Why I Don't Have Flat Rates Or Hourly Pricing
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- Опубліковано 23 сер 2024
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You know what's crazy is he's giving a talk that a mentor would give to help someone be successful in their own business. This should have more likes and views.
Thank you!
99% of the video is nonsense
@@coreyfranco7060make a video explaining why he's wrong
So true! Flat rates are good to have in mind as a baseline, but replacing a water heater in a basement is more work than replacing one in a garage, and replacing one in an attic even a lot more. Installing a tile floor takes much more time and legwork when it's upstairs compared to downstairs. Replacing a light bulb high up in a cathedral ceiling is a lot more work than replacing one in an 8 foot ceiling. The extra work needs to be compensated for! ... If a client asks me what is your service charge for replacing a water heater, my reply will be: It depends and may I first take a look at your particular situation?
Looks like we're on the same page about that! There are some property managers who will refuse to work with you without flat rates, but that's okay, there's always more property managers out there.
Yeah that makes a lot of sense especially with the example of the light bulb. Why charge one price for a light bulb when one of them you have to bring in a huge ladder and do more work to simply change the light bulb versus just walking in a smaller house and standing on the stool and changing it in a matter of minutes. I guess it's all in the details.. I do think though that whenever there is a job that I definitely want to know a price range because I have to know if I can afford it in the first place unfortunately.
Can you please share the percentage estimate of water heaters in the garage versus attic versus basement in your geographic location?
I worked for a large rental properties company for many years in the past, as a maintenance manager of a 20 man/ women crew, for a 1000 unit complex.
The CEO’s model was, “We eat steak and our Venders eat hotdogs.
Keep them hungry.”
I countered that unfortunate model by trying to create a partnership of trust with my repair venders.
Of corse flat rate is to minimize the cost of maintenance to a landlord.
Flat rate is not necessarily hourly.
I negotiated very low flat rates for all my contractors. I incentivized them, with high volume and quick pay turn around.
In order to stay on track.
I fallowed up by phone all my submitted vender payments through account payable.
The other property maintenance supervisors did not do that.
This made my venders more eager to put my property in the front of the line.
I eventually handled all the contracts for all the properties.
Slow payers are a killer for small businesses.
Thank you for that!
I charge an hourly rate with a two hour minimum. I also charge for drive time to and from the job site. If I need to purchase supplies I charge drive time for this as well plus the time required to do the shopping. I have two different hourly rates. A lower rate for well established clients who provide me with bulk hours and a higher rate for clients who need me only occasionally. At the same time I am keenly aware of only billing a fair amount for both of us. If I took longer to complete a task because of my own issues I will adjust the invoice amount downward. I will also bid a job if the client requests a bid, but I prefer to work off the hourly rate. For my business, how I go about coming to the final amount of the invoice is irrelevant as long as both of us are happy with the quality of the work for the amount paid. This is a good video illustrating the different grades of finish. I personally prefer working with the middle to upper middle class strata of people. High end homes are stressful and slums are disgusting.
Everything you said makes sense. I like it!.
What is your daily income?
I have learned so much about running a handyman business in the last couple weeks watching you videos here and there. My attitude alone has changed, my prices are more reflective of the quality and work I do and my customers are really praising my work and getting me more work for their friends and family. Thank you for your videos. Keep up the great work.
That is awesome!
The difference between McDonald's and a caterer is exactly the difference you are describing here. Your business is centered on problem solving, coming up with a very specific solution to their specific problem. It only makes sense for the price to be customized as well.
That's a great way to put it.
I'm glad you are there for me to better understand how to deal with some of these people with their nick picky issues, cuz I know sometimes doing a little more keeps people happy also
It's definitely a judgment call.
Another good vid! You do share some very good info. However hourly work does not incentivise laziness and inefficiency any more then a bid price incentivises greed and corner cutting or poor quality work. Ive seen it all in all types of pricing. And imo it boils down to whether your a quality person with integrity or not. The different pricing methods can work well or poorly depending on what your doing and what kind of business your operating. Plenty of good and bad work getting done with all these pricing structures.
It's true, working by bids can incentivize cutting corners. However, cutting corners results in losing your client so it still isn't in your best interest to cut corners if you're building a long-term business. 90% of my jobs are neither hourly nor bids. I simply receive work orders, perform the job, and send an invoice for a fair price.
@bulletproofhandyman I here what your saying. And I agree with your assessment for the most part. However I don't think hourly work necessarily promotes laziness. Because in all honesty I think most of us that are self employed develop our pricing through our own personal hourly compensation assessments on what our labor is worth. Even if we don't work hourly for a client. At least I do. But the difference between a W2er and a self employed person is that if your a good business person you also know that you have to incorporate additional compensation into your invoice to cover all the other costs involved with running your own business.
That's true
A property manager that has large apartment complexes with all of the units built the same it would be easier to provide a flat rate knowing what each service call is going to require as far as repair parts, equipment and tools needed to make the repairs. If your work is in different properties every day, it would be difficult to flat rate any of your service calls not knowing what you will run into.
I definitely agree with that. If I was working apartment complexes I would absolutely have set pricing for probably 90% of the request that would be received. I could also easily order bulk inventory. In fact, I would even be likely to rent a studio there just to store all of my inventory in which would double as an office and a break area!
Notes/summary:
Trip fee ($125) for up to 1h of basic work + fair rate for any additional services/materials, these vary by quality of work and level of detail/time depending on property condition.
Hourly incentives laziness
Flat rate pricing ends up losing money on complex jobs and overcharging on simple jobs
About half a days work is 350 if you’re working with property management companies
A full day of work is $800 and if they want to book a half day it will be $425
Not going to get a price in advance unless it’s an estimate for larger job, no standardized rates. I do the job and invoice a fair price for it.
Thank you
Hell yeah, decent advice and from a dude in Tucson
you break it down brother. appreciate your time and efforts for this video.
I appreciate that!
I'm with you I do not have hourly or flat rates. I've been doing this for years.
I do have some flat rate pricing for move outs, but only for specific line items that are very predictable. Typically, if I use my flat rate pricing on move outs it makes them more expensive than if I would have just priced them from my gut or from accounting for the time. My clients like it for move outs though because it makes them more predictable.
I do need to record some pricing based on supply and demand to better myself so I don't over charge or under charge
It's always been over if the most important things I've had to put energy into. Never easy
As you are your own boss charge whatever you want. For myself if I don't want to do the job I charge a reasonable but high price. The crazy thing is they accept the price hahaha. The flat rate doesn't work because every job is different.
I know exactly what you mean. I have tried too price myself out of jobs so that I don't have to do them and they just take the estimate and say yes anyways
Yep, still learning... When I started my plumbing trip I charged so little for my first job that a friend of mine when he ask me about it, he laught so hard that he almost craped his pants on hearing the news 😂
But now when I have some clients asking about the pricing I'm always tell them that they will find it at the end of the job and not a second sooner... For an example one of these days I had to replace a cracked toilet that was still used by an old lady and had crap all over, so there was absolutely no chance that the job will tend to be on the lower pricing end... But probably I should stat using this "show up" rate.
And yes, once your out in the world solving problems and customers are returning and recommending your services, you know your on the right track, just need some adjustments here and there, like fine tuning... But I'll will be in place with the experience...
Good luck everyone!
Great content anyway and thanks for getting it out!
I like the way you worded that. And it's true, you know you're on the right path when you're charging very good rates and you can continue to get repetitive work from the same clients with high praise over time.
I think the monetary rates that He suggests should be applied with the area you live in because the rate he charges may be very high in Texas as for in California it may be on the lower scale so just always take the prices on a sliding scale
Very true
Electrical Work?
Here's what the Florida Department of Business and Professional Regulation website says: “If you pay someone to perform even the simplest of electrical work, such as connecting two wires, you must hire a licensee (electrical contractor).” That means no installing ceiling fans or replacing lighting fixtures, etc... as a handyman... In Florida...
So how can so many handymen get away with doing things that are not legal? Just curious...
I'm not in Florida sir. If that is the law in Florida then it wouldn't be legal there.
I was a handyman in the 1980's... In Florida... Much more lax back then. Could do many things you cannot do now. I'm thinking about going into the handyman business again part-time as a retired person but I'm afraid I won't be able to do all the things I know I can do well. Kind of stumped...
Florida is hell for a handyman business. Can't do much there.
Great video thanks for the content and tips
You're welcome!
Thank you, great information. Very helpful!
I'm glad it was helpful!
I appreciate these videos because after 4 years of hourly. I tell people my rates and they give me the “oh.” Because 1) people don’t want to pay someone more than they make. Based on pride or whatever. 2) they hire some schmuck who charges $20 an hour to do it
And then eventually you get to come back and fix what the cheap guy did
$20 per hour is basically the value of the work you're doing though
Excellent discussion. Thank you.
My pleasure
I don't have Flat Rate pricing either - I Quote "Every Job" alone. In a year of work, there are not that many invoices/statements to create anyway for me (I like being small fish).
That's great!
Well put.
Thanks!
I feel like working hourly makes people entitled And they feel like they own you and every second.
I agree
Question from a handyman who does very well working exclusively for homeowners, charging purely time & materials: You state that hourly pricing incentivizes laziness (which is a form of fraud). Fair enough, I'll agree to that. Would you agree that your method of pricing incentivizes various fraudulent practices such as short cuts & substandard materials?
I'm not trying to pick a fight. It just seems to me that it's not quite fair to mention one and not the other, simply because it aligns with your way of doing business.
I would say this.
Both sides incentivize some sort of bad behavior as is true in all things. However if the ultimate price of the job upon completion is the same ($600 flat rate for a 3 hour job earned by extremely hard work, no breaks, pre-planning, inventory already on hand, etc or $100 an hour for 6 hours for the same job) then I can take that extra 3 hours to knock out another job which makes my property managers very happy and doubles my income for the day.
Of course those numbers aren't real, but the philosophy behind them is solid.
If an hourly handyman is lazy, he won't keep his clients and if a piece work handyman cuts corners or uses substandard materials he also won't keep his clients.
I strive to be the best that I can be at this job but if I'm charging hourly there is a financial disincentive to getting better and faster.
So the short answer is yes, my method incentivizes different bad behavior, which I preach against, but it also doesn't penalize me for being efficient and completing more work per hour.
From the perspective of my clients, they are paying an equal amount per job but they are getting far more jobs done in a shorter period of time.
The last 3 days of work for me, including today, are a good example. I've been doing nothing but drywall repairs for days. All three of them were estimates that were approved between $500 and $970. I usually subcontract my drywall work so I'm extremely familiar with the general going rates here in Tucson and I keep my prices in line with those rates. However, over the last 3 years I have likely invested weeks upon weeks worth of what could have been billable hours learning and practicing how to get both faster and higher quality. I had the incentive to do that because if the price is remain the same but I get twice as fast than I can provide for my family better without taking anything more for the job than I would have when I didn't have the skills.
@@bulletproofhandyman Thanks for expanding and clarifying, I appreciate it.
My pleasure sir. Also congratulations on having a system in place that works and provides. There's more than one way to do this that's for sure.
When you work hourly there will ALWAYS be clients that will hammer you for EVERY MINUTE you’re not productive.
This is all great info
Thanks!
I watch a video a day of yours 🙌🙌
Awesome thanks Doug!
BIG BOSS, YOU ARE 100% TRUE,BUT PEOPLE ARE VERY PICKY AND CRY ABOUT PETTY THINGS,SO YOU KINDA HAVE TO TRY HARDER TO SATISFY SOME PEOPLE AND SOMETIMES MAKE ENOUGH TO SATISFY THE PEOPLE, I'VE HAD 2 THAT CLAIM NOT ALOT OF MONEY AND SO THEY CRIED THEY DIDNT WANT TO PAY, SO I KNOW YOU CANT SATISFY SOME BUT I HATE GOIN THRU THAT TYPE OF ISSUE SO I JUST CALL IT A DAY IF ITS SMALL CHAGE BUT UF ITS BIG MONEY I'LL FILE A CLAIM ON EM AT COURT HOUSE
Yep!
Watched
Well said.
Thanks!
Great tips and well stated. Slums🤣🤣🤣🤣🤣 In case you offend a Nancy or Karen out there.... sorry I meant to say "Frugal" 👍💪👌👏
People get so work out of shape and the intention of my channel is to teach, rather than to argue with people. So I try to make sure everybody understands that not every word out of my mouth is 100% literal. They're just words used to convey ideas.
Thanks for info!
You're welcome!
Agreed👍🏼,
My opinion (..are like assholes) there can’t be standardized pricing. Unless your in business to lose money,or change your price on almost every job.
Personally the worst thing I could do is give a price,then raise it.🤮
Two of the “exact”same jobs are completely different,depending on the homes they’re in.💯
Very well said sir.
I believe in flat rate pricing. But 3:12 flat rate is hard to come up with. So what I'll do is I will charge the customer for an intrusive inspection and then come up with a price.
For instance, just recently I charged a customer $925 to the camera and did a little digging to come up with a plumbing price. Every other plumber came up with a hell, Mary price. So my customer like this and I got the job in the end.
It's definitely not an easy situation to navigate
I dont think you'll make many friends charging 925 to investigate a problem
Good video thank you
You're welcome!
You could say lower income residents 😊
Does Jobber have a place where you can create templates for the estimates? This way I'm not typing in the same info on the line items over and over. Thanks!
They have a feature where you can carbon copy an estimate, which could be used as a template.
They also have it set up where you can create custom line items so that every time you write an estimate you can just click on that custom line item and add it instead of writing it out.
You and eye are very close on pricing
That's good to hear
2 or 3 of your clients comprise 80- 90 % of your work ? Yikes !
Yep!
@@bulletproofhandyman You lose 1 client, there goes 1/2 of your work. I wouldn’t exactly call that”bulletproof “
Actually it is. I can get a new property manager in a day or two. Meanwhile any 1 client of mine can keep me busy for 2 or 3 weeks just in case it takes more than a day or two to get a new property manager. My clients send work to multiple vendors depending on how fast they're getting work done. Even if I was down to one client I would just get their work done faster (since the others aren't taking up time) and they would send me work faster. Thats also how I can hire and fire handymen. A new guy will contribute to the rate of completion, which will increase the rate of work orders, which will give him more work. So, losing a PM isn't a big deal. You just don't want to have only one or two.
@bulletproofhandyman Do you pay workers compensation on people you hire ? Unemployment insurance?
@jamesjoslin7586 LOL. You need to keep listening to this guy if you think having 2 or three large clients that give you easy repeatable steady business is bad. Those large clients pay him well and bring in repeatable steady business. I take that kind of business all day over tons of small individual clients that nickel and dime you not to mention having to chase that business down.
Do you have a handyman program available for newbies? I’m very interested in learning the way you operate. What you say in your videos make perfect sense to me. My biggest problem is that I don’t have a lot of experience and it’s just not second nature for me yet. I feel like I need to have the same understanding you have before I start. Anyway maybe you could do phone consultations? Just a thought
I'm starting a master class that will guide you step by step really really soon. I'm sorry I haven't gotten started on it yet but I have too much to juggle. Expected to start coming out within the next month. In the meantime, all of the information you need has been covered in my previous videos, you'll just have to watch a lot more filler to get the precise information that you need
Looking forward to the master class. I’d leave my number or email here but there’s a lot of scammers that will assume your identity and try to rip me off. So I’ll wait for you to announce the class on your videos and how to join! Thanks for responding