I was curious if anyone varies their rates on the "degree of difficulty" or experience required for an installation. In some peoples minds "anyone can do that"...changing recessed light trims, replacing light fixtures, etc. Some Darwin nominees even change circuit breakers.

It would be possible to vary rates, so the easy tasks would be priced less, and the really nasty jobs, like swimming in insulation in the summer, would be priced higher.

Anyone doing this or having comments on this would be appreciated (especially comments from residential service contractors).

Dave

The only time I really change my rates is for doing small favor projects.

would you pay your guys different rates too then? That could complicate things a little.

Or you could have your highest paid guy bill-in higher rates and give him the tougher jobs.

Now, if you flat rate, or as LK puts it, contract price it, you just figure it up and add the hassel fee to a higher hourly rate. I do something similar to that all the time.

If I am skilled for Job X why would I charge less to do Job Y? Don't I charge based on my skill level not the skill of the actual job?

Back in my earliest days in the trade I worked as an Electrical Mechanic. Our Labour rates were posted as $20.00/Hr. $30.00 if you watch. $40.00 if you help.
and we pointed this out and made sure the customer did not think we were kidding because we were not. It helped a lot in keeping our costs down both from the inevitable distractions and loss of borrowed tools. Still there was always the guy who insisted on paying $40.00/ hr.

Thanks to all for your responses. I'm not looking to restructure my pricing system because of one do-it-yourselfer. I think my time would be better spent working for someone else.

Dave

That's the challenge of pricing.

Apart from the costs of material, costs of labor, and fixed overhead expenses, there are many things that influence pricing.

First of all, how bad do you want / need the work? Your schedule, the nature of the customer, and the nature of your competition all influence the price you give.

Are there special expenses involved? A guy who owns a boom truck can probably service street lights cheaper than a guy who has to rent one.

Who's the customer? A repeat customer with a habit of paying promptly is going to get a better price from me.... than an unknown with a rep for being slow and difficult to please!

Who's the competition? If I'm competing against the "A Team," I'm likely to quote more than if my competition is a semi-retired , marginally legal, trunk slammer. IF I want the work.

What other contractors are involved? If I'm going to be working with the Three Stooges... my price goes up.

So, despite all the software and books that attempt to make estimating a science, it's really an art. Kind of like welding- you can't learn it from a book!

The company I work for has different rates for different customers. In short as high a rate as the customer is willing to sign for.

They do not tell me the rates and that is fine with me.

A licensed guy is billed out at the same rate as an apprentice.

Occasionally customers will not accept that so instead of charging say (made up numbers) $75 for each, they will be charged $50 and $100. either way the cost for two guys for one hour is the same.

Iwire,

It makes sense that the Jman and apprentice are charged out at the same rates, if they use jman labour hours to determine how long the job will take.

If a jman can do the project in 4 hours because of experience, the apprentice will probably take more. The relationship between the apprentice's experience and the time it takes for him/her to do the job should be fairly proportionate to the hourly rate of the jman.

express,

i'm not following you. if a jman and an apprentice are billed at the same rate, how does that work out?

for example. both billed at $100/hr. Jman takes 4 hrs = $400 labor. Less skilled apprentice takes 5 hrs = $500 labor.

am I missing something?

Erik,

Are you looking at this from the perspective of Time and Materials billing or from the perspective of time required vs cost to do the job?

If I estimate that it will take 4 hrs to install a new smoke detector, I am confident that a jman can install the new cct and smoke detector in 4 hrs... therefore, he will cost me $40 per hour times 4 hrs or $160.

If I have an apprentice go out and do this job, based on his experience, he will take say 6 hrs to accomplish this same job, but his hourly cost to me is approx. $27 per hour times 6 hrs or $162.

The apprentice rate should represent his/her skill level as compared to the jman. The actual hours required for the apprentice to complete the project should work out to the same dollar cost (plus or minus) to the cost of the jman to complete the project.

Therefore, when I bid a project, I don't differentiate between apprentice and jman, I quote jman rate and realize that the apprentice will take longer. I do realize that you can bid projects with jman rate and hours and apprentice rate and hours, however, the majority of my projects are smaller so it is quicker to handle the hours the way that I do.

I was talking about the T&M rates, I have no idea what rates they use for estimated jobs.

Iwire,

Sorry, I misunderstood.

No problem.

I don't know how they came up with this method or even it's wise but they take care of me so I must support them.

Even my up front prices go up and down with situation changes . No job is the same therefore almost no job price is the same. For instance if it is slow and price is the main concern of the client then I will lower rate for the job, but never right away. "I'll need an approval from the office on that sir I am only allowed to give our price" I always give bold amounts with change for example "That job is going to be $185.15" When customer says "oh $200" I say "No $185.15"Even down to the end I want to see the cents at the end of the check. That means no rounding up or down. We have it that price for a reason. Sorry I went on and sorta changed the subject