Setting Prices: Lower Full Day Rate

[HackElectric]

This is mainly for companies that do service work.

The rate that you use to price jobs is often based off of a lower billable efficiency than construction. Many people say to base your price off of 1,000 hours per year because there are so many unbillable hours when doing service work.

So the question is, when you are doing work that takes all day, are you using a lower rate? And if so, how did you determine it?

I know that I have read some people doing this.

For example, your normal hourly rate that you estimate jobs with is $150/hr. If you are going to do a full day job, would you lower it from that $1,200 down to $1,000?

 

[petersonra]

Charge what you can get.

Being in a competitive situation may have an affect on your rates if you want/need the business, but otherwise, why give away money?

We charge a minimum of 4 hours anyway for service. It is not worth going out for less.

 

[LEO2854]

This is mainly for companies that do service work.

The rate that you use to price jobs is often based off of a lower billable efficiency than construction. Many people say to base your price off of 1,000 hours per year because there are so many unbillable hours when doing service work.

So the question is, when you are doing work that takes all day, are you using a lower rate? And if so, how did you determine it?

I know that I have read some people doing this.

For example, your normal hourly rate that you estimate jobs with is $150/hr. If you are going to do a full day job, would you lower it from that $1,200 down to $1,000?

A good rule of thumb for service work 1,000 man hours,,, Remodel and new construction 1,500 man hours.

 

[HackElectric]

A good rule of thumb for service work 1,000 man hours,,, Remodel and new construction 1,500 man hours.

I'm glad you read the second sentence of my post Harry :roll:

 

[LEO2854]

I'm glad you read the second sentence of my post Harry :roll:

If it's a one full day job, I charge at the service rate, if it is more than two full days then I'll use the lower rate.

 

[HackElectric]

If it's a one full day job, I charge at the service rate, if it is more than two full days then I'll use the lower rate.

Ok so, you read the rest of the post, thanks!

What lower rate do you use? Just cut a percentage off? Any rhyme or reason when determining that percentage? That's the info that I am looking for.

 

[Fulthrotl]

This is mainly for companies that do service work.

The rate that you use to price jobs is often based off of a lower billable efficiency than construction. Many people say to base your price off of 1,000 hours per year because there are so many unbillable hours when doing service work.

So the question is, when you are doing work that takes all day, are you using a lower rate? And if so, how did you determine it?

I know that I have read some people doing this.

For example, your normal hourly rate that you estimate jobs with is $150/hr. If you are going to do a full day job, would you lower it from that $1,200 down to $1,000?

http://www.barebonesbiz.com/catalog/the-weekend-biz-plan/
$10. takes a weekend.

unless there is no other way, i won't do hourly.
to function, most people need to be generating above $150 an hour.

i figure in half day chunks. i don't break down how many hours on
the estimate, usually. i don't itemize material.

i provide the following:

scope of work.
cost for that to be done.
lead time after getting a purchase order.

anything more than that i've found not to be helpful.

 

[LEO2854]

Ok so, you read the rest of the post, thanks!

What lower rate do you use? Just cut a percentage off? Any rhyme or reason when determining that percentage? That's the info that I am looking for.

I change the calculation to 1,500 hours instead of 1,000, this seems to work out best in my case, but you should mess with the numbers and see where you're at, that works out to 66% of your service rate.

 

[mshow1323]

These are my billable hour factors I use:
500 (emergency/holiday)
1000 (service) less than one day
1250 (remodeling) less than 3 days
1538 (new work/preferred pricing) for anything beyond three days.

2.00, 1.00, 0.80, and 0.65 are the multipliers I use.

 

[HackElectric]

http://www.barebonesbiz.com/catalog/the-weekend-biz-plan/
$10. takes a weekend.

unless there is no other way, i won't do hourly.
to function, most people need to be generating above $150 an hour.

i figure in half day chunks. i don't break down how many hours on
the estimate, usually. i don't itemize material.

i provide the following:

scope of work.
cost for that to be done.
lead time after getting a purchase order.

anything more than that i've found not to be helpful.

I have all of Ellen's books on PDF's, but I like real world knowledge from other contractors too.

FWIW, I don't T&M nor do I break labor and material down. The hourly rate I spoke of is just what I use the estimate the job and give an upfront price.

However, unlike you, I often do smaller 1-3 hour jobs since I focus on residential service work. I believe you are mostly construction/renovation so I understand you not wanting to do less than half day.