# Billable Hours Per Year



## hdavis (Feb 14, 2012)

BamBamm5144 said:


> It always makes more sense to price per job than hourly.


I know very experienced people who from time to time have gone T&M simply because they're having health problems and can't bust butt all day. They still know the fastest way to do things, so they're still worth hiring. They don't make as much per year, but it's a good arrangement for them.


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## BamBamm5144 (Jul 12, 2008)

hdavis said:


> I know very experienced people who from time to time have gone T&M simply because they're having health problems and can't bust butt all day. They still know the fastest way to do things, so they're still worth hiring. They don't make as much per year, but it's a good arrangement for them.


I can understand that. I should add that we do repairs at a base charge rate and then hourly from there.

From a customers perspective, they want to know how much it will cost. If you tell them 2grand and you think it will take 10 hours, they won't fight as much as if you said I charge $100 and I think it will take around 10 hours.


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## hdavis (Feb 14, 2012)

Spencer said:


> I know I can still look my customer in the eye and sell "value." I know all the guys in business around here.


Sell the better / higher quality product - it's a better reputation to have than "value". Price shoppers will figure out who is cheaper any how. Finish quality is what people see, so it you can keep that top tier, you're in great shape.

If you want repeat customers, it's a relationship based business - that's an important part of the whole deal. I've always liked contractors / subs that were geniuses at using the quote / bid process to build the customer relationship - some are very very good at it.


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## aptpupil (Jun 12, 2010)

BThomas said:


> Apt
> How long have you been doing the handyman work?
> I ask because as I age, and as the economy has changed so much, I am finding I am getting a lot of calls for minor handyman type work. Most of it is for repeat customers that I have done a larger project for and because of that I almost give away my time on these jobs.
> I do want to keep these customers and the lighter work but don't want to give away my time. I seem to have a hard time charging my normal rate for these jobs but I do need to cover my overhead and still make a profit.
> ...


About 6-7 years, but more seriously in the last 2-3.

There are a couple ways to get around the trouble of the tiny jobs. I have a minimum fee - say, a two hour minimum. Some guys will charge more for the first hour. So, say $75 for the first hour and $50 for every hour after that. This is the method I like more because if you say you have a two hour minimum then they'll find other stuff to fill that time that they paid for. So, I had a service call on Sunday for a water heater hose that had blown. Took me 45 minutes (drive time and hardware store visit included), but I got paid for 90 minutes because that's what I charge for my first hour.

I charge most little things by the hour with the first hour costing more. If a customer has just one job (installing grab bars in a shower was my most recent example) I'll usually just give them a price. I'm playing with the idea of charging a higher hourly rate for electrical and plumbing stuff - higher risk, higher skill - versus the other little stuff I may do on a job. 

Most important thing for me is being well-stocked. I have plumbing, electrical, carpentry, painting (touch-up), and general materials (lubricants and cleaners, primer, caulking, shims, etc.) in my truck at all times. Refining the stuff I have with me is an ongoing challenge (partly because I have a small truck and partly because I do a wide range of jobs). For me, avoiding trips to the store is just as key as trying to get more bid work. 

I agree with others about the importance of bid work in making money and, as a I get better in estimating time/materials, I am pushing toward bid work more and more. Customers aren't watching the clock, you get to leave as soon as you're down with the job, and hustle is rewarded instead of punished.

Hope that helps.


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## Spencer (Jul 6, 2005)

I was just reading this article and like this paragraph making a case against T&M:

But for most remodelers, *T&M only postpones difficult conversations*–from the initial sales conversation about the merits of your company and the costs to the end of the project about, again, your costs. *And at the end, the client has the control, not you.*

http://www.remodeling.hw.net/construction-contracts/should-you-pursue-tampm-deals-no.aspx?dfpzone=management.finances


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## Foxit (Mar 2, 2013)

Bid your work and include as much detail scope of work. Don't just say supply and replace side garage door for $$$. Write out all that is involved-

Supply and pick up new door
Remove and clean interior trim for reuse
Remove existing door
Clean and prep opening
Remove old caulk from 'J' Chanel
Caulk sill and install door
Shim and nail in place 
Add long screws in hinges
Insulate and replace trim
Caulk trim
Site clean
Trash and door disposal included
Investment of $$$$

Shows more to the job than they think and they get more for their money


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## mikeswoods (Oct 11, 2008)

Foxit said:


> Bid your work and include as much detail scope of work. Don't just say supply and replace side garage door for $$$. Write out all that is involved-
> 
> Supply and pick up new door
> Remove and clean interior trim for reuse
> ...


Adding a line with with that is not included can save you from trouble--
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The above proposal does not include painting of the door--
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Sounds silly,but will save you from the simple minded people that assume that something is included.


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## Foxit (Mar 2, 2013)

I don't paint so I do include the line-

No painting or prep work included. 
I agree don't let HO assume anything


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## country_huck (Dec 2, 2009)

Billable hours are a good way to start, that's how I started got a good basis of my numbers , both on the job cost and overhead. I quickly got a way from just trying to get my hourly rate. I switched to using margins and markups on all my jobs. I do larger jobs some middle of the road on price to higher end. The problem I was findng a that the middle road job I was making the same as the high end. However the high end comes with a lot more risk so the reward should be more! All my jobs are fixed price now, I charge the going rate for a Forman in my area for my direct time and the profit margins cover the office time hours and the rest of my overhead.


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