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Charging A Full Man Hour For Fractions Of An Hour

Discussion in 'Lawn Mowing' started by bilbo7021, Nov 26, 2002.

  1. bilbo7021

    bilbo7021 LawnSite Member
    Messages: 99

    Ok, I went and did the search thing with this, and got nowhere. So here's the question..........

    A couple of contractor friends of mine tell me they charge a whole man hour for even a fraction of the hour (like 15 minutes = a billable hour and such). Basically they round "up" to the next hour.

    Is this the norm here as well? I've started getting into the habit of just figuring that a job will take X amount of hours, and not even thought of that.

    Thank you in advance.......again:D :blob3:
  2. Green Pastures

    Green Pastures LawnSite Silver Member
    Messages: 2,457

    It just doesn't sound to honest to me. It's just as simple to bill for 1/4 hour by just using decimals to figure your bill.

    Example 1 man for 3 3/4 hours. You bill @ $45 per man hour......

    $45 x 3.75 = $168.75

    Now if we were there for 55 minutes yeah I'm gonna bill for 1 hour but I'm not billing for 2 hours if we were there for 1 hour and 15 minutes. That's crap.
  3. cantoo

    cantoo LawnSite Silver Member
    Messages: 2,910

    How many times would you hire a Company if they billed you this way each time?
  4. stslawncare

    stslawncare LawnSite Bronze Member
    from DE
    Messages: 1,484

    i round to the nearest quarter.
  5. greenman

    greenman LawnSite Addict
    Messages: 1,405

    I round to the nearest quarter.
  6. Runner

    Runner LawnSite Fanatic
    Messages: 13,497

    I bill to the nearest quarter, also. There are, of course, certain instances where there are minimums, so they still get billed as designated.
  7. therainman

    therainman LawnSite Member
    from IL
    Messages: 196

    Round up to nearest quarter

  8. walker-talker

    walker-talker LawnSite Platinum Member
    from Midwest
    Messages: 4,771

    I am like everyone else on this one....to the nearest quarter as well.

  9. The Mowerdude

    The Mowerdude LawnSite Senior Member
    Messages: 372

    If you're going to stay in business, you have to have SOME kind of fudge factor in order to offset the hidden gotchas. If you bill right down to the minute, how do recover any money for time lost such as employess slacking, machinery breaking down or even there being a lot more work than originally met the eye? The fact is that without a fudge factor, your profit margin may run way too thin to compensate for any unplanned expense. However how you arrive at gaining your fudge factor is strictly up to you. If that means rounding up fractions of an hour up to the full hour, there's nothing wrong with that. Just don't tell anyone how you did it.

    For many folks, fudge factors seem to fly in the face of conventional honesty, but they are a very important part of running a successful business. However, if you ever tell your customer OR your employees that you "padded" up the price in any way, you'll have problems. Your customer will view you as a crook and your employees will work slower and slower on future jobs. It's a fact though, that NO ONE else will see your fudge factor as anything but dishonest. So don't tell them.

    My wife and I both belong to families that pride thenselves in being honest in ALL things. One day my wife was noticing that my billing didn't agree with the actual times that I had recorded for my jobs. She brought it up at a time when both her parents and mine were over at the house. I explained why I had to have that "cushion" and to my surprise, everyone in the room agreed. It simply is a very important part of running a successful business.

    Also, in the past, I've always told my leaf customers that I charge by the hour. But I've finally gotten to the point where I feel I can accurately bid leaf jobs by looking at them. But I promise you that every estimate I give has at least 1-2 hours in it more than I think it will really take. Is this dishonest? Hell no! If I give a customer a price that he accepts and then I get on the job and find out that it took only half the time that I thought, the customer still accepted the price. What's the difference between that and rounding up the hourly rate for any increment less than a full hour? If the customer is happy, take the money and go on to the next job. In the end, the cost of doing the job was the same as long as nothing dramatic happened. So the fudge factor went right into profits. But if the machine busted anything that caused a loss of time, the fudge factor helps minimize the loss of profits.

    On the other hand, if the job takes longer than I thought, I'm at least covered part way. After all, this is all about risk. If we're going to assume the loss of bad risk, we should reap the benefits of good risk.
  10. The Mowerdude

    The Mowerdude LawnSite Senior Member
    Messages: 372

    Everytime, because I would know that they know what they are doing. And I don't mind paying more to a pro. I simply want quality and if I have to pay a higher price, fine. My only complaint comes when I pay the higher price and DON'T get the quality.

    When I'm looking for new customers, I look for the one that doesn't mind paying more to get top quality. When I become a customer, I try to be the exact same way. It's not always about the money and I think most of our knuckleheaded lowballing competitors just can't seem to get that out of their thick noggins.

    However one only needs to look at other industries to see that I'm right. For example, if everyone wanted to save money, Mercedes Benz would not be able to sell cars. There would be no clear cut diamonds, only heavily included ones. The Gibson Guitar company would lose everything to Takemine. (Cheaper guitar made in Korea)

    Folks, let's get this obsession over a few bucks here and a few there out of our heads.

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