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| Subject - Flat Rate | |
| bahsparky | I am a one man show working strictly time and material. Where do I get more information on Flat Rate. Are the rates area specific? Thanks. |
| aline | You can get information on flat rate pricing at www.mrhvac.com The rates are not area specific. You set the rates based on your costs of doing business. You will probably have to make adjustments to the material costs to reflect what you pay in your area. |
| kiwisholland | Check out www.servicedoctors.com. Marc is a great guy and they offer full support for all of their products included in the price. Their Flat Rate solution includes all trade modules (for appliance hookup or subbing out other trades) as well as a comprehensive link to your accounting software. Flat Rate Plus from MrHVAC charges extra for all add ons. Call Service Doctors and they will do a full comparison for you. I strongly considered Flat Rate Plus and ended up being sold on the NSPG software that Service Doctors offers. What flat rate packages does everyone on this site use ? Again, all you guys have helped me a great deal. THANKS! |
| MONOLITH | John, can you just clarify something about the 'contingency fund' again please? Is this a fee that the homeowner gives you in advance, and you return any unused portion? or is it an 'intangible' that you can draw funds from if needed, as something comes up? Then that would basically be "Dear homeowner, please have an extra $3K on the side just in case I need it". I'm just trying to clearly understand how that works. Thanks. |
| John A. Peters | This is how I create a module. Most modules are two letters like LT SW PL CB. Others are two names joind with a hphen like SS-Con.
Plug module (or assembly)
PART NAME LEN TYPE SIZE TIME PRICE
Raceway 20 EMT 1/2 0.90 106.20
Wire 45 THHN #12 0.27 29.34
Connectors 2 SS-Con 1/2 0.16 15.04
Couplings 3 SS-Coup 1/2 0.12 11.64
Nail straps 4 Strap 1/2 0.08 8.20
Wire nuts 2 Nut red 0.12 11.18
Four square box 1 4S BOX 0.30 28.41
Indust cover 1 4S-Ind pr 0.20 19.75
Easy gr. plug 1 Device pr 0.10 10.55
===== =====
2.25 hr $259.21
This is for a typical plug outlet. The materials do not show up in this view but they are $15.40 Pre tax Twenty feet of pipe may be too long but we don't want to be too short either. Here is another version with the labor rate reduced from 106 to 35 per hour for use in other states where the living costs are lower.
PL ( 20' emt) 15.40 +1/3 2.25 hrs 99.46
35.00 per-hour
Raceway 20 EMT 1/2 0.90 42.30
Wire 45 THHN #12 0.27 13.95
Connectors 2 SS-Con 1/2 0.16 5.92
Couplings 3 SS-Coup 1/2 0.12 4.80
Nail straps 4 Strap 1/2 0.08 3.64
Wire nuts 2 Nut red 0.12 4.34
Four square box 1 4S BOX 0.30 11.31
Indust cover 1 4S-Ind pr 0.20 8.35
Easy gr. plug 1 Device pr 0.10 4.85
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| John A. Peters | I hope some one will log on to my secondary WebPages (not the Brookline Aries one) where the estimating program that created the above module-assembly is running. You could then play around with it. It is hosted here on my home-office computer so I need to open my firewall for you and give you the URL, by appointment. Twenty or thirty minutes lead time would be good any time between 9 AM and 9 PM with weekends and after work being the best times for me here on the West Coast. |
| John A. Peters | You can see a sample bid that was generated from the Contract Generator (tm) here. http://home.pacbell.net/japeters/sample-med-bid.html |
| John A. Peters | This technique is most useful for a company where the owner does all the estimates, but has electrician employees doing the work, rather than the ESI model where the men use a flat rate book. The computer generated contract includes a line item of a 25% contingency fund or $1,000 which ever is less. I find that the client mentally subtracts the fund when thinking of his budget. Remember we do not win our jobs by price, but rather lots of good features like giving our a list of references at each bid. Letting them know that we have a plan to make change orders more orderly, is another good feature of our company. Here the text I have on my web page which is my attempt to explain it. It works like a charm, and they like it. CONTINGENCY FUND The contingency fund allows the homeowner to give direct orders to the electrician. For example, you might buy a dimmer or find a new fixture. You can simply say, "I bought this, will you please install it for me?" The electrician will be glad to do it. If you are on the job site, you might give him a simple hand written note or maybe just initial the electrician's appointment book. If you are not home, we will be happy to get a verbal acceptance on the phone, or you could send an email. It will save us both time and money, since it won't require a change order to be drafted, faxed and signed. Historically, about half of the time, half of the contingency fund gets used up. Some times the property owner's partner or spouse will have an idea. Some times the electrician finds a code or safety problem. We take the extra time to bring it to your attention, for your consideration. That way you can decide what to do. You can have me estimate the cost, or just tell us to go ahead. I will add it as a line item, using the same database of standard prices and email you an updated version with a new version number and use a bar mark | to indicate the changed line. It is never billed if it is not needed. If nothing comes up and the contingency fund is not needed it never shows up on the statement. |
| MONOLITH | Thanks John. |
| John A. Peters | I any one else using the contingency fund process on jobs that have a lot of variables, options and or code work? It works quite well. |
| Wirenutz | [url=http://home.pacbell.net/japeters/sample-med-bid.html]very consice[/url] John methinks you'll find said contingencies hidden in less than forward verbage as you've done here, a standard change order come to mind, which essentially you've done ahead of time ~W~ |
| Wirenutz | methinks flat rate applys to generics better than the diversities we venture into myself for instance, a 100 A OH service can be flat rated over the phone, and many times needs to be so due to a)ph shopping customers b)non-toolbelt time chasing poco techs this is also subject to what the locale's market will bear, for instance a simple 100A service upgrade w/panel and GEC upgrade would be around $800 here... another common one would be $$$ per sq ft, something about $3-4 applies to our trade , builders often tell customers $125 or so, normal construction, double this for alternate construction yet another might be $$$ per outlet, commonly used on bids , but also something of a standard from one locatity to the next the a numero uno thing one can do to stay in tune is have coffee with one's local competition imho ~W~ |
| MONOLITH | John, in this example, you're marking up material 30%? (the wholesale plus 1/3 column) http://home.pacbell.net/japeters/sample-med-bid.html Thanks |
| John A. Peters | quote: No - the markup is a 8.5% sales tax 15% overhead in 10% profit. I usually explain these markups to the customer at the time I do the estimate. I think we'll all agree that this markup is fairly low but it looks good to the customer. We make most of our profit on the labor not the materials. It the time for doing a fish-in-walls new plug in an old house is 2.75 or 3.00 hours of labor and the parts are only maybe $5 or $10 then you can see that most of the cost is in the labor not the parts. The customer's hardware store savvy than he recognizes the prices of the parts are fairly reasonable, and that there's not much use in going on a buying the parts himself.. However he's not about to be able to compete with me on the labor since he's not an electrician. |
| MONOLITH | I tried to copy and paste a portion of the example here for simplicity, but it comes up all misaligned. So, in your item #3 for example...what does the 100.62 +1/3 represent? |
| John A. Peters | Dishwasher PL CB Circuit 1.65 190.54 Disposal -->? PL CB Circuit SW 2.50 286.16 To keep it from being misaligned you have to use (I will type it out so it does not interpret it) left-square-bracket code right-square-bracket to start and end it with left-square-bracket /code right-square-bracket. To see these codes look on the left side of the quick reply box and you see a little blue underlying thing that says form code. Click on that scroll almost all the way to the bottom and look for what I've described above. |
| MONOLITH | #3 Reconnect old 100.62 +1/3 10.02 1057.60 in the above section from your example, this is a typical top line from each section. What does the 100.62 +1/3 represent? |
| John A. Peters | Here is another example.
7. Kitchen Power 106.49 +1/3 14.15 1,643.62
Open-1-side
Dishwasher PL CB Circuit 1.65 190.54
Disposal -->? PL CB Circuit SW 2.50 286.16
Cords (if NIC) 2 Cord 0.50 60.42
Refrigerator PL 0.85 95.62
Stove Igniter PL 0.85 95.62
Counters 6 PL 2 GFCI 5.20 619.42
Util Circuits 2 CB 2 Circuit 1.60 189.84
Island ( Charge as ) Neat-EMT
Layout plugs 1 Hour Electrician 1.00 106.00
106.49 is the wholesale price of the parts, the +1/3 is a 8.5% tax 15% overhead and 10% profit, the 14.15 is the total hours for all those things hanging below, and the $1,643.62 is the total for all the line items in the paragraph below. I am using S.F. big cityrates of $106.00 per hour now. PL is plug, SW is switch, CB is circuit breaker, cord is the disposal cord, Neat-EMT is conduit. Open-1-side means that the wall covering is down but just inside. Sheathing is still up, making the corners a bit hard to drill, yes? |
| MONOLITH | quote: quote: Okay, so it's 33.5%. Basically your taking the retail cost (wholesale plus tax) and marking it up 25%. What made you determine to add profit and overhead only onto material? When bidding a job, I thought the general trend was to add overhead and profit to the entire cost. Obviously, this (O&P) is theoretically built into your labor rate already, right? It's just that you're only listing it as added to materials. Is that correct? Thanks. |
| John A. Peters | quote: The idea here is to have each element. Its own weight. Each part has it's own overhead attached to it as well as profit. Each labor hour is treated the same. Each labor hour has its own overhead and profit built-in. Remember I said the markup on the labor should be at least two times if you don't even have general liability insurance at least three times if you're fairly well structured company and higher if you're really shiny. The reason I do this is so I'm free to add or deduct any element. If they don't want a dimmer and they supply their own that is fine, I don't have any parts profit (or expenses or shopping time) but I still have the labor profit. I hope I don't offend anybody but I think it's kind of old-fashioned to add profit on at the bottom line. I see that going on but I don't see anybody showing those papers to the customer. The way I do it I show everything to the customer and he can cross off anything he does not went, I still make the fair profit on what work is left to do. I think my way is better. At least is better for me over the last 33 years. I tell them use don't pay for anything you don't get but nothing is free. Don't you think it's something like going to a restaurant in choosing things off the menu? Who ever heard of choosing things off the menu and making a list and then adding the profit. I think they do that with the tax and perhaps the tip. And, yes THAT works! I guess I include my tip in the hourly rate. |
| MONOLITH | quote: Right. That's what I wanted to verify. So you are, in essence, adding O&P to the entire job cost (mat. and Labor), but you're only identifying it to the consumer on your material. |
| John A. Peters | Yep I do not tell them how much I pay my men. This is part of my proposal papers. Prices and Schedules Start date(s) require a signature & are first come first served. Seven year guarantee on labor, manufacturer warrantee is 1 year. Parts are wholesale plus 8.5% Tax, 15% overhead and 10% profit. . Prices are based on the NECA manual of labor units & a 7 hr day. Each hour on site requires up to 1/4 hour off site support work. Time starts when the truck starts, ends back at shop or equal. Electricians times start when they get in the truck, till back. After the inspection I audit every room for a final printout. . If anything is less than perfect, except penny rounding, I will correct it. Master and journeyman electricians in San Francisco |
| MONOLITH | John, another question... I assume you are paying the sales tax at the time of purchase, and are paying 'retail' to the supply house (even if at a special contractors rate); Why not just show the price of the material as you purchased it, then add the other 25% O&P. What's the benefit of breaking down the wholesale price vs taxes for the proposal? |
| John A. Peters | The parts prices come from the database which has the wholesale/retail what ever it is, price that I pay at the supply house. To update the prices in the database it is easier if I can just copy the price from the invoice and not have to add tax to each one by hand. The supply house invoice adds the tax on the bottom for the whole invoice. In old houses the materials are such a small part of the picture that I do not try for special pricing. We win our jobs by providing many features, and the price is secondary. A cheaper price would mean that my O&P would be less any way. |