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  • #16
    Re: Starting to have doubts about T&M

    Originally posted by Clipper City Plumber View Post
    And if you give them a estimate and they want that for free by the way . Then they just take it to HD or Lowes and see how much they can save and you might as well just work for Lowes or HD
    You're going to get that, and there is nothing you can do to stop that. I'm all for the customer buying their own materials (ie: Faucets-toilets-water heaters) as that is something I don't have to stand behind.

    For example if a customer went and bought a Home Depot water heater, and something goes wrong with the unit itself...that's on them to make the phone calls, and run around like a nut...not me.

    Now I know you work for one of the Home centers, but I find that most in my area regret dealing with the home centers, when it comes time to standing behind their work.

    I charge for written estimates, because I don't play the game of them taking my estimate and showing it to another contractor. If I get the job, I credit them the money from the estimate towards the job.

    Verbal estimates are free!

    When you explain that to people 9 times out of 10 you will call their bluff.

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    • #17
      Re: Starting to have doubts about T&M

      What is "hoa" ? Every call I get is " yea I need to get an estimate to fix a leak " or you fill in the blank . I tell them what they need is a service call not an estimate and I give them the rate and they get turned off . Not all of them but too many. I have gotten one referral and this guy wants every thing flat rated and he was from a hourly customer . I did get another but never heard back I called him he told me he was still researching prices .

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      • #18
        Re: Starting to have doubts about T&M

        Too many free estimates going on around down here for that. They will just move on to the next guy.

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        • #19
          Re: Starting to have doubts about T&M

          Originally posted by Clipper City Plumber View Post
          Too many free estimates going around down here for that. They will just more on.
          Like I said..verbal estimates are free.

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          • #20
            Re: Starting to have doubts about T&M

            With time you will get better identifying a tire kicker. Then give them double your normal quote.

            Try not to get too torn up about losing these tire kickers. Easy to say when you're not busy, I know. But they will keep you starving your whole career too.


            J.C.

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            • #21
              Re: Starting to have doubts about T&M

              But then how professional is it with no written estimate . I just always thought that at least I gave them some thing that lays every thing out and if you are going to drive across Baltimore or an hour down to Annapolis you better leave some thing or they may forget about you right?

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              • #22
                Re: Starting to have doubts about T&M

                Originally posted by Clipper City Plumber View Post
                Flat rate at $80 per hour . The other shops out here are charging $130 to $250 per hour at a flat rate. And charging more time than necessary and taking on 110% for material . I am thinking what I need is a minimum hour block . instead of driving for an hour waiting 15 min. for a customer to get home change out a pilot assembly for P.V. in 40 min and only get $99.40 is going to really work. I guess the bigger problem may be getting the work if I did six of these I d be ok with it.
                IMO...there are 2 types of flat rates.

                Type 1 - Those that give a high hourly flat rate to cover their costs.

                Type 2 - Those that give a price to do the job or jobs around the house.


                If I was charging $150 to rebuild a toilet (Ball cock and flapper) and there are 2 toilets to do, I'm not charging $150 per toilet. I'll charge $150 for the first toilet and half for the second because I'm already there.

                Most businesses charge list or 100% mark up on materials...nothing wrong with it. You're selling an item, so you're entitled to make a profit on it.

                For our loyal customers...we don't do it.

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                • #23
                  Re: Starting to have doubts about T&M

                  Yea I am starting to think the whole " I need an estimate " things is a tell. But am thinking if I flat rate every little dam thing maybe I can pull some of that work just hate slaving it away for Lowes . And if I flat rate it at $80 or even $110 I will still be under what these big guys are charging .

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                  • #24
                    Re: Starting to have doubts about T&M

                    problem is you're dealing with the public that is starting to thing getting a price up front is a way of saving money.

                    if you get customers that trust you, then they will trust you to get the job done for the price that it comes out to at the end of the job.

                    of course i know the time and material cost for 90% of what i go out to do. so i can easily estimate the cost plus or minus 10%.

                    drain cleaning a main is 1 hour min. so for the most part, it's a set first hour rate. but i do break it down on the bill with the s/c machine and hour of labor.

                    hoa is home owners association. basically a condo or town house complex.

                    get established customers and you'll be able to land the jobs without all the smoke and mirrors behind a flat rate book.

                    what happens when a customers pays you a lot of money and you finish in less than an hour with little material outlay. they're going to feel like this guy just charged me $200 for a 1/2hr. of work. all of a sudden that $80.00 an hour doesn't sound so bad after all

                    i have yet to see a flat rate job come in less than my hourly total. that's how they found me in the first place. they thought they were getting taken and they asked their friends for a referral.

                    rick.
                    phoebe it is

                    Comment


                    • #25
                      Re: Starting to have doubts about T&M

                      Originally posted by Clipper City Plumber View Post
                      But then how professional is it with no written estimate . I just always thought that at least I gave them some thing that lays every thing out and if you are going to drive across Baltimore or an hour down to Annapolis you better leave some thing or they may forget about you right?
                      I could name just about any Profession that Professionals work in, that give free "verbal" estimates.

                      I'm not trying to be a smart *** or anything, but why in the world would you give a written estimate to repair a toilet, or fix a leaky faucet? You're wasting invoices my man!

                      Leave the written estimates for the big jobs like heaters, boilers, additions...etc.

                      But hey..maybe that's how they do things in your neck of the woods. Up here...it's rare for me to see anybody doing written estimates for service work.

                      Within time, you will learn who is wasting your time and who is not. We all went through it..and I still go through it.

                      Comment


                      • #26
                        Re: Starting to have doubts about T&M

                        That is what worries me is lack of " profit" I know I am not the U.S. Treasure here and cant just print money and have to get this thing cracking. I think it is a perception with these people. I have really never worked this area never worked in the ghetto till I started my company . And have no choice all the people and areas I thought I would be in I am not and have been trying ever since to get in . I know for a fact that if the old customers that I used to work for knew the could get me at a what 200% discount I would have no problem getting $600 a day in work. But it is like impossible to get work in those areas.

                        Comment


                        • #27
                          Re: Starting to have doubts about T&M

                          it takes time to get established. sooner or later you will either make it or break it

                          rome was not built in a day and neither is a company.

                          pay your dues and get a good reputation. try to network with others in the area of your choice. doesn't take long for a good reputation to get you noticed.

                          rick.
                          phoebe it is

                          Comment


                          • #28
                            Re: Starting to have doubts about T&M

                            Originally posted by Clipper City Plumber View Post
                            I have really never worked this area never worked in the ghetto till I started my company .


                            Consider your earnings to be lower in these areas as a guarantee, and only volume in work will boost the top number.


                            If you have that many people asking for estimates for even the simplest tasks, you're struggling with something out of your control, and it will affect your bottom line with the issue of those employing you.


                            It's certainly a tough situation, no doubt.
                            Northern Kentucky Plumbers Twitter Feed | Plumbing Videos

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                            • #29
                              Re: Starting to have doubts about T&M

                              Originally posted by PLUMBER RICK View Post
                              what happens when a customers pays you a lot of money and you finish in less than an hour with little material outlay. they're going to feel like this guy just charged me $200 for a 1/2hr. of work. all of a sudden that $80.00 an hour doesn't sound so bad after all

                              i have yet to see a flat rate job come in less than my hourly total. that's how they found me in the first place. they thought they were getting taken and they asked their friends for a referral.

                              rick.
                              What happens when that 1/2 hour easy job turns into 4 hours?

                              T&M = Customer takes the risk

                              Flat rate = We take the risk.

                              Customers don't like the "unknown" when it comes to pricing.

                              So according to your theory..if you messed around with a Kohler shower valve repair for 4 hours at $80 an hour, that's $320.00 + material . If you have a different hourly charge for what I just said, then you are using a form of flat rate pricing.

                              Smoke and mirrors would be the unknown cost of something compared to knowing the price upfront.

                              If McDonalds charged you a $1.00 for a hamburger for lunch, and at dinner time you paid $1.90 for a Hamburger at Burger King, was that smoke and mirrors of flat rate pricing? Were you ripped off?

                              If you want a legitimate complaint about flat rate pricing...look no further than the real estate industry. I will agree with you there!!

                              If 6% of the price of the home is the going rate, and you sell your home for $400,000, that's $24,000 you gave to someone who filled out paper work and listed your home for you. Now imagine if your home sold in 3 days! lol

                              Like I said in another thread, we have done both T&M and Flat Rate. Back when my father started out in business, I think T&M was perfect for it's time, as that's all everyone pretty much did back then.

                              IMO, with the cost of living and the cost of running a business, it's extremely hard to do T&M.

                              But you also have to remember that everyone's costs are different.
                              Last edited by Flux; 10-29-2010, 02:35 AM.

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                              • #30
                                Re: Starting to have doubts about T&M

                                flux, i would think that after 35 years of plumbing, there's not too many surprises that will go from a 1/2 hour job to a 4 hour job.

                                tell me what happens when you need to figure out a job before you can truly give an estimate. some jobs need time to investigate. what happens when they ask you for your hourly rate?

                                i can guarantee you that a management company that knows what's up, will not agree on flat rate. a bid yes, but not a book generated price. and that would apply for a large install. the nickel and dime jobs are not flat rate.

                                a competitive bid is not flat rate, but rather an educated take off of the time and material to complete a project. an extra is time and material at the pre determined hourly rate.

                                i work at 1 of the ritziest buildings in santa monica for 15 years. in 15 years when i'm not available the on-site manager always questions the other companies bills. with me, there is never a question when i present the bill. i get paid by the hour. there are seldom estimates unless the job is over a thousand. there is no way they would ever pay by the task. especially the nickle and dime jobs. your time has got to be worth a certain hourly fee.

                                but then again i see more flat rate companies with trucks just sitting in their yards waiting for the phone to ring. in fact one of the largest ones in los angeles is just 4 doors from my shop. they just recently changed their company name to get a new image and new unsuspecting customers.

                                maybe i'm just swayed due to all the flat rate proposals i've come across over the years that were way out of line.

                                if i switched over to flat rate i would honestly have to start looking for new customers.

                                rick.
                                phoebe it is

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