Res Service Small Job Challenge

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Tiger Electrical

Senior Member
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Northern Illinois
The challenge is how to cover my costs on the extremely small job that doesn't have a troubleshoot/diagnostic. Whether you have a small service charge or do free estimates, the job is starting out as a loss.

My challenge is recovering that loss on the small jobs. I've calculated the average time to answer the phone, drive to the job, meet the client, spend time checking their project, pricing their project, presenting the price, invoice, collection, setup, cleanup, trip back, and data entry at 1.5 hours.

So, the challenge is setting the price for a 1/4 or 1/2 hour job that I have 2 hours in.

Dave
 
I have found that when you pull up to a million dollar "summer home" on a sunday afternoon to work on a dock lift so the banker can get his 40Ft Bayliner out of the water before he goes home for the week that asking for a $200.00 service charge for about 30 minutes work is not an issue.
 
Tiger Electrical said:
The challenge is how to cover my costs on the extremely small job that doesn't have a troubleshoot/diagnostic. Whether you have a small service charge or do free estimates, the job is starting out as a loss.

My challenge is recovering that loss on the small jobs. I've calculated the average time to answer the phone, drive to the job, meet the client, spend time checking their project, pricing their project, presenting the price, invoice, collection, setup, cleanup, trip back, and data entry at 1.5 hours.

So, the challenge is setting the price for a 1/4 or 1/2 hour job that I have 2 hours in.

Dave
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This is where a service/truck charge plus a flat rate fee works well.

I try not to make two trips for small jobs. That's the time waster.

Also, for service work I base my hourly rate on twenty billable hours a week. Some guys base it on sixteen.
 
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Any bid job starts at 1/2 a day's labor. You have that much just showing up. Most are bid in the 6-8 man hours per man. Service calls are billed by the hour, first hour minimum.
 
Dave,

I will PM some info for you, as you know, we have been using flat rate for many years, long before everyone jumped on the wagon, and it had been very good to us, and helped up build the customer base we have today.
 
Thanks satcom.

FYI this isn't a flat rate vs T&M issue. I've been doing flat rate for 5 years and I'll never go back. I have this one issue to resolve. I'm sure it's a confidence issue or sales presentation issue, but I'm looking for something better than telling someone that first switch is $120 and the 2nd is $10, or the first one is $300 and the 2nd one is $30, or whatever, because that's pretty much what it looks like when I work up the actual time.

Dave
 
Tiger, I have hard time with this also. I started billing 2,4,6,8, hours. If I finish in 3hrs I bill for 4hrs. I haven't had any complaints yet. I am in the ballpark on jobs I bid and I get most of those.
 
Answer is simple:
1st...no free estimates!
2nd...price of job includes all time invested. 2 hrs + 1/2 hr job = 2.5 hrs billed.

Problem is actually getting job for that price. Obviously if you bill for less you will never recover cost. Period.
As has been stated many times, we dont charge, bill, etc, for what we are worth. Only way to fix that is for everyone to just start doing it.

As far as second comment...I assume that the price for 2nd switch being cheaper is because it was added after initial price and you are already on site? Or thats just how its seems to break down. If both switch jobs are similar in install time, then difference seems to be simply bid time, travel, etc. Customer needs to understand why difference in price if asked to explain.

Years ago I was doing a high end remodel and had a few contractors see van and stop by and state they were about to do a small job near by, and would I take a look and bid. Sure, no problem...$65.00 due at time of bid given. They would look at me with such big eyes and say "Estimates are usually free!" Not from us! I would tell them. I am billing my boss for the time I am at your job so I will be paid. That money has to come from somewhere, it aint magic.... and NO BID is free...its figured in to price. Usually at more than time involved. 2 hour bid probably figured at 3-4 hours to make up for loss at other bids given and jobs not awarded. Told them to start paying for all future bids from EC's at time given and they would save money since estimate would be closer to actual job cost. We got both jobs and did work for them for about a year

I have no problem explaining to customer job price at time bid given or up front over the phone. They will either pay or go elsewhere...simple.
 
Tiger Electrical said:
Thanks satcom.

FYI this isn't a flat rate vs T&M issue. I've been doing flat rate for 5 years and I'll never go back. I have this one issue to resolve. I'm sure it's a confidence issue or sales presentation issue, but I'm looking for something better than telling someone that first switch is $120 and the 2nd is $10, or the first one is $300 and the 2nd one is $30, or whatever, because that's pretty much what it looks like when I work up the actual time.

Dave
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If these jobs are not emergency jobs, we give the customer to option, to have the job done on our schedule, which will be billed at a lower rate, not at the same day rate, this is the best choice for small jobs like changing a switch, don't get fooled when pricing up a motion light repair call, on average many of them can take up the morning plus cost of material. not such a small job when all is done.

Same problem with 3 way repaired, It may be wiring problems that can take some time, not that simple switch in and out.
 
~Shado~ said:
Answer is simple:
1st...no free estimates!

I have no problem explaining to customer job price at time bid given or up front over the phone. They will either pay or go elsewhere...simple.
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You must be the only electrician in town or everybody in your area charges for bids orcontractors don't know how to dial a phone.This area has several contractors in the book and countless side jobbers I tell a pontential customer 65 bucks for a look and the WILL go elsewere.
 
Rewire said:
You must be the only electrician in town or everybody in your area charges for bids orcontractors don't know how to dial a phone.This area has several contractors in the book and countless side jobbers I tell a pontential customer 65 bucks for a look and the WILL go elsewere.
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Where I am at we have hundreds of contractors, in the yellow pages, and there are 20 or more contractors in my town alone, illegal side job guys are dropping off, since many of the contractors look for them, and turn them in, and with all the competition, people will still pay for an estimate, but not $65, it ranges $39 to $49, and the ones not willing to pay are not looking for professionals to do the job.
 
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satcom said:
Where I am at we have hundreds of contractors, in the yellow pages, and there are 20 or more contractors in my town alone, illegal side job guys are dropping off, since many of the contractors look for them, and turn them in, and with all the competition, people will still pay for an estimate, but not $65, it ranges $39 to $49, and the ones not willing to pay are not looking for professionals to do the job.
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Do you charge for every estimte or only the ones you go look at I have people drop off prints at the office would you charge for this at the same rate or not at all I am considering a 35.00 bid charge I will give it about 60 days and see how many actually pay and how many move on
 
tonyou812 said:
I dont charge for estimates. I think that really puts people off. Ill make up the time lost somewhere else.
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that's what many guys say...my guess is you never make up the time...you don't need to charge directly for estimates, but you need to calculate the costs into your rates...that's the only way to make it up...

and that's not happening when a guy does T&M for $70/hr and only bills for time on site...not travel or estimates...
 
Rewire...That post was in reference to OP how to recover lost time...estimate isn't free, its figured in. The only way to recover time invested is to bill for it, period. Either up front or padded in later, its got to be paid for.

As for me being only sparky in town...nope, this Denver!!! Tons of sparkies in the phone book. Already have to compete with Ishium and RioGrand.... :grin:
I dont work for myself, I am presently looking to get hired on from someone here in Denver wanting another body to thrash around. :cool: :roll:

The $65 charge was years ago, in fact it was 7 years ago. That was when there was plenty of work. I was already too busy with the jobs and crews I had going on for my employers. So, for me to waste time giving price and not getting job possibly, they were going to pay right then, I didnt care if we got it or not. Like I told them, I'm billing my boss for my time on time card, and someone's paying for it, I'm not free...period.
I'm easy..but...I'm not necessarily cheap!!! I'm no trunk slammer!!!!

As far as prints dropped off at shop, I dont know. There were times I would walk into office and see dozens of prints on the boss's tables and them working frantically trying to get them out in time. Then only get 1 or 2 of them...really disappointing. Then they are out scrounging for more work quickly to keep us guys going....In large shops its easier to factor in lost time from bids into larger jobs, but when small shops do mainly small jobs alot of time is lost. Its easy to figure an extra grand or more into a $200k+ job to recoup, but if average job is under $10k pretty hard to add in enough for all lost time.

I dont know how much you feel you are worth but if one feels at least $75/hr and you take 1 day a week and bid 5+ jobs...what you add $500 to each job in case you get awarded one and make it back? I guess the real way is to be able to afford 1 year and keep track of all time spent and number of bids given then average out expense and spread it around...problem is the following year may see twice the amount of bids. Still a loss. I feel only the big boys can truely recoup all time invested, thats why they are big. I also feel it will get worse this year due to the way things are. Alot of folks are going to really shop around just to save a few bucks. So more time will be spent, or prices lowered just to get the work, etc... sad affair now.
 
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emahler said:
that's what many guys say...my guess is you never make up the time...you don't need to charge directly for estimates, but you need to calculate the costs into your rates...that's the only way to make it up...

and that's not happening when a guy does T&M for $70/hr and only bills for time on site...not travel or estimates...
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My boss and I spent an entire day giving an estimate on 3 service changes at the far end of a neighboring county (Looking at job, puttiing together proposal, and faxing) only to lose the job by $12. :mad: He is about done with these type of free estimate/proposals. Hard to recoup that kind of time.
 
Why bid little stuff like that.. Homeowner tells you on the phone what they want. You give em a ball park number. T&M it. Fair markup on materials.
 
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