Small jobs need to cost more per hour. If your customer agreed to the price then they should only see value in you being done faster. The people who want to see you making a certain amount per hour just because it feels right to them aren't really the customers you want.

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These kind of people are breeding rapidly in this day and age.

 

I wouldn't rebate money, it undermines you. You could consider a credit for their next project.

The other way is to agree up front to a reduction in the event you find a more cost effective way.

Do you charge more if it runs over?

 

I wouldn't rebate money, it undermines you. You could consider a credit for their next project.

The other way is to agree up front to a reduction in the event you find a more cost effective way.

Do you charge more if it runs over?

Applying a credit is a good idea I didn't think about.
No, I almost never charge more unless it's a significant change by the customer or something I have mentioned before the project started ("there may be significant water damage behind this wall which will cost more to repair...", Etc).

 

1. “Hide that rate” speaks to your mind set.
2. Hourly rate to CALC bid is only part of the equation.

If you do great work, people will be happy to pay mostly because they are invested in YOU. Make sure you are always doing excellent work and better than others at customer service, and charge for that premium experience.

Bottom dollar clients will not be a good fit unless you invest in educating each one why you and your ways are worth more than Joe crack pipe who works for beer.

 

1. “Hide that rate” speaks to your mind set.
2. Hourly rate to CALC bid is only part of the equation.

If you do great work, people will be happy to pay mostly because they are invested in YOU. Make sure you are always doing excellent work and better than others at customer service, and charge for that premium experience.

Bottom dollar clients will not be a good fit unless you invest in educating each one why you and your ways are worth more than Joe crack pipe who works for beer.

You're right, I am definitely shy about my rate due to others (even a good friend who is a GC) being shocked that I charge so much. That is a mindset I am trying to change because I do present myself as a premium contractor. I do great work and have never had any customer issues with my work or rates so it's probably something that I just need to work on.

I have had countless clients tell me how happy they were to find me because all of the other handymen they try to hire are terrible to work with. I guess I am worried that if they feel like I am overcharging by a ridiculous amount they will find someone else. But I should probably just deal with that if it ever happens, because it hasn't yet!

 

. I use project-based pricing, but my behind-the-scenes rate is between $100-$150/hr.

At this point, I'm torn...Should I charge my client the full $500 we agreed upon? Or should I charge less because it took me significantly less time?

Does anyone have experience with this? Any suggestions?
---

I also use unit pricing for a variety of tasks, handyman type stuff as well as all manner of home repairs.

I generally shoot for double what you do.

I almost always charge what I estimate. Sometimes I give them a bit of a break; If they ask and if I like them.

Why should I lower the price on my hard earned knowledge and skill? Why would I charge less for making it look easy? Why should I charge less for doing it without screwing something else up? If I have the newest tools, most efficient techniques, and a huge skill set, Shouldn’t I advocate for more money?


You also have to consider your liability.

Sometimes things don’t go as well as you hope. Something takes longer than you thought it should. The touchup paint doesn’t work, so you have to get another gallon and go corner to corner. Sometimes you hit irrigation when you dig for fence posts. Sometimes you drop your impact driver off the roof and it breaks the windshield of the 2015 Chevy Silverado three days before Christmas.

You have to have reserves built up for the unanticipated and unexpected. It shouldn’t come from your own pocket.

Xxxxxxxxxxxxxx

Sometimes I will list a line item and describe it as “maximum price,” envisioning worst case scenario, but realizing it may be a lot easier than it seems. Nobody has ever complained about being charged less than my estimate.


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I also use unit pricing for a variety of tasks, handyman type stuff as well as all manner of home repairs.

I generally shoot for double what you do.

I almost always charge what I estimate. Sometimes I give them a bit of a break; If they ask and if I like them.

Why should I lower the price on my hard earned knowledge and skill? Why would I charge less for making it look easy? Why should I charge less for doing it without screwing something else up? If I have the newest tools, most efficient techniques, and a huge skill set, Shouldn’t I advocate for more money?


You also have to consider your liability.

Sometimes things don’t go as well as you hope. Something takes longer than you thought it should. The touchup paint doesn’t work, so you have to get another gallon and go corner to corner. Sometimes you hit irrigation when you dig for fence posts. Sometimes you drop your impact driver off the roof and it breaks the windshield of the 2015 Chevy Silverado three days before Christmas.

You have to have reserves built up for the unanticipated and unexpected. It shouldn’t come from your own pocket.

Xxxxxxxxxxxxxx

Sometimes I will list a line item and describe it as “maximum price,” envisioning worst case scenario, but realizing it may be a lot easier than it seems. Nobody has ever complained about being charged less than my estimate.


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Hahaha, sorry to hear about that Chevy!

Yes, you're right. I try to incorporate that liability into my rate as it is, but there have been several projects where I only make $50/hr. because I screwed up the estimate, so it makes sense that I should be looking to those "good days" to make up for some of the bad.

 

I plan on either a five hour day or an eight hour day with small projects, if it’s a 2 Hour Dr. I am getting paid for my drive time as well otherwise it’s not worth it for me to even get out of bed


David

 

This isn't how work done on stipulated sum (fixed price) works. If you finish faster you make more, thats yours, if you finish late, you make less, that's on you.

This works at larger levels like - figuring 6 weeks for 5 men to frame and cornice a house, and it takes 4.5 weeks - if I bid that at 66,000.00, that means I make an enhanced profit of about 16,500.00. No way I'd consider returning that. If it took 7.5 weeks would they pay you an additional 16,500? Negative.

If I feel like it went exceptionally well we have often done some additional (honey do) type stuff.

The good days are canceled out by bad ones for most anyway, and hopefully the majority of days are par for the course

 

John,

You really know how to hurt a man....but you're right.

It's not easy as a one man band, Nor is it easy for a large crew.

Us one man guys, may not be able to realize/ capitalize on that scenario you laid out. But when times slow down it's easier for us to keep our machine going.. Where the boss starts going without to keep his machine going....

When you fix or overcome one thing, then there's another.... If making too much money is our biggest obstacle, so be it!!

 

I've gone back and revised an already accepted proposal for a reduced amount.

Hasn't happened often but just did it last week.

Customer gave me a SOW to bid on. Site unseen. Crew went to site and found half the work already done. I reduced the price accordingly

I picked up work for a different customer at the same site. Was able to fit it all in the same day. Turned out billing more for the 2 smaller jobs than for the 1.

Worked out good for everyone. Seems rare lately



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I've gone back and revised an already accepted proposal for a reduced amount.

Hasn't happened often but just did it last week.

Customer gave me a SOW to bid on. Site unseen. Crew went to site and found half the work already done. I reduced the price accordingly

I picked up work for a different customer at the same site. Was able to fit it all in the same day. Turned out billing more for the 2 smaller jobs than for the 1.

Worked out good for everyone. Seems rare lately



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That's different imo, from a 500.00 handyman project. I have done the same thing you are describing

 

Additionally, in my opinion:

Any work done over 5k for a single man show should be at 50% higher rate (at a minimum) from a large crew operation. Example - a one man band contractor trims a house, large or small doesn't matter- imo that guy's rate should be atleast 50% more than an operation like mine with 13 carpenters.

Reasoning- say a payroll carpenter (like for a GC) makes 25-32 an hour on their check, with all the associated employment costs like payroll tax, WC, truck, tools, paid days off, company shirts, tool replacement etc... a company with a decent sized crew the cost for that hand is between 40 - 50 an hour just to cover their costs. Say you charge 65.00, an aggregate being a cost of 45.00 an hour per man (never that clean lol) the company is grossing 20.00 an hour per man, if you have 10 guys say you clear 1500 a day as a gross to the company after covering each hands individual costs, so the company makes 367k for the year to run the company (book keeper, shop, CPA, owners truck and salary etc) and assuming your hands work 5 days a week 245 days a year your total gross for the ten hands is about 1,250,000.00, so for industry standards if you use Mark Stones Mark up & Profit formula of 8&8 as a minimum- 8% owners salary, 8% net net, then the owner should be paid 101k a year and there should be 101k at years end as net profit tax your 401k and SEP and reinvest the companies profit into or for the comapny.

so using 65.00 an hour for an operation thats grossing 1.25 mm

If your trimming a house solo as a one man band - your should be at 100.00 an hour minimum if the payroll carpenter is billed at 65. That's 200k a year for 250 working days total gross - to run all those costs for you as the employee and for the business. The first guy is making money on 10 guys, not 1, to carry all those costs is easier.

Anything work under 5k for a single man operation- should be performed at an elevated rate of 75 - 100% imo. So let's round up to a 130.00 an hour as a minimum -

Why? Because 250 billable days a year at 130 an hour is 260k for clean numbers. So right off the bat the 8 & 8 won't work - thats 32k all in, doesn't sound like fun 😆

If you try to compete with a large crew pricing at 65.00 an hour instead of 100.00 your at 130,000.00 total gross, to run the whole business..... which is how people work hard and don't make any money

For small projects you will have a lot more unlilled or unproductive time. You have to either charge a higher rate to cover those costs or figure all that time doing the business side of the business and unproductive time

All that to say - if you aggregate solid wins like a few 250.00 hour 2 hour projects a week you aren't thst far ahead of the game and I'd leave that money in the kitty

 

Additionally, in my opinion:

Any work done over 5k for a single man show should be at 50% higher rate (at a minimum) from a large crew operation. Example - a one man band contractor trims a house, large or small doesn't matter- imo that guy's rate should be atleast 50% more than an operation like mine with 13 carpenters.

Reasoning- say a payroll carpenter (like for a GC) makes 25-32 an hour on their check, with all the associated employment costs like payroll tax, WC, truck, tools, paid days off, company shirts, tool replacement etc... a company with a decent sized crew the cost for that hand is between 40 - 50 an hour just to cover their costs. Say you charge 65.00, an aggregate being a cost of 45.00 an hour per man (never that clean lol) the company is grossing 20.00 an hour per man, if you have 10 guys say you clear 1500 a day as a gross to the company after covering each hands individual costs, so the company makes 367k for the year to run the company (book keeper, shop, CPA, owners truck and salary etc) and assuming your hands work 5 days a week 245 days a year your total gross for the ten hands is about 1,250,000.00, so for industry standards if you use Mark Stones Mark up & Profit formula of 8&8 as a minimum- 8% owners salary, 8% net net, then the owner should be paid 101k a year and there should be 101k at years end as net profit tax your 401k and SEP and reinvest the companies profit into or for the comapny.

so using 65.00 an hour for an operation thats grossing 1.25 mm

If your trimming a house solo as a one man band - your should be at 100.00 an hour minimum if the payroll carpenter is billed at 65. That's 200k a year for 250 working days total gross - to run all those costs for you as the employee and for the business. The first guy is making money on 10 guys, not 1, to carry all those costs is easier.

Anything work under 5k for a single man operation- should be performed at an elevated rate of 75 - 100% imo. So let's round up to a 130.00 an hour as a minimum -

Why? Because 250 billable days a year at 130 an hour is 260k for clean numbers. So right off the bat the 8 & 8 won't work - thats 32k all in, doesn't sound like fun 😆

If you try to compete with a large crew pricing at 65.00 an hour instead of 100.00 your at 130,000.00 total gross, to run the whole business..... which is how people work hard and don't make any money

For small projects you will have a lot more unlilled or unproductive time. You have to either charge a higher rate to cover those costs or figure all that time doing the business side of the business and unproductive time

All that to say - if you aggregate solid wins like a few 250.00 hour 2 hour projects a week you aren't thst far ahead of the game and I'd leave that money in the kitty

I gotta go watch tv with the wife now but I’m going to come back and reread all this later. I’ve GOT to really dig in and study up on pricing and numbers and get my income moving upward where it should be. 👊🏻

 

If the customer is never told how much the labor is, there's no way they can retroactively figure the hourly rate.

Just say the job will be $xxxx.xx. Problems solved.

 

Well, many of my jobs are labor only. So if I say the project is $1,000 and I am working at their house for 5 hours, they can do the math.

 

Last I checked, nobody knows what myself or my hands make. If your worried they might have a concern about it, you don’t know much about business. Associating your clients w/such is a race to the minnow pond. Whose concern is it if I kill it on a gig, or go bust. 2 sides to that wall


Mike

 

Forgot to mention, pinching your rates not only shows your lack of business effort, it could pinch the next guys rates


Mike

 

You're right, but I'm not talking about taking LESS than my rate, I'm talking about taking less on a project that I over estimated. My standard rate is $100-150/hr. If I end up making $250/hr. because I overestimated the time it would take to me to complete a project should I discount the final bill a little bit to get me closer to $100-150/hr.?

 

If this is the type of people you commonly run in to, then you need to adjust your marketing towards potential customers with IQs higher than shoe sizes.

 

I had just finished another sink replacement job for a customer which turned out great. Right after she handed me my check for the balance due, he asked me, “So now that you’ve been paid, how much was the sink?”
“You can probably find that sink on Amazon for five to six hundred dollars” I replied. Big mistake.
Quickly calculating how long I’d been there he said, “Oh, so you’re making lawyer rates”.
This is why I never break down labor and material for customers. How much money I’m making is absolutely NONE OF YOUR BUSINESS. I gave you a proposal for labor and material combined. If you have any objections to my proposal, the time to make them is before acceptance. Once we have a deal, this issue is no longer up for discussion. In hindsight, when he asked how much the sink cost, I should have said. “Respectfully, I’m going to let you look that up yourself.”
As I finished loading tools and cleaning up, he looked me in the eye and said “I’ll never recommend you.”
Considering how well the job turned out and how happy his wife was, I thought he may be joking, but his tone wasn’t.
Incredulous, I asked “Are you serious?”
He pulled open a cabinet door that had a splash of stone slurry on its back. “Look at this!” he said.
“Let me wipe that up” I said.
“I’ve paid you. Get out of my house” he said. So I picked up my spray bottle of Simple Green and left. I got in my van, pulled out of sight and to the curb, then deposited the check I’d just been given with my phone. You can be as mean and ungrateful a jerk as you please, but a “Stop Payment” is no longer an aspect of this job I’m going to have to worry about.
This guy had given me warning when we met initially and when they gave me the down payment for the job. He asked me how much the sink was then. I should have taken the hint. They asked if there was a discount if they paid cash. Another hint.
Funny how people never ask about my insurance rates, the tuition and time the continuing education the state of Florida requires for me to keep my building contractor’s license, or the $2,500.00 a month in advertising it took to get me into their kitchen. They fixate on material, as if that’s my only expense on their job. Ironically, I do make lawyer rates. Intermediate lawyer rates. So he’s right but irrelevant.
The next time a potential customer tries to play the “Let’s-figure-out-how-much-the-contractor-is-making” game, I’m going to look him in the eye and tell him that the discounted rates I get for buying sinks in the volume I do is none of his business. And no, I’m not sharing that savings with him. Then I’m going to shut up and wait for him to break the inevitable uncomfortable silence. If I get the down payment, great, the issue is resolved. If I don’t, fine by me. I’ve had plenty of satisfied customers who never attempted to stick their nose into my business or throw me out of their home for doing exactly what I said I would do for the amount I said I would do it for on the day I said I’d do it.

 

I had just finished another sink replacement job for a customer which turned out great. Right after she handed me my check for the balance due, he asked me, “So now that you’ve been paid, how much was the sink?”
“You can probably find that sink on Amazon for five to six hundred dollars” I replied. Big mistake.
Quickly calculating how long I’d been there he said, “Oh, so you’re making lawyer rates”.
This is why I never break down labor and material for customers. How much money I’m making is absolutely NONE OF YOUR BUSINESS. I gave you a proposal for labor and material combined. If you have any objections to my proposal, the time to make them is before acceptance. Once we have a deal, this issue is no longer up for discussion. In hindsight, when he asked how much the sink cost, I should have said. “Respectfully, I’m going to let you look that up yourself.”
As I finished loading tools and cleaning up, he looked me in the eye and said “I’ll never recommend you.”
Considering how well the job turned out and how happy his wife was, I thought he may be joking, but his tone wasn’t.
Incredulous, I asked “Are you serious?”
He pulled open a cabinet door that had a splash of stone slurry on its back. “Look at this!” he said.
“Let me wipe that up” I said.
“I’ve paid you. Get out of my house” he said. So I picked up my spray bottle of Simple Green and left. I got in my van, pulled out of sight and to the curb, then deposited the check I’d just been given with my phone. You can be as mean and ungrateful a jerk as you please, but a “Stop Payment” is no longer an aspect of this job I’m going to have to worry about.
This guy had given me warning when we met initially and when they gave me the down payment for the job. He asked me how much the sink was then. I should have taken the hint. They asked if there was a discount if they paid cash. Another hint.
Funny how people never ask about my insurance rates, the tuition and time the continuing education the state of Florida requires for me to keep my building contractor’s license, or the $2,500.00 a month in advertising it took to get me into their kitchen. They fixate on material, as if that’s my only expense on their job. Ironically, I do make lawyer rates. Intermediate lawyer rates. So he’s right but irrelevant.
The next time a potential customer tries to play the “Let’s-figure-out-how-much-the-contractor-is-making” game, I’m going to look him in the eye and tell him that the discounted rates I get for buying sinks in the volume I do is none of his business. And no, I’m not sharing that savings with him. Then I’m going to shut up and wait for him to break the inevitable uncomfortable silence. If I get the down payment, great, the issue is resolved. If I don’t, fine by me. I’ve had plenty of satisfied customers who never attempted to stick their nose into my business or throw me out of their home for doing exactly what I said I would do for the amount I said I would do it for on the day I said I’d do it.

I sometimes worry in the back of my head about getting done too soon and they think oh he cuts corners or whatever. I repainted a basement recently and I quoted it and everyone was in agreement. Since the job was far I went in like a bull and super focused and knocked it out without cutting corners or sacrificing quality in 7.5 hours and came out to over 200.00 an hour. I felt guilty but there was no deception and the quality was good. They were great customers unlike this guy you worked for. I attached a video to show you a similar situation as yours but with a landscaper.

 

Business Cost List



Building

Building

Warehouse Space

Trash Removal

Lawn Care

Snow removal

Upkeep & Repairs



Office Expenses

Computers

Stationary

Copy machine

Fax machine

Forms

Printing

Software

Office Equipment

Computer maintenance

Files

Postage

Office Supplies



IT

Internet service

Email accounts

Web site

-Initial creation

-Updating

-Maintenance

GPS services



Benefits

Vacation Pay

Holiday Pay

Uniforms

Uniform Maintenance

Unemployment

Bonuses

Incentives

Retirement Plan

Christmas Party



Taxes

Property Taxes

Tangible Taxes

Pay Roll Taxes

Income Taxes

Sales Tax



Training

Management Training

Office Training

In-House Training

Tech Training

Mfg. Training

Training Equipment

Safety Training

Update classes

License testing

OSHA compliance

RRP compliance



Insurance

Building Insurance

Liability Insurance

Employee Insurance

Life Insurance

Business Insurance

Workers Comp.



Utilities

Gas

Electricity

Telephone / Fax lines

Internet Service

Toll Calls

Telephones

Pagers/Cell Phones

Radio Maintenance



Vehicles

Vehicle Maintenance

Ladder Racks

Interior bins

Fuel

Truck Signs / lettering / vinyl

Tires



Financial

Accounting

Loans

Tax Preparation

Interest

30+ Day Receivables

Bank Charges



Travel

Hotel

Meals

Airline / vehicle



Unique to the electrical trade

Permits

Licenses

Bonds

Inspections

Trade Association

Subscriptions

Memberships

Dues

Retainers

Safety PPE

-Lock-out/Tag-out kits

-Fall prevention harness

-Arc-flash clothing

-Hard hats

-Safety glasses

-Hearing protection



Tools

Company Tools

Safety Equipment

Ladders

2-way Radios

Test Equipment

Replacement Parts

Parts Storage

Damages

Tool Replacement

Job site storage



Misc.

Trips to Supply House

Theft

Uncollected Money

Collection fees

Unbillable Hours

Commissions

Call Backs / Warranty work

Shortages

Bad Checks

Delivery

Credit Card Sales

Drug Testing



Legal

Legal advice

Law Suits

Incorporation / LLC fees



Advertising

Marketing

Business cards

Signs

Radio / TV

Newspaper

Flyers / brochures

Material Purchases

Inventory



Labor

Wages

Salaries

Dispatcher

Answering Service

 

I’ve got a client that’s an F.B.I. agent. Built 3 houses for him. When he sold the 2nd, he called me to swap out the interior doors to Santa Fe style. 5000 sq. Ft. house so a bunch of doors. Had to order more base etc. So end of job he says, damn Mike, your looking to retire early as he hands me final check. I said no sir, I won’t have that steady check when the market goes bust. It’s always food & drinks on him when we work for him, so he moans but hands the cake over. You’ll get those. But —— — if it happens often, your targeting the wrong clients


Mike

 

It might not work for everyone, but for me, I find that small jobs never pencil out in hourly rates, I only do them at a day rate or half day rate (where the half day rate is something like 60-75% of the day rate). Small jobs usually require more time in overhead than actual working. They always seem to require every tool I own, at least one if not more trips to the store, pack in and pack out, loading the truck up with the tools and materials the night before and unloading them all. Small jobs demand a premium for this.
On larger jobs that overhead gets amortized out over a longer time span. There's the constant business overhead that has been mentioned that doesn't change, I'm more talking about the non-billable work involved in getting a job done.

On top of that, you can't really do other billable jobs in the day if even a small job takes up 3/4 of your day, so using a per diem rate helps alleviate that problem.

Stop worrying about if people think you're too expensive, only worry when the phone stops ringing or that you're not charging enough. The only people who have ever chastised me for my rates are those who don't know their own numbers, claim some "going rate" bs, or homeowners who view trades as a servant class. That being said, you should still be to explain it in order to build trust with clients if pressed. I found more success in being able to explain a daily rate compared to when I used to charge an hourly rate when I first started.

 

I listed everything as individual projects. I did not discount any of it. That's the price I put myself out to make it happen.

 

That’s how I roll


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All said a done, they paid without batting an eyelash, and seemed to be quite pleased...

 

following....

 

Thank you to everyone for responding. Hearing opinions from seasoned tradesmen is invaluable!

I just want to reiterate that I have not had any complaints from customers about pricing or any horror stories like the one from @Kowboy , this is just something that I've been struggling to get a grip on for the past few months because it has happened several times to me.

I DO market myself to higher paying customers and have been able to avoid the low-ballers who call me every once in a while. So far it has paid off...hopefully that will continue!

 

As another guy said on here, if you are doing top quality work then you should never feel bad that you are making great money. You should be. I also do small handyman projects as well as larger scale jobs (kitchens, bathrooms, decks..) I love small jobs for that specific reason. I'm in and out in one day and I make $500-$1000 many times with no helper.

I have been in your shoes feeling that maybe this person won't call again because I'm too "expensive". And then I think to myself, what would one of the big name companies charge? Easily what I charge and sometimes double. Don't feel bad about making the same money that they do just because you may be a smaller contractor with less overhead.

You work quickly, you do quality jobs and you get paid accordingly. When you start second guessing that and charging less is when the rest of us get screwed over because jakedasnake will come in and do the job for less then what it's worth. The plumber that I use tells me he gets $200 labor to install a toilet. 30 minutes of work and he doesn't feel the least bit bad about it. That's because he is a professional and gets paid accordingly.

 

Years ago, as a young buck GC, I was complaining to a salty old plumber about how much another sub charged me and how long it took him to do it. Old plumber looked me in the eye and asked, "how long would it have taken you to do it?" I learned a valuable lesson early from that old plumber. BTW, he was no where near cheap but his work was excellent and he got the job done and got out of the way.

 

I 9nly worry about pruce third, at most.

Can they hut my time frame, can they do acceptable work, are they going to be stealing stuff out if the house or the job site.

Neat, complete, correct, timely and no b.s. is worth a good price.

 

I just come in low as hell and extra the crap out of em', that way I know for a fact they are gonna be pissed at the end!
I've done pretty much all T&M this year and it kinda bites me in the ass as we are very efficient, tooled up to the gills and I've worked with my lead for close to 20 years. If we get a days work done in 6 hrs they get paid 8 and it gets billed the same way, 8 hrs.

I never disclose material prices and markup everything 10 - 20% plus my time. If they ask what something cost I tell them I have no idea all the paperwork is back at the office. I've done a few pro bono things that made the customer think I made too much. Fish a coax while we are there, fix a ripped screen. Now I pick my audience of who I don't charge for little stuff.

 

If they ask what something cost I tell them I have no idea all the paperwork is back at the office.

Every once in a while I run into something here that I'm going to steal. That's one.

 

Joe,

I think customers hate T&M work because they think the contractor will drag their feet, the contractor hates T&M because they are too efficient, lol.


If I am doing a T&M job it’s usually because I am really concerned about some aspect of a project and I express such to the customer, along with an hourly rate I will bill them. I hate these types of jobs for various reasons and try to avoid this type of pricing. I may also T&M just a specific part of a job.


The other type of T&M jobs I do are for some repeat customers who price Is not a concern of theirs. They trust me to bill them accordingly for hours worked.

Generally all other work is estimated and agreed to in advance.

 

Joe,

I think customers hate T&M work because they think the contractor will drag their feet, the contractor hates T&M because they are too efficient, lol.

The other type of T&M jobs I do are for some repeat customers who price Is not a concern of theirs. They trust me to bill them accordingly for hours worked.

As a GC in Dallas I did ONLY T&M work. At first the customers all thought that was a "blank check". I worked only in one 600 unit townhome complex. It took a few jobs, but eventually two nearly identical remodels talked, I had done one of them. They discovered that I saved my client over 25% relative to the price the other paid (and we did better work). After that I kept 3-5 employees busy and booked at T&M ONLY. Garage conversions, kitchen and bath remodels, paint, landscaping...it didn't matter.

I eventually had concrete subs, garage door subs, and stopped purchasing prehung doors at the box stores. Better price at a local door manufacturer and on exterior I purchased all fiberglass with phenolic frames to end the water rot. Still cheaper than the box stores. One benefit was that the door manufacturer would come and measure and verify door swings etc. Life got simple.

I did include a mark up for subs, but not that much really.

Travel time was ZERO as my shop was in the complex, I charged all my time for purchasing, picking up materials, loading and unloading tools from the shop etc. All overhead on a job was charged to that job as hourly time and included all employees on that job.

All materials and all labor were billed and had to be paid for every Friday afternoon or when the job was completed whichever happened first. Never had a problem with late pay.

The only reason I gave that up was because my wife didn't like me working in Dallas and living in Tampa area, visiting every month. Wishing had moved to Dallas back then....