Standard Rates & Scope Brochure

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megloff11x

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I ask this question because my mother lives on the other side of the country and she's often reluctant to get needed work done because:

1. She doesn't know what needs to be done
2. She's concerned about being scammed - which has happened

Until the 10-minute oil change places cropped up, she wouldn't get the oil changed in her car because the local mechanic shops would try and talk her into scam repairs she didn't need. They'd do this to me too. I still recall a kid showing me metal shavings I'd watched him pick up off the floor and claim they were on my tranny filter. It was more of the same for anything from plumbing problems to electrical to getting her roof re-shingled or driveway re-paved. My other relatives who live nearby are not trades people and have the same problems themselves.

If someone would write a book or brochure for the "layman" spelling out why it really does cost you $100 to drive out to reset a circuit breaker and why it is hard, time consuming, and costly to fix wiring done during the second (or sometimes the first) Roosevelt administration that wasn't even up to snuff back then, but must be done while you fix something alongside or upstream, it would be a great service.

People who have never run a business have NO CONCEPT of overhead cost. They think if the kid doing the work is getting $8-$25 an hour, then that's what the labor cost should be and the rest is evil greedy business owner. This is especially true of politicians. They have no concept of insurance, accountants, payrool, taxes, equipment, gasoline, wear & tear on vehicles, etc. Nor do they understand about having to make payroll through thick and thin times, and often times are thinner than thicker.

It could show what to look for yourself. It could have basic troubleshooting. Give prices of hardware at the time of publication - caveat: please consider inflation when this book is a decade old. And give estimates on such things as installing a new panel. Installing a new panel if other wiring needs fixing. Options for running new wire to replace old. How much to put in central air. How much for a new outlet? How much for new lighting or one of those ceiling fans. Why you should hire a licensed contractor who has his workman's comp paid up and how to check.

I've had friends and relatives call and ask me if quoted repairs seemed reasonable or necessary. In some cases I've said you're being scammed. In others I said pay it. In a few I've said not only pay it but you should offer them beer and pizza at the end of the work day.

If you publish it, I'll buy several for Christmas presents.

Matt
 
megloff11x said:
Until the 10-minute oil change places cropped up, she wouldn't get the oil changed in her car because the local mechanic shops would try and talk her into scam repairs she didn't need.
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I recently took the work truck to one of those places.

They also tried to up sell everyone, they actually told the woman in front of me that if she changed her engine coolant for 69.99 the car would warm up faster on cold mornings. :roll: :mad:

As far as the book would the customers read it?
 
iwire said:
I recently took the work truck to one of those places.

They also tried to up sell everyone, they actually told the woman in front of me that if she changed her engine coolant for 69.99 the car would warm up faster on cold mornings. :roll: :mad:

As far as the book would the customers read it?
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Our local garage not only changes the oil, they bring to our attention problems that may leave you stranded on the road, some may call this scamming, I call it good service.

A few years back, one of the guys decided to take the truck to one of those 10 minute places, he din't want to wait for our garage to do it, so he brings back the bill, which was higher then our garage charges, because they have hidden charges, a scam in my book, but the worse part was they never put the oil in, and they never checked, so we lost the engine on that one.


We will explain the charges to our customers before we do any work, and they can ask away, no book needed.
 
megloff11x said:
If someone would write a book or brochure for the "layman" spelling out why it really does cost you $100 to drive out to reset a circuit breaker
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I always explain it like this. It doesn't cost you $100 to have a breaker reset. If you have a breaker that you want someone to reset then order a pizza and when the pizza man comes have him reset the breaker. That way you get the breaker reset and a pizza ( plus tip ) for about $25.

I don't know how others handle a tripped breaker but I always have an idea of what caused the prolems before I leave. I have never reset a breaker and said " that will be $100, I'm out of here ". At times it will be that someone plugged in to much on one circuit ( they get an explaination of how to avoid this and how to reset the breaker if it ever happens again ) but most of the time there is a bigger problem that must be corrected. I have reset many breakers over the phone at no charge.

The best way to avoid being scamed is to find an honest company and use them. Ask friends and neighbors ( word gets around ). Most people get taken advantage of when looking for that " good deal ".
 
megloff11x said:
If someone would write a book or brochure for the "layman" spelling out why it really does cost you $100 to drive out to ...

People who have never run a business have NO CONCEPT of overhead cost. They think if the kid doing the work is getting $8-$25 an hour, then that's what the labor cost should be and the rest is evil greedy business owner. This is especially true of politicians.

If you publish it, I'll buy several for Christmas presents.
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Matt,

The truth is - people don't care and don't really want to know...if they did, more people would be in business for themselves.

Much of this information already exisits in one form or another whether onlne or in a book store/library. Any book on running a small business will discuss the various cost associated with operating the business....from start-up costs to overhead to markup and profit.

Here is a link for you:
[Business Owners' Cost Calculator]
[FONT=Verdana,Arial,Helvetica]Use this Plumbing calculator to work out the hourly charge out rate you should be using for your plumbing/gasfitting & drainage business. Compare the result with the rate you are currently using now. You may be suprised by the comparison.[/FONT]
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[FONT=Verdana,Arial,Helvetica]
While made for "plumbers", it can be used for virtually any trade.


[/FONT]
 
Celtic,

Thanks for the excellent link.

The last EC that I subcontracted for joined Nexstar and they have a similar calculator which he payed who knows how much for. This really does explain what you need to charge. I also remembering him telling me Nexstar says that for service work your billable hour should be based on 16 hours a week per man. Does anyone agree/disagree?
 
tmbrk said:
. . . for service work your billable hour should be based on 16 hours a week per man.
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What does that mean? Charge per hour what you pay him for 16 hours? If I pay a guy $15/hr, I should charge $240/hr? I wish!

Seriously, do you know what he meant? :confused:
 
Larry,
What he was telling me is that if it cost him $x/hour per man that he would charge $2 times x./hour for service work due to travel/down time that is involved with service work. This certain EC was candid with me and I know for a fact that he started charging much more than this when he joined Nexstar. I am not saying that I do or don't condone this line of thinking, but it is the main reason that I went out on my own. He used to charge a service charge to dispatch any of the electricians plus the cost of the work, which he gave over the phone as a round about price(say a certain job will cost between $250 and $375 + service charge). This was easy for me as a sub because when I went to a job I new that the customer already had an idea what the work would cost ( I recieved a % of the price). After he joined Nexstar he stayed with the service charge but would not give an estimate over the phone for the work to be done. This hurt me because it was up to me to "sell" the job at the significantly increased price when I got to the customers home or I walked away with nothing (as a sub-contractor). I am in no way saying it is right or wrong to join Nexstar, but I found it better to tell him that this was not a good situation for me and to go on my own after a number of no sells.

BTW he was considerably more than $240/hour
 
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"But all you did is reset a breaker!!"

"No sir. I got into my truck, which I had just filled with gas this morning, spent 30 minutes driving over, -then- I reset the breaker. While I'm in my truck or at the customer's, I can't do work for anyone else."

Of course, some people won't even tip the pizza delivery guy.
 
zbang said:
"But all you did is reset a breaker!!"

"No sir. I got into my truck, which I had just filled with gas this morning, spent 30 minutes driving over, -then- I reset the breaker. While I'm in my truck or at the customer's, I can't do work for anyone else."
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You missed a WHOLE bunch of stuff...

No sir.....You found my ad ($), called me on the phone ($) at my office ($) where there is heat/AC ($), lights($), then you got in the truck($) which is registered/insured($$)....and then the gas...

We haven't even gotten into the cost to maintain your EC credential$
 
LarryFine said:
. . . or insurance, insurance, and insurance. :roll:
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That's part of the EC credentials....getting a license in the first place, then paying for the name to go with the business permit that you have to pay for, along with the bonding ...oh yeah, then the insurance ;)

We can go on about the cost of maintaining the credentials with the CE credits that are needed :D
 
celtic said:
You missed a WHOLE bunch of stuff...
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Actually, I ignored a whole bunch of stuff :grin:. Most people can understand direct costs (gas, time, materials etc), but you loose them when you get too far into the overhead (phones, insurance, licenses, etc).

Wasn't there a discussion a while ago about "shop charges"?
 
zbang said:
Actually, I ignored a whole bunch of stuff :grin:. Most people can understand direct costs (gas, time, materials etc), but you loose them when you get too far into the overhead (phones, insurance, licenses, etc).
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I know ....
celtic said:
Matt,

The truth is - people don't care and don't really want to know...if they did, more people would be in business for themselves.
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...from Post #5
post_old.gif
02-10-2007, 05:24 PM


But we here have the attention span to be able to discuss these things ....even if it takes a few days :D
 
When people go to the store and buy a loaf of bread they don't even think about the fact that they are paying for more than just that loaf of bread.

It doesn't cross their mind when they purchase a loaf of bread they are also paying for the store maintenance expenses, the electricity to light and operate the store, phones, employees wages, delivery of the bread to the store, the delivery companies employee wages, the company's expenses that made the bread to begin with, etc. A lot has to get paid for when you buy that loaf of bread.

They just think they're buying a loaf of bread.
 
tmbrk said:
I also remembering him telling me Nexstar says that for service work your billable hour should be based on 16 hours a week per man. Does anyone agree/disagree?
Click to expand...


That 16 hours a week pr. man may make sence, I'm not sure. I do know that if you raise your rates by a significant amount that you will probably lose some customers. 16 billable hours may be all you can hope for to start building a new customer base at the new higher rate. You indicated that you were having trouble making sales.

This is just a guess but I think the logic here is that once you establish a new higher paying customer base then you reap the rewards. Would you rather work 20 hrs. at $200 an hr or 40 hrs at $50 an hour.

I had a plumbing contractor that told me that a few years ago he was working twice as much for half the money he is making today.

A few years ago I never dreamed that contractors would ever get some of the rates charged today. Others had faith and they did it. I've seen an invoice for $300 to change out two GFCI receptacles ( out of there in less than an hour ).
 
growler said:
I've seen an invoice for $300 to change out two GFCI receptacles ( out of there in less than an hour ).
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But, have you ever seen two for the same customer?
 
growler said:
A few years ago I never dreamed that contractors would ever get some of the rates charged today. Others had faith and they did it. I've seen an invoice for $300 to change out two GFCI receptacles ( out of there in less than an hour ).
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Growler ...did you ever get a chance to read my very first posting here?

The one about a simple GFCI swap out that ended up in the neighborhood of $3,600.00? (Elusive Neutral ~ #26)

I'm not bragging - far from it - but you did say "I never dreamed that contractors would ever get some of the rates charged today" ...this was one job I will never forget!

This was DEFINITELY the exception to the "rule"....changing out a GFI is $150+permit (as required by NJ laws - just the permit, not the price tag:roll:). Last years price was $125+permit.

In my experience, dealing with the area I am in - old buildings, handymen on a "mission", etc - I have found that most times a "simple swap" is an oxymoron (in the same vein as "jumbo shrimp"). The result is that I usually need a rotozip because "someone" didn't cut the formica/laminate backsplash large enough to accomadate a GFCI...barely enough room for a duplex recept....forget about seeing the sides of the box. Same story on most outdoor devices too...siding is removed just enough so that the recpets screws touch the siding. It can be a horror show w/o the right tools ;) so I can be in and out in under 1/2 hour.
 
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