ECN Forum Forums General Topics of the Trade Business Related Discussion Billable vs Non-Billable hours

Mahlere,
Thank you for clarifing your post. We also do flat rate pricing and have for years however in a slightly different form. We strive for a 63% gross profit on every job.
As has been said job management is essential.
Our rate for a 200 amp service change is $3400 and nothing but quality materials are used.
I've also seen the results of those run-in run-out contractors. We work in the state of Mass. and they have an excelent system for weeding out those ilicit contractors see www.state.ma.us/reg/boards/el and go to the diciplinary site and pay close attention to Electricman, they were one of those bad contractors that the State closed down

Given all this talk about charging folks for professional service I just have to throw in two fun comments: 1) When Larger-than-life oilfield firefighter, Red Adare was asked by a Senator “Why do you charge such high prices to put out the oil fires in Kuwait, his response was: “We charge these prices because we are professionals. If you think it is expensive to use professionals, try using armatures.” 2) I just read on NewsMax that Donald Trump gets paid $1.5 million per hour.

vince,

incredible isn't it. my father taught me a saying years ago, he learned it from an old timer in NYC,

"we don't get paid for what we do, we get paid for what we know"

Truer words have never been spoken in my mind. Anyone can do electrical work, hell a trained monkey can be taught to sling romex. But a true, educated professional that knows when, where, why and how to pull that romex is worth every penny and then some.

mahlere,
I agree completely. For a service shop like ours, knowledge and professionalism enable us to provide value. Providing value is the key to word-of-mouth referrals that, in turn are the key to profitable growth. Yesterday I got two calls (unsolicited) from customers telling how the lighting we had installed really enhances their homes. They thanked our estimator for his suggestions which saved them $$ while helping them translate their ideas into reality. I am sure we will hear from their neighbors over the next few months.
The issue for me as a manager is to develop our electricians so they get better and better at professionally providing value by helping customers get what they want at a fair price. Right now, we have not gone to a “flat rate” book. Our guys want take each job individually. Of course 60+% of the jobs that are simple and we just “add a circuit where they want it” and charge our hourly rate. However, for the other 40% they get the opportunity to really add value that leads to future business.

We have actually had a couple of retail customers who told our electrician that "they don't get paid to drive to work and feel we shouldn't either." We tell them that we actually drive to work several times a day and if we didn't charge for travel we would pay out 8 hrs and bill out only 4. Won't stay in business too long that way.

LearJet9 -- good point!

learjet,

no offense, but that is why i personnaly hate T&M. We found that once we started to flat rate everything, it made our life easier. Now instead of earning 4 and billing 8 (we've been there -still are on occasion -getting rare though) we found that we can flat rate the call and cover our travel.

in regards to commercial, it took a while, but we just started by billing 2 hr min, then we got them used to a min charge, then we just switched over to flat tcall charge. once we got there, if there was work beyond the scope, we would just let them know what it would be and do it.

it wasn't easy, but we had a lot of good customers going back 20 yrs that trusted us. also it helped that we were growing and I could sell them on the fact that not all of my men worked at the same speed as I did, so it would be better for the customer.

it's been pretty successful. A couple of T&M holdouts, but they pay travel w/o complaint and we make it up on their new projects.

good luck.

Hi Eric
Welcome to ECN and thankyou for your input

mahlere - I agree. We are trying to get to that point but at this time remain on the journey. Our retail customers are very slow to come around. Currently we do have a min 2hr charge and we have a strict policy of "0" non-billable hours. Every hour paid must be billed to a job.

I had carpel tunnel surgery this summer.
The costs are listed below.
Pharmacy $196
Medical/Surgical Supplies $659
Operating Room Services $805
Anesthesia $589
Recovery Room $261
Total $2,510
This does not include the doctor's fee for the surgery. I was talking with the doctor before the surgery and he said it would take him 45 minutes or less to complete the surgery. I went into surgery at 3:30 pm woke up in the recovery room at 4:30 pm and left the hospital at 5:00 pm.
I received the bill from the doctor the other day and it was for $4,128. So from what I can see he made two incisions in my wrists and stitched them up and it took him no more than 45 minutes and charged $4,128.

Charging $300 per hour is starting to look more and more like a bargain to me.

The hospital charges were $2,510
The charges from the doctor were $4,128
Total amount for the surgery $6,638
This doesn't include the charges for the office visits before and after the surgery.

Electricians are cheap.