I'm going to start building a rate book. I have looked through alot of the archives here and have some more questions about how some of you guys do it.

What level of detail do you take your line items to?

I see some of you have a $XX.XX price for 1st item and then less for additional.

What kinds of things do you have adders for?

Here's a sample job, how would you assemble a price for it?

Single family ranch with an unfinished basement. Owner wants a 30-amp 240-volt electric dryer and 20-amp 120-volt washer circuit in bedroom closet 40' away on the first floor. FP stablock panel in the basement with room for breakers. EMT required. Dryer needs 4-wire cord.

To what level of detail would you break that job down to?

Jps, since you saw the job, how long will it take you? And what will your materials cost you? Do you know what your breakeven number is? If so you have all the info you need to make a good bid. Remember also that on small jobs, there is less productivity in the day, but I bet you have a full day there.

Yes Mike your right, key work being "make a good bid."

I am talking about building a flat rate book. If I send my installer (tech) out to look at it and start it right away if approved, how would he go about using a flat rate book to do this? How would you who have books break it out into tasks?

[This message has been edited by Jps1006 (edited 01-26-2007).]

(4) 3/4" emt w/ (4) 10ga and (2) 12 ga copper
Dryer Outlet
GFCI
single pole breaker
double pole breaker
Appliance Cord
Addition for access (laundry room drywall)
Possible addition for multiple bends or junction boxes in basement

I'd also give a short lecture on the FP and offer a price on a QO upgrade.

Dave

JBF-1060-0060 Daily Job Fee (For Job Setup, Cleanup & Paperwork)
DCL-3050-0240 Dedicated Circuit: EMT Conduit 30a Limited Access
DCL-2050-0240 Dedicated Circuit: EMT Conduit 20a Limited Access
AHU-1006-0030 Install Dryer Cord 30a

The dedicated circuit tasks include everything. The breaker, conduit, wire, receptacle, etc.

The above task numbers have a code to them.
The last three digits of the first number is the distance. The four digits of the last number is the time in minutes.

Example: DCL-3050-0240
DCL = Dedicated Conduit Limited Access
3050 = Distance Up To 50 Ft.
0240 = 240 Minutes For Task

I have distances that range from 10 Ft. to 200 Ft. 10ft, 25ft, 50ft, 75ft, 100ft, etc.

I also have three catagories for degree of difficulty.

Open Access = All framing is exposed

Limited Access = Attic space, crawl space or unfinished basement. Fished up or down a finshed wall.

No Access = Wiring has to be fished through finshed walls & ceilings.




[This message has been edited by A-Line (edited 01-26-2007).]

Thanks guys.

A-Line,
Did you buy or make that book?

Do you have a way to account for fluctuating material prices (i.e. automatically tie into purchasing etc.)?

What if I decide I can put (3) #10 & (2) #12 in a 1/2” EMT?

How do you account for the drastic price difference between a GE 2-pole 30 and a Stab Lock?

We use a service software program, cost was about about $145 and it does the work of the $3000 plus programs and has a lot of extras included, no buying add on modules. They have a trial at www.ayanova.com

We make the book from our actuals, and have up to date inventory from our vendor billing.

"Do you have a way to account for fluctuating material prices (i.e. automatically tie into purchasing etc.)?"

Automatic updating is very expensive, but our purchasing prices can be updated with vendor billing, vendor quotes, or connect to the many on line pricing schedules.

"What if I decide I can put (3) #10 & (2) #12 in a 1/2” EMT?"

In that case you use the task add on for that task.

"How do you account for the drastic price difference between a GE 2-pole 30 and a Stab Lock?"

Use the inventory item that fits the job, and add it to the task.

Why make it complicate?

$150 Material
4 Hours labor
.5 hours overhead
Add your mark-up

[This message has been edited by ITO (edited 01-26-2007).]

A good point ITO, but it takes experience to estimate that way, and often the markup is left out.

Dave

There is a need to complicate things for various reasons. One being that some feel a need to prove how smart they are.

Another reason might be to blow smoke.

Keeping things simple is the best advise I've ever heard.

ito - it is keeping it simple.

you run an 80 man union shop, and cringe at the thought of those 80 men pricing a job. correct?

imagine running a 20 man residential shop where the guys do price the jobs. jobs that are $500 to $5000 dollars.

do you want them to walk in look at a job, then figure out how long it will take, figure out all the material needed, figure out the OH & Profit, add it all up and give a price?

or would it be easier to look in the book that has the average prices for that job, and just adjust it accordingly?

takes much of the risk out and keeps it simpler.

Just to clarify, I'm not looking to start the "to flat rate, not to flat rate" discussion here. There are many good reasons to do it for particular business plans. I see the wisdom in it from first hand experience. If any of you want to rehash those views, please start a different thread. I promise I'll contribute.

Also, I'm not asking how to figure up a price on the example above.... I'm asking more specifically how to do it using a flat rate book. I'm interested in the day to day technique and the different variations people have to them. It's more about using the book than figuring the job.

[This message has been edited by Jps1006 (edited 01-27-2007).]

jps,

flat rate is a guide. you have to educate your guys how to use it. but what it does is keep them in the right ballpark so the customer gets the correct job and the company makes the money it needs.

as for your question, everything is a task and everything is an adder. huh?

customer wants you to put in the 240v and the 120v line. both jobs have a price for primary task and additional task.

our pricing would be the following:

primary task - install 240v line in emt (this would include the circuit, a standard breaker, receptacle and all misc parts)

additional tasks:
adder for FPE breaker
adder for 120V circuit (includes outlet and breaker)
adder for dryer plug

(all these prices are in the price book as adders)

pretty simple and basic.

now, if you had to drill through a concrete wall, or if it was a QO panel and you needed to install a twin breaker to make some room, or anything else, they would be adders.

now the customer would see the following:

install 30A 240V circuit from existing FPE panel to location of dryer. Install 30A 250V dryer receptacle. Install 30A 250V cord set on dryer - $x.xx

install 20A 120V circuit from existing FPE panel to washer machine location. Install receptacle for washer machine - $x.xx

Simple as that. But those prices are based on all the job conditions. The only difference between this and what ITO proposes is that with this information in a price book, your technician can look everything up and adjust according to the field conditions. He doesn't have to start from scratch.

ITO's idea is fine if you have only a couple of people who price everything out.

Oh, the primary task includes your travel and setup time.

[This message has been edited by mahlere (edited 01-27-2007).]

"Simple as that. But those prices are based on all the job conditions. The only difference between this and what ITO proposes is that with this information in a price book, your technician can look everything up and adjust according to the field conditions. He doesn't have to start from scratch."

And that is what helps us, having the information to put it all together.

Please don't confuse a pricing guide with a pricing book, the guide system is more of an on the site estimate, where the pricing book may be used by volume service providers, in and out pricing, IMO not a good business practice.

Very helpful, thanks guys.

mahlere,

for distance on the 240 & 120-volt runs, do you use a multiplier or do you have different length line items like A-line?

I bought software that had inventory and tasks already set up in it. I made a lot of modifications to the tasks and inventory. With the software you print out your books.

I update my material prices manually. The software allows you to download material price updates into it but I haven't done that.


I have add-on tasks for this. For example if I want to add wire to a conduit I use an add wire in conduit per foot task. For a federal pacific breaker I would use an add-on task for installing it. If I need to install a device that costs more than a dryer receptacle I would use an add-on task for that.

I usually put a work description right above the list of tasks.

Example:
Install 30a circuit for dryer & 20a circuit for washer. Install dryer cord.

JBF-1060-0060 Daily Job Fee (For Job Setup, Cleanup & Paperwork)
DCL-3050-0240 Dedicated Circuit: EMT Conduit 30a Limited Access
DCL-1001-0000 Add Additional #12 THHN Wire In Conduit Per Foot
BFP-2051-0005 ADD-ON Install Federal Pacific 30a Double Pole Breaker
BFP-1016-0005 ADD-ON Install Federal Pacific 20a Single Pole Breaker
AHU-1006-0030 Install Dryer Cord 30a

These tasks have different price columns so I can make adjustments if I feel the job conditions will make the job easier or more difficult. I could also go from a 50ft. run price to a 75ft. run price if I felt the 50ft. price was to low.

If I need to setup scaffolding or something I have tasks for that as well.

Keep in mind I'm new at this and I'm not saying this is the best way of doing this. This is just how I'm currently doing things at the moment. I'm very interested in learning how others do this as well.


[This message has been edited by A-Line (edited 01-27-2007).]

[This message has been edited by A-Line (edited 01-27-2007).]

[This message has been edited by A-Line (edited 01-27-2007).]

Also the software allows you to do T&M Billing, and as A-Line said you can build your own custom sheets.

I had actuals for the past 45 years, a lot of the builds were in spring binders and some in files, i transfered a lot of that to excell, then found it was a lot of work to move it around, so that is when i bought the service software, i felt the $145 was cheap and the support has been better then expected.

jps,

are runs are up to 25', after that there is a per foot price for each wiring method.

The problem I have had in the past is every time I teach someone how to estimate or price jobs; shortly thereafter they start looking at me as the middleman between them and their money. Another problem I used to run into is they start adding up all their tickets figuring all the profit, then use this information to ask for a raise, at new truck or in a worst case scenario to justify dishonesty on their part.

So every time I hear about a “technicians” (is that what yall call electricians up north?) pricing work, I just cringe. Here is some advice take it or leave it I don’t really care, but if you have enough men running around and doing work, and you think you need a pricing book, take a step back and consider hiring a salesman/estimator. It’s never a good idea to mix the business end with your labor; the very most a serviceman should be doing with paper work is write up the hours worked and the materials used. If you cant support a salesman/estimator then you need to be doing it yourself sspecially if its only a part time job right now.

Again this is just how it works for me, some other business model may work you and that is fine but keep this in mind, 3 of my biggest competitors all started at my shop.

[This message has been edited by ITO (edited 01-27-2007).]

ito,

i feel you. but there are some very vocal opponents to us making money. some of them are right in our own industry.

now for residential service calls, where our job average is about $400/ticket. I couldn't justify having a salesperson/estimator look at every job. it would bring that ticket avg to $500. Thereby costing the customer more money.

if we did this work at T&M, our avg ticket would be about $300, but that would leave us pretty much bankrupt.

my guys can add up all they want, but they also know what most of the costs are. They know what the advertising is, what the trucks cost, etc.

I look at it this way, if they are gonna go on their own, they are gonna go on their own. nothing i can do to stop them. keeping them in the dark won't stop them. it'll only make them ignorant competitors when they do.

if they know the deal, they won't start out trying to work for $50/hr and wonder why they can't seem to make any money.

but that's just what works for me. but, we've been a union shop before, and it's a different world. most of those guys are not going out on their own, except to moonlight.

big difference.

I have a union shop, for what that is worth...

Why are you estimating $500 jobs? I guess if that is your business model and it works then who am I to say anything? But every successful service model I have seen is strictly T&M.

I dunno maybe I am not looking hard enough.

These franchises use flat rate pricing.
I would say they are quite successful. http://clockworkhomeservices.com/

I don't think it's because your not looking hard enough. I think it's because your not looking at all.

[This message has been edited by A-Line (edited 01-27-2007).]

[This message has been edited by A-Line (edited 01-27-2007).]

t&m is a bad business model for residential service.

it leads to surprises for the customer and lost profits for the contractor.

look into it a little.

we don't so much estimate these jobs as we just let the customer know before we start what the total cost will be.

this allows them to make the decision whether they are good financially before we invest the labor and materials to do the job. No more "if i knew it was going to be that expensive, i would not have had it done"

it also allows us to make the money we need without having to drag the job out because of some low hourly rate. We could never generate $1000+materials/8 hr day with one man in a truck on T&M.

T&M still works with commercial, but not so much with residential.

look into these people - Frank Blau, Maurice Maio, Ellen Rohr, Patrick Kennedy.

They are just a couple of the people that have been advocating flat rate systems for years.
www.youresi.com www.nexstarnetwork.com

sorry to get off topic jps....

I hope it works you, but I gave up residential work years ago; home owners drive me nuts.

ito,

good luck with that. you should still look into those links aline and i posted.

it's gonna start to find it's way into the commercial service sector real soon. we already use it there quite a bit.

factories, warehouses, retail, big box....we do them all...some with flat rate...some with T&M. i make more with flat rate and those customers are happier.

"it's gonna start to find it's way into the commercial service sector real soon. we already use it there quite a bit."

Eric, by the way you told me a year ago, the guy up the street would be eating everyones lunch, just to let you know he is not just eating our lunch, he is hiring and putting on more trucks, he is doing both resi and commercial, and his flat rates are twice our rates, and to add insult to injury, the guys that said he will not last, the T&M old thinkers, are cutting back men and trucks, you called that one right, was funny how everyone said these people here, will not pay those kinds of prices, now they see him all over town and can't figure how he is getting all the business, i think it's because they feel more comfortable knowing the price, the ones we had in town would do T&M and leave the customer in unknown land.

That's why I'm looking to get away from any T&M. The only time I've ever had problems with homeowners is with T&M. If I took the time to bid it out, no problems, but with the smaller stuff it's just not worth it the time. A rate book should help there. I don't mind small jobs as long as they're profitable.

Thanks for all the input. It's been very helpful. I will revisit this again soon or start a new thread later. Right now I'm playing with the demo LK refered to AyaNova. The more I look at it, the more features I find. Custom fields, totally customizable reports, and everything is indexed so you can almost google your database. As soon as my trial runs out I'm going to buy if only to schedule and use inventory, but I'm convinced I can use the rest of the features once I get familiar.

JPS,

Just let me know when you get your key, I will send you base data and some templates for electrical, so you get off to a good start, I really like the workorders, and the ability to slide the scheduled jobs around it's a real plus, you can add or delete the price book part and custom it your own way.

We still can't figure how they can give you a $3000 program for $145, we looked at every service software package out there before finding Aya


[This message has been edited by LK (edited 01-31-2007).]