I really try to avoid charging by the hour but sometimes it just works out to where I can’t avoid it. I do a lot of service and maintenance work for a couple major restaurant chains.
The problem with hourly bills is that I am a very efficient worker. I get a plan in my head and get to it… wasting no time.
The net effect then becomes that my efficiency costs me money. If I get a job done in two hours that I could have stretched into 3 or 4, I am doing myself a disservice….. but I cannot bring myself to stretch a job out. I am obsessed with efficiency once I begin a project.
I recently had billed for a morning’s work and because I got the project done in 1.5 hours on site (plus 1.5 travel), my minimum charge was complained about. I cut my price in half for that day. It was a two-day project. I cut it to make happy a client that I enjoy working for. they pay quick and I have very little problems with them. It was well worth the money to keep them pleased, imo.
How do you guys feel about such situations?
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I refuse to accept that there are limitations to what we can accomplish. Pete Draganic
Take life as a test and shoot for a better score each day. Matt Garcia
Replies
Have you considered raising your hourly rate? Sounds like you may perform better than the "average" guy, and should be compensated accordingly.
Do what the moving company I used to work for did.
Four hour minimum.
Its not out of line when you consider drive time, set up, clean up, and drive home.
Family.....They're always there when they need you.
Pete
When God wants a laugh he gives us what we ask for..
Careful; part of the reason you may be busy in these times is exactly because you are efficent..
That's a wonderful reputation to have and in the long run you may be doing yourself a great disservice to change your billing procedure..
I must be missing something here.
How exactly does being efficient and getting done fast cost you money?
I see it as you have the balance of that time to go do another job.
You have now gotten two minimum charges for a day instead of one.
Not to mention how (or who is doing the figuring on ) the 2 day minimum you are giving for being inefficient arrived at ?
the problem occurs when I go to a location and the work takes me 1.5 hours on site and I bill them a minimum of 4 hours.
They see this as $300 for 1.5 hours... they don't realize that there is travel time, gas, operating expenses, etc. So when I reduce the day to $150, I am making $30 per hour when all is said and done. Shoot, I could be working for a company, using only 5% of what I know for $30 per hour.
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I refuse to accept that there are limitations to what we can accomplish. Pete Draganic
Take life as a test and shoot for a better score each day. Matt Garcia
Ahh, now I understand the issue. So with the example you gave breaking it down into 1 hour service call charge, 1 1/2 hour travel, and 1 1/2 hour labor onsite gets you what you want.
They can't get your Goat if you don't tell them where it is hidden.
You can do a certain number of jobs per week. Let's say there are going to be 15 jobs in a week, each one is going to take an average of 1.5 hours on the job, for a total of 22.5 hours per week on the job. Figure out your needed weekly gross and divide it by 22.5. That's your hourly rate. You need to get paid all week long, even if there is a ton of running around and gear-changing time that does not "feel" billable. My guess is that your rate needs to be in the $75 range and up, possibly way up. If you're charging $40/hr in a situation like this I'm gonna come over there and grill ya'.
I do charge $75 per hour when I am billing hourly, 4 hour minimum... although I avoid the hourly thing like the plague.
I typically charge standard rates for stuff and a lot of what I do is quoted ahead of time.
I got some feedback from an area manager today where he said that he hears complaints that "pete is too expensive" and he countered the argument with "you get what you pay for, he does good work and he does everything"
The construction manager from this company made the same comment to me about complaints about my pricing but that it is nice that I am a one-stop contractor.
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I refuse to accept that there are limitations to what we can accomplish. Pete Draganic
Take life as a test and shoot for a better score each day. Matt Garcia
Very simple solution that electricians, plumbers, appliance repairmen --and now roofers use.
for small things like that------$90 service call==PLUS whatever hourly rate you have decided on
half hour minimums--
job takes 1-1/2 hours--- $90 service call plus $80x1-1/2 hours = $210
I used to get nickel and dimed all the time==== little old lady needs a spouting elbow replaced----- part cost $2---- takes 20 minutes---and they argue no matter how little you charge them.
Institute the service call charge--- problem vanishes--- they happily pay $132==== when previously they argued over a $42 charge
I really should THANK the plumber who started me on this---
stephen
Two posts in a row with guys doing it right.... can I get a third?!
I'd recommend the "service call" charge also.
thinking your problem might be that U work anywhere from down the street to hours away.
most "service call" people work in a contained area.
how about "service call zones" ... get a map ... draw circles ...
closest to home base is the lowest rate.
or just tell them the hourly starts when the truck leave the driveway.
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
the downside to treating them differently although they are all part of the same chain is that you cut your throat a bit on the far ones because they may not use you at all.
I try to be fair and charge pretty much a job price with some minimums in mind... although Ihave charged less than the minimum on certain occassions.
I am not complaining as much as making an observation about working too efficently as it may apply to a lot of folks.
If you could finsih a 5-day job in three days your problem might become that the customer wants to know why they have to pay you full rate if you are done so early. so, being efficient is not to your benefit in that case.
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I refuse to accept that there are limitations to what we can accomplish. Pete Draganic
Take life as a test and shoot for a better score each day. Matt Garcia
"I am not complaining as much as making an observation about working too efficently as it may apply to a lot of folks.
If you could finsih a 5-day job in three days your problem might become that the customer wants to know why they have to pay you full rate if you are done so early. so, being efficient is not to your benefit in that case."
I completely get and understand your point. It's all about customer expectations and assumptions. Hard to find a nice middle ground.
Only thoughts I could add, if all this work is coming from the same contact, same bank account per say ... then best just might be to keep charging what you feel is a fair price, and realize you'll have to eat a little on the jobs farther away.
Look at it as a full years worth of work and divide it all out to see how good you did ...
as opposed to taking each job, one by one ... and seeing that you made more on some and less on others. If it all divides out in the end ... don't sweat it.
That's how I have to look at big remodels. Some phases I kick butt, others I "lose money" ... but when it's all said and done ... if I made money during the time spent there ... all's well than ends well.
Some would suggest sharpening the pencil and nait it all down tight, but ... sometimes being the guy willing to take that hit on certain portions is the reason I'm the guy that's able to walk away in the end with a little change in my pocket.
Bad with the good, as it were ...
more good than bad ... sign me up.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Some good ideas here. I find that if you educate the customers a little as to why you charge the way you do most reasonable people will understand. The key word here is reasonable . . . the lowballers will never be happy.
Maybe write up a one page pricing policy explaining how you try to run a hyper-efficient operation, hussle as if you owned the company (because you do), keep a large parts and supplies inventory on your truck, maintain a clean work area, yada yada yada.
I think the ideal position you want to convey is that you're a professional and you should get paid for what you know, not just what you do. That's what lawyers, at least the expensive ones, do.
I was thinking about exactly that. Maybe even making personal calls to discuss just that with the locations that I service. One of my chain clients has 38 locations in this amrket and over 200 nationwide. I haven't done anything outside of my market but they've asked. Recently they wanted me to go to california to help with a new market they just purchased, existing locations. However, the cost and time to travel there and back would not have made it feasible for them or me.
I will do more to try to sell them on why I am worth the money.
I have occassionally thought about a reduced rate of some sort for an exclusive work realtionship but that is hard to deal with as a lot of these locations will handle small things themself (which has a whole range of problems) or they know a local handyman for quick and simple stuff.
Problem is thattoo often the job they saved a few bucks on costs more later to fix the right way when the cheap work fails.
Here is a brief and true instance of the above. A door closer had lost screws that mount the arm bracket to the door frame. The manager picked up some screws at HD and repaired it. wrong size and wrong hardness screws. they all broke off in the frame and I had to come out to drill and extract them all to remount the closer the right way. This took hours instead of 15 minutes.
Another more common and expensive problem is kitchen regrouts performed by cheap guys. No proper prepartion work done, substandard product and the result is a grout job that starts to come apart. The expensive problem is that I now have to go through every joint and chisel all the loose stuff off of the improperly prepared substrate. My regrouts last years... other cheaper jobs have lasted 6-9 months. My price is probably up to twice what others charge.
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I refuse to accept that there are limitations to what we can accomplish. Pete Draganic
Take life as a test and shoot for a better score each day. Matt Garcia
Pete, You are a rare commodity. As a HO, it drives me crazy the guys that charge by the hour then work as ineffeciently as humanly possible to boost the bill.
Don't cut your rate, maybe if you know it is a smaller job, let them know upfront that there is a minimum charge ór the service call fee, whatever. If they know upfront, they can't complain. If your work is good & complete, & they know, if they still complain, well, that is there problem. Dont make it yours.
Pete For the work you describe the landlord/tenant is always going to complain about pricing. The LL that have been in it a long time are used to cheap, cheap and more cheap. I know it may be an upscale mall. All of the price comes off the bottom line. Hold the line. Whatever you figure out w/service charges and hourly. Make what you need to make.Is there a way to make a route out of the clients? North side on Tuesday. Discounted. But full bore if it can't wait till Tues. Just a thought
you can't win this one... you are just too damn good...
my FIL was a sheetmetal hvac guy.... small town mostly but... he was sharp... he yhad a very good idea what was wrong before he got there because he knew what equipment everyone had...
so he could look good.. have the part in hand and required tools in the other when he walked in the door... and be done in 15 min.... the problem is no one wanted to pay him... because it only took you 5 min to fix it...
he had to choke it up... go in... inspect the unit... spend a few min take'n off the bad part... go back to the shop pick up the new part and come back and install... the whole time telling the people how lucky they were that he just happen to have that part in stock.... all so he could charge $39 mid 1960's...
btw before he was charge'n $15 for the same deal with part & tools in hand and 15min... and no one wanted to pay...
pay'n by the hour i sometimes have issues with.... i had a sparky who kept every tool in his truck... no tool belt... he'd make 50 trips a day back and forth... use to burn my butt up... hated that guy
P
Pete, maybe you should try doing things right.
From what I hear that takes a lot more time...
badoom tishhhhh
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"After the laws of Physics, everything else is opinion"
-Neil deGrasse Tyson
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If Pasta and Antipasta meet is it the end of the Universe???
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according to statistical analysis, "for some time now, bears apparently have been going to the bathroom in the woods."
I recently took a job that I had estimated would take me 2 hours; as luck would have it, I had more than 8 hours in before all was done. No matter; I had quoted a fixed ("flat rate") price; the customer paid the same.
"Hourly rate" is fine, for the purpose of your calculations. That's it, though .... the customer has no need to know how you arrived at your final price. Nor is there any need for you to always use the same figures; raise them for more demanding jobs, lower them for better customers.
I had estimated would take me 2 hours; as luck would have it, I had more than 8 hours in before all was done.
LOL... gotta love those jobs... but I never charge more than I quoted either.. and customers never complained about it.
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I refuse to accept that there are limitations to what we can accomplish. Pete Draganic
Take life as a test and shoot for a better score each day. Matt Garcia