View Full Version : Pricing repair work
08-06-2001, 05:23 PM
Just curious what other Irrigation contractors charge for irrigation repair jobs. Do you have an hourly rate? Do you have a minimum?
Currently, we charge $35 per hour plus parts. That's the regular going rate in these parts (only a small handfull of irrigation contractors charge more than that where I live). We have begun to set a $65 minimum lately because it's just not worth it to drive over for a 1 hour job just to make $35.
08-07-2001, 08:22 AM
$25 to come to the door plus $50 per hr. 1/2 hr minimum and 1/4 increments after that. And that quarter hour is for any part of a quarter hour, even 3 minutes. 1 or 2 we will let slide.
Goal has been to achieve close to 100% billing efficiency. Means that if I pay a man for 9.75 hr on his time card I want 9.75 hr of billable time. The "service call" or $25 to come to the door counts as a 1/2 hr. Covers drive and truck restock time.
Also added a "misc mat" charge of $3 this year to cover, primer, glue, paper towels, saw and cutter blades etc. that are not things you would routinely bill for but are consumed regularly.
If we can't finish a repair during the scheduled visit for any reason, we will return and bill for the on the job time only. Gotta figure out how to recover money discretely for that.
08-19-2001, 12:36 PM
Thats a really good way of billing, complicated to understand at first maybe but I'm sure it covers everything. I might have to impliment that into our billing, we just charge a flat rate of $60/per hour plus materials.
08-20-2001, 07:30 AM
Originally posted by Harris
we just charge a flat rate of $60/per hour plus materials.
Is a 15 minute job $60? Is a 60 minute job $60? Do you do computerized accounting and billing?
08-21-2001, 07:02 PM
I'm not going to give out my employer's price schedule, on the off chance that he or his competitiors are reading this forum, but we have a service call charge, a minmum time charge, extra charges for laborers, wire tracking, the pipe puller / trencher / borer. we charge higher rates for commercial labor than residential, and we bill for EVERY part...wire nuts, poly fittings, poly clamps, wire, pipe, nipples, a charge for plumbing supplies to cover solder, flux, grit cloth, fitting brushes and etc....
a good sorce of prices is the century rain aid catalog. they list "list prices" for almost anything you will ever sell your customers although I would reccomend marking them up above list for the time and energy it took to order them, pick them up, stock them in your van, pay for them in advance and reorder them before you ran out.
DO NOT undercharge for service. you are sending a skilled, experienced technician (well i would hope anyways) to someone's house or place of business on short notice with a van full of the parts and tools to fix whatever is wrong. That's a pretty valuable service.
08-22-2001, 07:23 AM
It is probably beneficial for good contractors to post prices to give other intelligent operators an idea of what to charge. Ignorance is what hurts us.
Nobody is going to ruin our business by charging ridiculously low prices because they won't last. If they are $2.00 and hour less than us most people won't change if you have a good relationship.
How do I know? I'm in the top of pricing for my area and do alot of service. I'm continually amazed at how long people will stay with a schmuck. A combination of laziness and loyalty keeps them were they are until they really get stiffed or he goes out of business.
And when they call us and the labor rate is $10-$15 per hour more and the same for a blow out they just book it and are happy.
08-22-2001, 11:07 AM
Do you do computerized accounting and billing?
The billing is computerized, it needs to be implemented b/c its getting to be out-of-date the way we enter info and bill. I am thinking about buying the Lawn Monkey program. I think it will help out a lot! They even got some type of bar code scanning software to go with it that will make it so much easier and faster at the end of the day and billing period.
As for the irrigation service charge. We have a minimum of 1/2 hour which would be $30 and then charge $60 per 60 minutes. But for a job that takes 1 hour and 13 minutes we charge for 1.5 hours ($90). 1/2 hour increments after 1 hour even if its 1 hr and 3 minutes. Then we charge for every little piece of material used. For Poly pipe we charge $0.50 per foot that we buy for $0.33 per foot. we mark everything up about 20-30%. We charge for everything, you have to in the irriagation industry, even wire nuts, clamps, 1/2 ft of 2 strand wire. I mean everything. Money is money.
08-22-2001, 11:21 AM
Harris- you said
"We have a minimum of 1/2 hour which would be $30 and then charge $60 per 60 minutes. But for a job that takes 1 hour and 13 minutes we charge for 1.5 hours ($90). 1/2 hour increments after 1 hour even if its 1 hr and 3 minutes. "
If a tech works 8-10 hours a day, is this method giving you and equal amount of hours billed?
08-22-2001, 12:40 PM
It covers everything but its probably not the most effiecent way to bill. My buddys company who is strickley irrigation service and install made around $23,000 last month gross on service with 4 techs at $10 to $12 per hour working 8-10 hrs per day. which would be around $8,000 a month for payroll on the 4 techs. So I'd say it covers everything but it could be better. Maybe if I implemented your billing I come make an extra couple hundred or thousands.. It would probably save my buddy another 3 to 4 thousand a month. Its just a rounded figure that I can up with that would cover everything. But I never got into the details, if I did it would be a little extra money here and there and make a difference at the end of the billing period. I just don't like getting real complicated b/c I have bigger stuff to worry about so I tried to make it a simple flat rate.
08-22-2001, 01:21 PM
The $23K your friend grossed sounds like a lot of dollars but those 4 guys probably worked a total of 688 hours that month.
That means his sales were $33.43 per man hour employed. That also includes his sales of repair parts.
If I bill my way, my sales are approximately $50 per man hour and the parts add to that.
Even though I bill for wire nuts and small stuff I don't worry about 6" of otherwise scrap pipe or wire.
My guys make in the mid teens of dollars and I'm more concerned with $50 hours than pennies of scrap.
The old adage is "watch the pennies and the dollars will take care of themselves". But with labor being a big part of what's sold in the service business and costly as well, I think if you watch the dollars the pennies will take care of themselves.
08-22-2001, 01:39 PM
I did a little math and I know things are different in Columbus as my son lives there. Here it goes.
$8,000 base labor
$2,200 w/comp, lia, SS, uniforms, etc
$3,440 equip $5/ hr x 688 hr, deprec, gas, oil, ins, other maint etc
$3,400 overhead $5/hr x 688 hr, adv, office help, postage,
communications stuff, facility rent, office supplies, dues & subscriptions, bad debt, etc.
$4,600 cost of materials used in service (20% of sales @ 23K)
Total cost of work produced $22,480
Net profit before taxes $520
Where am I wrong here?
08-22-2001, 07:10 PM
It is probably beneficial for good contractors to post prices to give other intelligent
I agree, but since my boss didn't give me permission to post his service price schedule on the web, i really can't share it. we are deffinately not the cheapest.
as for people ruining the bussiness by charging too little i'd have to say that in the areas I work its becoming a reality. Competition, particually from "scrubs" is really driving down the price of installs and to a certain extent, the quality. I often find myself doing things diffrently from how I would want them done at my own house b/c that's what the job was sold as and what my superiors want to see.
08-22-2001, 08:11 PM
In NJ you must be licensed as a "Landscape Irrigation Contractor" to perform work for hire. Excluded are plumbers and anyone doing their own work.
People thought licensing would be beneficial but I told them no. Once a cheapo always a cheapo. And I'm very right. Install prices are off 30% from 13-15 years ago and I sell few installs except through referalls or reputation if anyone cares to believe.
Most build inferior systems at sub-standard prices. Given this years drought and those '97-'99 dry ones you can really see it. Most people just don't believe that a properly engineered system can can you green even with zero rainfall and high temps.
Some build decent systems at low prices. They have the same Nextel radios, trucks, trailers, pullers, probably insurance and definitely on the trucks as I. They use the same phone company and the same health insurance and so on. Their prices are way below mine. I think ther eis some hanky panky going on with labor like salaries with no OT, cash etc that I can't figure out.
A couple peole tell me it's because they do a house per day and I can't because of a smaller crew. I say hogwash because whats the difference I come for 2 days with 3 men and one truck or they come with 6 guys and 2 trucks? Same production time, same everything. Then you have this hungry monster waiting to be fed with a job per day that you gotta feed come hell or high water. Which means you gotta get lots of referalls and be unquestionably the cheapest for the relevant quality to keep going.
Now you skip a day here and there and start cutting prices more to stay working and what do you have?
I gotta be missing something! Any clue?
I can't bring myself to build the crap other people pass off because I know there is better and why it's better. Then about the time I cut corners like corner heads, nozzle sizes, matched precip nozzles etc, somebody will say to me some dry year "how come my lawn isn't green like...", and what am I gonna say? I could have built it better but I didn't because I wanted to sell a job?
But service is good. We probably added 10% to our customer base this spring with zero risk and foer good money. No major warranty issues, free winterizations, or anything. Just good paying customers with problem systems that we'll get to service again soon, unlike a new job that will proably be trouble free for a bunch of years to come and produce little revenue beyond the minimum.
So while I'm offering quick and competent service to new service customers even in the busiest time, the others are too busy or will put them on a list or come out in 2-5 weeks because their tooooo busy with cheap installs.
Maybe the industry will change in our area to service companies and install companies. From what I've heard this goes on in some parts of the nation.
In the 80's and 90's a couple of distributors were beating on doors to get more contractors into the business. I don't know why they didn't help us existing guys grow instead. |That really fractioned to the market and today almost no one in our area has the size that I read about in other parts of the country.
My wife and travel a lot and we always check the yellow pages for contractor listings and sometimes visit or talk with them. NO place has ever had anywhere near the amount of contractors that we do locally. And I mean major metropolitan markets.
What's your take on the state of the industry.
you are so right
I do work in your same area and know your company and the other "big company" in the area
I also know alot of the smaller ones
I service alot of crappy system out there
even commercial jobs are put in bad
How do they get the work ?
I'm also Cert. in the State of NJ
keep your feet dry ----
08-30-2001, 11:26 PM
What Harold is talking about is comming to a head in my area.
I keep on getting calls about people that had systems put in a couple of years ago and they now need to be fixed. About 60% of the time I end up telling people that it's better to start over( new install) rather than trying to repair it.
These people that were installing these "Mickey Mouse" systems, most of them are in jail or out of business. All these casual systems are making me some money.
05-12-2004, 11:27 PM
I agree hbfoxjr. When a man gets out of a limo and and theres a bum on the street. The bum can always say. "I underbid him everday."
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