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How to bill T&M ?

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  • #61
    Re: How to bill T&M ?

    I dont I just think i may want to try out t&m and see if it would work for me. I just get tired of hearing a the cry about not being told the price and trying to get my work done in some made up time when i hear older plumbers say flat rate no way you never know what you are going to get in to,and if it work in the past why can't it work today? I would also like to know what you guys had to do when starting your companys? ie how much ads , direct mail, new work does not really seam like an option these days .

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    • #62
      Re: How to bill T&M ?

      [QUOTE=Some Day Plumbing;233399]
      Originally posted by SewerRatz View Post
      What I got from your example is that you would charge about $83.00 an our since you said you have to drag out the job to 1 ½ hours if you build T&M but you would flat rate it at $125.00 This tells me you need to raise your hourly rates. Same example If the job only took me 20 minutes I would be getting $140.00 that is a $60 service call and $80.00 per half hour. Not to different than your flat rate of $125, and I still did the job in 20 minutes.


      So at what point do you tell the customer that you are charging them $160.00 per hour.
      They know our pricing upfront.
      Ron Hasil Lic #058-160417
      Ron's Facebook
      A-Archer Sewer & Plumbing specializing in:
      Tankless Water Heaters | Drain and Sewer Cleaning
      Sump and Ejector Pumps | Backflow RPZ Testing

      Comment


      • #63
        Re: How to bill T&M ?

        Originally posted by Clipper City Plumber View Post
        I dont I just think i may want to try out t&m and see if it would work for me. I just get tired of hearing a the cry about not being told the price and trying to get my work done in some made up time when i hear older plumbers say flat rate no way you never know what you are going to get in to,and if it work in the past why can't it work today? I would also like to know what you guys had to do when starting your companys? ie how much ads , direct mail, new work does not really seam like an option these days .
        You should name your company 1111AAAAAAAAA Plumbing to get the first page in the yellow pages. Sheesh

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        • #64
          Re: How to bill T&M ?

          for the flat rate plumbers.

          how do you bill for installation only on a customers products assuming it's an hours worth of work?

          is every hours task a different figure supplying labor only?

          there has to be a cost associated with an hours worth of labor.

          the reason i ask is because there is nothing left to absorb except the labor charge.

          an hours worth of labor has a cost associated with it. what do you tell the customer who needs an hours worth of work?

          rick.
          phoebe it is

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          • #65
            Re: How to bill T&M ?

            ok, lets make it real simple.

            customer needs you to clean aerators, shower heads, tighten toilet seats.

            wants to hire you for an hour.

            you have to disclose an hours worth of labor only. no parts.

            don't tell me cleaning out aerators are in the book

            rick.
            phoebe it is

            Comment


            • #66
              Re: How to bill T&M ?

              I tell them $95.....If they ask for hourly.
              Unfortunately they ask "How much will it cost?"
              So it should be easier for me to give flat price.I have not established my prices yet and am uncomfortable because I am unpracticed at communicating flat rate principles to the customer.

              I bid construction projects.I don't ever get the plush A$$ dragging T+M jobs.I underbid and still make an incredible profit when my proposal is accepted.So I'm used to busting butt and getting paid for it.

              I have worked on/with endless amounts of hourly gigs.I can't stand the pace.I'm not there for friends and entertainment.I enjoy a fast,efficient groove.I could care less about the homeowners nephew's english score(yes I'm polite).
              I feel that I'm going to be in and out a lot faster than an hourly guy because that's my personality.Why do I have to take it in the shorts cause he's so slow,inefficient,unorganized or inexperienced.

              Hourly companies leave out the fact that there is a travel charge.
              That puts them at $145.00 for the first hour which as we know is minimum charge.
              How many jobs are less than an hour?sure we ask if there is anything more we can do inside that hour.Usually they want to get back to their day.
              They also neglect to state equipment rental.
              Oh,and sometimes the lucky homeowner draws the long straw and gets the kid.

              I am a one man show.I have to answer my cell phone...A lot.How or who tells this to a new customer before they show.I've heard others complain of having their shoulder being looked over.

              If you have a customer base,all your assets and ready to retire this conversation has a totaly different meaning as it would somebody starting his business in this economy.

              Again,all these established companies grew out of an economy that was Puking money.

              Sorry guys and gals.This is a tough one for me.I had to get it all out at once.



              P.S.
              Who knows,
              It may not work here.
              Last edited by drtyhands; 06-02-2009, 11:32 AM. Reason: Post Script

              Comment


              • #67
                Re: How to bill T&M ?

                Originally posted by PLUMBER RICK View Post
                ok, lets make it real simple.

                customer needs you to clean aerators, shower heads, tighten toilet seats.

                wants to hire you for an hour.

                you have to disclose an hours worth of labor only. no parts.

                don't tell me cleaning out aerators are in the book

                rick.
                You don't need a book to quote a job. I would look at what they want and if it isn't in the book, then I give them a price based on what needed to be done. I would say, "I can do all this work for you for $X. Wether it takes me an hour or not is irrelevant, I will do the service for $x no matter how long it takes. That is flatrate.

                T&M figures the total AFTER job is complete. FR figures the job before the job is complete. A simple word for it is: CONTRACTING. It can be a verbal contract or a written contract. Customer and contractor agree on the job, terms and price BEFORE work starts.
                Water Heater Reviews & Water Heater Information

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                • #68
                  Re: How to bill T&M ?

                  theres always the estimate too. its what you "Think" the job will run, But. at the end of the job it could run over "OR" under.

                  Comment


                  • #69
                    Re: How to bill T&M ?

                    I do both. Flat rate for pumping. 500 gallon tank is x, 1000 gal. is y. Labor, cable machine, jetter, locator all have their own price per hour. My price per hour includes the man to do the job (labor) so the labor clock stops when the jetting clock starts. I will give the customer an idea of what normally takes place and how much time will be spent per task therefore they have an idea of the total cost.

                    I don't dilly dally when I'm working either. When I'm on the clock, I bust my ***. I don't want to be there all day, I want to get to the next job or go back to the office to work on something else. Most of all I don't want my customer to think that I'm milking it. I rely on them to bring me more work either through word of mouth or repeat business, why would I take the chance on pissing them off?

                    Yes I do charge a minimum charge, but that's only fair. I do not charge travel time in my normal service area. I don't normaly travel out of my normal service area and if I do the customer knows up front that they are paying me x to travel to their location. I try to get them to use someone local in order for them to save money. In fact I turned one down today for that reason.
                    www.ClinkscalesSeptic.com

                    Comment


                    • #70
                      Re: How to bill T&M ?

                      Flat rate is fun.

                      Rick, I don't flat rate cleaning aerators. I don't flat rate tightening toilet seats. Those are the things I normally do for free while I'm there for something else.

                      Seems like if you give someone your hourly rate, their next question is, "How long will it take?" So, you're flat-rating whether you want to or not. And you'll always shoot yourself in the foot because the book is smarter than you are. If my book turns out to be wrong, I fix the book.

                      For the poster who said that they will give a flat rate price but then rebate money if it was easier than they thought it would be, do you get more money if it takes longer? That isn't flat rate. Sounds like you always find in favor of the customer.

                      I do have charges for minor services - a show-up fee in the event that they don't need me when I get there; a minor tech fee if I do something simple, such as an aerator change or a toilet float adjustment; a regular tech service if I do something more elaborate, and that adds up to about an hour.

                      If I have to fix something in a crawl space, I add for access. It takes longer. There's a charge for that.

                      If I'm installing a customer-supplied fixture, I have a task for that - but basically, put it together this way:

                      For a kitchen sink, figure the time it normally takes, figure out what you need per hour based on your overhead, wage, profit, etc. Figure out what items you use - strainers, tubular, whatever. Add it all together. Now, add your markup for a sink. Put all those together and you have a flat-rate kitchen sink price. Your work may vary depending on whatever you run into, such as a drain in the wrong place or something else, but basically, it's not going to be that different. So, on one job you make a few bucks more than another. On another job, you make a little less. But the difference is minimal.

                      Most T&M people depend upon their material markups to supplement their hourly rate. But when you are replacing faucet washers, you are then losing money - you cannot afford to operate without the material markup.

                      Earlier in the thread, there was mention of a water heater installed for three hours of labor - 270. I usually think that a water heater takes about three hours, too. And the fifty percent markup mentioned in that post then becomes the difference in labor - it's going to be a hefty amount of money. For example, I think my last water heater cost me about $360. With a 50% markup, that becomes $540. Add the $270 and you get $810.

                      That's a bit lower than my service contract price, but then I have discounts for main floor, no-haul, easy access, already drained. The average price that I charge therefore isn't really different. But if that customer had called me and asked my hourly rate, and I said it was $90, but was actually making $150 per hour with the markup added in, how honest is that? (difference between $360 and $540 plus $270 divided by 3)

                      Hourly rate can be tinkered with so many different ways and the fly-by-night shops are going to have the lowest hourly rate but the largest bill at the end of the job. Up-front pricing is the price the customer is going to pay for the work they request. Hourly is whatever the company wants to define - for example, it was a standard practice with many shops to have a "service call" and an hour, or double the hourly rate for the first hour. Some companies charge travel from shop to job. Some companies add a surcharge for solder or flux or pipe dope. Some companies mis-add on a regular basis and will apologize if the customer notices. Some companies will give a lowball rate to get a customer's business and then raise it later, once they've beat out the other companies in town.

                      Just because flat rate seems high (and sometimes it is), doesn't mean that the bill for T&M will be less. And some companies use the cheapest junk they can find and we've already seen that some companies, such as franchises, will teach their techs to lie to replace a line that just needed cleaned.

                      When the box stores moved into my area, people started buying their own materials. They'd hand me a Chinese toilet and tell me that they wanted it installed. They refused to pay a markup on a toilet they supplied. Depending on material markup was business death. With flat rate, I give them a single price out of the book that has that markup built in and I get far fewer arguments.

                      So somebody doesn't want pickles on their hamburger. Do you sell the hamburger for less? If they want cream for their coffee, do you charge more? No, you sell it for the average and if you have to depend on that small percentage to make it, you aren't doing it right.

                      Comment


                      • #71
                        Re: How to bill T&M ?

                        Originally posted by Herk View Post
                        Flat rate is fun.


                        So somebody doesn't want pickles on their hamburger. Do you sell the hamburger for less? If they want cream for their coffee, do you charge more? No, you sell it for the average and if you have to depend on that small percentage to make it, you aren't doing it right.
                        Let me tell you it pisses me off when I buy a value meal with a milk shake and they don't discount the price of the soda that I would have normally gotten. I'll take the soda and and the shake thank you! Most people don't notice this and so the burger joint makes a couple extra bucks. I don't think it's fair practice.
                        www.ClinkscalesSeptic.com

                        Comment


                        • #72
                          Re: How to bill T&M ?

                          Herk is smart.

                          Nice, clear explanation there about service contracting.
                          Water Heater Reviews & Water Heater Information

                          Comment


                          • #73
                            Re: How to bill T&M ?

                            Well then. I guess we're all a bunch of crooks.

                            Comment


                            • #74
                              Re: How to bill T&M ?

                              Originally posted by lmpg View Post
                              Well then. I guess we're all a bunch of crooks.


                              You can't please the world, it's all about fairness but at the same time making a profit. we are in this trade to make a profit, build a company, support the trade, not weaken the trade or lower the market value of the trade.
                              Last edited by westcoastplumber; 06-03-2009, 09:19 PM.
                              sigpic

                              Robert

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                              • #75
                                Re: How to bill T&M ?

                                Originally posted by drtyhands View Post
                                I tell them $95.....If they ask for hourly.
                                Unfortunately they ask "How much will it cost?"
                                So it should be easier for me to give flat price.I have not established my prices yet and am uncomfortable because I am unpracticed at communicating flat rate principles to the customer.

                                I bid construction projects.I don't ever get the plush A$$ dragging T+M jobs.I underbid and still make an incredible profit when my proposal is accepted.So I'm used to busting butt and getting paid for it.

                                I have worked on/with endless amounts of hourly gigs.I can't stand the pace.I'm not there for friends and entertainment.I enjoy a fast,efficient groove.I could care less about the homeowners nephew's english score(yes I'm polite).
                                I feel that I'm going to be in and out a lot faster than an hourly guy because that's my personality.Why do I have to take it in the shorts cause he's so slow,inefficient,unorganized or inexperienced.

                                Hourly companies leave out the fact that there is a travel charge.
                                That puts them at $145.00 for the first hour which as we know is minimum charge.
                                How many jobs are less than an hour?sure we ask if there is anything more we can do inside that hour.Usually they want to get back to their day.
                                They also neglect to state equipment rental.
                                Oh,and sometimes the lucky homeowner draws the long straw and gets the kid.

                                I am a one man show.I have to answer my cell phone...A lot.How or who tells this to a new customer before they show.I've heard others complain of having their shoulder being looked over.

                                If you have a customer base,all your assets and ready to retire this conversation has a totaly different meaning as it would somebody starting his business in this economy.

                                Again,all these established companies grew out of an economy that was Puking money.

                                Sorry guys and gals.This is a tough one for me.I had to get it all out at once.



                                P.S.
                                Who knows,
                                It may not work here.


                                WOW, Adam, that must have taken along time to type out?
                                sigpic

                                Robert

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