Reasons For Not Giving Free Estimates

[BryanMD]

If that is your case, prove that he is losing money.

Can we assume that any employee capable of and entrusted to do troubleshooting isn't going to be the apprentice hired last week?

Can we assume rather that he is an experienced journeyman level mechanic driving a well equipped and stocked truck to make those service and troubleshooting visits?

Can we assume this guy gets paid pretty well and qualifies for every benefit a responsible employer will offer? Things like health insurance, and 401K, and CEU classes, and maybe even a uniform and tool allowance?

Can we assume that regardless of how capable and efficient this guy may tha in a given work day he won't actually be able to bill a customer for each of the hours his employer is required to pay him for?

Can we assume that all the above is nothing exceptional or particularly an out of the ordinary set of circumstances/conditions for most EC's to operate in?

Can we assume that in business terms that breaking even on costs is in fact "losing money" ?

If we can't assume the above...
then we aren't having a conversation about the same question.

 

[emahler]

If that is your case, prove that he is losing money.

there is no place in the country that a contractor paying a living wage, benefits, and the other items that professionals want and require...can be profitable doing resi service at $65/hr....it's a financial impossibility to do it without being dishonest..

 

[petersonra]

Hmmm....If i didn't have a clue about what a job should cost, i wouldn't get much business. It's fairly cut and dried....set rates for everday projects (i.e. changing devices and fixtures, adding circuits, hot tubs, etc.), or $65 an hour for troubleshooting and repairs.

that seems pretty cheap, but if you are including driving time both ways, that might make it come out about right in most cases.

 

[mivey]

there is no place in the country that a contractor paying a living wage, benefits, and the other items that professionals want and require...can be profitable doing resi service at $65/hr....it's a financial impossibility to do it without being dishonest..

To start with, SPARKS40 says he has 20 yrs experience, but I'm not sure how long he has been a contractor.

I am going to give him the benefit of the doubt that he knows what he is doing. I am not going to essentially say "case closed" because his price is less than my price. I have do not have enough information to pass judgment on his rates and would be hesitant to do so even if I thought I did have enough information. I'm sure not going to suggest he is dishonest because his rates are not close to my rates.

I have not worked in every place in the country and neither have you.

 

[Mike Burch]

I agree with you. Your making a nice effort at being a decent person. I wish there was a lot more of it. What goes around comes around in one way or another.

 

[emahler]

To start with, SPARKS40 says he has 20 yrs experience, but I'm not sure how long he has been a contractor.

I am going to give him the benefit of the doubt that he knows what he is doing. I am not going to essentially say "case closed" because his price is less than my price. I have do not have enough information to pass judgment on his rates and would be hesitant to do so even if I thought I did have enough information. I'm sure not going to suggest he is dishonest because his rates are not close to my rates.

I have not worked in every place in the country and neither have you.

sorry, i am not a bleeding heart...a lining wage anywhere in the country is min $20/hr...with benefits, $30/ hr...resi service averages 50 perent productivity...if you ar honest, you are paying your employee $240/day ($30*8) and you are generating $260/day for labor ($65*4 hrs)...leaving you $20/man/day +material markup to cover overhead....good luck...

guys that claim that rate either bill minimums (bill 12 hrs, pay 8) or make their money on fixed price contracts.

and while i haven't worked all over the country, i do know (and am friendly) with resi service contractors in all 50 states (yes, even Alaska and HI)...i'm not pulling this stuff out of thin air..

 

[BryanMD]

I agree with you. Your making a nice effort at being a decent person. I wish there was a lot more of it. What goes around comes around in one way or another.

Let's not be too hard on emahler. I'm sure he wasn't implying anything illegal.
Giving HIM the benefit of the doubt (re the hyperbole) I choose to assume he meant cheating **someone** in the transaction; and in EC terms too often that someone will be the EC or his company.

 

[emahler]

Let's not be too hard on emahler. I'm sure he wasn't implying anything illegal.
Giving HIM the benefit of the doubt (re the hyperbole) I choose to assume he meant cheating **someone** in the transaction; and in EC terms too often that someone will be the EC or his company.

bryan, appreciate it...my point is simple...too many EC's will damn another contractor who charges flat rate with a billable of $150+ for being overpriced or ripping the customer off...this same contractor will then send a truck with a $20/hr mechanic and an $8/hr helper (no benes), bill them both at $65/hr (because that's the going rate) and then charge a 2,3 or 4 hr minimum...

so with a 2 hr minimum, they will bill $260 for 1 actual hour onsite...i'm not saying that that is too much...i'm saying be honest.

 

[emahler]

add to that that damage done by promoting an unrealistically low rate based purely on arbitrary factors, far exceeds any damage i may do by offending someone's sense of self worth....heck, how can "charge more and live a better life" even be thought of as bad advice? what a backwards industry....

 

[mivey]

Let's not be too hard on emahler. I'm sure he wasn't implying anything illegal.
Giving HIM the benefit of the doubt (re the hyperbole) I choose to assume he meant cheating **someone** in the transaction; and in EC terms too often that someone will be the EC or his company.

OK. I'll go along with that explanation. Hamlet, Act I, scene iii, line 78.

That still does not mean that SPARKS40 is clueless. emahler does not know what SPARKS40's costs are. emahler is pulling numbers out of his data tables and pasting them on someone else. He also makes assumptions about how someone dispatches their crew, if it even is a crew. He then claims that person is using arbitrary factors because their numbers don't match his.

emahler may or may not have the correct number for SPARKS40, but only SPARKS40 can tell us that. This is like trying to remotely troubleshoot a service call, you may or may not get the correct answer, but a lot of times you are missing some vital information.

[edit: FWIW, I support emahler's concern about getting the ECs to charge enough to cover their REAL expenses and make a decent profit]

 

[emahler]

i admit to being jaded...unfortunately, it is too often with ust cause

 

[macmikeman]

emahler is pulling numbers out of his data tables and pasting them on someone else. He also makes assumptions about how someone dispatches their crew, if it even is a crew. He then claims that person is using arbitrary factors because their numbers don't match his.

emahler may or may not have the correct number for SPARKS40, but only SPARKS40 can tell us that. This is like trying to remotely troubleshoot a service call, you may or may not get the correct answer, but a lot of times you are missing some vital information.

For what it is worth, once on another forum, Erik computed my gross sales down almost exact, based on just a little bit of info I gave out. I would venture to guess he is well educated in economics and if he says somebody is clueless about charging enough, he is almost certain to be right about it.

 

[mivey]

For what it is worth, once on another forum, Erik computed my gross sales down almost exact, based on just a little bit of info I gave out. I would venture to guess he is well educated in economics and if he says somebody is clueless about charging enough, he is almost certain to be right about it.

I'm sure he is glad to know he has such a loyal fan.:smile:

 

[macmikeman]

I'm sure he is glad to know he has such a loyal fan.:smile:

I just call em like I see em.......

 

[BryanMD]

...emahler may or may not have the correct number for SPARKS40, but only SPARKS40 can tell us that.

Every comment made in these cost threads are based on certain assumptions. Some (like Erik's) assume a rational, profit motivated, well run business or an operator who is working hard to be there soon. Some don't.

Take a deeper look at my post (#221) on the issue of assumptions and what is (or should be) universally included in the costs of doing business when discussing the rate one EC or another then chooses to bill out at. In my post I attempted to establish a threshold of what should be included; but there are a lot more that rightfully belong in there... EVEN if that EC isn't actually incurring them at the present stage of their business.

if we're to err in our assumptions we should err on the side of profit and longevity for the business; and not merely covering the costs of that immediate period.

 

[emahler]

mac...checks in the mail

bryan, if my memory serves, you are an employee at this time, yes? going with that, you seem to have a desire to learn and grow in this industry (as evidenced by your participation here)....and growing on that, as an employee would you prefer to work for a company that provides the items in you post 221? or one who strives to be the lowest price in town and can't afford those items? just curious...

 

[BryanMD]

bryan, if my memory serves, you are an employee at this time, yes? going with that, you seem to have a desire to learn and grow in this industry (as evidenced by your participation here)....and growing on that, as an employee would you prefer to work for a company that provides the items in you post 221? or one who strives to be the lowest price in town and can't afford those items? just curious...

I'm an anomaly.
I've been a manager of a service company.
I've been a salesman.
I've been an estimator.
I've been a certified designer.
I've been the owner of a company too.
I've experienced success and I've experienced failure.
I've sweated it out on Tuesday and didn't have the cash for payday.
I've been there and I've done that and ALL before I ever (poorly) hammered my first nail-in box onto a stud.

But to answer your question...

 

[mivey]

Every comment made in these cost threads are based on certain assumptions. Some (like Erik's) assume a rational, profit motivated, well run business or an operator who is working hard to be there soon. Some don't.

Take a deeper look at my post (#221) on the issue of assumptions and what is (or should be) universally included in the costs of doing business when discussing the rate one EC or another then chooses to bill out at. In my post I attempted to establish a threshold of what should be included; but there are a lot more that rightfully belong in there... EVEN if that EC isn't actually incurring them at the present stage of their business.

if we're to err in our assumptions we should err on the side of profit and longevity for the business; and not merely covering the costs of that immediate period.

I agree that one should cover more than labor and materials and have stated before that one should also cover overhead and profit. I also agree that many ECs forget to include many of the overhead items that you mention.

What I can't say for sure is that SPARKS40 has not covered his overhead or that he has forgotten to include certain necessary items in his overhead. I think to do so is a little presumptuous at this point.

Perhaps SPARKS40 will be kind enough to share his model with us but I see no reason that he has to. I'm just not ready to call him wrong with a very limited amount of information.

Maybe he charges separate for travel time, or has an overhead adder or admin charge on his bill, or maybe $65 is just for a one-man crew, or he starts charging when he cranks the truck, maybe he is happy clearing $30k/yr, or $50k/yr, or 80k/yr or... The point is, unless you know how someone has accounted for their profit, overhead, job admin costs, job size costs, and variable costs, I don't think you have enough information to draw a conclusion about his particular operation.

 

[BryanMD]

presumption, assumption and implication.

What I can't say for sure is that SPARKS40 has not covered his overhead or that he has forgotten to include certain necessary items in his overhead. I think to do so is a little presumptuous at this point.

None of us can say for SURE on much of anything.

Perhaps SPARKS40 will be kind enough to share his model with us but I see no reason that he has to. I'm just not ready to call him wrong with a very limited amount of information.

I don't think anyone said that. At least not without some qualifiers.
And yes it would be nice to have OP's get back in most threads.

...The point is, unless you know how someone has accounted for their profit, overhead, job admin costs, job size costs, and variable costs, I don't think you have enough information to draw a conclusion about his particular operation.

The implication (rather than assumption?) is based on direct experience (here and elsewhere) that too many EC's have never even heard, let alone understand, the terms you used in that last paragraph.

edit to add:
Just so it's real clear... I don't think anyone who posts in these threads intends anything for Sparks40 (or any other poster) anything but success and happiness in their work. That in this instance Sparks was the one to be pointed out as an example is completely incidental to the intent. Many have been in his role here before him and (sadly) there will be many others in that role in the future. If SPARKS40 feels in anyway, that anyone, had any malicious intent toward him I hope by this point he recognizes that isn't the case.

 

[mivey]

too many EC's have never even heard, let alone understand, the terms you used in that last paragraph

Of that, you can be sure, and not just ECs.