Telling a customer your man hour rate

Discussion in 'General Industry Discussions' started by greenproadam, Oct 29, 2009.

  1. TMlawncare

    TMlawncare LawnSite Bronze Member
    Posts: 1,197

    The one rule that must be remembered it "never tell the customer your hourly rate." Now repeat this again and again. Yes some might get away with it, but more often then not you will have a customer question you. Its not worth losing a job or a client. If you are fairly good at accessing time just figure a little long and you will usually be fine.
     
  2. greendoctor

    greendoctor LawnSite Fanatic
    Posts: 8,826

    Never. If someone needs to know that, they can find someone who will buy all of their materials at the orange box and work for $10 an hour. If they called me, it is because they are looking for a professional and a technician who knows his business. I bill by the job. That price includes materials, my time and overhead.
     
  3. Stillwater

    Stillwater LawnSite Platinum Member
    Posts: 4,800

    I don't go out of my way to anounce labor rates either but you guys must know the moment you hand them the bill and they write the check they know your rate for the job you performed, it is really no secrete then.
     
  4. greendoctor

    greendoctor LawnSite Fanatic
    Posts: 8,826

    I do not hand people bills. In fact, someone who is home is a red flag to me. If they were out making money, my invoice would not be cause for a Buddhist rite.
     
  5. topsites

    topsites LawnSite Fanatic
    Posts: 21,654

    My answer to this question is ALWAYS:

    "My minimum is 30 dollars."
    Which, yeah, that just so happens to be my minimum.

    The thing is I have to answer the question yet it's really none of their business and that gets the point across.
    And I do say it nicely but I'm not working for less than my usual rate, either.
     
    Last edited: Nov 10, 2009
  6. Dave_005

    Dave_005 LawnSite Senior Member
    Posts: 359

    i NEVER tell a customer my hourly rate. when i give an estimate thats the price i do the job for.
     
  7. JohnnyRocker

    JohnnyRocker LawnSite Senior Member
    Posts: 739

    So if you were to NOT give an hourly rate, how would you throw leaf clean up in a detailed annual contract if you had to? Given that there are no leaves on the ground when you write up the contract.
     
  8. Roger

    Roger LawnSite Fanatic
    Posts: 5,916

    Agree. I realize many are saying "never give them an hourly rate," but are we so naive as to think the customer can't do the simple math? Surely not. Yes, some customers may not be on the property and see the amount of time involved, but some customers, especially residential, will be at home. It is easy for them to track time spent on the job. Residential customers are tuned into timed task for a home, such as appliance repair. Stillwater is right, nobody is being fooled.

    I think there is confusion in terminology in this thread. I view two types of business transactions:
    1. Firm, fixed price -- customer is charged a fixed sum for an agreed-upon scope of work, regardless of time and materials (if any).
    2. Time & Materials -- customer agrees to pay for the labor in terms of time at a fixed rate, $/man-hour, plus the cost of materials (that may include a G & A fee). Materials may also include other fees, such as dump fees.

    When many posts in this thread are speaking of "giving the customer an hourly rate," you are really meaning (2), Time & Materials. Right?

    There may also be a third option, as a variation on (2), that is Time & Materials, with a "not to exceed" price.

    Most of my work is mowing, and I charge on a "per cut" basis. However, other work is done on a T & M basis. I've never had anybody get upset, and question me. They appreciate breaking out the Materials piece, such as dumping fees, because they are not paying taxes on this item. Tax is collected on the labor only. If current PA taxing proposals are enacted, this probably will change.
     
  9. JohnnyRocker

    JohnnyRocker LawnSite Senior Member
    Posts: 739

    Great info on taxes, Roger!
     

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