Question: with 52 weeks in a year and a 40-hour work week, a company might typically pay each full-time employee for 2,080 hours. However not all of those 2,080 hrs an employee gets paid for are “productive” for the company. 5 days or 40 hours might be paid vacation and there are probably another 5 days or 40 hours of paid holidays. There are also things like company meetings and while we really always try to manage our projects so that it doesn’t happen sometimes our employees are just standing around waiting for the truck to deliver cabinets or lumber.
Anyway what I’m wondering is what do other contractors out the find is the real ratio of billable hours to non-billable hours that employees work. I heard guys mention figures from a low of 5% non-billable time up to one contractor I know who uses 25% (2000 hrs worked to 1500 actual billable time).
I’m sure the ratios vary based on the kind of contractor you are and the type of work you do but I was wondering what some of the people here have found.
Replies
Not counting 'research' time spent here?
All of my people's time is billed out.
my own tho - on a large job, I will spend about three hours a day in management and sales. This increases the smaller the jobs are. I've been scattered over four jobs for the past two weeks and my own billable hours are less than half the time I spent working, and this is on jobs already sold during the summer.
Excellence is its own reward!
Piffen- "All of my people's time is billed out." All of it? Then you're telling me you don't give any employees paid holidays or paid vacation? Even if an employer does all his or her projects T&M I don't think any client is ever going to accept you handing them a bill for 40 hours to cover the cost of an employee who took his or her vaction during that client's project schedule or even 8 hours for a paid holiday.
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I may not count with only an employee and a half (guy only wears pants, no shirt). I calculate what our costs plus profit and overhead wiil be then pick a number that I feel we will be able to bill the employees time out and and divide it and that is my rate for the year. So effectivly as long as we work my low number (typically 1700 hours) we make the 2080 number of OH and profit. Anything above that is gravy. In my mind this method keeps me from having to worry about it except at the beginning of the year when I set the number. DanT
DanT actully you count more than you might think. Contractors with "only an employee and a half" represent a huge percentage of the total number of contractor businesses.
"So effectivly as long as we work my low number (typically 1700 hours) we make the 2080 number of OH and profit. Anything above that is gravy." That's good, real good, but unfortunatly so many contractors don't think like that at all. I am shocked and surprised at just how many figure based on 2080:2080 ratio. I always knew there were a lot but recently I've discovered there are a lot more of them than I ever imagined. I was working on this last night
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It's that last line I was thinking about and considering when making that post last evening. In Willam Mitchells book Contractor's Survival Manual there a chart he has called the Time Waster Chart.
Amout of Time Wasted on Non-Productive Activites
Number of Employees Loss In Hours)
1
2
5
1
Coffee Break
.25
.25
.50
1.25
2
Rest Room Trips
.25
.50
1
2.5
3
Slow Xeroxing
.25
.75
1.5
3.75
4
Slow Worker
.50
1.25
2.5
6.25
5
Long Lunch
.50
1.75
3.5
8.75
6
Excess travel
.50
2.25
4.5
11.25
7
General Gossiping
.25
2.5
5
12.5
8
Mistakes
.50
3
6
15
The number he uses may be arguable but I think it still points out a lot of lost time we need to account for. As I mentioned in my first post "while we really always try to manage our projects so that it doesn't happen sometimes our employees are just standing around waiting for the truck to deliver cabinets or lumber." Let face it that really happens and happens a lot more often than we ever seem to be aware of. What about times like waiting for a building inspector to come and make his approvals so that you can start sheet rocking. What about those unexpected trips to the lumber yard when a trade person runs out for screws that they thought they had enough of? (A $3.25 box of screws can really easily end up costing $75 in that circumstance. We are all a lot more inefficient than we think we are.
1700 hrs:2080 hrs works out to 18% non-productive on un-billable time which I think falls in the pretty good safe ratio range. Obviously the higher that percentage is the safer it is but that also raises your Prices putting more pressure on a contractor's sales skills, marketing, and branding efforts.
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That's right. I have never in my life had a paid holiday and have never paid for one..
Excellence is its own reward!
Well I offer paid holidays to employees after the probation period but don't pay myself for them I guess. One interesting story I have is that way back when I just got out of college I had a client who begged and bribed me to work one Labor Day for him since he couldn't find anyone who would work on his store to get it ready for a scheduled opening that coming week and ever since then there hasn't been a single Labor Day where I personally haven't worked.
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There are probably a couple reasons for my condition.
When a roofing sub, My work was very seasonal so any help I hired in spring were well trained by winter when they went south or back to school or just plain laid off. nobody ewver became permanent enough for benefits.
When I started this remodeling outfit, I focused more on using subs instead of employees. On major sized jobs, I would hire extra help, but then not sell ahead enough to keep them busy year round.
Starting to change my thinking as I see past management mistakes and anticipate need for full timers.
edit add - here's another thing I was just thinkiing of, I have mostly lived in vacation areas so when you make hay while...the demand perks up when the people are there at the homesite. That keeps me working on the official holidays. I charge extra when I can for those deadline deals too and take off when it suits me later in the year.
Back to the subject, Yoiu still have a higher waste /unbilable time whenever the jobs are smaller - as in the case of Brownbaggs comments. I try to stck up smnall handyman and repair jobs for all in one day. Sometimes, with the two hour minimum that way, I end up with thirteen or fourteen hours billed in a nine hour day. When i have to pull off a job to take care of a small call, I can end up with working thirteen hours and billing for eleven for some strange reason.
.
Excellence is its own reward!
Edited 11/16/2003 5:51:55 PM ET by piffin
My practice as a consultant is to ask "would I be doing this (filling out an expense report, doing a time sheet, filing a report) if the client hadn't spilled a toxic waste"?
Some stuff is overhead for sure, OSHA required training, company meetings, sick, holiday, vacation.
Training is tricky. An all day seminar is pretty obvious. But on the job training hit the client's bill. And the client benefits from all the previous on the job training.
Thanks David, You're correct about "Training is tricky. An all day seminar is pretty obvious. But on the job training hit the client's bill. And the client benefits from all the previous on the job training." I like to think of every day and every hour as on the job training (or improvement) but amongst some of the ancillary things I thought I might find out about by asking my question were:
does anyone spend any real time on training and...
how do they account (recover) for it.
This training aspect kinda has a link in it somewhere to
davidmeiland's excellent topic of Fixing mistakes, T&M vs. fixed price which I read through yesterday.
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jerrald... i'm not at the office , but i'm pretty sure i've figured 1600 hours based on 2000 available..
some of the 400 hour difference gets rolled into "labor burden".... which i raised last year from 47% to 50%
Mike Smith Rhode Island : Design / Build / Repair / Restore
Mike Smith- "jerrald... i'm not at the office , but i'm pretty sure i've figured 1600 hours based on 2000 available.." That does sound pretty familiar to me Mike. I know you and I have thrown this concept around before and I searched for it but couldn't find it before I made my initial post last night. You don't by any chance remember what is was we were all talking about when that came up do you?
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i think we were talking about calculating labor burden:
that is where i account for my field labor non-billable... i've been using 2 line items in my column
1st is 5 days of downtime ( training, shopwork, non-billable)
52 weeks x 5days /week = 260 possible workdays less 8 holidays = 252 possible work days, so ..
5 days downtime / 252 possible days = 0.198 (0.02)..
I carry the same % for "warranty work" (0.02)
BOTH numbers are somewhat arbitrary but better than nothing
i also fold in some clerical payroll administration labor / field labor payroll.. which amounts to 0.056
and 1 hour of my time (252 hours ) / total possible field hours , in this case
0.063
when i add the percentages for Fed, State, WC, & GL i wind up with my labor burden of 0.49 which spoils the hell out of a $50 bill so i use 0.50 for labor burdenMike Smith Rhode Island : Design / Build / Repair / Restore
we work on a two hour minimum charge, portal to portal. so if I hit one job and it takes 45 minutes. it will be charge as two hours plus travel. So the best I can do in one eight hour day is cover eight jobs and bill sixteen hours (but that really is impossible) so the minimum covers the non billable time. We also do not get lunch or morning/ afternoon breaks. It is basically covered in the travel from job to job, grab a burger and drive. It really not that bad, most time I spend on one job is about four hours.
The best employee you can have but you wouldn't want him as a neighbor " He the shifty type"
I don't have it down to a science, Jerrald, but I have established a ryhtym over the past few years that works for me.
I work alone probably 11/12ths of the year. So for the majority of my work year I do my best to work 30 "billable" hours a week, leaving 10+/- for administrative tasks like bidding, billing, ordering, working on my investment properties etc.
Now there's no way I figure on 2000 hrs/year. I like to take a week off here and there, probably at least a month's worth every year, plus all the three and four day weekends most folks enjoy here in the States. So I guess that maximum potential hours worked for me is closer to 1700/year, which I guess makes my yearly "billable" what, close to 1275 hrs/year?
Did I do that right?
Every few years I take on a larger project that requires I hire help, and am on that project for 6 or 9 months, sometimes more. When I do that, my billable/admin ratio gets higher, I'd guess closer to 7:1 (35hrs:5hrs) per week, maybe even a little higher than that.
Easy to see why many companies don't like to mess around with small projects, huh?
Eh ya know Jim there are actually lots of guys who "don't have it down to a science" but stumble on doing it right any one of a number of different ways. Sometimes its just by accident and sometimes it by just good darn instinctive intuition. But then again the high business failure rate in this industry ( the highest according to Dun & Bradstreet) is evidence that there are tragically plenty of contractors who actually never do get it at all.
"1700/year, which I guess makes my yearly "billable" what, close to 1275 hrs/year?" That's 25% non-billable which if you are a solo operator is pretty darn good. Certainly sounds to me like you "get it". ( With "I work alone probably 11/12ths of the year" were you saying you are a solo operation? I knew that you are ASmallWoodworkingCompany but somehow still I thought you had one or two employees.)
"Every few years I take on a larger project that requires I hire help, and am on that project for 6 or 9 months, sometimes more. When I do that, my billable/admin ratio gets higher, I'd guess closer to 7:1 (35hrs:5hrs) per week, maybe even a little higher than that. Easy to see why many companies don't like to mess around with small projects, huh?" Well yeah but if you know your numbers and have the right ratio in place you CAN make money off of small projects but you certainly do have to understand what that does to that ratio.
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"(With "I work alone probably 11/12ths of the year" were you saying you are a solo operation? I knew that you are ASmallWoodworkingCompany but somehow still I thought you had one or two employees.)"
Yeah, I pretty much work alone. This summer my son worked with me a few months and my daughter about a month before they each went off to school, but I generally work alone. Maybe 11/12 is too high though...maybe more like 80% over the past 12 years.
Wow that sounds like your talking about a lot of travel. What exactly is it you are doing?
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soil/concrete inspector
The best employee you can have but you wouldn't want him as a neighbor " He the shifty type"
Ahhh... okay now that makes sense. It tough at times on line when you don't really know a person trying to figure out where they are coming from or how what they are saying about their experiences sometimes relates. I was imagining something like heavy equipment maintenance & repair or a computer technician etc.
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It's disgusting, sometimes, the amount of time we burn doing things that don't seem productive. I got so miffed at the concept I tracked it last year. But I only divided it into two categories. One was I was working, hammer in hand, saw running, whatever. Work was occurring. The other was I was doing something else - bids, materials, scratching my head, watching the rain fall. 69% of the time was work in 2002. The rest was mostly work too, but you get the point."The child is grown / The dream is gone / And I have become / Comfortably numb " lyrics by Roger Waters
Whoa, Randal somehow I missed your post before and didn't see you sneak it in here. I'll have to put your stats in my database too.
RW"The rest was mostly work too, but you get the point." Yes I certainly do get the point. it's still all work in fact sometimes that's the real hard work to since it's not always fun and there often no visual or tactile reward to appreciate for your efforts.
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This data is based off of 1.5 years off of running side jobs and only 3 months or so of larger scale jobs but it does vary significantly from what everyone else seems to have so I'll add it in, sorry if the response is rather long winded.
The mix of jobs has been about 50% contract - 50% T&M with jobs ranging from $180.00 to $12,000.00(subs pay subtracted from these totals already, this is our gross) , I find that I pay out to employees 20% more than they are working, ie. most of the time a 8 hour day is paid as a 10 hour day or a 6 hour day as an 8 hour day. For 2004 I am planning on paying out 120hours of paid vacation to each part time employee, I am planning on using 2 of them for 1,000 hours each. I figured this will cost me $2.49/hour per employee if they are working 1,000billable hours each(whether this be billable in estimating the contract or T&M). My percentage of hours not actually worked that are paid out to employees works out to about 34%, so I figured on adding about 36-40% to my estimate of "real laboring" that is done for contracts(not including insurance markup), not sure how I will change around the T&M rates charged as we often charge an 8hour minimum for 5 to 6 hour projects which currently covers these benefits+extra pay.
A very large percentage of our work has been commercial work that takes place after business hours, lots of times we wait around for subs to finish something(refrigeration guys are really slow..do a lot of restaurant work) or we can finish our installation and leave after 4 hours. I won't pay someone for 4 hours, figure $80(4 hours @ $20/hr for laborer) for coming out to work 4pm to 8PM is a waste so I try to make it alittle more appealing. At the end of each week I look at how many hours the guy's have actually worked and add 20% to that hour total, I have a four hour minimum that they will be paid for. Of the four people I have employed in the past year as employees(not subs) only one was a accomplished carpenter, the other three were helpers and I figured they were working within their job description picking up screws/lumber just as much as when they were working on site and working on 3 different jobs in a given week it just isn't possible not to make numerous trips to the hardware store. Alot of times we will be on site and end up installing a door, repairing cabinets or attending to handyman/fixit tasks that we wouldn't normally have the tools/supplies on site for but can be lucrative to do as we are already there.
Like to say thanks to Jerrald as his posts are consistently thought provoking and help me concentrate on all my costs. It is really hard to pay employees(and myself!) what I consider a decent wage, figure I win 1 of 6 bids I do, we could definitely be more efficient but competing against these handyman/contracting/cleaning company hybrids I see around here working with no insurance, driving personal vehicles, no materials markup, no safety precautions at all, etc.. is tough when you are doing primarily under 10K jobs for which they are also competing.
-Ray
Ray I don't think you need to apologize for a post being long winded (especially with me around) and anything that helps by adding to the body of knowledge here and gets people to at the very least think about things is a good thing.
"For 2004 I am planning on paying out 120hours of paid vacation to each part time employee, I am planning on using 2 of them for 1,000 hours each. " Wow that seems just incredibly generous. Either your the nicest guy in the world or possibly you need that kind of enticement to attract to good personnel to work the projects and/or the hours that your do?("A very large percentage of our work has been commercial work that takes place after business hours"). While we haven't done any in a while we have done some Madison Avenue retail remodeling work which had to me done overnight 9pm to 5am so that we wouldn't be in the way, making noise, or cause them to have to shut down the store. What I did was I just paid my troops a bonus for that work (that I planned and accounted for in my quote for those projects, we do all fixed price work, only two T&M jobs in 13 years) which translated into just about double time for them. I paid it out as a bonus rather than just doubling their wages so it would drive what I was paying for Worker Comp through the roof with it.
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I find the discussion about paying holidays very interesting. Around here (Atlantic Canada) every employee is entitled to 4% vacation pay (ie, 2 wk / year if full time). If you are hourly paid, your employer must pay you an additional 4% to cover vacation, although this can be either kept in reserve to be used as a regular paycheck when you take vacation, or paid incrementally every payday. Employer can choose.
Also, if you are hourly paid (full or part time), you must be paid for any statutory holiday, if it falls on a day that you would normally work(?). This can be an administrative pain, so it is also allowed to add 3% for stats, as they call it. For some employers, it's just simpler to add the 7% to every pay and let it go at that.
Thanks for the idea on how you implemented paying the bonuses, I'll have to check with my insurance agent to see if I should consider giving extra hours as bonuses, might lower my worker's comp as well.
As for you comment about being the nicest guy in the world with the vacation time, I always am talking about how I prefer the European style of worker treatment(though not the high unemployment they are experiencing on the continent) and figured I couldn't very well say that and not back it up. I wouldn't have any trouble, I don't think, finding a couple of helpers at $15/hr with no benefits but I certaintly couldn't afford to live on that and I don't figure anyone else in a major metropolitan area could so I just don't feel comfortable paying that low.
Our retail work recently has been remodeling some fitness clubs and restaurants in downtown Boston, working at night is our only option in these places. Generally I like working when people aren't buzzing around underfoot anyway, this probably sounds crazy to alot of you but I'll often pull out the hand plane or the yankee screwdriver instead of the power sander/drill while working by myself anyway as I like the quiet and am willing to lose 40minutes if I'm not in a rush.
How do you guys in urban areas handle your estimating, do you group all your trips to give an estimate in 1 day to cut down on the amount of time on the road? If I leave a downtown Boston job at 3PM to give an estimate it can take me 1.5 hours to go 4 miles , meaning not many estimates can get done unless a day is devoted to it entirely to it. Do you find prompt estimating greatly increases sales or is the deal clincher almost always price? I could definitely increase my working to non-working hours ratio by grouping all estimates into 1 day of the week but always feel like I have a better chance at the project w/ a prompt estimate.
-Ray
I could definitely increase my working to non-working hours ratio by grouping all estimates into 1 day of the week but always feel like I have a better chance at the project w/ a prompt estimate.
I very much agree with that. There's no way of knowing for sure what gets you the job and what doesn't (unless you take a polygraph with you), but it seems obvious to me that showing you are keen to get the job has got to better than making people wait before they even get to meet you and hear the cost
John
Ray,
I hope the deal clincher is NEVER price!
And promptness of estmates probably won't be as big a factor in increasing your sales ratio as you think. It will be a big factor in increasing wasted time 'though!The times you left a job early to race across town to give an estimate----without getting results will begin to add up and irritate you.
Puctuality of the estimate WILL come into play 'though.the last few years I have been working at letting the customer think THEY are scheduling the time of estimate.Simply ask the prospect when it would be convenient for you to stop by----they will usually give you a wide range of times----some of which will be clearly favorable to YOU. for instance ---if you are talking by phone with them on monday---they may say" I am off work all day on thursdays,but on other days I don't get home untill 6:00" .That works GREAT for you---If thurs is good for you--schedule it,if not you can pick another convenient evening for YOU. but whatever you do---pick a very specific time---and be there at that specific time.
A lot of times when I am picking up my final payment check the customer will say something like----"ya know, we had a hard time even getting someone to give us an estimate on this job---but you showed up at EXACTLY the time you said you would be here, that really impressed us."
If the time you schedule is more than a day or in the future---call the day before and leave a message on the answering machine" I am just calling to confirm our appointment for weds. at 6:30pm"
I wish I could say price wasn't the break even point but unfortunately it seems to be the case on the jobs I'm chasing. I've read your previous posts and was impressed with how well you've defined your market and your apparent success generating sales from them; I've yet to do that. I think there is a fine line I'm trying to toe between specialization and efficiency and being open to a variety of jobs while keeping jobs enjoyable to work on.
I'm not a master craftsmen at any any particular aspect of the trades so we do general remodeling and a lot of custom cabinets/shelves/metal pieces for commercial customers. My market isn't defined so I seem to be chasing work in every which direction. In addition, I've only lived in this area for three years so I don't have a network of references established draws prospective customers in; thus, the strange hybrid of all kinds of commercial work, small residential remodels and finish work. My goal is to grow my field of references so that within the next 2 years we can specialize exclusively in millwork and finish installations hopefully generating myself a net income of about $150K, until inflation catches up I don't want to grow things any larger than that.
-Ray
ray... what does net income of $150 amount to.. is that what your company makes ? or is that what you make ?
if that is what you make .. keep on keeping onMike Smith Rhode Island : Design / Build / Repair / Restore
That's what I'd like to net personally, as in what I 'pay' myself out of company gross plus profit(will just pay it out to the sole shareholder, me). I live in the city in Boston(between Beacon St. & Comm. Ave for anybody familiar w/ the area), I can see you live closeby so you know how expensive things are here, couldn't buy a house near my condo now for less than 650K. I'd like to see us gross 150K after materials+subs next year and plan on paying out 50K for employees, we'll see how it goes.
-Ray
Your PARKING costs are probably as hiugh as my house payment!
Not that you would need a car down there..
Excellence is its own reward!
this thread deserves rejuvenation.. helps to fill in the blanks of the "billable hours " threadMike Smith Rhode Island : Design / Build / Repair / Restore
Mike, I was culling through some of my notes for something I was working on today I came some things I thought I could add to the topic here that might help some of the others here think about looking "Time" and how they bill or recover costs.
Also as part of something I was writing for one of my sites regarding Comparing Markup Methods I cited and recommended a JLC article:
Oddly or perhaps unfortunately there are tons of contractors who go into business without really understanding the concept of billable time vs non-billable time. I know I was certainly one of them years ago.
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Jerrald,
I hope this thread makes some people think a little. I remember a similar conversation here a few years ago. At the time I made a guess on my "production hours" versus "Overhead hours".----then I set out to track it exactly---and kept a dailey journal this year to register everything.
this year to date 693.25 hours production/272.5 hours overhead
Production is anything specifically credited to one job----If I need to run out to the lumberyard for a box of nails to finish a roof----that's still production in my system.
But----- if I go to the supplier and order materials for a couple of rooftop deliveries and pick up some other misc. supplies for a few roof repairs---then that trip goes under overhead.
I am a seasonal employer---so I might have 3 guys working from late march untill early june----I might have ZERO employees in july and august---and I might hire a single helper for september/october.
All overhead ,however is carried on MY personal production hours---not shared out among employee hours at all.
Usually between thanksgiving and christmas each year I am done with production( excepting minor emergency repair work) untill March. Late november/december I formulate the Next Years budget---personal and professional----so I know what nut I have to crack.since I also know I am gonna have to cover that nut in less than a thousand hours---it makes figuring out the rates I am gonna charge simple. sometime between july and sept. of each year it becomes clear that I am gonna make my nut for the year---and from that point on I become increasingly mercenary when pricing new work.
Stephen"----then I set out to track it exactly---and kept a dailey journal this year to register everything." Good thinking. It's amazing what we don't see when were not actually wrting it down and logging it huh?
"this year to date 693.25 hours production/272.5 hours overhead" That 28% of your time is non-billable. That's right in there with a lot of others. I'm actually building a database to chart the people I've talked to who actually do keep track and understand that kind of thinking.
"All overhead ,however is carried on MY personal production hours---not shared out among employee hours at all." meaning you just figure employee that as a "pure" cost of doing business??? You do markup that cost for profit though don't you?
"sometime between july and sept. of each year it becomes clear that I am gonna make my nut for the year---and from that point on I become increasingly mercenary when pricing new work." Interesting way of putting it. I appreciate and understand that entirely.
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Jerrald---the employee costs are no different to me than a sheet of plywood or a square of shingles----just an expense that needs to be paid to produce the job.
there is a "markup" of sorts---but it is indirect. I figure this out the reverse of the way most people would. when I look at a project---the VERY FIRST thing I decide on is how much money I am going to make on the project.( After all thats why I am gonna do the job) Only after I decide THAT do I start ADDING ON the costs associated with producing the job( materials,permits,dump fees,labor,overhead( the years total overhead figured as a ratio of that particular job to the 1000 hours I expect to work each year) etc.
Once I have that total figure I usually do a rough check based on $/Square.I may adjust my total price UPWARDS ( frequently)---but I never adjust downwards.
BTW---I realize my method wouldn't work for most people here doing more complex jobs. Many of the jobs I do are VERY similar to previous jobs--so I have a good handle on material costs,labor costs for similar work etc.
Steve-
Your method isn't as unusual as you think- I worked for a guy doing residential remodels, and that's how he estimated. He figured out how much he needed to make based on the duration of the job, and then added the direct work costs that I put together through labor estimates, material quotes, and sub quotes. It worked great for him as long as the job finished on time- if it ran long, his overhead for the extended schedule wasn't covered.
Bob
Brownbagg,
your politics,spelling,punctuation and/or grammar haven't improved----but your sense of humor sure has------ congrats.
by the way----you now have the only tag line here remotely interesting.
Mike Smith- "I carry the same % for "warranty work" (0.02)' Hmmnn, I didn't even think of that one. Thanks that a good one.
A couple of weeks ago on Mark Cadioli's recomendation I tried to e-mail you through this Breaktime Prospero system to get your opinions on what I was working on and why I'm asking these kinds of questions. Did you ever get that? I'll try again this evening and try and show you where I'm going to try and work that "warranty work" idea in and get some more of your advice and opinions.
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as far as i know... the BT email works... i may have been on vacation.. and they tend to get lost fast..
i get about 100 emails a day because of a CAD user group i subscribe to..
anyways , i'll check tomorrowMike Smith Rhode Island : Design / Build / Repair / Restore
Mike Smith-"I get about 100 emails a day because of a CAD user group i subscribe to.." Wow I thought I was bad with the project management groups and blogs I'm subscribed to!
I didn't get that e-mail off last night because the power has been continuing to go on and off as a result of those heavy winds we've been having here for days. The winds are now over but power went out again this morning for about an hour. I just sent you that e-mail as I made this post.
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are probably another 5 days or 40 hours of paid holidays.
DoL actually mandates 6 holidays for 48 hours (worked for an outfit that would not disipline leaders for permitting abuses of leave tiem, so, they punished the entire company instead--if one wants to draw a corollation between that policy and not working there, they are free to do so). DoL does not require that an employer provide sick, jury, or funeral leave, however; and does permit that employers may force employees to either take the time agains vacation pay, or with no pay.
Employers are not required to offer vacation pay--employees may require it, though.
1600 out of 2080 sounds idyllic, but that's also coming from an office perspective. Archy & engineer offices are hugely overhead intensive. Understanding that can be tough for some professionals. (Worked for a engineer who had 3 family members "helping out," one of the ways they helped was by "correcting" timesheets so that "office expense" hours were actually billed to the "fat" accounts--stopped working there after learning that, too . . . )
Tracking your hours is probably key, but identifying them is also key (as has been brought out in other posts here). After all, who is paying for your time when you are out talking to a prospective customer? Which probably means you have to be measuringthe time you are spending now, if only so you can learn later (back to "thinking like a businessman," again).
CapnMac Ill have to check but what I thought that what the DoL actually mandates is that you have to give them holidays but they I don't think they don't have to be "paid". It's still a good idea to offer them as paid however since like inferred "...employees may require it, though." or they'll go elsewhere to where they are treated better.
The key thing I think I'm getting at is a lot of contractors never figure out or plan for where that money to pay for those paid holidays actually is going to come from.
"1600 out of 2080 sounds idyllic," I don't know I have one production guy who is pushing those numbers to beat or be in the 5% range. The thing is I would be a fool to base everyone else's expected ratios on the way he is working. It's a sliding scale and the distinctions aren't necessarily black and white. in fact some time they hazy and gray but you still need to plan for them. In construction trade work the more solely and purely "Production" oriented an employee is that percentage goes down. As you move on the scale more and more towards a managerial aspect the percentage increases.
"Archy & engineer offices are hugely overhead intensive." Very true which is why you see 100% to 500% markups over a person wages to cover for those costs however then again I think there is tons of waste or muda (the lean thinking term for waste meaning -...consumes resources but creates no value...) in many of those offices.
"Tracking your hours is probably key, but identifying them is also key" Absolutely! While I've always been sort of obsessive about keeping track of my own time there was a point three years ago when I was really spending my time as a full time manager that I actually stopped keeping a TimeCard so to speak. The after a little while of that I was fooling around developing a TimeCard application that I(we) could use on PDAs and I started keeping track of my my own time again with what I was doing managing things. I was stunned to find I had weeks sometimes where 50%-60% of my time was spent just driving around! Talk about waste!
I knew I was driving around a lot but not that much and actually putting a number on it thanks to my time tracking helping me identify that waste I was able to make some changes to help alleviate that problem.
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however then again I think there is tons of waste or muda . . . in many of those offices.
Ok, we're relly on the same page, then--within some terminology definitions <g>
Trust me, I know the wrong way to do business--took an undercapitalized startup and starved to death on my own success.
In defense of a typical or generic archy office, one of the "waste factors" that is underappreciated is the bid "capture" factor. I've seen some very low rates reported (like 1 in 12), but that also has to inclue archies who are their own worst enemies. So, maybe you are "capturing" 1 in 6 or maybe 8 of your starts. (This would be real exceptional, far too often the client has a budget of $70K and wants $150K worth of design.) Legal requirements then fuel a high "muda" factor after that. (Typically, you need all started drawing on site of one year, and then stored as long as the malpractice policy requires; onsite needs a costly flat file, off site can be rolled & tubed, but has to go into dry, fire-protected storage.)
Last guy I worked for had absolutely no concept of recovery costs. In a simple simile, he would spend $10 to pick up a dropped dime. Counted it as bein ahead $0.10, not as being behind $9.90. Measurements are key. Say there's you and a helper and you need just one box of deck screws to finish the project. Who do you send for the screws? It may be that you are a better choice (so you can call other customers on the drive to and from; maybe the next project needs something on sale today). The helper can keep doing what he's doing, and remains on the clock and the project's time budget. Without some metrics, you can't know.
Still looking at the data, still looking for answers.Occupational hazard of my occupation not being around (sorry Bubba)