Hourly vs Set price example

[electricmanscott]

I just did a small job the other day. Install generator interlock (heard about it here, still not sure if it is really legal), run 10/3 through basement, drill through wall to garage and mount generator feed receptacle, make up 30 foot generator cord.

Marked up materials were about $351.
An hour to look at job and provide estimate.
Three hours to do job including getting materials.

Had I billed the job T&M it would have been three hours @ $95.00 ($285.00)
Add in material costs $351.00
Job billed $636.00
Would not have billed an hour for the estimate.
Not bad for an easy little Friday job. But could be better, and it was.....

I gave a quote for just over $1000.00.
Minus the $351.00 for materials and that leaves $649.00 for the labor
$649.00/ by the four hours into the job = $162.50 per hour including the estimate time

Guy was surprised how fast the job went but did not bitch. We fired up his generator and threw the switch and he could not have been happier. Threw down dropcloths, vacuumed when done, ran him through the whole operation and even threw in an extra breaker to split a doubled up circuit.

 

[iwire]

It's all good, customer is happy he got a nice job and a free breaker and your happy to get $160 per hour.

Great for you.



BTW, why would the interlock not be 'legal'? :-?

 

[emahler]

good...it's amazing how much better of a service you can offer if the customer isn't watching the clock...how many times has someone told you "don't worry about cleaning up" because they didn't want to pay you $50 for the 1/2 hour it would take you?

 

[Minuteman]

Hot Tub showroom passes out my card after every sale. We get most of their work. We came up with a formula for most installs.

On installs that do not require trenching, we charge $375 + $6 per foot from panel to GFCI disco. They provide the disco, but we provide the whip made with a set of #10's and a set of #12's.

Went to look at a Tub Thursday evening, about 2 miles from my house. G. E. panel has room and is inside garage on North wall far West. Hot tub will set in back yard near NE corner. Total run is 30' so bid = $550 (I thought $555 was too cute).

Friday at 1pm apprentice and I get there. Nipple though panel and brick wall, 3/4" EMT up to clear the door, then over 30', and down to disco while apprentice installs disco and builds the whip. Together we pull the #8's with #10 ground. Clean up and happy guy says he's gonna get in tonight and writes the check, we are out at quarter to 4.

Had we billed T&M just for the time there, it would have been $270 labor and maybe $85 material.

 

[electricmanscott]

BTW, why would the interlock not be 'legal'? :-?

I'm not really sure. I thought I had read something about the fact that with the panel cover removed the interlock is also removed so in theory a person could backfeed generator power out to the street.

It is a listed product though.

http://www.interlockkit.com/index.htm

 

[emahler]

I just did a small job the other day. Install generator interlock (heard about it here, still not sure if it is really legal), run 10/3 through basement, drill through wall to garage and mount generator feed receptacle, make up 30 foot generator cord.

Marked up materials were about $351.
An hour to look at job and provide estimate.
Three hours to do job including getting materials.

Had I billed the job T&M it would have been three hours @ $95.00 ($285.00)
Add in material costs $351.00
Job billed $636.00
Would not have billed an hour for the estimate.
Not bad for an easy little Friday job. But could be better, and it was.....

I gave a quote for just over $1000.00.
Minus the $351.00 for materials and that leaves $649.00 for the labor
$649.00/ by the four hours into the job = $162.50 per hour including the estimate time

Guy was surprised how fast the job went but did not bitch. We fired up his generator and threw the switch and he could not have been happier. Threw down dropcloths, vacuumed when done, ran him through the whole operation and even threw in an extra breaker to split a doubled up circuit.

this is a great example of the difference between an hour and a billable hour...

Scott's hourly labor rate is $95/hr....this particular project took 5 hrs of Scott's time...1 hr to estimate, 1 hr for travel (2 trips) and misc time, and 3 hrs to do the job...he already said he would have only billed the guy for the 3 hrs of actual work...

so his $285 labor would actually have earned him ($285/5 =) $57.00/hr....

now by charging the way he did, he earned $649 for the same 5 hours of time...or (649/5=)$130.00/hr...this job had 3 billable hours (on site) and 2 non-billable hours (est and travel)...these non-billable hours need to be covered somehow...

now, if he was able to do another job that day, good for him...but if not, he still earned enough in that job to almost cover his whole day (649/8=)$81...vs doing it T&M (285/8 =)$35.50.hr

I don't think his price was high at all, it was definitely fair...if you are able to bill your hourly rate for 8 hrs/day you can usually get by on T&M...but for resi service, where you will regularly work 8 hrs and only bill 5, you will probably never generate the revenue you predict..

 

[stickboy1375]

I'm not really sure. I thought I had read something about the fact that with the panel cover removed the interlock is also removed so in theory a person could backfeed generator power out to the street.

It is a listed product though.

http://www.interlockkit.com/index.htm

It seems to meet the requirements of 702.6

 

[emahler]

Hot Tub showroom passes out my card after every sale. We get most of their work. We came up with a formula for most installs.

On installs that do not require trenching, we charge $375 + $6 per foot from panel to GFCI disco. They provide the disco, but we provide the whip made with a set of #10's and a set of #12's.

Went to look at a Tub Thursday evening, about 2 miles from my house. G. E. panel has room and is inside garage on North wall far West. Hot tub will set in back yard near NE corner. Total run is 30' so bid = $550 (I thought $555 was too cute).

Friday at 1pm apprentice and I get there. Nipple though panel and brick wall, 3/4" EMT up to clear the door, then over 30', and down to disco while apprentice installs disco and builds the whip. Together we pull the #8's with #10 ground. Clean up and happy guy says he's gonna get in tonight and writes the check, we are out at quarter to 4.

Had we billed T&M just for the time there, it would have been $270 labor and maybe $85 material.

same thing as Scott's example...I'll extrapolate your hourly rate at $90/hr for you and a helper....

So this job was 3 hrs on site, an additional 1 hr for travel and 1 hr of your time for the estimate...or a total of 5 hours (i won't break it down to the time you were alone, etc, it's not that critical)

So normally at your T&M rate, you are at $90/billable hour and $54/hr for the 2 of you...

the way you billed this one, you were at ($550-$85 =)$465 labor...or (465/3 =) $155/billable hour and ($465 /5 =)$93/hr...which is the labor rate you are billing...the difference is in the 2nd instance you are accounting for non-productive time as well as productive...

good job

 

[Poolside]

It's easy to be retrospective about how the jobs turned out. You assume the risk that they will be profitable, and that you will complete them in time you think. We seem to forget that these jobs can go south and not make a dime of profit, too. The extra money made is payment based on the risks you assume. If you do the work T&M, you assume no risk.

Good work!


- Greg

 

[emahler]

It's easy to be retrospective about how the jobs turned out. You assume the risk that they will be profitable, and that you will complete them in time you think. We seem to forget that these jobs can go south and not make a dime of profit, too. The extra money made is payment based on the risks you assume. If you do the work T&M, you assume no risk.

Good work!


- Greg

this is true...but if you do T&M, you receive no reward either...and as these cases showed, sometimes you lose money on T&M without realizing it....

 

[220/221]

You assume the risk that they will be profitable

No guts no glory.


Good job

 

[macmikeman]

The correct way to mitigate risk is to determine the $ impact of it prior to bid, and install that impact into the bid. This is why each and every "upfront" or "flatrate" or plain old bid should get some risk built into it. If you find over time that you seldom need the use of the risk factor you can always lower it if you wish, since your installs go trouble free. But if you are like me you will end up using it cause I find so much jackleg stuff that affects how I have to go about repairing as I perform my new work. When it becomes serious jackleg interference, I go for the extra change order route.

 

[jaylectricity]

I just did a small job the other day. Install generator interlock (heard about it here, still not sure if it is really legal), run 10/3 through basement, drill through wall to garage and mount generator feed receptacle, make up 30 foot generator cord.

Marked up materials were about $351.
An hour to look at job and provide estimate.
Three hours to do job including getting materials.

Had I billed the job T&M it would have been three hours @ $95.00 ($285.00)
Add in material costs $351.00
Job billed $636.00
Would not have billed an hour for the estimate.
Not bad for an easy little Friday job. But could be better, and it was.....

I gave a quote for just over $1000.00.
Minus the $351.00 for materials and that leaves $649.00 for the labor
$649.00/ by the four hours into the job = $162.50 per hour including the estimate time

Guy was surprised how fast the job went but did not bitch. We fired up his generator and threw the switch and he could not have been happier. Threw down dropcloths, vacuumed when done, ran him through the whole operation and even threw in an extra breaker to split a doubled up circuit.

The one I did yesterday went like this:

Showed up at 10:45.
Customer tour guided me around the house for each problem.
She let me contemplate each task.
I fixed certain things immediately and made a plan for the rest of the stuff.
Drove to Orange to get some things.
Bought a couple extra of the things just in case (added about a third of the cost)
Used those things to fix everything for the customer.
Finished at 2:15 (3.5 hours since I showed up)

Originally I planned on charging her for all the materials as markup. I was also going to charge her the 3.5 hours. But then I realized that I charged her $75 to drive my truck, pick up some stuff and drive my truck again. So instead of a $15 markup on materials I added $75 in labor minus the gas money and wear and tear for the hour it took me to drive a truck and also simply following her around amusing her and coming up with solutions.

I charged her the exact cost of her materials plus the hourly wage from the time I showed up to the time I left.

 

[bradleyelectric]

But then I realized that I charged her $75 to drive my truck, pick up some stuff and drive my truck again. So instead of a $15 markup on materials I added $75 in labor minus the gas money and wear and tear for the hour it took me to drive a truck and also simply following her around amusing her and coming up with solutions.

I charged her the exact cost of her materials plus the hourly wage from the time I showed up to the time I left.

Did you spend that time for things involving the job? It would have been billable time to me and I'd have marked up the materials also. Might want to up your rate enough to afford a work truck and insurance.

 

[jaylectricity]

Did you spend that time for things involving the job? It would have been billable time to me and I'd have marked up the materials also. Might want to up your rate enough to afford a work truck and insurance.

Well I did take a few wrong turns to find the place.

 

[jrannis]

It seems to meet the requirements of 702.6

The one I used from them didnt fit very well. The one from the manufacturer work better. But, If they dont make it for your setup you have to use these guys.