home inspection pricing

[aline]

When someone gives a price and performs the service for that price, why would you consider them a crook? I don't care if they are higher than the next guy or twice what the next guy is. Price is what the market will bear. That guy may have plenty of work, and floated a number that he would take the job if it was agreed upon. That doesn't make him a crook. It just makes him expensive. He feels he gives a premium job at a premium price. do you think you are a crook if you are well paid for your service? The $3000. roof service may not have netted the guy $250/every 20 minutes. Does that make the guys that charge that for an estimate crooks? I say only if you didn't actually get the estimate for the $250 agreed upon price.

Steve

I was joking about the guy being a crook.
I wasn't being serious.

 

[emahler]

Hi all,
We all use different methods of ways to deal with the consumer, not saying one method is better than the other. We look at each Job and use the method that will work usually. Sometimes we fall short. or make a killing. It's all a game, but we usually come out above water. We get many repeat customers, word of mouth customers, and are awarded many quoted jobs also. I'm not trying to say one method is better then what might work for someone else, just stating this has been what's worked for me and my crews.We can sit here and debate how we should treat the consumer fairly, but in my past experiences ,I found being honest and fair usually works for us.I am not against making the ole mighty dollar, by no means, I just use the methods I feel work and in most cases give the consumer a break so they will feel they got what they needed for a decent price.
just my 4-1/2 cents(inflation)

RU,

in all honesty, however you price is really up to you. I just don't understand taking all the risks and responsiblities of being a contractor and giving all the rewards to the customer (T&M with a cap)

A few things to really think about: (and these are not directed at you RU, they are general thoughts)

The customer will pay what we, the industry, charge. So if you feel that you need to quote a job at a loss to get it, look at your fellow contractors. It's them that have caused this situation.

Many of the Captain Save-a-Customer's hate flat rate. They think that flat rate guys are ripping off the customers. Here is some food for thought: What is more ethical, giving the customer a firm price before you start, explaining to that customer everything they are getting for that cost and avoiding surprises? or giving them an hourly rate, and the rest being a surprise until the job is done?

Yes, you can ball park it. Yes, you can give them an NTE. But the fact is, they still don't know. They don't know how much you will mark up material. They don't know how long it will take.

In addition, how many of you T&M guys have tacked on an hour here or an hour there? How many of you have changed parts that didn't need to be changed just to increase the material charges?

How many T&M guys regularly bill out 10 - 12 hrs a day, when you only work 8? And yet somehow this is more fair to the customer than being upfront and honest with them?

These customers being the same ones who will call out you and 4 of your brother contractors to give a quote on a $400 job. These same customers who think that all work should be done in 30 mins and cost $20.

And then, you have fellow contractors who actually work to sabotage this industry. You have contractors who attempt to make us look bad in the eyes of the customer.

Any contractor on this board with more than one employee can tell you at least 1 horror story about what their employee did. They can tell you how they fixed it and what the outcome was. But, no matter how diligent you are as a contractor, hire help, especially residential, and the problems will occur.

Satcom has made the point many times, a contractor working on T&M is no different than an employee working for an hourly rate. The only difference is more costs and more headaches as a contractor.

I highly recommend that anyone who does, or is looking to do, residential service work look into, and read, the following:

Plumbing and Mechanical Magazine (www.pmmag.com)
Frank Blau
Maurice Maio
Ellen Rohr
Al Levi
Randall Hilton
Patrick Kennedy

This is just for starters. Everyone on that list has run an incredibly successful residential/lt commercial service company. And they all have a few things in common.

But in the end, the choice belongs to each of us. That's the great thing about a free country. I will add, everything that people say can't be done, is usually already being done by someone else. It can be done, you just have to learn how.

Good luck.

 

[jimmyglen]

erik

Most of my jobs come in at $70-$100 including drive time/shop time.


I dont want to get into a flame war so I think I will duck out at this point.

Jim

 

[bradleyelectric]

erik

Most of my jobs come in at $70-$100 including drive time/shop time.


I dont want to get into a flame war so I think I will duck out at this point.

Jim

Where are you located? How many hours a day do you bill? Do you mean $70-$100/Hr or is that the total cost of the job?

 

[satcom]

Where are you located? How many hours a day do you bill? Do you mean $70-$100/Hr or is that the total cost of the job?

"Most of my jobs come in at $70-$100 including drive time/shop time."

$70 to $100 for scheduled jobs may work in his area, for service work it needs to be a bit more to cover, non billed hours.

Now what usually happens is, some EC's do a lot of scheduled jobs, remodel work, new additions, and small projects. When a service call comes in they respond, and charge at the scheduled rate, now if this is only 2 or 3 times a month they will not notice the loss, however if their service calls increase, their related losses will grow.

At this time In my area, we are seeing EC's cutting back and closing shops, most of them did scheduled work, and were charging in the $90 plus or minus area, they just could not meet their overhead and operating expenses. And wonder of wonders, would you think, anyone going in business would check their area before going in business, I guess not because as these guys are going under at the $90 we have new entres comming in with lower rates, with their new license in one hand, and dreams of building a business.

IMO, checking out the market in your area, and pricing to cover your overhead, and operating expenses with a small profit, will assure success, if the general market conditions, and local economy are in good condition, the economic conditions are usually in constant flux, so be ready for a roller coster ride, and have some monies budgeted for bad times, they will come.

 

[RUWIREDRITE]

Labor rates

Labor rates

Here in the Garden State we charge $75.00 per man per hour, this charge is portal to portal. I have been told at time this seems high or excessive, but our service is great ,callbacks minimal, and our crews do quality work to boot.
Most people here are willing to pay the freight for a honest, quality based contractor. We try to respond to call within an hour and have crews on standby for emergencies.We DO NOT USE A Recorded messaging service when we are open, most consumers like talking to a real person and not machines. As for my competitors we average in there somewhere.I will never compete with the guy who works from his trunk with no overhead, or do I want to. There is enough work out there for all here so I don't really have problems how others charge or run their own businesses. We are capable of handling minor service calls or doing a high rise complex.
just my 2 cents

 

[emahler]

RU - 2 men to a truck?

so $150/hr x 8 hrs/day (portal to portal) = $1200/truck/day

the only difference between you and someone doing flat rate is how you bill, but the amounts are the same.

A company that works flat rate will simply figure their prices based on 5 billable hours or ($1200/5=$240/billable hr)

Look at the job, it will take approx 1.75 hrs, price will be based on 2 hrs...or $240 * 2 = $480

You would simply charge 3 hrs x $150 = $450 (the extra hour being travel)

The big difference is:

customer "how much will this job cost?"

flat rate contractor : "$480, no worries"

T&M contractor: "$150/hr maam, we'll let you know when we are done."

if you can run full residential service at that rate for t&m, you are set. The issue comes in on days that you only bill 5 hrs, but pay your guys for 8. Things like that.

Good luck.

 

[RUWIREDRITE]

Service calls

Service calls

Yes emalher,
Two men to a truck on most jobs, but I do have service crews that I run one for small calls. I can't see sending two men to change a switch or a ballast. We also have a one hour minimum charge for most calls. My crews haven't seen a 5 hour billable day in many years. Most are out there between 8-10 hours a day on an average. I give the customer our labor rate per man right up front and a esimated cost on what materials will be needed to do a job, most are fine with that. If I can't foresee something that would run into additional expenses, I try giving them a ballpark or a Not To Exceed price.That doesnt mean I lose money after that, I just have to call them first before proceeding.

 

[emahler]

talk to satcom...he's got some info on NJ and laws regarding quotes, etc...i don't know them off hand.

I'm gonna come work for you, you're rich

edited to add - realize that all of my comments in this thread are geared exclusively at the residential sector of our industry. Commercial is a different ballgame, and plays by a different set of rules, as we all know.

 

[satcom]

talk to satcom...he's got some info on NJ and laws regarding quotes, etc...i don't know them off hand.

I'm gonna come work for you, you're rich

edited to add - realize that all of my comments in this thread are geared exclusively at the residential sector of our industry. Commercial is a different ballgame, and plays by a different set of rules, as we all know.

Ya, I am still trying to figure how he is legally working T&M for an 8hr Job. 13:45A-16.2 (12) is clear job over $500 a contract in writing, and the amount known to the consumer, before the work is started. 8 hrs at 75 that is over the $500 limit. You need to give the customer a contract, with a firm price, in writing, There are times when I wish I could use T&M, but I don't want to put my license on the line.