What about covering the time that you are out chasing new business, and not making any money? Unless you are sitting at the top of a team and can spend all of your time finding the work that you then send your crack squad out to squash, a lot of time may be spent finding work and not making money.
Or, later, if you start getting successful, you can hit a dead man's curve where you have too much to do, but not enough reserve (cash or time) to man up so that you can handle the new work, so you are both pissing off already signed customers but have no time to be out finding new ones.
Both of those seem like they'd be common hazards in the single proprietorship type of installer business, and something you'd have to 'tax' your customers for?
Newest Technology integrator has an article with helps. Author notes that the billable rate for an employee should be 2 to 2.5 times their hourly rate. That has always been the minimum in the industry.
There is no truth anymore. Only assertions. The internet world has no interest in truth, only vindication for preconceived assumptions.
Newest Technology integrator has an article with helps. Author notes that the billable rate for an employee should be 2 to 2.5 times their hourly rate. That has always been the minimum in the industry.
Hourly rate that employee receives, or that employer spends?
Hourly rate that employee receives, or that employer spends?
I'm hoping they meant the latter or that's in a small/depressed market. I sure as hell won't bill out an average installer earning 20-25 per hour at a rate of 50 to 62.50 per hour.
Newest Technology integrator has an article with helps. Author notes that the billable rate for an employee should be 2 to 2.5 times their hourly rate. That has always been the minimum in the industry.
This seems awfully low, my experience comes closer to 4 times the hourly rate.
I hope this thread is not telling new people here that just because you are paying an employee $30 an hour it is only costing you $30 an hour. This does not work with a legitimate business, at least one that is being run legally.
So are all of you then billing time & materials on all jobs? Or does it depend on the job and thus are quoting a price to install, which includes the anticipated labor rate?
This the way I look at it. I charge $75 hour per hour per guy. If my guys cost me $30 per guy per hour . I am making $165 per hour. For me and 2 guys on a job. Plus the equipment. So when the client gets a $22k bid from the big companies for outdoor speakers, I'm at 19k the client uses me. I get the in with designer on the job and get 5 more jobs. Plus that designer finds out three of his other clients are my clients . And those clients swear by me . Or I could drop dollars while picking up dimes. And worry about 2k on the first job and not get the other 100k in work. I found low price and great work works for me.
You should take some business classes before it's too late. Right out of the gate you are wrong. And that's assuming "my guys" are subs and they really only cost the business $30/hr.
75*3=225 30+30=60 225-60=165
You billed for 3 guys but you only costed for 2. You are now a slave to your own business.
If you don't know what anything costs, you can't possibly know if the business makes money.
we bill almost exclusively on a time and materials basis (roughly 95% of our jobs, the non T&M are usually the result of a client request or package price negation - ie client can only spend x)...we do occasionally discount the final invoice for non billable time though, or for other issues that can occur.
The big caveat is things like a basic TV mounting or other quick jobs we do have a minimum charge with the first hour being billed at a higher rate, see below.
300 for the 1st hour + 50 trip fee for projects within a 15 mile radius 200/hour billed in 30 minute increments there after * for projects that last longer than 4 hours the first hour is discounted to our standard labor rate of 200 versus 300
- this is for our 2 person general installation team; Programming/IT/other specialty work is billed at higher labor rates but usually as a single Tech.
4x base compensation is usually a good factor for a lead installer, an entry level apprentice at a starting wage is usually 5-6x; for our company.
It's funny, that if you read my post a little closer you would see that you and everybody else keep missing something about my math.
Yes, I do use subs. But I don't do what most people do. I don't treat like employees. I spoke at length with the state of how to go about this. In my state there is a checklist I follow. They have to use there own tools , cars and all checks are written to there company. Everthing has to be for a set rate. And they can come and go as they please. And I can't work with them.
Example Hey joe, I have a job where i what you to cut out and install 10 pairs of speakers. You can do it any time between now and Friday when they are sanding the floors. It should take you between 8-10 hours and I will pay you $300. I will be in another part of the house doing something else. This is completely legal.
I Example Hey joe, I have a job where i what you to cut out and install 10 pairs of speakers. You can do it any time between now and Friday when they are sanding the floors. It should take you between 8-10 hours and I will pay you $300. I will be in another part of the house doing something else. This is completely legal.
If you have subs that allow you to pay them $30 an hour using a 1099 then they will be very unhappy when they do their taxes and learn they were actually working for about minimum wage.
Some guys are enamored with a showroom and my opinion is that it is totally unneeded. People just want to know what you recommend nowadays. A showroom takes incredible amounts of money to break even on. Have a small office in your home and a storage unit for stuff if needed.
Wonder what that showroom costs. Warehouse and all. Must be nice to have enough biz to support that
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