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Just curious Pat. Billable hrs = tech hrs?

Love this discussion! Best learning tool out there. Sorry I missed Biz Chat last night.

Twh,
You are absolutely right. I've been afraid to mark up the small items because I figured all the homeowners can walk around the local hardware store and see that I din't pay that much for a keyless socket.
As for the more expensive items like fancy light fixtures, they are already so pricey I'm afraid the customers would freak out at a 40% mark up on a $400 light.I'm gonna have to get over that aren't I?

Steve,
From my point of view, billable hours are different from tech hours. I pay my guys 40 hours per week (tech hours) even though it is nearly impossible to keep them busy exactly 8 hours a day. Sometimes the calls don't take quite as long as I anticipated so what do I do? Piss loyal employees off; send them home and dock them an hour or two? Over book the day and piss the customers off because they took the day off work to wait for us, but we're not going to make it there until tomorrow because the last job took too long?
Billable hours are basically the number of hours the tech is actually on the job in front of the customer with the $ meter running. Traffic, trips to the supply house, etc., all cut into the billable hours. I do charge more for the first hour to make up for some of this lost time.
I saw one electrician on TV that charged customers a minimum of four hours no matter how small the job. That would cover most of the difference in tech vs. billable hours.Good solution, but you gotta be one hard son of a gun to charge a little old lady four hours to fix a bad receptacle.

Pat

[This message has been edited by Pat@Amber (edited 08-26-2004).]

Pat.
Getelectric missed the expenses of company payroll costs, he just took the pay rate, and he did not consider the increased comp insurance costs, company paid, or the payroll services, then after that add overhead and truck expenses. And the most inportant did not consider that all hours are not billed out. If his figures worked i would have been retired 20 years ago.

I was hoping he was right

I don't think anyone should be afraid to mark-up mats! Have it right there in the agreement they sign, and go over it with them before they do. "We mark-up ALL material 20%...Billable hours are any hours concerning said project..."

If someone doesn't understand how that works explain it to them, if they don't like it... Tough! It's that or raise your rates, and don't mark-up anything. We do this for money, and if people understand the billing before hand, they either hire you, or look for someone willing to lose money. If they do the later, great, it wasn't your loss. You may not have had the job, but you didn't lose at it.

Sorry, this is a sore subject with me, as current employer often takes jobs lower than his original bid, because somebody low balled. Then whines to me about it, when he knew it was a looser to begin with.

A Company I used to work for had a rate plus mark-up, and a higher rate with no mark-up (And clock every minute you even think about the job, material handling too.). With a little explanation of what that mark-up covered. Once the customer understood how it worked, (maybe to thier advantage, if fixtures or high cost items were involved) many choose the higher rate! They say to themselves, "I pay high rates, but I'm not paying bluebook column #2 for a GFI!"

Thanks e57,
I'm gonna print that post out and tape it to my dashboard.
Pat

Print it on all contracts!

"I do this for money punk!"

Kidding... there are subtler ways of saying that.

Oh, discourage your employees from side work, but tell them to charge 2X market rate if they do. Otherwise they kill thier day job, and after all it is thier week-end!

Why would you tell people what your markup is? Does Wal Mart list their cost on a case of paper towels? No way. Also I would never tell someone they can't do side work. Why sould someone not be allowed to make the best posssible living they can?