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Time And Materials: Employee/Laborer Rate

 
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Old 08-04-2012, 01:20 PM   #1
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Time And Materials: Employee/Laborer Rate


So, I had a situation today with a customer. I have done a bit of work for them in the past but everything has been contract work which I far prefer, it just keeps things less complicated.

So, they had a bulge in a tile floor by an entrance way and wanted it fixed. Knowing that tile doesn't just bulge up like that... I knew they had water issues with the door install. I told them that the only way I could do the job would be on a Time and Materials basis as I have no idea how far the extent of the damage goes.

My standard rates for T & M work are $insert figure here$ per man per hour. I don't separate for different skill sets etc.. If I'm on the job and have a laborer there with, that's two guys.

Well, my customer tells me today that they would rather that just I do the job and have my laborer on something else, or they could pay him what I pay him. Customer then asked what I pay my laborer.....I told him that was none of his business.

I explained to the customer that I have overhead costs that come into play here and that I charge a set amount per guy on the job. If you'd rather hire a different company to do your next project I'll understand but I won't be lowering my prices. I also won't be doing jobs solo so that they don't have to pay rate for a laborer.

I explained to the customer that when I make a mess, I have to clean it up, should he have to pay full rate for that? When I need to fill the nail holes, should he have to pay full rate for that? How about me packing up MY tools, should HE have to pay for that? And full rate none the less?? To which I say no, he doesn't have to pay me anything, I'll just go work elsewhere...

What do you guys do? Have you come across this? Is there a better way, or did I do what needed to be done?
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Old 08-04-2012, 01:29 PM   #2
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Re: Time And Materials: Employee/Laborer Rate


Ask the HO if they've ever requested an hourly breakdown from the doctor, or what their doctor makes along with nurses, receptionist etc... Give them the same answer that the doctor does

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Old 08-04-2012, 01:34 PM   #3
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Re: Time And Materials: Employee/Laborer Rate


http://www.youtube.com/watch?v=3n3LL...e_gdata_player
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Old 08-04-2012, 01:38 PM   #4
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Re: Time And Materials: Employee/Laborer Rate


That's funny.. I may bookmark that one :
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Old 08-04-2012, 01:48 PM   #5
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Re: Time And Materials: Employee/Laborer Rate


I think you played it correctly.
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Old 08-04-2012, 01:53 PM   #6
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Re: Time And Materials: Employee/Laborer Rate


Quote:
Originally Posted by TxElectrician
I think you played it correctly.
Totally disagree. Sounds like wildwill lost the job. I know the whole some jobs arent worth doing routine but I would have handled it a little differently. When in the groove I could turn a chit situation like that into him thanking me for bringing 3 guys. NEVER loose your cool, ever..
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Old 08-04-2012, 02:03 PM   #7
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Re: Time And Materials: Employee/Laborer Rate


Quote:
Originally Posted by ohiohomedoctor View Post
Totally disagree. Sounds like wildwill lost the job. I know the whole some jobs arent worth doing routine but I would have handled it a little differently. When in the groove I could turn a chit situation like that into him thanking me for bringing 3 guys. NEVER loose your cool, ever..
Well, I may have lost the next job, but that was a job that I did already. EDIT: Sorry for my mis-communication there. They were talking about a future job, this one I already completed. That being said, I never lost my cool over the situation, I just explained that I don't change my prices based on the customer wanting to pay us less. I explained that in the future I'd attempt to keep everything to a bid but if I couldn't bid something then I'd let them know and they could hire someone else.

Can you explain how you'd go about getting them to have you bring more guys? Or even how I could have better handled the situation? I did feel like I could have handled it better but I'm just not sure how. Another thing that crosses my mind is whether or not I really want them as a customer in that role. Time might be better spent dealing with better customers?

Anyhow, I'm all ears. And thanks for the replies!

Last edited by WildWill; 08-04-2012 at 02:08 PM.
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Old 08-04-2012, 02:11 PM   #8
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Re: Time And Materials: Employee/Laborer Rate


Quote:
Originally Posted by WildWill View Post
So, I had a situation today with a customer. I have done a bit of work for them in the past but everything has been contract work which I far prefer, it just keeps things less complicated.

So, they had a bulge in a tile floor by an entrance way and wanted it fixed. Knowing that tile doesn't just bulge up like that... I knew they had water issues with the door install. I told them that the only way I could do the job would be on a Time and Materials basis as I have no idea how far the extent of the damage goes.

My standard rates for T & M work are $insert figure here$ per man per hour. I don't separate for different skill sets etc.. If I'm on the job and have a laborer there with, that's two guys.

Well, my customer tells me today that they would rather that just I do the job and have my laborer on something else, or they could pay him what I pay him. Customer then asked what I pay my laborer.....I told him that was none of his business.

I explained to the customer that I have overhead costs that come into play here and that I charge a set amount per guy on the job. If you'd rather hire a different company to do your next project I'll understand but I won't be lowering my prices. I also won't be doing jobs solo so that they don't have to pay rate for a laborer.

I explained to the customer that when I make a mess, I have to clean it up, should he have to pay full rate for that? When I need to fill the nail holes, should he have to pay full rate for that? How about me packing up MY tools, should HE have to pay for that? And full rate none the less?? To which I say no, he doesn't have to pay me anything, I'll just go work elsewhere...

What do you guys do? Have you come across this? Is there a better way, or did I do what needed to be done?
I am sure the story lost a little something in the re-telling-----but the way it reads to me is that you came off as a little defensive.

I definitely think you gave too much info and too much of an explanation to your customer.

Keeping in mind that there are some people who think it is YOUR mission in life to give THEM the lowest price possible, even if it means screwing your helper over--------

Basically, I would have told the customer our rates and terms------and if the customer suggested cutting out the laborer I would simply say " that's not how we are set up to do business"

in my business if the laborer reduces MY work on the job by a single hour per day- the laborer has earned his keep for the day because MY personal rate is extremely high- but it's not good business to divulge THAT to the customer either, LOL

also- it's my ethical duty to be training and developing the helper/laborer/apprentice-and he won't be learning much if he is sitting home so that the customer can save a few $$$

part of what the helper learns( by observing me)-is how to handle customers like this.
we are here to earn a living for our families,first and foremost- not to be doing favors for the customers.

some things you just sack up on and do not engage, LOL
stephen

Will- I just read your above post.- if you are anything like me you will think about this for days-and then a week or so in the future it will occurr to you"THAT is what I should have said!"
which is OK- you just file it mentally away to use the next time, LOL
Best wishes,
stephen

Last edited by Stephen H; 08-04-2012 at 02:14 PM.
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Old 08-04-2012, 02:13 PM   #9
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Re: Time And Materials: Employee/Laborer Rate


Ill tell you what sir, you seem like a smart guy. I can discount my hourly rate for our less skilled employees from $50 to $40. Also to minimize your cost I can bring in another guy to handle some of the other grunt work so you can get even greater savings. Sales is mojo. Let the good lines roll
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Old 08-04-2012, 02:13 PM   #10
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Re: Time And Materials: Employee/Laborer Rate


Quote:
Originally Posted by ohiohomedoctor View Post
Totally disagree. Sounds like wildwill lost the job. I know the whole some jobs arent worth doing routine but I would have handled it a little differently. When in the groove I could turn a chit situation like that into him thanking me for bringing 3 guys. NEVER loose your cool, ever..
Groove on brother

I long ago lost my desire to dicker over my price.
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Old 08-04-2012, 02:23 PM   #11
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Re: Time And Materials: Employee/Laborer Rate


Here's what I tell a customer:
It will take 1 man 2 hours or 2 men 1 hour. There is no difference as far as price goes.
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Old 08-04-2012, 02:29 PM   #12
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Re: Time And Materials: Employee/Laborer Rate


Quote:
Originally Posted by ohiohomedoctor View Post
Ill tell you what sir, you seem like a smart guy. I can discount my hourly rate for our less skilled employees from $50 to $40. Also to minimize your cost I can bring in another guy to handle some of the other grunt work so you can get even greater savings. Sales is mojo. Let the good lines roll

Thanks for that! Lol, I'll have to store that one away! Although I have to say, the angle he was looking for was, "I'd like to pay you rate and then lets figure out how much the other guy costs exactly and then I'll pay you that as well."


Thanks alot to all of you! That is why I love this board. I need more peers here in my local area to bounce this stuff off of, I count myself very fortunate to be able to bounce this stuff off you guys!

Last edited by WildWill; 08-04-2012 at 02:33 PM.
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Old 08-05-2012, 01:45 PM   #13
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Re: Time And Materials: Employee/Laborer Rate


I wouldn't have even told him I have overhead costs. I would have just told him my rate then said "I think I could do it in two days but not sure". However, now when I look at water damage jobs I still give them a contract price, I work it out in the contract with allowances, I explain to them what the risk is and they are happy with it. Whenever you offer time and material you will get people like that, they won't trust you and give you a headache.
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Old 08-05-2012, 01:55 PM   #14
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Re: Time And Materials: Employee/Laborer Rate


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I wouldn't have even told him I have overhead costs. I would have just told him my rate then said "I think I could do it in two days but not sure". However, now when I look at water damage jobs I still give them a contract price, I work it out in the contract with allowances, I explain to them what the risk is and they are happy with it. Whenever you offer time and material you will get people like that, they won't trust you and give you a headache.
Have you ever done cost plus or T and M contract?
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Old 08-05-2012, 01:59 PM   #15
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Re: Time And Materials: Employee/Laborer Rate


Quote:
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Have you ever done cost plus or T and M contract?
Yep, I used to do it all the time but there's only one customer I have now that I still do it for, but I've been working for him long enough I can trust him with it.
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Old 08-05-2012, 02:11 PM   #16
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Re: Time And Materials: Employee/Laborer Rate


Im with Stehen H, i dont explain our rates. Depending on what zip code you work in, some people will be cool with the rate, others will pass. It is what it is, our company is not a good fit for some, some clients arent a good fit for our company.

Imo, it is enormously disrespectful to ask you to not use a laborer, or ask what you pay him.

I dont do staight T and M, I do cost plus or fixed cost. 80% being fixed cost. Small jobs especially repairs, cost plus. We have a labor rate for our employees and we add a set % on top of the materials and labor. It works very well, as long as you are honest.

For a project of a large scope, I like fixed cost. Point is, every company and every client is different. I would not presume to think my way is the only way, or to presume to know whether a certain business model is unsuccessful when there are many successful companys that use that model.

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Old 08-05-2012, 02:13 PM   #17
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Re: Time And Materials: Employee/Laborer Rate


Quote:
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Yep, I used to do it all the time but there's only one customer I have now that I still do it for, but I've been working for him long enough I can trust him with it.
Out of thanks.

Last edited by Jaws; 08-05-2012 at 02:20 PM.
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Old 08-05-2012, 02:30 PM   #18
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Re: Time And Materials: Employee/Laborer Rate


Quickie.. Just had a customer ask when Im in the area to check to see if her property needs to be mowed..It's currently bi-weekly and worried it might need weekly. Told her I needed to raise the price, she was astounded..."But, but your right down the street" she literally shrieks. I said "Im a property maintainer, not property manager, everything takes time".. Maam I quickly tell her " I got charged for air yesterday" .. Point being is customers have no idea that shat costs money. So there perplexed, and some do need coaxing from the ledge..Ive given more than a few debit breakdowns, not cost breakdowns. ex: travel to and from, disposal, disposal fee, disposal time, gas, equipment, ins and biggie taxes etc. Almost always ending in I can't even fill up my truck for less than 120$(try and relate costs without revealing anything)..That last number also basically being my job minimum, for that exact reason.. So it can be ok that some might need explaining, don't reveal to much though. When a customer asks how much I charge hourly I usually say " No where near enough" have you seen the truck Im driving..Divert the question while awnsering them..(note last example doesn't work if you have a nice truck)
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Old 08-05-2012, 02:31 PM   #19
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Re: Time And Materials: Employee/Laborer Rate


Quote:
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Well, my customer tells me today that they would rather that just I do the job and have my laborer on something else, or they could pay him what I pay him. Customer then asked what I pay my laborer.....I told him that was none of his business.

...

Although I have to say, the angle he was looking for was, "I'd like to pay you rate and then lets figure out how much the other guy costs exactly and then I'll pay you that as well."
That kind of loses me. Do you bill your laborer and yourself at the same rate? Or did the client think so? Or he just wanted to pay your emp's base wage rate to you and have your emp do something else for who? exactly? Or how does paying your rate and your emp's rate to you on top and sidelining your emp's not cost him more money?

I'm so confused...

Doc is much busier than I ever managed to be so I am sure his approach is the more successful one but me personally I would go with the doctor office analogy. Would you expect to go into your doctors office and start suggesting how to reorganizing how they are going to handle you to save you some money? Hey doc, just pile your assistants base pay onto your charge and have her do x-rays instead and... Loopy.

A part of me thinks if you take Doc's approach then that is the relationship you are OK'ing with this guy, so you better be prepared to massage and tap dance because you just said that will get him somewhere. Whether it does or not you will be dancing, and me personally I came to work not dance.

But being a better dancer may well be one of the important missing ingredients in my effort at being independent.
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Old 08-05-2012, 02:33 PM   #20
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Re: Time And Materials: Employee/Laborer Rate


Nobody wants to pay anyone for anything these days and it seem to be getting worse.
The costs to be in business are up and materials are 3x what they were 7-10 yrs ago but most people are earning less then they were in those days.

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