Drive time and $$$$

Status
Not open for further replies.
I

In Charge Electric INC.

Member
I currently have two different rates. One for a smaller county and one for the bigger city. My rates are $75 for the 1st hr and $55 for additional. In the the big city its $100 and then $75. Question 1, Does that sound right for central Fl? Question#2. When does time start? when I leave what ever I was doing or when I get there? Question #3 Should I charge for small estimates when someone wants me to come over at there house? I think I should but I got in a debate with one of my friends about that one!
 
Depends on how busy you are and if you are actually making any money.

We charge portal to portal, but the men are expected to get to the first job on their time same getting home, except for overtime and emergencies.

Emergencies are 4 hours minimum. Overtime we give them 1-2 hour travel depending on job and location.

For myself I charge 2 hours drive time plus minimum 4 hours on job, for most jobs (depending on customer), I also have variable rates depending on customer a regular or one time.
 
In Charge Electric said:
I currently have two different rates. One for a smaller county and one for the bigger city. My rates are $75 for the 1st hr and $55 for additional. In the the big city its $100 and then $75. Question 1, Does that sound right for central Fl? Question#2. When does time start? when I leave what ever I was doing or when I get there? Question #3 Should I charge for small estimates when someone wants me to come over at there house? I think I should but I got in a debate with one of my friends about that one!
Click to expand...

The firs thing you need to do is change the same of the company from in charge electric, to out of control electric.

Service calls will burden a company at a much higher rate, usually twice or more then your normal burden, lets say your normal cost per man hour in $75, then your service rate would be $150 for each and every hour, and even at these rates, you may notice a loss on doing service calls, many guys never track their real costs, and live in ly ly land, thinking they are making money on service work.

Free estimates are not free, they can cost you plenty, you can't go to a customer to price a service call for minor repairs or small jobs, it will break your business, faster then any other bad practice. Rule of thumb free estimates for jobs over $2000 give or take a little.

"I think I should but I got in a debate with one of my friends about that one!"

Your right you should charge, so when your friend goes bust, you can help him out!
 
In Charge Electric said:
One for a smaller county and one for the bigger city. Does that sound right for central Fl?
Click to expand...
I didn't know there was a small county left in central Fla. You are right on with the srcond rate. We charge slightly more for our service guys.

Can't help with the estimate thing, we don't take new costumers. If we have to go look at something, we try to find someone thats going by and thats a courtesy.

Nice to see another Floridian join the Forum, Welcome.
 
pricing

pricing

Pricing seems to be the biggest concern and reason so many little guys are dropping out of the business. A part of one members signature here is...$75 an hour,if you watch, $100 an hour ..if you help $150!!! I guess this is why so many refuse to do residential work. So much squabbling about prices. Why do homeowners not blink an eye to pay a painter $700 to paint a couple of small bedrooms and go ballistic when I tell them it is $150 to add a additional outlet(recptacle)?
 
In Charge Electric said:
thank you guys! Satcom take it easy on me. I'm very new at this! I'm wearing alot of hats here.
Click to expand...

No I will not go easy on you, I don't want to see you make the dumb mistakes I made, and had to pay for, the rest of my life.
 
In Charge,

First, take off for a couple of weeks and catch up on so light reading regarding pricing. Just do a search on this forum, and you will find plenty.

In regards to charging for estimates, if you don't charge for them, who is paying for your time to give them? Someone is...and it is either YOU or the customers that actually use your services. You will have to charge the customers that you perform work for more money per hour to make up for all of the "free" estimates. That doesn't seem fair to those people.

As for your hourly rate, well that is for you to decide. However don't just guess at a number (as it seems you are doing). As it's been said a thousand times before, perform a break even analysis to determine your true cost of performing service work, and then add in your desired profit. Search here or the internet for "break even analysis" and you will find some worksheets to help you. If you don't do this first, there will be absolutely no sympathy given if your business quickly fails.

Although I use it, I won't "demand' that you price by flat rate, but you should seriously consider it. It will make it easier sell a job to a homeowner when you give them the total price instead to telling them $125-$200 an hour. And yes, that is what you will probably come up with if you perform a break even analysis. Let us know what you come up with if you do this.

Rich
 
Look at your market and what your competitors are doing. Price to your market.As for estimates ,nothing is "free" but you can give the customer the illusion that it is.
 
Rewire said:
Look at your market and what your competitors are doing. Price to your market.As for estimates ,nothing is "free" but you can give the customer the illusion that it is.
Click to expand...

Just remember every one of those competitors may not know their true cost, so looking at them willl not help you find your price.
 
satcom said:
Just remember every one of those competitors may not know their true cost, so looking at them willl not help you find your price.
Click to expand...
Prices are market driven ,you can price yourself out of the market so having a knowledge of what is being charged by other electricians is a determining factor in what you charge.
 
Rewire said:
Prices are market driven ,you can price yourself out of the market so having a knowledge of what is being charged by other electricians is a determining factor in what you charge.
Click to expand...


I aggree with this. I price our Labor at what I feel is on the high side. I spend no money on advertising and we get all of our work through word of mouth and refferals. I love to see that others are charging the same. I am just curious about helper/apprentice rates.
 
Rewire said:
Prices are market driven ,you can price yourself out of the market so having a knowledge of what is being charged by other electricians is a determining factor in what you charge.
Click to expand...

that's only partially true, and easily avoided...

It's completely true if you charge by T&M...

Flat rate allows you to avoid much of this issue. Complete job prices are much easier to sell to a residential customer at a higher rate than T&M.

Residentially we average about $230/billable hour/truck (1 man, 4 billable hrs avg in a day...do the math) This works out to about $115/hr/man for an 8 hr day. I'd have a hard time getting $115/hr/man (including travel time) in my area. Guys are still billing out at $60/hr/man.

But with flat rate, we get it everyday. So, my market really doesn't concern me. By the way, there are a couple of companies that are not from our area, but work here, who are over $300/billable hour.

But I'd hazzard to guess that approx 50% of our market still operate T&M for $60/hr or less....
 
emahler said:
that's only partially true, and easily avoided...

It's completely true if you charge by T&M...

Flat rate allows you to avoid much of this issue. Complete job prices are much easier to sell to a residential customer at a higher rate than T&M.

Residentially we average about $230/billable hour/truck (1 man, 4 billable hrs avg in a day...do the math) This works out to about $115/hr/man for an 8 hr day. I'd have a hard time getting $115/hr/man (including travel time) in my area. Guys are still billing out at $60/hr/man.

But with flat rate, we get it everyday. So, my market really doesn't concern me. By the way, there are a couple of companies that are not from our area, but work here, who are over $300/billable hour.

But I'd hazzard to guess that approx 50% of our market still operate T&M for $60/hr or less....
Click to expand...
What do you do if your material cost is over 230.00 and your time is only 1 hr seemsd you would be loosing that way?
 
Rewire said:
What do you do if your material cost is over 230.00 and your time is only 1 hr seemsd you would be loosing that way?
Click to expand...

If you include all your labor, and all your material, how can you loose, you can only loose if you charge T&M.

Whatever the cost is that in the price of the job. That simple and you never loose, the customers that don't want want to pay what the job costs, are not customers you want.
 
Rewire said:
What do you do if your material cost is over 230.00 and your time is only 1 hr seemsd you would be loosing that way?
Click to expand...

those number don't include any material.

can you explain what you mean in the second part? are you saying that if I only charged $230 and my material was more than that and it only took an hour, that I would make nothing on labor and actually pay out of pocket for material?
 
In Charge Electric said:
On a couple of small jobs that I happened to do I had a helper and I charged an additional $ 40.00 for him.
Click to expand...

including downtime? or only for time on the job? 4 hrs travel, 4 hrs billable...$160 billed out...$20/hr billed...how much paid? how much made?
 
Status
Not open for further replies.
Top