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Old 02-25-2002, 10:02 PM
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JimLewis JimLewis is online now
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Location: Beaverton, OR
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Irrigation Hourly Rate

I am trying to figure out irrigation rates. After talking to some of the guys on this board it seemed like we were a little low in our irrigation rates ($35 / hr.) for hourly work (e.g. repairs).

So I have done some extensive...er... research (called a lot of my competition, pretending to be a customer, and asked about how much they charge for sprinkler repair.).

After about 15 calls, about 9 of them said they charge $45 per hour plus parts. A few had a minimum service call ranging from $65-95. Only one guy charged a lot per hour at $85. And the others were $30, $35, $48, and $65 per hour.
Anyway, seems like $45 / hr. is pretty normal around here. And minimum service call charges are too.

But what I don't get is how some of you guys get so much more than that per hour. Especially since Oregon is like the most difficult state in which to become a licensed irrigation and backflow installer. Furthermore, our min. wage laws are $1 per hour higher than most states and that effects all labor rates. I would think that we'd have higher rates than elsewhere.

How do you guys do it? Are these rates comparable at all with what's normal for your area?
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Old 02-25-2002, 10:18 PM
Merc145 Merc145 is offline
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Hey,

Here in TX I charge $50/hr ,$50 service charge , plus parts. I started out at $20/hr 3 yrs ago boy was I wrong. Then $45 then $50 then $50/hr and service charge, plus parts. I have yet to have a person say it was too high. Especially in the summer. So charge what you are worth and you will be happy.

Hank
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Old 02-26-2002, 12:35 AM
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gusbuster gusbuster is online now
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Re: Irrigation Hourly Rate

Quote:
Originally posted by jimlewis
How do you guys do it? Are these rates comparable at all with what's normal for your area?
I can't speak for your area, but how much is the contractor license for irrigation up your way enforced.

From friends north of me (Sacramento), I know it is enforced and people do ask about whether or not they have a c-27 license.

Now in my area, working in this field last 25 years, I have yet been asked to produce proof of my license.

Price is the driving factor for this area. However, I'm seeing more and more people asking me if I'm licensed.

I can't tell you how many people laugh at me when I tell them a min $35 service call and an hourly rate of $60 plus parts. About every 5th one does call me back. Why, "I tried the other guy, but he still didn't fix the problem." or he never showed up.

Point I'm trying to make, what works in other areas won't work in your area. It's called market conditions. As long as people can find people who will work cheap, don't care if they're licensed, going to hold down cost.

I should be at $60 for a service call and $90\hour for labor. Will I ever get that? Not in my lifetime.

John
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Old 02-26-2002, 01:20 AM
Chuck Sinclair Chuck Sinclair is offline
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Just a tad north of gusbuster (Sacramento) i charge $55.00 an hour with no service charge i hour minimum.
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Old 02-26-2002, 06:27 AM
SprinklerGuy SprinklerGuy is offline
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jim
You are doing the right thing by doing your research. I do that usually twice per year. I find that my prices need adjusting about once every two years. I just bumped my pricing at the first of this year due to some "research". I may have to bump again though.

I think we all have a decision to make. Do we want to stand out from the rest of the companies? If we do, do we want to be the cheapest or the best? I prefer to be the best and I price myself higher than most companies to reflect that. My guys are the best trained, we are there when we say we will be. We stand by our work.

I get people that laugh at our pricing too. I don't care. We are worth it.

I find that the other companies in my area are following MY lead on pricing also.

We charge 60 for the first 1/2 hour and 60 per hour after that. I will charge by the 1/4 hour. 6 years ago I was 35 per hour with no minumum. Then I went to 42 with no minumum. 4 years ago I raised it to 45 with a 1 hour minumum. then I think I started getting smart. I was the first in my area to go to a service call fee that included only 45 minutes!!! Seems funny now but when I do my "research" there are a bunch of 'em doing that same 45 minute service call. There are also several guys charging 90 for the first hour with a 1 hour minumum. That is what made me decide to go to my current rate. Nobody has complained. I am considering bumping the service call fee to 75.
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Old 02-26-2002, 08:43 AM
HBFOXJr HBFOXJr is offline
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$28 to show up at the door (service call)

$56/hr, 1/2 hr min, 1/4 hr increments, always round up time to next 1/4 hr

Around here a good tech makes $15-$20/hr. Add health ins $3-$4/hr. labor burden of all taxes and insurances incl WC, Liability etc, a truck @ $4-$5/hr and OH @$10/hr and the guy costs you in the mid $40's/hr +/-.

I've set my floor at a minimum profit of $10/hr on labor alone. I think thats Ok. Materials bring in more but you can't count on them even though you know you will use them. Some stops don't use many materials to solve a problem, ie: spray nozzle or a few wire nuts.

Last year I really started looking at everything thing on the basis of profit per hour. What used to appear to be a good margin many times doesn't necessarily yield a good profit per hour.

I'm really liking the profit per hour thing because I know how many hours per year we work and it's real easy to watch results and set goals.
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Old 02-26-2002, 08:53 AM
SprinklerGuy SprinklerGuy is offline
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I guess Harold and I do the same thing....kinda. I track mine by day instead.

I have a spreadsheet that has all my expenses except parts. I update it monthly if things are changing. I then break it down into a daily need based on a 20 day month. Then I try to meet my "nut" on a daily basis. I figure my top techs cost me approximately 200 per day just for labor and related. The truck adds to it though.

if I meet my nut, I'm happy!!!!! If not, I'm not.
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Old 03-09-2002, 04:51 AM
Lance Takara Lance Takara is offline
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Harold (and others),

Out of curiousity, approximately how many billable hours per year per man do you get?

Lance
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Old 03-09-2002, 05:08 AM
Lance Takara Lance Takara is offline
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Realistically, regardless what the "going" rate is, if your expenses exceed the income your hourly rate produces, you will lose money and eventually go out of business even if you may be billing 60+ dollars per hour.

Although it's important to know where your competition is, it should be more important to know what the cost of running your business is and then price your hourly rate accordingly to meet your expenses and make a profit.

Harold briefly outlined some of the expenses incurred in running a business and showed how he came up with an hourly figure. It should not be "pulled out of the air" or "pulled out of some other companies air." It is a calculated number and will be different for every business. Consider, how can one company that provides full medical benefits, paid sick leave, educational training, clean uniforms, retirement plan, etc. have the same houly rate as one that doesn't?
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Old 03-09-2002, 07:40 AM
HBFOXJr HBFOXJr is offline
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copying prices

And if there is any reason to think that a company might ever want to grow towards what a worthy competitor is doing, then you better copy his numbers so you got the $$$ to make it happen.

And for you young guys out there thinking that company size has something to do with operating costs and prices you can charge, get that silly idea out of your mind.

In a well run organization the overhead costs won't be too much different per man hour of production work. The type of business such as construction vs service or lawn service vs irrigation service makes the biggest difference in operating costs.
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