours.
 
mtnelect said:
When I get a service call, I have a "Diagnostic" charge. When I discover the problem I will give them an estimate for the complete repair. If they accept it, I will credit the diagnostic fee.
Click to expand...
That system might be received better than 2-hr minimum, and beat asking for gas money when the solution didn't require any work?

What happens when your diagnosis & parts fail to fix it?
 
I have a one hour service charge for the first hour which is approximately 1.4x that of my regular hourly rate, customers are aware of that in their estimates. This covers a lot of possible unknowns and pays for the odds and ends to even get to the job like fuel and insurance.

I do two hour minimums when the customer is geographically less than an hour away. And then do four minimums when over an hour away. And then I just bill hourly at regular rate. No problems yet on my end. Personally I think if you have two hours left in the day on a six hour job I'm certain you can find a way to utilize those two hours to better the customer, and if not that 1.4x fee we mentioned earlier truthfully almost covers you anyway. But in short, no. You should bill truthfully and honestly, you want repeat business and word of mouth references.
 
If I'm bidding and see its around 6 hours, but not 8, I will treat it as a full day. If T&M, I usually just charge for the 6. I too have a higher 1st hour rate.
But if you think about it, rental places charge you for either half day or full. If your job takes 6 hours, that's too late to book another job, so why not charge the full day.
 
I think if you're going the route of time + materials, then it ought to stand. It's not time + materials + wasted time.

I think a T & M rate should factor in that wasted time. I believe out of a 2,080 hour work year, a service electrician will only have about 1,200 hours of billable time.

Just suppose you want to make $200,000 per year. That's $96.00 per hour on a full 2,080 hr year.

But in order to make that same $200,000 per year on only 1,200 billable hours, the rate needs to be $166.00

$166.00 x 6 hours is $996.00
I think most electricians would be okay with that
 
There is often a lot of screwing around time not captured in billable hours but necessary. I would not be too cheap or you will find yourself working for relative peanuts.

I just paid $2700 for a water heater Thursday. Two plumbers, maybe 6 hours each including picking up the new unit, take out old unit, installing new unit, and dragging the old unit off to wherever such things go these days.

They were from about an hour from here and were on site 3-4 hours.
 
James L said:
I think if you're going the route of time + materials, then it ought to stand. It's not time + materials + wasted time.

I think a T & M rate should factor in that wasted time. I believe out of a 2,080 hour work year, a service electrician will only have about 1,200 hours of billable time.

Just suppose you want to make $200,000 per year. That's $96.00 per hour on a full 2,080 hr year.

But in order to make that same $200,000 per year on only 1,200 billable hours, the rate needs to be $166.00

$166.00 x 6 hours is $996.00
I think most electricians would be okay with that
Click to expand...
James, just curious, is this or has this been your practice? As a sole proprietor, still in the growing stage, would settle with $100,000. And that’s including an owner salary and tools on.
 
You should be compensated for all the time s job takes, including travel time and running out for parts. You should also be paid for the use of your truck. You can bundle that into to a show-up charge if you want but somehow you need to get paid for it.

If there is an hour or two left at the end of the day that is not billable, go home and take a nap if you can't find something productive to do.
 
OK Sparky 93 said:
James, just curious, is this or has this been your practice? As a sole proprietor, still in the growing stage, would settle with $100,000. And that’s including an owner salary and tools on.
Click to expand...
That has not been my ongoing experience, but when I was incorporating service work into my routine, I had a rate that was substantially higher than my bid rate as a subcontractor.

When I was doing service work, I found that my billable hours were only about 60% of the day on average. Either that, or every trip to get materials was included in the billable time.

If you go after hours and stock a truck and you show up and only charge for the time you are there, and you don't charge for a trip to Home Depot if you're missing something, then yes, your rate needs to be about $165 per hour.

I have an hourly rate right now of $105 per hour, only for customers who I already know and/or subcontract from. And I charge every minute from the time I arrive until the time I leave and I'm done. If I have to go get materials I'm on the clock.

At that rate, 7 hours per day would bring in $190,000 per year If you don't take any time off.

But I much prefer flat rate pricing because I "usually" make the same amount of money by working a lot fewer hours.
 
What would you guys charge? Using the flat rate numbers that I have supplied by others, it would be over $1100 to install a generator inlet and and interlock. That is using a rate of $175 Does this seem high, or about right.

I have done these in about 2&1/2 hours, although very little drive time and probably not including gathering everything.
 
The last one I did I think I charged $375

But it was a whole house remodel and I was swapping out the panel already. This one was added onto the panel with an offset nipple and it was supplied by the customer. I did have to buy the interlock. I had less than an hour in the whole thing and I was already there.

I had another one I did for $450 and the homeowner supplied the inlet. I was already swapping out that panel as well, so I was already there. I think it was about 12 ft from the panel with a piece of Romex to the outside. Basically like air conditioner disconnect.

I say just price it with the number you know is right, let the chips fall where they may. Make sure you're making money on every bid, and don't worry too much about how many people say yes or no. You'll get enough to say yes
 
James L said:
The last one I did I think I charged $375

But it was a whole house remodel and I was swapping out the panel already. This one was added onto the panel with an offset nipple and it was supplied by the customer. I did have to buy the interlock. I had less than an hour in the whole thing and I was already there.

I had another one I did for $450 and the homeowner supplied the inlet. I was already swapping out that panel as well, so I was already there. I think it was about 12 ft from the panel with a piece of Romex to the outside. Basically like air conditioner disconnect.

I say just price it with the number you know is right, let the chips fall where they may. Make sure you're making money on every bid, and don't worry too much about how many people say yes or no. You'll get enough to say yes
Click to expand...
That should be a 500 min job. People will ask for a free estimate and you say 350ish and they'll keep shopping around. You say 500 min then you can have more buffer but even at 500 min say that's only under the most ideal circumstances.
 
You must log in or register to reply here.
Top