I’m curious about what most contractors in the north east are charging on T&M work.Seems like most around here are between $35-$55 p.h. for carpenters, @$10 more for mechanicals.I think thats more than fair, but many customers are shocked by the rates.Appreciate any feedback.
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It doesn't matter what they charge, it's what YOU need to cover your azz and make a profit. If you don't yet know what your numbers are, you better sharpen your pencil and figure it out.
I don't always charge the same rate, factors of risk may sway my demands..cover my bases, and if I am flat on theground in the warm or high up in the sleet, might be differnt prices..but the bottom rate has to cover what I need to still be around in the future.
Spheramid Enterprises Architectural Woodworks
"Success is not spontaneous combustion, you have to set yourself on Fire"
I vary sometimes based on the complexity and tools that will be used. If i do something that requires a hammer, saw, and not much thinking I will go easy. If I have risk (personal or liability) it rachets up. If have to pull out a couple of thousand dollars worth of tools to give them a nice finished product then up again. If I have to research, think a lot, or create then it is more.
I have been doing 30-35/hr for mid range, if family, close friends, or church 25-30. Have done some commercial at 60 and should have gone higher. Had an immigrant( German) Real Estate baron (Baron von Trailer Park) call and ask rates. Told him 30-40 based on what the job was and he about fainted. Asked what he had been paying and he said $10. Told him thank you for your call you had better stick with them.
I use the auto comparison too, used it when I ran an aircraft maint shop. Could not believe the ones that paid $75/hr for their Benz and screamed at $35 for their Cessna 210. But that was 15 yrs ago.
I've at least 3 tool belt rigs in the truck..I have came up with a system.
40.00* an hour for that one
50.00* for that one
70.00* for that one.
Basic piddling trim, punchlist stuff, on the ground is low $$$
Using the brain that uses the scribes, and sliding bevel, moderate ladder use ( step or ext.) and cordless drills, saws, and what not..or tablesaw, guns and hoses, or god forbid every tool in the truck..middle..and I do a LOT of middle..$$$
High up, scaffold , harness, roof tie off, specialty tools or what have you is higher bucks. If I am willing to die, they can pay me for it. period.
*=sliding scale as to WHO I am dealing with, and how hungry I am, site conditions, length of job, distance from home..etc.
One customer saw my Miller Harness in the van, and remarked that it musta set me back a bunch, I just said yeah and if I strap it on, you are paying more, because I only wear it where I am at risk of being a para plegic the rest of my life. It sunk in..he agreed.
I read a great book way back..don't recall the name, but it was about risk management..I actually used the lessons in a prodution environment of Guitar Manufacturing, but it applies to everyday stuff..if you have to take a chance, manage it..manage the risk to offset a potential loss..or don't. But don't be suprised when the #### hits the fan, and you happened to be standing in front of it, and yet you knew better.
Maybe a philosphy more that a Biz practice, but I respect risk..I think I may have been addicted to it like a gambling addiction at one time..take it, just take it..prove to myself that I could..blah.blah.blah. It was also sorta foolish, but looking back..and seeing the results, I don't think I did that bad.
It sucks when you're knee deep in alligators and wearing chicken feathers..but walking out of the swamp on the backs of dead alligators has it's joys.Spheramid Enterprises Architectural Woodworks
"Success is not spontaneous combustion, you have to set yourself on Fire"
I think it's great when LAWYERS balk at my hourly rate.
LOL, I had Dr.s, Lawyers, auto dealers, a couple of the better ones were auto dealers. (this was at the airport not now).
I saw my Dr's appointment instructions, one every 15 min. Usually $95/patient. Realizing he does have some serious overhead and there is a bunch of staff involvement too. Besides you would have to pay me a bunch to give prostate exams. Ditto for some of the ladies I saw in the waiting room.
....but many customers are shocked by the rates.
That's because "anyone can swing a hammer".
Beware the bikini clad female.
She may be interpreted as offensive.
"...but many customers are shocked by the rates."
Yup. Anymore, most of the time I just agree.
Customer: "That's kind of high, isn't it?"
Me: "Yes, it's ridiculous how much everything is these days."
Or something like that. When I've replied like that, it has put an end to the topic of my price being high (at least, so far....).
Rich Beckman
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A couple of years ago, I was talking to a prospective customer who was having a mild case of sticker shock. He wasn't hostile, but my price was obviously quite a bit above his expectations.
I "won" the debate when I pointed to his shiny, new, Lincoln Navigator and asked if he had it serviced at the dealership. When he said that he did, I told him to check their shop rate on his next visit (state law requires that automotive shop rates be clearly posted). I told him that my rates would be considerably below theirs - and that I make house calls. - lol
Yup.....I use mechanics as an analogy for some customers as well.
When their $30K investment needs attention, they rarely look for the cheapest fix.
Why would they in regards to their investment of $500K and above? (Cheapest homes in my area start in the four hundred thousand dollar range.)
Beware the bikini clad female.
She may be interpreted as offensive.
I'm not in your area, but I've been in business for myself for ten years now and still feel guilty about the cost of every job I do by the time it is finished. I have always worked on a time-and-material basis, no mark-up on materials. I'm a perfectionist and never cover up any problems I reveal in demo, so I always put in far more hours than I anticipate (you'd think I'd have learned by now, since I always work on old houses). I tend to eat some time on every job, but also bill for the rest of the excess as I can't work for free. I just upped my hourly rate to $40.00 from the $35.00 I had been charging for the past six years. I also just finished a job that I had estimated at $6700.00 and ended up at $9100.00 after coming across a few things and generally running long. She sent me an email yesterday stating that she felt it still should have cost more given the quality of the work and all that I did. Felt nice. I agree with some other comments. Charge what you need to charge, and DO NOT undervalue yourself as I tend to. No one else, particularly the big mechanical contractors, apologizes for rates. One of my uncles used to own a car dealership in a small town. He said he always charged as much as he could--was the highest around--but was also the best and was always swamped. I'm running long, but one last thought, I do feel that we Americans have adopted a "Wal-Mart mentality" about everything--gotta get the best deal.
Good luck to you, and remember, if price is the bottom line for a client and you take pride in your work, you probably won't enjoy working for that person anyway as your effort will be lost on him.
Good thoughts, try to hit return about every fifth line or so. Much easier to read.
Cheers
Handyman $70/hr for residential in the surrounding burbs. Higher ($75 & up) for burbs that don't touch mine. $89 & up for commercial.
North of Chicago.
And I'm not in the high range. The Handyman franchises go around $89 to start.
Pete Duffy, Handyman
Any addittional work we bill out at $65.00 per man hour.
1 hour north of NYC.
[email protected]
$65 per man hour- that's for basic "labor"
It goes up from there if you want "skilled"
I'm waiting for Gerald to help us with this subject. He and Sonny convinced me years ago that it's a business!
Like: you want overhead with that? Profit? Risk vs. reward?
T&M scares alot of people... especially if they don't know you and your work habit. I only work T&M for established customers and the price varies between $45-75/hour.
I once watched a plumber spend more time trying to get a customer to pay the bill then it took him to do the work... All the customer wanted was justification of why he had to go from the basement to his truck 12 times and wanted credit for the time he spent on 3 incomming calls.
I've been lucky over the years working T&M. I know it's unsettling for prospective clients, but honestly, all my clients have either been referrals or have seen my work. I'm sure I seem to be very trustworthy on first meeting, so new clients don't even hesitate about T&M. Plus, once I start working, I work like a dog all day and will put in crazy long days if needed or allowed, so no one has ever questioned my work ethic.
We'll see what happens if the housing market slow-down is sustained. I'd imagine many of the new-build guys are getting into more remodel business, so competition may drive rates down for a while. Fortunately, I work alone and therefore don't need to find too many clients in a year's time, so referral work and repeat clients generally keep me busy enough.
I've tried to listen to most of the advice here and on JLC and do not like working T&M on projects.Generally much better to scare em up front with a big number that they get used to and you do the job as it works for you.Whereas, T&M, no matter how good of a job you do, when it goes over - and it will, there will always be a little bit of irritation on the HO's part for every little phone call you got or the 10 minutes you spent figuring out how to cut something or whatever.My feeling is - get better at estimating! That's the only reason most guys are still doing T&M.Plus - by estimating and bidding jobs, you are gaining the markup on the supplies and materials cause lord knows - when they have a problem with a product you installed - they'll be calling you. That's what the markup pays for. And you benefit by buying supplies in bulk and finding deals on clearance, etc. that you should be rightfully billing your clients full retail for.For handyman stuff, I charge $85 to come out (service fee) includes 1 hour - add'l hours at $65.For bidding jobs, I try and figure my labor at $50-60 hour plus all the % you add on for the unknown.I still do a few T&M, mostly only if it's for a friend or associate or if it's on a job my buddy's working on - at $50 /hour. And I think that's still too cheap.I'm still figuring it all out - I changed careers back in 04 and got my license and Scorp and insurance in 06, so I've only been doing this for a few years now.But my feeling is this - even if you are not driving a new truck with a note and not paying Health insurance cause you're on your old ladies plan - you should be billing yourself enough to cover all those costs cause that's what it costs to be in business.It's all about presentation and trust - in my area, Metro detroit western suburbs - there's so many new condo associations, Mcmansion neighborhoods, that if you put it out there, it'll come back at you.Anybody out there charging less than $50 is not doing the rest of us any good and probably is working too hard for too little.CHARGE MORE, WORK LESS - MAKE THE SAME. Or, work the same and make more.Julian
My reasons for posting this question were two-fold. First, I really wanted to know what other G.C.s were charging to justify to H.O.s that our prices are in line with other PROFESSIONAL contractors.The second reason was to show the people that are working too cheaply to survive past the warranty period that they are making the correctly priced G.C.s look over-priced, and that they could easily be making better money.We do'nt do alot of T&M work, mostly contract, but for additional work,or for the rare customer that decides things as we go along(ca'nt picture how it's going to look) some times t&m is the better way to go.I wish I had more guys like sphere,rasconc and sledgehammer on my crew! Thanks very much to all for your insights.
I like your style. Well said.
I have a loose cannon type HO right now, only wants T&M, abject refuses a contract price, it's (To him) not about the cost ( he'll gladly pay the invoiced amount) it's about controling the scope of work.
I've seen him refuse workers who wouldn't give an hourly rate.
I watched an interaction of one painter sub..he said " I'll need about 3k for this" HO says "how long?" Painter says "3 days"
HO says "how about T&M?" "I'd rather that"
Painter says ( and I quote) " I can't make any money on T&M"
WTF?
Maybe I am hungry or a people pleaser, but I don't have an issue with billing at T&M , I set my rate..and honestly, I covered my azz better on some stuff that would have reared up and bit me, due to me not awanting to estimate deeply.
I'll shoot a "not to exceed" $ # , that seems to quell any issues about revealing my OH and P.Spheramid Enterprises Architectural Woodworks
"Success is not spontaneous combustion, you have to set yourself on Fire"
See, that's my thing - if you can get a job and tell them a "not to exceed" number, than you are already capable of coming up with a firm number.I'm doing a T&M now on an insurance remodel. Guy's a friend though and he wants to do some of the work when he can, so it'd have been weird to bid. So i've been working on it at $50 an hour and he reimburses for the materials.In general though, I think the relationship between you as the contractor and the home owner is ALWAYS easier and cleaner and better (in the middle and at the end) when you give them one number and stick to it. Of course, you have to educate about the scope and about unforseen conditions and have a good change order form/contract. It's very easy though to let small changes get rolled in and than it's too late to charge for them - so tackle those suckers and inform and charge for them right away - before they get touched.JT
You betcha. I lose my azz on the incidentals like throwing in a few screws or a tube of caulk..everytime.
Seems when I need to buy a box or a case.it's my money.
I gotta work on that.Spheramid Enterprises Architectural Woodworks
"Success is not spontaneous combustion, you have to set yourself on Fire"
And do you charge the client straight across on materials, or do you mark them up?
"Research is what I'm doing when I don't know what I'm doing..."
If I supply, it's 15%.
Spheramid Enterprises Architectural Woodworks
"Success is not spontaneous combustion, you have to set yourself on Fire"
the box or tube get charged to what ever job they were bought for, Instead if itemizing out the items classify them as "Framing Material" "Sheetrock Material" , "Exterior Trim/Siding Material"
then charge the next customer for the 1/2 box you used on their job ;)
as for mark up on material we charge 25%
I've had customers complain and say they're not paying that, they either agree or find someone else to do the job.
Edited 3/1/2008 9:43 am ET by CAGIV
I watched an interaction of one painter sub..he said " I'll need about 3k for this" HO says "how long?" Painter says "3 days" HO says "how about T&M?" "I'd rather that"
This seems like a no brainer. All the painter had to say is "Can you divide 3k by 24? That's the hourly rate."
My problem with T&M jobs is who pays for the incidentals of being in business? When you submit your T&M invoice, where do you put stuff like laying awake at night planning the work, organizing the paperwork after the job is done, cleaning and organizing your tools after the job is done?
And in fact, how about stuff like doing your taxes, designing a logo or a website, designing an advertisement, washing your worktruck, attending a seminar, interviewing a potential hiree, bidding (or estimating) work you don't get, etc, etc.
You might cover that in your T&M rate, but unless you're dealing with a client who has a deep understanding of the complex costs of being a contractor, your client will likely balk at paying when they see it broken down per jobsite hour.
Plus, lets say 20 years' of experience allows you to solve a certain esoteric problem in an hour that every other contractor would have spent a day on, if you charge for that hour T&M, how do you charge for the 20 years' experience, or the 7 hrs saved?
I guess a lot of my issues with T&M stem from the fact that it works better for a subcontractor than a general contractor, and I'm a general contractor. A lot of what you get when you hire me cannot be invoiced T&M. And I think I'd be losing a lot of income opportunities by going T&M.
I guess the bottom line, for me, is that my business is doing much better since I stopped working T&M, and went to bidding. Successful, profitable bidding is far and away the most difficult part of the contracting business, but my feeling is that your business will hit a growth ceiling if you stay exclusively with T&M.
View Image “Good work costs much more than poor imitation or factory product†– Charles GreeneCaliforniaRemodelingContractor.com
I changed careers back in 04
Curious, what was your former career? Was getting into remodeling a choice or something you fell back on because your other career got eliminated?
Bowz
I was a photographer for 15-20 years, latter part doing crazy photoshop retouching and digital work.Got tired of the BS from the ad agencies and working 7am-1am 7 days a week cause they get their #### together last minute.Have been a tool guy forever and had been planning on getting out for a long time.Did so in Oct 04 and finally got the license and incorporated in April 06.Still figuring it out, but trying to do it right from the getgo - with the help of all of the accumulate experience here.Sure does help to be able to take excellent pictures of your work though - set's me apart from a lot of guys just from that fact alone.Been part of a BNI group for 2 1/2 years as well - that's kept some referrals popping up every week or so.Here's some of the before and after pics:http://www.juliantracy.com/RBD%20Remodel%20Jobs/index.htmJT
nice work julian
View ImageMike Smith Rhode Island : Design / Build / Repair / Restore
Thanks,I print those up 5x7 glossy and hand em out.Have a nice set of 10 where I've gotten good befores and afters - the current job I'm on will yield another kitchen, bathroom and attic sample.JT
Nice work Julian! Nice pics. Do you have a website up and running? Bob's next test date: 12/10/07
jim... he's got a great website...
http://www.juliantracy.com/RBD%20Remodel%20Jobs/index.htm
i'm jealousMike Smith Rhode Island : Design / Build / Repair / Restore
Thanks - but that's no website.. just a web gallery of images.Need to get on the whole website issue - major hole in the marketing not having one yet!Long as you guys are checking out my web gallery, here is my little girl!:http://www.juliantracy.com/LizGallery/Julian
no fear ...View Image
i'm thinking that after 20 years on Winows , my next computer might be an apple
have you worked with both in your photography ?Mike Smith Rhode Island : Design / Build / Repair / Restore
helen likes this one best
View Image
boy, some kids definitely know where the camera isMike Smith Rhode Island : Design / Build / Repair / Restore
She's my sweetheart - no denying.Our divorce was (finally!) final in Oct of 07 - we have joint custody.I have my daughter every other Weekend, every Wed. and every other Thurs.She'll be 4 this July.JT
hi jack
smi jack
who's gonna argue 'bout this ?
View Image
Mike Smith Rhode Island : Design / Build / Repair / Restore
Edited 2/29/2008 10:21 pm ET by MikeSmith
I think we may be hijacking this thread...She's just a tad over 3 years old in that picture!Been using Macs since 1999 - I'll never ever again use a PC.No viruses, no virus scan software.
Bootup in 45 seconds
latest OS can be installed on 7 y.o. computers
high resale (5 y.o laptops still worth $500-600)
everything works!
everything works together!
Great free built in software (that works together)
No viruses.JT
>>i'm thinking that after 20 years on Winows , my next computer might be an apple have you worked with both in your photography ?<<Mike,I'll jump in briefly on this one. I've been on Macs for 23 years. Photoshop originated on the Mac and to this day is a slightly better performer on it. But once you are in photoshop, you won't know if you are on one platform or the other except for the appearance of the interface or when doing OS specific things.If you are comfortable with Windows, there is no real reason to switch based on what you can or cannot accomplish. If you are fed up with Windows in broader terms (malware, stability, time spent on maintaining, etc) then I would recommend the switch. Macs make for pleasant day-to-day use of the computer. Not perfect, by any means, but generally less annoying than windows, in my humble opinion.You are a big fan of Chief Architect though, if I recall, and as far as I know they have no plans for a Mac version, though you could dual-boot into windows on the Mac and run Chief that way.Steve
I am in North texas. I quit bidding jobs because for one thing, I always..ALWAYS underestimate the time, so I end up losing money. I began T&M about 2 years ago and I wont go back to estimating.
My problem with charging is that I do such a large variety of things that I cannot keep track of the prices. I have a 13 foot trailer that enables me to tackle just about any job, I am not the best at anyof it, but when I arrive at the jobsite the client is getting honest and thorough workmanship. I honestly care that the client is happy.
I have had trouble charging what I am worth since I started. I try to stay around 25 per hour. But with gas going up and my truck getting 12 mpg I have to consider raising my rates.
T&M meets my needs as well as the client. I dont jack the price on material because they are paying me to go get it. Also, when they look at the reciept, (which it rare)..they realize....it adds up fast.
At $25 you are probably not making any money in your "business".You cannot fall into the trap of thinking that you are "making" $25 an hour.Insurance: Liability, truck, health, disability, etc.
Truck payment
tools
salary???
office,adverstising, education, licensing, etc.Just cause you are not driving a new truck - why shouldn't your business be able to afford something as simple as a truck payment every month? Charge enough to be in business for real - and everything that comes along with that.I don't care WHERE you live - $25 an hour is absolutely giving it away.Make your value be the honest quality - not the price. Your client's are driving new cars and have the latest cool stuff and have nice houses - why shouldn't you?Double your price - lose 30% of your clients, make more money, have more free time.Ellen Rohr's book "How much should I charge" is a good start.No offense - but if you are charging $25 to do good honest work, than you, sir - are part of the problem.You are cheating yourself and hurting your fellow contractors.Off the soapbox.I'm a frugal SOB, but if I do ever have anybody do anything for me, price is about 3rd down the list. Your clients probably feel the same way, and if they don't - get a different client base.JT
Me likewise. I tell them that there are hundreds better than me............................but thousands worse than me.
I charge $60.00 an hour. No mortgage, no kids, no debt.
roger
Edited 2/29/2008 10:54 pm ET by roger g
If you're licenced and insured, that's pretty low. You're probably hauling in all of $12-$15 an hour when all's said and done.I should know: it's what I charged for years.You don't have a business at $25, you just own a crappy, stressful job.
Hey, if you've read some of the others comments on this topic, it sounds as though you and I had better take more expenses into consideration in our hourly rates. Honestly, I've always just tried to work hard, be honest, and live frugally. I do end up eating some incidental materials, but I try to buy a small stockpile of something or other on each client to replace something else I used from my own supply for that client. My truck is 15 years old--just a Ford Ranger--so I only bring what I think I'll need each day.
If I were bidding jobs, I'd lose my arse every time. I generally underestimate the final tally by 30-40%. In my defense, EVERY client says, "Since you're here. . ." I do feel that in working T&M, those add-ins are easier and less expensive for the client, and I like to work in a more open, flexible way with the client feeling welcome to tweak details as we go.
No one has mentioned it, but I have worked with a few architectural firms along the way on some small jobs. I've been trying to revamp a house for my wife and myself, but once I finish it up, I plan to develop relationships with a few firms here in town. My impression is that many contractors don't want to mess with smaller jobs, which for me working alone, may be a perfect fit. Plus, my hope is that it will open a door to high-end work where costs will be a lesser issue. We'll see.
I appreciate all the input on this topic. This has been a great line of comments to read.
I love the smaller jobs. 1 man, quick work, moderate income. Add 6 of them a day and moderate become lucrative. Quickset is my friend.
At some point in time though..I have to get serious and hire help. Put a sign on my trailer etc. But you cant just go get help that can hang crown as well as me or tile or wire in a plug, fix a water leak, anything that requires a skill. My clients want me..and they are usually willing to pay T&M. I am a handy guy to have around,......I am the epitamy of a "handyman. "Plus when I am on their clock..they talk to me less.
I was finishing up a job and the woman asked how much for a a extra. I quoted her a quick price (discounted because I was there set up etc )she comes back with that WAY to much she has a guy that will do it for half that "well then he would be the one to call ""I tried and his phones disconnected ""well then I guess he wasn't charging enough to pay his bills "you gotta charge enough to pay the bills
Biggest key to bidding a job is PREQUALIFICATION!How many estimates have I wasted time on cause I didn't take the time to make sure they had a clue how much they could spend, how much it would cost, ect.I don't regret all those wasted estimates, because I look at them as learning experiences, but I'm trying harder to qualify folks these days so as to not waste as much time on tire kickers, low-rent budgets or wishy-washy clients.Of course, that means you got to be able to quickly get a good feel for what the numbers may be as well.I've found that if I do it two ways - first - take your gut feeling of how long it's gonna take as a project whole - say 3 weeks - and use your daily rate + percentage + materials + markup to come up with a big number quick.Then - I forget that number and break the project down by tasks and really do an in-depth analysis of how long I think each will take and add it all up. Compare those two, add a bit for reality and you should come close to where you need to be.Using allowances is a big part of not losing your butt on em either. That allows the client to change their mind at any point on product selections and have a clear idea how much extra their new decisions will cost them. And - it allows you to get that estimate done without some of the decision making done yet.But what do I know really - I'm just trying to figure it out myself...JT
Julian, you're making a lot of sense. Could you elaborate a bit about how you prequalify? How hard do you press them for a budget? Do you ever show your finished basements and tell them what each cost as a way to get their head into the realality of prices? Bob's next test date: 12/10/07
You start talking like that and it makes it sound like I know what I'm doing...Talking the talk is one thing, walking it is another.But I have started to let people know that you cannot finish a basement nicely, even a small one for less than $30,000. and if you get into one of a decent size, were going higher than that.Nicely done average larger size would be between $40K - 70K.I had some "client's", a young affluent couple - (doctors) last year that I had worked up sketches and quotes for their basement and was there in their living room with them basically saying that Yes, they wanted to do this. They had mentioned that they had some work in their offices and could I come down to take a look and possibly roll that into the basement job and when I went down there, I was ambushed by the father and uncle who were the real people behind the money in the family.So we set down in the office and the father says, let's talk about this basement job.... And they start with all the questions and I've got all the answers and than at the end, they say, well, we'll think about it and we can negotiate further. Never heard from them, but the only negotiation I would have been doing is upwards - what a trip!The lesson learned there is work on my closing skills and had I had them sign a contract with a deposit that night - they'd have had to commit. But probably just as well - would've been a pain in the butt having a second set of clients on the job.Weird situation - learned a few things in the process. Would've been a 55K basement.JT
"But I have started to let people know that you cannot finish a basement nicely, even a small one for less than $30,000. and if you get into one of a decent size, were going higher than that.Nicely done average larger size would be between $40K - 70K."That is the type of conversation that I would have over the phone instead of setting an appointment. Your pictures and basic presentation is effective enough to prove that you know what you are doing and you know your costs. If they don't know it takes a minimum of 30k, then they ought to before they start setting appointments. I've ran into the Dr thing too. It's amazing how cheap some of them are. Then it's amazing how demanding some of them can be. I once argued (negotiated) over the phone with a Dr about setting one door over the course of several conversations. He was a brother of a friend and wanted me to do it by the hour, then balked when I wouldn't do it without him accepting the responsibility for the door, which he was supplying. He couldn't understand that I didn't want to involve myself in a two hour job and risk damaging a $2000 door. At that time, I didn't charge very much per hour and I just refused to risk so much for so little. I saw it as a simple risk vs reward equation. He saw it as a professionalism issue. Eventually, he agreed to pay me something like $100 extra for me to assume the risk. That was a long time ago. Today I'd just laugh him off and tell him to find someone else if he didn't want to accept my terms. If I know the Detroit area market, I'm guessing that your Dr's were of a different culture? Bob's next test date: 12/10/07
Right you are - Eastern Indian or something like that.Lot in the Canton area - wasn't the first time I've spun my wheels in that sense.Trying to keep learning how not to waste my time.JT
I used to discount prices for extras, then I decided to stop that, extra's are at full rate no matter what now.
Why bother discounting, you're already there and the chances for them saying no or finding someone else is close to zilch.
Why someone would want to go from someone they know and trust to an un-known makes me question their sanity. I prefer to not work with the stupid.
WOW, i was way off, I only get $10/hr. and I am the boss and employee
hmmmm, your post perplexs me
I am impressed by your enthusiasm and the early start to running your own business, however, I suspect that you may not yet have actually incorporated or registered a business with the appropriate licenses and insurance. That will certainly affect the rates that you can command. Later on, you can raise your rates, but be aware that many of your established customers may be expecting the same "bargain" they always got.
I generally bid jobs, but many of my long-term customers never even ask how much it will cost, they just ask how long it will take because they have a general idea of what my daily rate is. Unbeknownst to them, they are actually getting a better deal than if I were to bid the job because I can nudge my rate upwards on a bid where they're not paying attention to how long it takes. On the other hand, working T&M has the advantage that I never have to worry about the unexpected, explaining why it's necessary and adjusting the cost accordingly. Trust is a beautiful thing, I'm very careful not to abuse it.
Part of the logic behind my rates is that I expect to be paid for what I know, not just what I do. Much like doctors charge the same whether they find nothing wrong or write a prescription.
Even having said all that, my rates are probably a little low compared to most skilled tradesman, a little high compared to most painters (I do a lot of painting), but about what I need if I'm successful at scheduling 40 hrs/week.
ARE U JOKING?Quality repairs for your home.
AaronR ConstructionVancouver, Canada
Aaron, do you know Andy is 14 years old? (seriously) buic
Edited 3/2/2008 1:14 am ET by BUIC
LOL! I had forgotten!
Still, it may be an important thing to get him used to the real world.I was in the bank, the other day, talking to the teller about something, and the idea of "profit" came up. The teller said "that's your income".
Now, this is a 25+ year old.
I had to explain to him what profit is, and that that's not salary, because his parents never taught him about business.
Gett'm while they'r young.Quality repairs for your home.
AaronR ConstructionVancouver, Canada
Certainly a good thing for him to have an awareness of as he continues...buic
This is a hard one for most--lots who work alone or set their own wage.
It would appear that 'profit' is what you take home after your materials--what you get for your work.
More advanced might see that 'profit' is what you take home after your materials, insurance, phone/office, license, bonding, equipment, taxes etc... overhead.
And finally when you really get it--profit is what's left over after ALL that.
That right?"Research is what I'm doing when I don't know what I'm doing..."
it didn't jell for me until about 20 years in "business"
then i decided to figure out what would a real business look like
i incorporated and became an employee of the corporation
just like any other corporate business ... it was owned by the shareholders
shareholders don't expect anyone to work for free for their company... they don't expect to get a share of the profits unless there is a profit to share
so ALL costs have to be accounted for:
labor, direct & indirect (management, office, field labor )..... materials... subs... vehicles... real estate ( owned or rented )... bookeeping, legal..... paper clips, computers, training...
capital (long term & short term )
anything a big corporation would need to function and prosper and persevere....those are the same things a small corporation needs
they are also the same things a sole proprietor needs
after all those costs are paid for, anything left is PROFIT
so... labor is not profit....wether you pay it to a manager... or you pay it to yourselfMike Smith Rhode Island : Design / Build / Repair / Restore
This is my third season, and with a lot of insight from this forum, a lot of reading and some experience in the 'real' world.... I get it.
I started @ 30$/hr, a bigger remodel for friends of ours. Now I charge 40$/hr for new clients--more if it involves especially difficult or nasty work... When I bid jobs I try to make 60$ and sometimes end up more.
I think it's different for me, being a one-guy outfit. My expenses are very low--very low overhead. 1100$ a year for insurance and bond, 130$ a year for license, then truck pay 200$/month, insure it for 50$/month. Our mortgage is 800$/month with proptaxes and ins. All the rest in there and there's still been a good chunk of $ left over that we've been able to save/remodel our own place/pay off cars and whatnot/ buy furniture... Keep some in the 'business.' Invest.
I had good training but I didn't know it as my wife and i were basically poverty level before I started working for myself and she went FT as a teacher. We didn't really realize this until we both started working professional jobs. We'd just had our daughter, who's now 4. We just lived on less! But had everything we wanted--mostly I wanted expensive sporting goods--so I worked in that field racing, building and repairing bicycles, tuning skiis and snowboards... 1,000$ on a credit card would have made me nervous even 3 years ago, but now It seems I nearly charge that much on every trip to the lumber yard!
With confidence in your work and an eagerness to learn, good clients, good understanding of what a business is, what it's supposed to produce and knowledge of what other trades charge, NO skilled professional should have issue with charging what they are worth. Gotta believe you're worth it.
Do fine work, charge more, work less, enjoy your life!
Cheers Mike
Pat"Research is what I'm doing when I don't know what I'm doing..."
Charge $15.00 p.h. when you turn 15. I made $5.00 per hour 30 years ago mowing yards. If anyone complains tell them a college education costs more than your house!
Where are you? In the NE?
Out West here I charge 35$/hr at the least and it goes wayy up a) if I have to go OVER the house, and WaYYYYYY up if I have to go UNDER the house.
That's kind of a joke, but my thoughts on billing echo Sphere's. It depends on the type of work I'm doing.
"Research is what I'm doing when I don't know what I'm doing..."
Here in SW CT I vary my rate according to project, just finished an addition 60 days work bill myself at $55/hr. I will charge $65/hr for fine carpentry, builtins and crown. Also have charged up to $100/hr for handyman type service calls (toilet, smoking lightfixture).
I don't do T&M work because I tired real quick of justifying the rate against the $10 bonehead or how it stacked up against the HO's salary.
When a customer asks about my rate or how I justify my quote I simply tell them that my costs/rate are in line with other trade professionals, i.e.; plumbers, electricians, HVAC and yes, the auto service center. They want a hammer-swinging monkey for short money look somewhere else.
-Norm
They want a hammer-swinging monkey for short money look somewhere else.
That's a great line.
Mid-west here, and we charge $60.00 per hour for carpenters, mechanicals are in the 75-85 range and I'm looking at increasing our rates very soon
Like sphere said, it should be what you need to cover your expenses and make a fair profit.
What I find funny is people will bring their car to the mechanic and have no problem spending 60-75 per hour to have work done to something that is loosing money every minute they own it but gasp at paying the same amount to work on their home which is usually their single largest investment and appreciates.
One major problem I have with T&M jobs is the days that come up short timewise.
What do you do on those days when you know it's going to end early and filling an extra 2 or 3 hours on another job just isn't possible?
I'm doing a small bathroom gut job right now, T&M would kill me... jackhammering concrete then needing a plumber, patching the concrete, drywall finishing, tile, paint ....etc.
One major problem I have with T&M jobs is the days that come up short timewise.What do you do on those days when you know it's going to end early and filling an extra 2 or 3 hours on another job just isn't possible?I've gone to time and materials as a great way to 1) not eat the job and 2) not rip off the customer. I submit a written estimate with a ballpark figure for how many hours of labor will go into the project, in addition to any materials. I add in extra time so that I can cover all the unknowns. I keep track of my hours and deduct my half-hour lunch. I find it to be the most fair way to conduct business. On days like today, I only worked four hours. I'm not sure what your question was regarding short days. Maybe you work in whole-day increments?
In the Chicago area most tradesmen are union. A union residential carpenter makes $37.77/hour $16.43/hour for benefits [$19.07/hour commercial benefits] 21% of gross wage for work comp; add in taxes, overhead, etc. $84.05/hour. As a union contractor I have to supply all power tools and any hand tool that will not fit in 1’x1’x3’ box except a hand saw and framing square. As a general rule most customers can be a little sticker shock, until they get a few estimates. It is the going rate. Once a potential customer sees that I am not ripping them off and my prices are competitive all of a sudden we’re best friends. Also I try to explain to them that on a T&M job the rate at which you work is equally or more important then the per hour rate.
Julian,I'm an ex-photographer/art director who also chose to jump to remodeling 15 years ago. I'm in forever-in-a-recession upstate NY. Just today I was talking to a client about the economy and we were saying "yep the rest of the country is going into the tank again, they'll have to live like us again for a while" he was telling me about people who were interviewed about living through the depression up here who said "what depression?"Anyway, wages are really depressed up here. I'm at the upper end of what contractors in this area charge: 35.00/hr plus 20% markup on all subs and materials.I worked in Minneapolis for a while, where carps were billed between 55-70/hr.Steve
Edited 3/1/2008 5:02 pm by mmoogie
Totally agree with you on upstate NY, I work in the Utica area and thats pretty good here too. Nice to know I'm not way off when I read what others are getting (Oh, just charge that you'll get the job)Doesn't work well around here!The most beautiful thing about a tree is what you do with it after you cut it down. -Rush L.-
One,We're getting quite a few Uticans around here these days! I'm near Cooperstown. My work partner (Henley on these boards) is from Utica, and I think I saw framer52 is as well. I was just at a movie at the Proctor Institute a few weeks ago.Steve
Edited 3/2/2008 1:38 pm by mmoogie
I know that you feal that you can't charge more, maybe you ought to go up to cooperstown. I know for a fact they will pay more. As far as utica is concerned, we have areas ie. n harford, clinto, Whitesboro, HP etc. that I have nwever had a hard time getting 45-50/hr. I just had my roof done with extras billed at 45/hr. Sometimes you have to drive a little to make a lot.
Ps. I live very close to the museum. We go there 2x's month
Quetion to all the T&M billers?
How do you stay ahead of customers on payments?
No need to on big stuff if you mean payments to suppliers. Anyplace I deal with gives me 30 days. Minor stuff , I include in the bill at the end of the week , I include photo copies of invoices paid. My worst burn happened on a fixed bid job many years ago (late 70's), End of a $180,000 job. Took me 3 months to get my 10% final payment. That never happened again.
They can't get your Goat if you don't tell them where it is hidden.
Actually I was wondering how much the T&M workers extended their customers.
At $55 per hour plus materials that can add up to a chunk of change in short order, including the time it takes to bill them then a couple a days to get a check...
I'm sticking with bid contract work and a set payment schedule. First thing I learned when going into this business... never let a customer get ahead of you when it comes to money. Being on the wrong side of the golden rule is a non negotiable position.
We do pretty big projects, almost always T+M. We take a 10% deposit and then bill for work completed. It's not unusual for a client to owe us $70K at the end of a big month. Not saying it's the safest position, but so far people pay us eventually, at least most of what they owe us.
It's just me and one other guy, so we can't get too far ahead. Winds up being about 2500-3K a week unless windows or something big comes in. I bill every week or two. I list materials pretty generally in the bill. I don't show copies of the actual invoices. If someone made a fuss about it I would show them all the records they want to see, but I've mostly got long-term clients with a lot of trust built up.In fifteen years I've been stiffed for 100 bucks, not from a homeowner, but from a sleazy contractor who made a big deal out of what a Christian he was. He was slimey as all get-out. He had no address or phone number on his paperwork with me or with clients. He stiffed me for a day's pay during a really bad stretch when I found myself having to drive an hour and 45 minutes each way to put vinyl siding on a trailer in January for 10 dollars an hour. I walked out on the job at the end of the day, and he didn't pay me for the day.
I managed to track down his son and called him to let him know his father was a thief. He hung up on me.Lowest point in my career.Steve
Last two contracts I wrote, I just said "$X per week as long as work is progressing". Explained that prevented either work or pay from getting too far ahead or behind the other. Both agreed, no problem (both were $23K, one I wrote at $4K a week, the other at $3K). Works out great, makes me wonder why I didn't think of this years ago.View Image “Good work costs much more than poor imitation or factory product†– Charles GreeneCaliforniaRemodelingContractor.com
Boy - that put's the pressure on you to get there right in the morning and put the 8-10 hours in every single day.Not a problem some weeks, but I've got enough other distractions (other quotes/daugther) that there's some (most) weeks I couldn't dependably be there enough to make someone happy on a weekly defined paycheck. I'm still recharging from an entire year of #### from getting divorced last year and getting into the swing of my new custody agreement. Haven't perfected my weekly/monthly schedules as of yet.It just seems that working that way would invite a LOT more scrutiny and over the shoulder looking from the homeowners.And I though T&M hourly was a tricky client/worker relationship...Regards,Julian
Boy - that put's the pressure on you to get there right in the morning and put the 8-10 hours in every single day...It just seems that working that way would invite a LOT more scrutiny and over the shoulder looking from the homeowners.
???
Quite the opposite. Both jobs are simultaneous, so I don't even try to be at each for 8 hrs. Each week either I or one of my sub's will show up at some time, and move the job along. Both jobs have estimated completion dates, and so far both are on schedule (OK, one's a little over, but they've thrown a ton of extras into the equation). These are not T&M jobs - these are contract jobs for a set amount. The job is progressing each week, they pay each week. That's the way the contract reads, it hasn't been a problem. View Image “Good work costs much more than poor imitation or factory product†– Charles GreeneCaliforniaRemodelingContractor.com
I read that as a weekly time and materials project - not a fixed contract job with weekly payouts.Make sense now.Too late to be on the computer...JT
I don't see why it wouldn't work on a T&M job as well. My point is, I'm writing checks and paying either bills or payroll every week - so why shouldn't the checks come in every week? Plus, I like to get the point across - you want the work to occur every week, you write the checks every week.
It gives me leverage in case they were to balk on paying, it gives them leverage in case the work progress were to stop or slow down, and it provides opportunity for any disagreements on pay to get worked out as the job progresses, rather than at the end when they're holding a bunch of my money.View Image “Good work costs much more than poor imitation or factory product†– Charles GreeneCaliforniaRemodelingContractor.com
Huck,I like to keep 'em used to the idea of writing checks too.That actually goes against what they teach you in business school. They tell you that to keep your customers happy you should aggregate their pain and segregate their gains. Theory being that it's less annoying in the long run to be hit in head with a 2x4 once and shake it off than to hit your finger with the hammer every day.But I like to keep the money flowing, so I make them suffer death by a thousand mosquito bites.Steve
I'm not at all consistant, client's vary a lot.But for most medium to large jobs, I'll list out a payment schedule based on completion of various phases on completion.But I'm a small potato compared to a lot of you guys here.Still learning the business (and the craft....)Good stuff, being here and listening in ( and chiming in) on some of these discussions.JT
julian...
<<<<But for most medium to large jobs, I'll list out a payment schedule based on completion of various phases on completion>>>>
we use a payment schedule also.... but a long time ago i stopped tying it to completion of a phase and started tying it to start of a phase
like
deposit with signing of contract
start of work and obtaining a building permit
ready for foundation
start framing
ready for sheetrock
windows delivered
etc,
i never wanted to leave wiggle room for dispute
like windows installed ( what if one is missing , or had to be returned ... blah, blah, blah )
stack the deck in your favor and remove the areas subject to disputeMike Smith Rhode Island : Design / Build / Repair / Restore
I'm in Ct. I get $55 per hour no matter what I'm doing. clients are waiting in line as it should be.
today is sunday and if I feel like it I could go down to my shop and and fire up the money machine
I shoot for 40 hours a week. usually get pretty close to that. with about six weeks vacation (planned) I like to net between 80 and 90 K after expenses.
I like T&M arraingements. it works well for me but I understand its not for everyone