Pulling numbers out of a hat

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emahler said:
that"s the truth...business concepts are universal...in our industry, you need trade knowledge to be safe and legal...you need business knowledge to make money...
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OK, so here's where the rubber hits the road so to speak. Why do you think that so many contractors are just satisfied with half a loaf and fail miserably at making the amount of money that all this effort and risk is worth?

Note: the reasons "people are set in their ways" and "we are afraid to kill the sacred cow" don't count. ;) :D
 
mdshunk said:
I guess I only have one thing to add....

If you're busy, that's how you know you need to raise your rates.
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One businessman's model is to raise his rates until a certain percentage of his customers complain. When that percentage drops he raises his prices.

Dave
 
emahler said:
It's not quite price fixing...however, mandating that contractors actually be educated in learning their costs, you would find that most contractors are sorely underpriced...which apparently is illegal in some jurisdictions...

but I ask one question...if the government mandates "Prevailing wages" why is it different if contractors mandate "Prevailing Wages"?
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thats why I said it was close to price fixing, maybe close enough to get one into a legal battle with an entity that has an infinite budget for lawyers. Most small business don't have a nearly infinite budget for lawyers.

I think you are asking a rhetorical question about prevailing wage law. That is close to a subject no one is allowed to discuss on this board. But basically a group of politicians traded increased wages for a small group of workers in exchange for their votes, generally to the detriment of the rest of us. Politicians often do such things to gain favor with certain voters.
 
peter d said:
OK, so here's where the rubber hits the road so to speak. Why do you think that so many contractors are just satisfied with half a loaf and fail miserably at making the amount of money that all this effort and risk is worth?
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I think it's a pretty simple explanation. There are so many that don't' realize that they're only dealing with 'half a loaf'. They're technically competent, people like them as a person, so they think that they're ready to set the world on fire. You see them in a few years driving someone else's truck.
 
Tiger Electrical said:
One businessman's model is to raise his rates until a certain percentage of his customers complain. When that percentage drops he raises his prices.
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Q: "How much do you charge"
A: "As much as I possibly can".
 
Well guys the more learn the less I know. I am going to take a real serious hard look at my billing and pricing. Im stuck in the eightes and cant find my way out. HHHHHHEEEEEEEEEELLLLLLLLLLLLPPPPPPPPPP.
 
tonyou812 said:
Well guys the more learn the less I know. I am going to take a real serious hard look at my billing and pricing. Im stuck in the eightes and cant find my way out. HHHHHHEEEEEEEEEELLLLLLLLLLLLPPPPPPPPPP.
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How did you arrive at the rate you presently charge?
 
tonyou812 said:
Well guys the more learn the less I know. I am going to take a real serious hard look at my billing and pricing. Im stuck in the eightes and cant find my way out. HHHHHHEEEEEEEEEELLLLLLLLLLLLPPPPPPPPPP.
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How do you think I feel? I know WAAAYYY more than you:D
 
tonyou812 said:
<P></P>
<P>And on another note I dont consider myself a resi guy I go were the work is resi. commercial, industrial, I do it all. Yea I still have alot to learn about pricing but please go to a mirror and say 500$ per hour to yourself and if you dont break out in laughter than your just plain nuts. I dont even think that law firms and doctors charge that much. Oh and I could still run my busness at 2250 a week.
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I've heard that with lawyers, when they bill by the hour, they charge for every minute they work on a case. From phone calls to discussing the case with other lawyers, research, etc. They would probably bill for time spent asking about advice for a case on a forum such as this one.

We spend half of our time running around giving free estimates, doing paperwork, research, ordering supplies etc. Time that we don't bill as hourly charges directly to the customer. The customer would have a fit if we sent them a time and material bill with 20 hours of time on it but only spent 10 hours at their place doing the work. This is not the case with Lawyers.

Here's a few articles about billing and Lawyers.

Hourly rates of Lawyers ariticle
http://www.law.com/jsp/article.jsp?id=1134122711101

Lawyers and billing by the hour articles
http://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1132653918886

http://www.abajournal.com/magazine/the_billable_hour_must_die/
 
petersonra said:
thats why I said it was close to price fixing, maybe close enough to get one into a legal battle with an entity that has an infinite budget for lawyers. Most small business don't have a nearly infinite budget for lawyers.
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I doubt the "unspeakable entity" would care if you engaged in price fixing and raised your rates. Probably support you 100% in fact.

I think you are asking a rhetorical question about prevailing wage law. That is close to a subject no one is allowed to discuss on this board. But basically a group of politicians traded increased wages for a small group of workers in exchange for their votes, generally to the detriment of the rest of us. Politicians often do such things to gain favor with certain voters.
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How is requiring prevailing wages to anyone's detriment? This entire discussion is about the harm caused by non-business saavy lowballers are doing to other contractors who are trying to increase their standards.

A rising tide raises ALL ships. Right?

It is often joked about how the space shuttles are made by the lowest bidder. Would you fly in it?
 
Note to self: Keep the questions about the actual money to a minimum.

More importantly my question was about whether it was acceptable to charge by the hour for some things, and by the piece for others.

Also, how to explain that to a customer.

I try to get more money plenty of times and I do get it, but at the same time I work and live out of an apartment that costs me $750 a month. My Nissan Pathfinder serves as my truck and my personal vehicle. I don't have a separate business phone. I do virtually no advertising and don't have any employees. My insurance runs me about $700 a year.

I work less than 20 hours a week on average and still manage to get by comfortably. Sometimes I go weeks without working and other times I work everyday for a couple of weeks.

No mouths to feed other than my own.

Thanks for the responses, as usual they are entertaining as well as informative.
 
jaylectricity said:
More importantly my question was about whether it was acceptable to charge by the hour for some things, and by the piece for others.

Also, how to explain that to a customer.
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The less time you spend explaining prices to a customer the better.

Switching back and forth between a fixed and a T&M structure only confuses their simple brains. T&M forces the frugal to focus on you rather than on the finished project where it should be; and should be directed toward by you.
 
Doesn't RS Means have data on this?
They have prevailing rates for everything else.
 
I price my service work at just a tad under $200 an hour, based on a careful calculation of my overhead, my desire to live in the manner I set my goal to, and a bit of a hedge for inflation and underbidding hours required to complete some jobs. I have learned how to always flat rate quote this work no matter what the customer wants out of me. I bid my remodel and construction wiring at a tad over $100 an hour based on a more productive day. I get my share of rejections, and I have all the work I can do. I am a one man shop. I job cost everything afterwards just to compare it to the estimates to make sure I am getting what I expected to get from each job. When I don't I adjust. Now if I can do it, and I am just an average old ex stoner, not particularly brilliant like Mahlere or Mr. Haskins, why can't you? It's because you won't let yourself try thats why.
 
jaylectricity said:
Note to self: Keep the questions about the actual money to a minimum.

More importantly my question was about whether it was acceptable to charge by the hour for some things, and by the piece for others.

Also, how to explain that to a customer.

I try to get more money plenty of times and I do get it, but at the same time I work and live out of an apartment that costs me $750 a month. My Nissan Pathfinder serves as my truck and my personal vehicle. I don't have a separate business phone. I do virtually no advertising and don't have any employees. My insurance runs me about $700 a year.

I work less than 20 hours a week on average and still manage to get by comfortably. Sometimes I go weeks without working and other times I work everyday for a couple of weeks.

No mouths to feed other than my own.

Thanks for the responses, as usual they are entertaining as well as informative.
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Jay, that's all fine and good...but let me ask a few questions that are all related...what happens when you meet the girl of your dreams, wanna take her on a date without emptying all your tools, get married, have a kid or two, want to take a vacation, want to go out for the night and hire a baby sitter, want to pay for your kids college, want to pay for your daughters wedding, want to retire?

i understand that you don't have to worry about any of these right now...but what about your future? the word of the month is myopic...and it's an epidemic in our trade...

back to your question...if i am your customer and you do a job T&M and charge me $60/hr for the time you are there, then your rate is $60/hr...if the next time you do work for me, you charge me $400 to install a new circuit and it takes you 2 hrs, well now you raped me for $200/hr...I say raped because your hourly rate is only $60/hr, so why are you charging me $200?
 
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