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hlgmoney
03-30-2002, 07:50 PM
I have been providing landscape maintenance for several years but an now thinking of getting involved in Irrigation . I have one employee who has some experience and I have done extensive rapairs but never a total install. Anyone have any suggestions? Also, what's a reasonable goal to set for the first year in terms of gross$. Thanks

SprinklerGuy
03-30-2002, 10:34 PM
I would say concentrate on doing repairs only at first....the installs will come from the repairs.

One technician booked full time should bring in over 100k per year. If you are just starting out I wouldn't expect but about 30-40% of that.

Good luck

HBFOXJr
03-31-2002, 09:37 AM
Study the market carefully between installs and service.

Here in NJ the install market sucks and has for years. I can put a really good tech on the street for $56/hr plus materials at list and Iget $28 for just showing up at the door.

I'm pricing installs at $45/hr and ZERO markup on materials and I get laughed out of many places. Thats right, materials are included at my cost.

Since the site is soooo famous for "help me with this pricing in your area" I think I'll prepare a little bidding exercise of my own but I won't be looking for dollars I'll be looking for hours to do the job along with any pricing. I'll also supply enough info so that everyone should be on the same page.

hlgmoney
03-31-2002, 10:06 AM
Thanks for the info. I live in Myrtle Beach and here things are just crazy. They're building houses on every corner and they all have irrigation. Some of the more affordable subdivisions don't but I've talked to other contractors who say they're getting calls from these neighborhoods too. I'm a little nervous about jumping in feet first but I think I need to since there's such a demand.

DanaMac
03-31-2002, 10:53 AM
SprinklerGuy - does your estimate for $100k per year per tech take into account the winter climate of the area the company is located? In Phoenix you can probably work all year but in Colorado I am off from November 15 to apprx March 15 from repairs. I'm not sure of the winter climate in Myrtle Beach, South Carolina though.

HBFOXJr
03-31-2002, 01:49 PM
Colorado will be less probably. Look at it like this. Your talking a 34 week season in your area.

If you structure billing right you should be able to bill at least 40 hr/week @ $50+/hr. That will be about 75K right there. Add in repair mat and you bump up some more. You probably winterize your systems like we do here in NJ so instead of billing 2K/wk you can probably bill 3K per week while winterizing. So add a little more for that.

Lance Takara
04-01-2002, 06:37 PM
HBFoxJr,

How many hours per week do your technicians work that they are able to bill 40 hours per week average?

HBFOXJr
04-02-2002, 07:19 AM
I'm not so concerned with how many hours per week so much as getting payed for all the hours I pay for.

Last year I changed my billing method to acheive at least 100 percent billing efficiency. I checked it several times and we were always even to up by a 1/2 hr. Here's how it works.

We charge an amount equal to 1/2hr of labor to show up at the door. This is billed as a "service call". It covers drive time and loading parts & supplies time at the shop.

Then we charge for on the job time, 1/2 hr minimum. 1/4 hr increments after that.

Any part of a 1/4 hr is always rounded up, not down. That way you won't lose 7 minutes per stop. You figure 5-6 stops a day and luck isn't coming your way, 7 min x 6 stops is .75 hr you paid for but didn't bill.

If drive time and morning prep time can be kept under an average of 1/2 hr per stop you can win a little there too.

Questions from the audience please.

SprinklerGuy
04-02-2002, 08:04 AM
We do much the same as you HB....only problem we have is that I am still in growth stages and am using some Direct Mail to sell the company to new clients. ON those direct mail pieces we sell the first hour for less than our normal service call!!! This has helped me establish quite a base of clients and they keep calling back. I would like to get out of this direct mail habit, but it is addicting. Maybe I should structure the deal a little better but it creates about 15-20 new calls per week.

Dana...yes we have a 52 week season here. I do things a little different than Harold for tracking purposes. I like to call my total overhead costs (insurance, debt payments etc.) and my direct costs(wages etc)my nut. My nut is a set amount per day. I have to bill at least my nut on average every month to keep the doors open. My 3 techs and contracting crew each contribute towards that nut in different ways. One of my techs is also a foreman so his contribution cannot always be measured. The other two techs and the construction crew can be measured. It is tracked daily so that I can see any deviation and take measures to fix the problem immediately. More often than not, it is my fault though due to poor routing etc.

My techs contribute approximately 90k each towards that nut per year. Now remember that is labor and markup only. That is how I track it. In other words I add up all the labor and service calls for the day and I add up the profit made on the parts for the day to come up with that number. I want to see 350 minumum per day. Some days are way bigger and some are smaller but the averages must be around that 350 or somethings wrong. In fact, for some reason in March the averages were way UP. Must have been those 90 degree days!

Ground Master
04-02-2002, 09:21 AM
hbfox- if you send a tech to someone house you charge 28 to show up plus 56 per hour? Is that correct? So, if a guy is at someones house for 1 hour, you get 84 for that hour? (28+56)

SprinklerGuy
04-02-2002, 10:07 AM
We get 60 for first 1/2 hour and 60 after that.....1st hour is 90

Lance Takara
04-02-2002, 01:07 PM
Few questions:

1. Are all (if not most of your jobs) within a 1/2 hour drive of each?
What happens when you do long service calls (1-2 jobs per day) on a jobs that are much further away than a 1/2 hour

2. Does your billable hour rate already factor in down time for servicing equipment, restocking truck, training, weather delays, overlooked missing parts, etc? There are many other non-productive tasks but you get the idea.

3. Your system seems to be strictly time & materials (T&M) based. Have you run into any problems with owners wanting a set fee for work done? Obviously, there are many issues with T&M. Among them, 2 different technicians may do the same job in different times, if they are at the same billable rate, the cost to the owner will be different which it seems it shouldn't be. Maybe you have different rates for different technicians?

4. If a technicians (new or inexperienced) needs some training in the field, how do you accomplish this without sending 2 technicians or yourself in the field? How does your billing system allow you to cover their cost?

That's probably a screen full - enough for now.

By the way, Harold, Is irrigation your primary type of landscaping work and what is the rate of pay for sprinkler technicians in your area?

Ground Master
04-02-2002, 03:14 PM
Thanks for explaining your system Harold, I hadn't seen your post when I posted my question. Your system seems very fair to you and your customers.

Ground Master
04-02-2002, 03:22 PM
Lance, I think Harold has a fairly fool-proof system. It might not be perfect, but its easy to understand. That translates into the customer understanding it. Even if he can only account for 7 billable hours in a day where his technician is paid for 8, he still sells $392 (7x56). I'm sure that covers his technicians wage and then some

There seems to be too many variables if your not time and material based. Say you had a set fee for replacing a valve. I've had valve replacement jobs that have taken an hour and some that have taken 3 hours. The same goes for replacing heads.

Lance Takara
04-02-2002, 04:56 PM
GM,

Just thinking out loud here. No harm intended here. Harold seems to have a good program going. That's why I follow threads related to him. The intent is not to make holes in Harold's system but rather to learn what he may have already discovered.

As far as giving a set fee rather than T&M, we are talking about after the job is seen. It wouldn't seem too hard to have adjustment factors to cover most if not all of the conditions that may be encountered.

For example,

Valve replacement say a fee of A dollars - standard conditions ("standard" can be clarified)

Plants around valve box (if valve replaced, obviously needs to be replaced after repair completed) - B additional dollars

Depth of valve piping - C additional dollars

etc.

You get the idea.

Basically a menu. So, you are correct, for the same valve replacement, you can arrive at different set prices for different conditions from site to site.

There are numerous benefits to this system some of which I already mentioned. I could continue but I'll wait for some feedback to see if there are any takers.

SprinklerGuy
04-02-2002, 05:41 PM
Personally, I have always dreamed of the day when we could institute some form of flat rate pricing, much like the plumbers have done around here. They come to the house for 60 bucks......they spend 15 minutes evaluating the situation and then they open their little book and say......."plugged drain....30 year old house....one clean out.....that will be 225 sir!"....at that point you can either pay the 60 and they will leave or you can buck up and pay the 225. They have already figured in the time it took to give you the quote.....into the 225 I mean.

But

Too many variables with yards and soil types and crappy systems installed by crappy contractors, and so on. so I have given up on that idea. The problem with the different prices for the different techs is that naturally people will probably want the "apprentice" rate but the "master" service. If they opt for the apprentice and his lower rate, they will complain that the guy didn't know as much as he should of. You know the problems with that.

I operate on the premise that I will be honest and true to my clients. If they want a fair job at a fair price....DONE RIGHT...I am their man. If they want it cheap and patched together they can go elsewhere.

I still do not know how the hell Harold is billing 8 hours in an 8 hour day, for the life of me I cannot figure it out. Must not be as spread out in NJ as it is here I guess. I generally bill about 5-6 hours on a good day.

Wish I knew.............

HBFOXJr
04-02-2002, 07:12 PM
Originally posted by Lance Takara
Few questions:

1. Are all (if not most of your jobs) within a 1/2 hour drive of each?
What happens when you do long service calls (1-2 jobs per day) on a jobs that are much further away than a 1/2 hour

HF- 1/2 hr gets me pretty far even though it is congested around here. Some of my routine stuff may be 45 minutes away but I can usually insert some other jobs between the shop and the most distant job. I'm looking at averages of under a 1/2 hr travel including that prep time in the morning.

2. Does your billable hour rate already factor in down time for servicing equipment, restocking truck, training, weather delays, overlooked missing parts, etc? There are many other non-productive tasks but you get the idea.

HF_ Down time - We do preventive maint on rainy days or schedule it for outside shop service in the off season. We seldom lose billable days because of down equipment. Basically I don't let it worry me.

Truck stocking- Restocking c is done in the morning for the days work. That time is part of the "service call" charge = to 1/2 hr as is the drive time. Stocking is easy as we use utility body (service body) with everything in bins and very visible. Guys are taught to keep a minimum of 10-12 rotors, 6-10 4" sprays, 3 12" sprays, 3 12 " rotors and stuff to make risers for rotors or sprays. Threaded and slip x slip 1" valves and boxes are on struck. Universal solinoids from RCo that fit hardie/irritrol valves, Hunte solinoids and solinoids for RB100dv are on the truck. Diaphrams for RBEV100, 100DV, Richdel204 and 205 valves and Hunter 1" valves. That covers most of the stuff installed here for decades. Small brass valves and other seldom used valves are replaced. Large brass aand plastic valves I order parts for. On many residential jobs we now replace all diaphrams at one time if it is an older system. We gotta locate the valves anyhow so we might as well do all. One truck haas all common PVC fittings up to 3", one to 1 1/4" and another to 1.5". All carry commonly used 1" poly insert fitting and saddle T's. Progressive electroni 521 locators and a Fluke 7-300 ohm meter are on board. WE now use only the Hunter Pro-C controller for all new work under 12 zones and for universal replacement. We seldom use original model controllers.

When we're busy I do a weekly visual inventory of bins in the shop and order box qty of all favorite stuff. Slow stuff like glue caps, thr plugs, thr red bushing etc I aim to keep some visible in the bin. I also order for upcoming installs and any special needs service items. JD delivers to my shop and my guys put it away that day or the next morning in a few minutes.

Training- I ride with them a few days and only hire partially experinced guys. I may or may not bill for 2 men when I go out with a newbie depending on if I perform or coach.

Weather - We don't lose a lot to weather. On reainy days we do shop work or go home. Guys can or will work Saturdays to keep up hours.

3. Your system seems to be strictly time & materials (T&M) based. Have you run into any problems with owners wanting a set fee for work done? Obviously, there are many issues with T&M. Among them, 2 different technicians may do the same job in different times, if they are at the same billable rate, the cost to the owner will be different which it seems it shouldn't be. Maybe you have different rates for different technicians?

Set fee - Only if a large scale service project where we are more or less revamping by lots of wholesale replacement and new work. I quote our hourly rate for an estimate telling them it's all underground how do I know. I'll credit the estimate to the rest of the repair. Of course! Usually that kills that nonsense. We do cap some repairs at a set amount on big unknown problems. This is by mutual agreement and can be exceeded at customers OK. That satisfies a lot of folks. Tony has given reason why we aren't flat rate and they are all valid. I'd love flat rate and to beable to pay techs the same but it isn't fair for them now or workable for me.

4. If a technicians (new or inexperienced) needs some training in the field, how do you accomplish this without sending 2 technicians or yourself in the field? How does your billing system allow you to cover their cost?

HF- I'll send a less experienced helper with an exp tech. Billed @ $40/hr, no extra chg to bring him to the door. He is perectly capable of replacing heads, repairing pipe or rebuilding or replacing a valve. He won't know GPM, pressure loss, ohms, volts etc. He can replace like for like or equiv with a head but won't know if the first one was the proper choice. Occasionally I've let these guys do simple repairs on there own. I bill for them according to my mood and the situation. After all if I sent a real tech for a simple problem I don't charge cheap so what's the diff.

That's probably a screen full - enough for now.

By the way, Harold, Is irrigation your primary type of landscaping work and what is the rate of pay for sprinkler technicians in your area?

Irrigation is my largest volume, followed by fert programs and 7 mowing/maint jobs (1 is mine). Down to what can be done in one day by one guy now.

DanaMac
04-02-2002, 08:33 PM
I'm sure we all have different ways that may not work for all. But here is mine.

I am now charging $75 for the first hour - one hour minimum. If I am there 10 minutes changing a frozen bonnet, $75 plus parts. If a job is 45-60 minutes from the house/office, I don't make it a direct drive. I will fill a couple jobs in between to and/or from. After the first hour it is $56 per hour. But I can go higher or lower depending, as Harold said "...according to my mood and the situation."

Revamping I also charge T&M. You never know what you'll run into. I've run into a system that came off a 1/2" line, feed into a 1" PVB, and had zones stretched to 20 GPM. No drains on manifold or before or after PVB. So everything froze and cracked. I won't give a set price unless it's an install.

Since my business has been primarily myself for 7 years, I have not had to worry about tracking employees. And unfortunately have not tracked things for myself (slacker). But now I'm at the point of expanding the biz and will take all advice on what to do. Tony has already given me advice in the past. Much appreciated.

HBFOXJr
04-02-2002, 09:20 PM
I don't understand if you are billing the first 1/2 hr as 1 hr and after that 1/2 hr do the increments how come you wind up short on billable hrs. You are getting a 1/2 hr plus the on job time just like me. Also this is a revenue thing not a real hrs thing wwe are talking about. Wwhen I say pay for 9 and bill for 9 that is only becasue I count the "service call" as a 1/2 hr along with the on job hours. Does that clear it up???

Everybody - If you are paying for hours you gotta have a method of billing for an equal amount or darn close. I found out last year when doing some spread sheet analysis it is one hell of a $$$ leak if your not. You can make $$$ but not what you should. I've put my labor rate where even if I don't sell much in materials at stop I still make $10 plus $/hr.

Around here a good tech starts in mid teens plus benefits. OT adds 10% to the wage scale and health ins about $4 hr. With other ins and taxes these guys are costing $26-30/hr plus truck @ $4-$5/hr plus business OH of $10/hr so your at low to mid $40's of $/hr to put the man out everyday. 9 hr x $42=$378 cost.

6 billable hr @ $60=$360. Gotta problem. No parts profits and we're minus for the day. If that daily labor revenue goes to 8 x $60 we're $102 ahead and if we paid for 9 hr we made $11.33/hr.

$56-$60 looks like big $$$$ but if your not counting hrs it gets small real quick. Other thing is we gotta get fat Mar 1- Dec 20. So we need big $$/day or week to carry us over.

Lance Takara
04-03-2002, 02:18 AM
Thanks for the detailed response, Harold.

More questions if you don't mind.

Lance Takara
04-03-2002, 02:20 AM
hit return too soon. . .

Are all if not most of your hours billable too or are you overhead?

And how many techs do you carry to have $10 per hour overhead?

Lance Takara
04-03-2002, 02:28 AM
Another thought.

If a tech has a knack for figuring out more efficient ways to do the same routine jobs, is he rewarded by getting an increase in pay and therefore an increase in his billable rate also?

If this is true, what do you use as a review to determine which techs this applies to?

I'm assuming you are not on the job site for each job.

HBFOXJr
04-03-2002, 07:20 AM
I've typed a number of times on this subject so it's best if you read some of my old posts. Here are some thoughts though.

Nextel phones, computer software & support, land line phones, YP adv, all other adv, my truck with ins, fuel and maint, assoc dues, occasional business travel, education classes, business lic(s), postage, my wife as part time off manager with benefits, electric, heat, stationary, facility maint and on and on. We do our own payroll and book keeping. Only income tax prep goes out to a CPA.

I could get the number down some if I had more employees to spread it over but not in half. To put more people to work I'd spend more on adv, nextel, a fancy phone system instead of a couple single lines, more time in the office for my wife, more postage and stationary because you have more customers to service.

If we really grew then an existing person or new person would have to do sales full or part time and that would add to OH as non-production.

Total OH $ tends to rise and fall with how many with size of business but the per hour thing generally will be the same.

Large companies with lots of labor like landscape design build operations may have OH of $5-6/hr. Small service companies in irrigation or lawn care tend to have fewer people to spread it over.

HBFOXJr
04-03-2002, 07:24 AM
Like what? How many ways can you diagnose or repair?

The answer is I don't do anything. I pay well and I expect a lot.

SprinklerGuy
04-03-2002, 08:36 AM
HB, you are up EARLY today! Welcome to the world of the dawn lovers.

I bill 60 bucks and it INCLUDES ONLY THE 1ST HALF HOUR. so I am essentially doing the same thing you are......after one hour I have actually billed for 1.5 hours.


I just checked spreadsheets, it appears I am regularly billing approximately 80-90% of the hours I pay. That is fine with me and I can try and target a higher percentage but it may be tough. My guys are all salary so when they are busy I usually do bill more hours than I pay........so I guess according to Harold's numbers, I am on track.

My biggest problem is the coupon mailers. These are practically giving away my first hour, I need to adjust them. We are basically advertising a "tuneup" and the 1st hour is almost 1/2 of what we would normally get. I need to restructure that or quit doing it.....problem is it is approximately 25% of my revenue for new clients........and then they stick around and become regulars.. We all know what that is worth right?

HBFOXJr
04-03-2002, 11:13 AM
Tony- you have to weight the costs of aquiring the customer with the discount and the advertising vs their life span and expected revenue.

If you can get regular revenue through service checks 2x/yr like we try to do with a start up and winterization you eventually come out ahead. But it costs to build clientel for these small sales so you got to keep them coming back.

Lance Takara
04-03-2002, 03:41 PM
gotcha - thanks again for sharing.

I guess our situation is a little different as we do other landscaping work in addition to irrigation.

hlgmoney
04-06-2002, 10:41 PM
Do you guys ever bid just based on eyeing the property- without actually laying out the design and counting heads-guestimating?

HBFOXJr
04-07-2002, 08:28 AM
You ever have sex just riding down the road looking at a girl and eyeballing her up?

Your public enemy #1.

SprinklerGuy
04-07-2002, 12:39 PM
We do guestimate but it is scientific the way we do it. Sometimes we base it on square footage....i.e. 500 square feet per valve or something like that. Very rarely does my salesman or myself lay out the system and count fittings to do an estimate. .10 cent fittings don't add up very fast!

hlgmoney
04-08-2002, 09:17 AM
Thanks,
Just looking for a way to avoid actually designing each system prior to the bid. I can look and tell the approx amount of materials that will be needed, I just didn't know if some of you had a system for that.

HBFOXJr
04-09-2002, 07:44 AM
A sprinkler system is an engineered device. Once you are very familiar with design, it all becomes easy and quick for the smaller jobs. Accurate Pricing and engineering can be done for many residential jobs in 1/2 hr give or take a few. And then there are no mistakes or short comings.

You will do a disservice to you clients, your reputation and your wallet if you think you can do drive by engineering for a irrigation system.

The fact that you even proposed this indicates a level of knowledge and experience that needs serious education before proceeding further.