# Hourly rate



## wyrickmech (Mar 16, 2013)

What is your opinion on hourly rate for work in federal pen. I was thinking of doubling. Have some med gas work to do and it will involve shutting down the system at the source valve and tracing out the problem. This means going threw the building zone by zone. That's a lot of doors and extra time.


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## Hoosier Plumber (Nov 28, 2013)

Why should the hourly rate change? 

The cost of the job will be increased by factoring in the additional time it takes to do the work. 

I will never understand a variable rate shop. Nothing else changes as it pertains to cost to operate the business.


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## Redwood (Sep 8, 2008)

I could understand a difference at a Flat Rate shop with the extra time due to security, however a T&M shop...:blink:


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## Shoot'N'Plumber (Apr 27, 2013)

Hoosier Plumber said:


> Why should the hourly rate change?
> 
> The cost of the job will be increased by factoring in the additional time it takes to do the work.
> 
> I will never understand a variable rate shop. Nothing else changes as it pertains to cost to operate the business.


I disagree. Of course that's just because not all customers are the same. One thing I've learned from doing state, county and section 8 housing is this...unless your charging for every minute of drive time, every minute spent getting parts then every minute talking to the "engineers" then every minute discussing what the problem is over the phone with some pencil pusher....your rate for these type of customers must be different. 

I had a captive air tank 95 gallon expansion tank) go bad in the well house on a state facility a few weeks ago! And I decided to change my approach as it relates to this customer. I flat rated the $hit out of it. Parts were $770 total. Job was bid at $4400.00 with all the beuarcratic bull crap I knew i would had too deal with, then 3 trips to the facility (72 miles one way from shop) stretched over 3 days. I figured the job would take 3 hrs once I got there and it in fact it did take 3 hours...but total time spent working on this job was 14 effin hours! I knew it was gonna take extra time so I marked the crap up out of my parts and quadrupled my rate based on the time it would take once I was able to get there. Basically I charge $1,000/hr (I'm not kidding) but after the actual time and fuel I actually made $250/hr...double my rate. 

Oh! I will add that after job was completed and I got payment via credit card, the county engineer called and said...."hey Tim, good job in that well tank. So, sorry it was a pain in the azz, but we greatly appreciate you not hitting us with a change order"! :laughing: but you see, that's what funny, I knew if was gonna be a PITA so I accounted for it and still made more than if I charged my normal hourly rate. I would have lost my shirt on that job if I bid it out for 1 day of work.


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## Hoosier Plumber (Nov 28, 2013)

I thought the point of hourly was to cover all those contingencies.

Clock starts at the shop and stops when the job is done. Bam, all talking and time wasting is compensated.


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## Shoot'N'Plumber (Apr 27, 2013)

Hoosier Plumber said:


> I thought the point of hourly was to cover all those contingencies.
> 
> Clock starts at the shop and stops when the job is done. Bam, all talking and time wasting is compensated.


And your right! It should...at a minimum! So your telling me that you would bid the job for the 3 hours..then After job was completed and all things being equal would add a line item on your invoice that states...3 hours verbal phone consultation $375....on site consultation 2 hours...$150. Drive 1 hr there, get called off to another facility with an emergency another hour away, then head back to this job 1.5 hrs away...$425. Head over there next day 1 hr. then discover the crew was out on an accident call and had to wait 1.5 hrs for crew to return to open facility...$200. 

Seems like a way to loose the customer too me. I guess what I'm sayin is that even though I'm a T&M shop, it sounds like I'm subconsciously moving towards flat rate. But in my situation, I do have a different rate for Residential and commercial as they each have different needs that need to be tailored to.


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## Hoosier Plumber (Nov 28, 2013)

Shoot'N'Plumber said:


> And your right! It should...at a minimum! So your telling me that you would bid the job for the 3 hours..then After job was completed and all things being equal would add a line item on your invoice that states...3 hours verbal phone consultation $375....on site consultation 2 hours...$150. Drive 1 hr there, get called off to another facility with an emergency another hour away, then head back to this job 1.5 hrs away...$425. Head over there next day 1 hr. then discover the crew was out on an accident call and had to wait 1.5 hrs for crew to return to open facility...$200.
> 
> Seems like a way to loose the customer too me. I guess what I'm sayin is that even though I'm a T&M shop, it sounds like I'm subconsciously moving towards flat rate. But in my situation, I do have a different rate for Residential and commercial as they each have different needs that need to be tailored to.


I would bid it for all contingencies as per usual. How hard is that, and its all based off a set hourly rate. 

The OP is about adjusting the hourly rate, not how to bid, unless I read it wrong, which is possible.


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## Shoot'N'Plumber (Apr 27, 2013)

Hoosier Plumber said:


> I would bid it for all contingencies as per usual. How hard is that, and its all based off a set hourly rate.
> 
> The OP is about adjusting the hourly rate, not how to bid, unless I read it wrong, which is possible.


Yes, the OP's question was about an hourly rate, however, I was trying to offer my personal experience with federal/govt work. My experience is how much they hate change orders. My govt customers don't care what my hourly rate is, they want a price for the job so they can allocate funding prior to work being done. When a change order is issued it tends to send everyone into panic mode and can delay payment by as much as 90 days extra. So they say "how much are we looking at to fix our problem?" Not all jobs are a complete PITA but there's no way I can account for all the extra time in my hourly rate. As you can see from my last job I would have had to hit them with a series of change orders. So, whether I charged $1000/hr for 3 hrs or $250/hr for 14 I still needed to double my rate while also adding additional time. This is based on my business and customers, not yours or someone else. All I can say is when I first started doing work for the state I lost money based on doing T&M because they woukd not authorize an hour talking on the phone with an engineer. then i irritated them with change orders and delayed payments and at times had $3,000 tied up in a job for those 90 days. Since I started flat rating with the unknowns in mind I've come to know its has been smoother and more profitable transactions. 

So you or the OP can absorb what I have to say, or can choose to ignore it. It all still boils down to demographics and our own individual business needs.


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## wyrickmech (Mar 16, 2013)

Hoosier Plumber said:


> I would bid it for all contingencies as per usual. How hard is that, and its all based off a set hourly rate. The OP is about adjusting the hourly rate, not how to bid, unless I read it wrong, which is possible.


the question was in some situations there is going to be extreme time consuming protocol which I do understand. The real thing that we market is knowledge and of corse time. When you have a job that they have to hire you because your qualifications your time is worth more because you only have a set number of hours in a day. Is it a good idea to double your hourly rate for a job that has such requirements that they will demand more paperwork more time and more steps.


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## Redwood (Sep 8, 2008)

We do work at a number of secure installations, Drug Companies, Military Contractors, Military Installations, Penal Institutions....

The first time is always a rough guess at how much extra BS will take up your time... 

We adjust our prices accordingly... And call them flat rate...
I've found thinking in terms of 1/2 day increments for our service work usually works well for estimation purposes...

Billing 4 hours of my time of a simple toilet auger job on a military base is not out of the question....
Especially if there is a raised threat level and heavy traffic into the base...
Or if it is in a restricted area...
Time for the checkout and vehicle inspection at the gate...
Waiting on an escort to follow to the job...
etc.. etc... etc...

Try snaking a line on a Los Angeles Class Attack Submarine sometime...:laughing:
My charge was nothing compared to the total cost of that job...:whistling2:


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## Plumbus (Aug 4, 2008)

I'm curious Red. How much does a snake job on a LA Class sub set the Navy back, as much as a toilet seat for NASA?


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## Redwood (Sep 8, 2008)

Plumbus said:


> I'm curious Red. How much does a snake job on a LA Class sub set the Navy back, as much as a toilet seat for NASA?


I don't have a clue...

But if you consider they drove the boat 4 or 5 miles down the river which also takes a couple of tugs & security boats and parked it at General Dynamics Electric Boat Division docks, had a bunch of sailors on board, covering up all the classified gear and guarding it, had a bunch of Electric Boat Engineering Staff there guiding the process, and a bunch of Electric Boat workers there to gain access to the line...

It was a couple of cubic dollars...

Nice Job Though...
They carried in all my equipment and I walked in for a guest appearance...
Snaked the line counted the feet of cable and felt for the fittings the engineer was telling me I was going to hit, stopped when he told me to...

The job was done I walked out and they brought out all my equipment...:thumbup:


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## plbgbiz (Aug 27, 2010)

Shoot'N'Plumber said:


> And your right! It should...at a minimum! So your telling me that you would bid the job for the 3 hours..then After job was completed and all things being equal would add a line item on your invoice that states...3 hours verbal phone consultation $375....on site consultation 2 hours...$150. Drive 1 hr there, get called off to another facility with an emergency another hour away, then head back to this job 1.5 hrs away...$425. Head over there next day 1 hr. then discover the crew was out on an accident call and had to wait 1.5 hrs for crew to return to open facility...$200.


I wish more Plumbers understood what SNP is saying. If they did, less would scoff when told as new OMS operators, they were only going to bill and average of 20hrs (or less) in a 40-45hr work week...our Trade would be a bit better off.


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## Redwood (Sep 8, 2008)

plbgbiz said:


> I wish more Plumbers understood what SNP is saying. If they did, less would scoff when told as new OMS operators, they were only going to bill and average of 20hrs (or less) in a 40-45hr work week...our Trade would be a bit better off.


It's exactly why an hourly rate might be 150 or 200 dollars an hour vs 80 an hour...

It's not something you should be caving in on when a customer questions your rate...

Its the time you spend lining up parts, giving quotes, talking on the phone with customers, and jumping through hoops that doesn't show up as a line item on the bill...


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## plbgbiz (Aug 27, 2010)

Redwood said:


> It's exactly why an hourly rate might be 150 or 200 dollars an hour vs 80 an hour...
> 
> 
> 
> ...


Yep. Oh so many quips available on this topic.

One of my favs...

"No sir, you did not pay me $200 for 30minutes of work. You just bought back 20 hours of your own free time and saved yourself an arse beating from your wife for $200. Seems like you got a pretty good deal to me." :yes:


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## Hoosier Plumber (Nov 28, 2013)

plbgbiz said:


> I wish more Plumbers understood what SNP is saying. If they did, less would scoff when told as new OMS operators, they were only going to bill and average of 20hrs (or less) in a 40-45hr work week...our Trade would be a bit better off.


If more plumbers new or old understood a few basic components to bidding and running a business the whole trade would benefit. 

Such as

1. Break-even or accurate cost of running a business, such as overhead, profit margins that allow for growth, down time, etc...
2. How to bid jobs with an knowns and unknowns covered, as well as possible.
3. Factoring a percent on top of the bid to cover the real unknowns or unseen. 
4. Billable hours per day, week, month, and year. 
5. Selling their value, instead of slitting their own throat for wage work. 
6. Time management. 

The road of growing a business is hard, its even harder when you don't know your financials. 

Raising an hourly rate, better bidding, more billable time etc, is competely useless if you do not know what you should be and are making on an hourly billable hourly basis. 

Business financials are the thorn in my side and have been since day one. Five year in and yes I understand them much better, but its still not where it should be to be a legit run business.


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## plbgbiz (Aug 27, 2010)

Hoosier Plumber said:


> ...Five year in and yes I understand them much better, but its still not where it should be to be a legit run business.


25 years in and on any given day, I feel the same way.


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## Plumbus (Aug 4, 2008)

plbgbiz said:


> 25 years in and on any given day, I feel the same way.


40, ditto.

I have been reminded of that a bit of late. Hadn't done any restaurants in years. The two I've done recently have come with a stiff tuition between what I've forgotten and what has changed code wise. Though none of which was indicated on the engineered plans, they all fall under that which a qualified bidder should know. Though the GC I've been bidding to is not too happy with the price creep he's seeing from my bids or the change orders I've been cranking out on the work we are presently doing, I keep telling him I'm playing catch up. Doing something for free has a way of staying in your memory for the next time.


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## Flyout95 (Apr 13, 2012)

Prison work means time spent waiting for for doors to open. It's the worst.


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## wyrickmech (Mar 16, 2013)

Flyout95 said:


> Prison work means time spent waiting for for doors to open. It's the worst.


ya and my cousin used to be the state Warden wearing a company **** may be trouble. Lol


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