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Is $280 to $340 The Correct Hourly Price

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  • #91
    Re: Is $280 to $340 The Correct Hourly Price

    Originally posted by wrench spinner View Post
    Mark!!! You of all people!! I never expected our level headed figure head to resort to name calling!!! Calling Rick a Fairy isnt very nice I think you should apologize.... personally.
    Have you seen who his friends are?
    I love my plumber

    "My Hero"

    Welcome, Phoebe Jacqueline!

    Comment


    • #92
      Re: Is $280 to $340 The Correct Hourly Price

      Originally posted by MrsSeatDown View Post
      Have you seen who his friends are?
      Point taken!

      Comment


      • #93
        Re: Is $280 to $340 The Correct Hourly Price

        Originally posted by ToUtahNow View Post
        These all factor into the cost of sales which are all passed onto the customer. It would be nice but naive to believe the plumbing fairy magically delivered a plumber and material to your home.

        Mark
        The plumbing fairly is being well compensated for the parts and labor, what the fairly is doing wrong in my opinion would be inflating prices far beyond parts and labor which are customary in many businesses and has includedall operating expenses. The cost of vehicles and maintenance are eventually covered throgh profit, or taken off as a loss through depreciation. To use this guys business model one could conclude that a business owner does not undergo a period of being in the red while building a business and wheter or not the business is run properly the customer will pay not only for labor and parts but abuse, misuse and wear and tear ofvehicles and equipment. Maybe you guys are able to be very vague when giving quotes or inflating rates, but when I contract for work in my home I want to know the price of parts, cost of machine use or rentals and materials and labor. If a contractor allued that I would be paying for some of the costs this guy used to reach his$340 an hour rate I wuold show him the door. Open your eyes to the other trades and services you use and honestly consider what they charge and how they approach their business. Auto Mechanics in my area charge roughly $90 an hour, if one of those business owners said to me this moth we are investing in a new fleet of tow trucks and cell phones for our employees so the hourly rate will be $300 I would tell him figure out a way to differ payment, have employees contribute to their equipment but don't think for a second that I will pay more than the going rate which other Auto shop owners are able to work with and prosper. I would then get up and leave. Like I said if you can find suckers to pay these rates enjoy. Hopefully you will need the services of other similar minded business minded people and when you pay $300.00 an hour for parts,labor and all those extras you don't seem to mind I hope you remember your own words. In my opinion only a part of your operating expenses need to be passed on because your hourly rate should already include a profit margin with which you should be able to pay expenses and make money. Maybe some months either business wil be slow, or expenses will be higher than normal, to assume you will never encounter a loss by inflating prices does not seem to be a good business practice. Granted it will give you a much greater profit margin as long as you have foolish customers who do not shop around, but unless your customers are all playful childlike fairies who do not work hard,struggle to make ends meet while raising a family of their own I have a feeling you will run into trouble. Hey, maybe that $125 an hour figure thrown out earlier is just not making it anymore so another five would cover the rise in gasoline without breaking your customer. But $340? sick minded, guy's on fairy dust for sure.

        Comment


        • #94
          Re: Is $280 to $340 The Correct Hourly Price

          Originally posted by Frankiarmz View Post
          The plumbing fairly is being well compensated for the parts and labor, what the fairly is doing wrong in my opinion would be inflating prices far beyond parts and labor which are customary in many businesses and has includedall operating expenses. The cost of vehicles and maintenance are eventually covered throgh profit, or taken off as a loss through depreciation. To use this guys business model one could conclude that a business owner does not undergo a period of being in the red while building a business and wheter or not the business is run properly the customer will pay not only for labor and parts but abuse, misuse and wear and tear ofvehicles and equipment. Maybe you guys are able to be very vague when giving quotes or inflating rates, but when I contract for work in my home I want to know the price of parts, cost of machine use or rentals and materials and labor. If a contractor allued that I would be paying for some of the costs this guy used to reach his$340 an hour rate I wuold show him the door. Open your eyes to the other trades and services you use and honestly consider what they charge and how they approach their business. Auto Mechanics in my area charge roughly $90 an hour, if one of those business owners said to me this moth we are investing in a new fleet of tow trucks and cell phones for our employees so the hourly rate will be $300 I would tell him figure out a way to differ payment, have employees contribute to their equipment but don't think for a second that I will pay more than the going rate which other Auto shop owners are able to work with and prosper. I would then get up and leave. Like I said if you can find suckers to pay these rates enjoy. Hopefully you will need the services of other similar minded business minded people and when you pay $300.00 an hour for parts,labor and all those extras you don't seem to mind I hope you remember your own words. In my opinion only a part of your operating expenses need to be passed on because your hourly rate should already include a profit margin with which you should be able to pay expenses and make money. Maybe some months either business wil be slow, or expenses will be higher than normal, to assume you will never encounter a loss by inflating prices does not seem to be a good business practice. Granted it will give you a much greater profit margin as long as you have foolish customers who do not shop around, but unless your customers are all playful childlike fairies who do not work hard,struggle to make ends meet while raising a family of their own I have a feeling you will run into trouble. Hey, maybe that $125 an hour figure thrown out earlier is just not making it anymore so another five would cover the rise in gasoline without breaking your customer. But $340? sick minded, guy's on fairy dust for sure.
          You say he should build the profit into his hourly rate and take the expenses out of that. How would he know what to charge though unless he computes those expenses to get a fair profit. You say that $90 is fair for an auto mechanic, but they are going to have lower expenses than a service plumber. The customers come to them, so they can schedule as many jobs as they want without any down time. Also, your mechanic is probably ripping you off worse than the plumber. They get paid in "shop hours" which come out of a mystical book, and don't really correspond to how long the job takes. You could pay for 10 hours, but it took the guy 3.

          I'm not disagreeing with you about not paying $340 an hour, but your logic that the cost of the truck doesn't play into his costs to pass on is just not right. These fixed expenses are expenses that need to be covered, just because you don't see them in a bid explicitly doesn't mean they aren't there.

          Comment


          • #95
            Re: Is $280 to $340 The Correct Hourly Price

            Originally posted by ToUtahNow View Post
            Leonard,

            You and I have both been at this for better than 30-years. Since you have been so kind as to share your business model with us I thought I would offer you some free advice back to you.

            The first thing I would do is consider firing your entire crew and office staff and starting over with a crew and office staff which can give you better than 1000-hours per plumber per year. My shop was closer to 1900-hours per plumber per year but anything close to 1700-hours per plumber per year would be a start. Because your hourly rate is based on annual hours per plumber the additional hours per plumber will reduce your burden by at least 35%.

            Secondly you need to factor in the profit you make on materials. Using your numbers you have $1,760,000 in annual material sales. Assuming you have a modest makeup of 30% on materials you should be making north of $500,000 in profits just on your materials.

            The third item is your advertising. After 30-years of doing this your phones should be ringing on their own. $5,000 per month is entirely too much money to spend for advertising in an 8-man shop.

            The last thing for now, as I am on a lunch break and need to get back, is I would reconsider how much you are paying City Girl. I know she shares the same last name as you so she is likely a relative of some type. However, with her $11,000,000 in net worth and her 121 homes is it possible she is over qualified for her position?

            Mark
            I firmly believe this was the best post out of this entire thread. I don't doubt what Leonard needs to charge to make a profit, if he needs to charge 280-340 to make a profit then that's what he needs to charge. My thing is and I think we're dancing around the issue is why does he need to do so much advertising? This is the most troubling part with me. High advertising whether it's tv, radio, yellow pages, etc. implies bad work. Getting the money for the moment if you will. I'd like to think I'm from the school where you get a customer once and keep them for life through honest rates and work. By keeping a lower overhead you can pass the saving onto the customer and still come out ahead. Charging a high price to make ends meet isn't thinking for the future nor is it good business sense.
            Buy cheap, buy twice.

            Comment


            • #96
              Re: Is $280 to $340 The Correct Hourly Price

              The money spent towards advertising is curious to me as well. Leonard, you have been doing plumbing as long as I have been alive and so has my hubby (he robbed the cradle). Don't you have a large enough customer base by now to have enough work from repeat business and positive word of mouth from your current customers? The amount of advertising you are doing implies the answer to this is no. If your prices were fair to your customers and your work was great according to your customers, then why would you need to spend so much in advertising and having full time employees just to pass out fliers?
              I love my plumber

              "My Hero"

              Welcome, Phoebe Jacqueline!

              Comment


              • #97
                Re: Is $280 to $340 The Correct Hourly Price

                Originally posted by MrsSeatDown View Post
                why would you need to spend so much in advertising and having full time employees just to pass out fliers?
                To continue to grow and make a larger company. There is nothing wrong with getting your company name out there all the time no matter how many customers you have.

                Comment


                • #98
                  Re: Is $280 to $340 The Correct Hourly Price

                  Originally posted by mrs. westcoast View Post
                  To continue to grow and make a larger company. There is nothing wrong with getting your company name out there all the time no matter how many customers you have.
                  I am surprised you are defending him since you originally posted that he ripped off your friend/neighbor. When a company has been in business as long as his it should speak for itself at a certain point. His name should be out there from his large customer base that are happy with his prices and services.

                  I can't find that post anymore. I guess you deleted that now
                  I love my plumber

                  "My Hero"

                  Welcome, Phoebe Jacqueline!

                  Comment


                  • #99
                    Re: Is $280 to $340 The Correct Hourly Price

                    Originally posted by MrsSeatDown View Post
                    I am surprised you are defending him since you originally posted that he ripped off your friend/neighbor. When a company has been in business as long as his it should speak for itself at a certain point. His name should be out there from his large customer base that are happy with his prices and services.

                    I can't find that post anymore. I guess you deleted that now
                    Ripping off one of rob's customers neighbor is what we will be discusing tonight. I'm not hiding anything Joey.

                    And i didn't delete that now, I deleted it few days ago before Robert decided to meet with him.There is 2 sides of every story.

                    If you have a problem with that let me know.

                    What he charges is up to him and his customers and reflects in his reputation.

                    Comment


                    • Re: Is $280 to $340 The Correct Hourly Price

                      no takers on my bet about going on and on and on
                      Charlie

                      My seek the peek fundraiser page
                      http://observatory.mountwashington.o...nal&fr_id=1040


                      http://www.mountwashington.org/weather/conditions.php

                      new work pictures 12/09
                      http://public.fotki.com/hvachawk/

                      Comment


                      • Re: Sucks being at the top don't it?

                        Dunbar gets my vote as the best post in this thread so far....stay tuned

                        Originally posted by DUNBAR View Post
                        Here is what I'm gathering from all this rhetoric, and I thought I was the only one that could type out brittanica's latest edition of dictionaries in print.



                        From a realistic view, you've logged in hours trying to push a strategy, defend that strategy, now you're hostile to protect your name and on top of all this, disclosing your most extreme personal life by mentioning kids, what colleges they went to, your full name for those who would really give a flying **** whether you're important or just another barrage of pixels on the screen.


                        Someone obviously touched a nerve with you in something said, of course I'm not going to read it all. I've come to realize in life that if something is true, it usually carries a adverse reaction by defending endlessly, down to the name calling and accusatory statements to belittle and scold to place on a higher level.

                        If it isn't true, why are you so dead set on proving otherwise? I'm well liked in the world of internet, I"m also well hated in the same stroke and I don't lose one wink of sleep as a result. I'm a stand alone thinker and one moment I'm in unison with your thinking and the next minute I'm a polar opposite. If you don't like that then tough ****. I don't care.


                        All I'm getting out of your agenda here is you are "for some reason" wanting to lay out everything and anything about you to either build a faulting ego or comprise some sympathy from the masses that you are the "best" in your pointed view.


                        There's nothing wrong with drive and direction, but you are someone that claims to be at the top....showing a truely ugly side that nothing will ever be enough to satisfy your current position, otherwise you'd be spending time focusing on more pertinent matters.


                        Enough about you,

                        I got my own problems to deal with, I just thought the momento of my thinking was justified since you whopper-jawed my thread topic about how employees are useless. I still haven't changed my mind on that topic as I watched a good businessman slam his phone on his desk when he found out 3 of 11 employees weren't showing up today....the guy is slammed with work.

                        No writing on the wall changes insubordination or the "typical" american worker that has figured out a way to build every excuse not to work because they've accustomed to knowing that their job is a job, no personal commitment as there is so many out there to choose from. Don't try to lecture me on hiring professions because I'm better than that, I'm not going to play that game because I'm better off in the long run, truly by manning this show without, instead of with. You'll read every word I printed so comprise your rebuttal and expect no response from me; I'm not playing the game anymore.

                        Comment


                        • Re: Is $280 to $340 The Correct Hourly Price

                          Originally posted by mrs. westcoast View Post
                          Ripping off one of rob's customers neighbor is what we will be discusing tonight. I'm not hiding anything Joey.

                          And i didn't delete that now, I deleted it few days ago before Robert decided to meet with him.There is 2 sides of every story.

                          If you have a problem with that let me know.

                          What he charges is up to him and his customers and reflects in his reputation.
                          I did not mean now literally. Whatever. I just found it curious that it was gone at this point in time.

                          My point was that what he charges is in direct correlation with his need to heavily advertise.

                          Rick and Adam have a meeting set up with him too. Have fun tonight.
                          I love my plumber

                          "My Hero"

                          Welcome, Phoebe Jacqueline!

                          Comment


                          • Re: Is $280 to $340 The Correct Hourly Price

                            Originally posted by HVAC HAWK View Post
                            no takers on my bet about going on and on and on
                            Nope. It's a sucker bet
                            I love my plumber

                            "My Hero"

                            Welcome, Phoebe Jacqueline!

                            Comment


                            • Re: Is $280 to $340 The Correct Hourly Price

                              So how is a plumber supposed to calculate his hourly rate Frankiarmz? I'll tell you. You calculate the annual business expense overhead, and then divide that by the average number of hours billed in a full work-year.

                              If you don't do that, then how is one supposed to run the business? Lets just say for example (these numbers are for example only!)
                              that I decided to charge $50/hour because that 'seemed fair' and I billed out 6 hours/day to do service. Thats is a gross income of $300/day or $1500/week.
                              So I get my $1500 at the end of the week and I decide to pay my bills to seewhat kind of money I can afford to pay myself as a salary.
                              Now at the end of the week I have to pay for vehicle maintenance and upkeep on the company owned work truck, lets say $100,
                              I have to pay for fuel for the week: $200,
                              if I have a $800/month advertising bill in yellowpages, psotcards, internet, whatever, thats about $200/week.
                              If my insurance premium is $1200/year, then its about $25/week.
                              Phone service: $50/week.
                              Secretary/dispatcher/book-keeper: $600/week in total payroll.
                              Tool maintenance and replacement: $40/week.
                              Office supplies and misc. expenses: $10/week.

                              Remember these numbers are purely for example only. But anyway I end up paying out $1225 in business bills that week, and then I take my leftover $275 dollars and I pay the taxman and I am left with $225 in total income and zero business profit.
                              Obviously in the above example, the $50/hour rate isn't enough. So how do I decide what is enough??? By asking the other plumbers what they charge? By asking my customers what they think is fair? NO, I figure out all my business expenses down to the last penny, calculate in a fair salary and profit margin and thats EXACTLY WHAT EVERY BUSINESS OWNER SHOULD BE DOING.
                              Every time you buy a Ridgid tool, a portion of that money goes towards changing the light-bulbs in their sales offices....that how business works, DUH!
                              Last edited by Service Guy; 07-08-2008, 04:44 PM.
                              Water Heater Reviews & Water Heater Information

                              Comment


                              • Re: Is $280 to $340 The Correct Hourly Price

                                Originally posted by MrsSeatDown View Post
                                Nope. It's a sucker bet
                                thats me
                                Charlie

                                My seek the peek fundraiser page
                                http://observatory.mountwashington.o...nal&fr_id=1040


                                http://www.mountwashington.org/weather/conditions.php

                                new work pictures 12/09
                                http://public.fotki.com/hvachawk/

                                Comment

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