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billed time

billed time

billed time

(OP)
Like many of you I have a very small Civil Consulting company, myself and 1 employee.  We are only 18mos old.  We have a ton of small jobs, jobs under $500. Things like a perc test, quick little topo survey, size a beam here, ect.  My dilema is we bill hourly which works out great until the job is ended.  Then I am getting ph call after ph call from the architects, owners, county, ect.. asking questions. Then I send a bill for my phone time and the client freaks.  

Should I just set a minimum job cost at say $500 to cover this incidental time?  I had a $200 job that after the job was over I spent 2.5 hrs of phone and email time that they refused to pay because it wasn't in my verbal estimate!!! Hardly a profit there. Well sure it wasn't in my estimate, they asked for a price to do 'x' and I end up spending way more time dealing with the parties involved than just doing the calcs. Do any of you deal with this?
Thanks,
 

RE: billed time

It is a problem..  I am in the mid-west - St. Louis

VERY simple jobs - I charge no less than $250.  Simple jobs start at $500.  $1000 for home design (no drawing) with new IBC/IRC Codes.  If they think that is high - go somewhere else.  I am usually overwhemlemd with these "little" jobs - because no else will do them.

I ALWAYS allow for an extra hour or two -  keeps customer from "freaking" and they feel good that I didn't charge them extra.  Some have even been appreciative!!

If it is REAL change - then I discuss the extra costs before proceding.  

If perchance - they don't call back - I am ahead for the times they call back 10 times!!

Good Luck

RE: billed time

We used to have this same issue and went to a minimum $500 fee. It cost us a few small jobs that probably would have been a pain anyway. But overall it has been no problem for our clients.

Always generate a written contract and get it signed.
 

RE: billed time

Some use a four hour minimum on a signed contract for any job.  This approach sends a lot of the real small jobs packing.  Sounds like that may not be what you want here, so...

You can also have a contract, set fee, where you have worked in a reasonable amount of phonetime, listed in the contract, and state that anything above that will be billed at the hourly rate of XXXX.

Mike McCann
MMC Engineering

RE: billed time

It is a tough situation.  These customers will likely not come back whether you provide great service or not.  If a homeowner contacts me, I ask them if they are working with a contractor and then I try to run through him - for the relationship and future work - since the contractor will understand my language better.  I do not mind giving away some phone time if future work may come.  Plus it adds to your karma account you need someday (glass half full) or may become a good deed that later punishes you (glass half empty).

In some cases, I have looked up public records on the clients (talking homeowners) and found one with a few civil cases (found out later he owned like 7 rental properties and they were evictions) and one where his mother owned the house so I drafted a contract for his mother to sign.  Never did hear back from that guy.   

Don Phillips
http://worthingtonengineering.com

RE: billed time

Same problem here.  We went to a 3-hour minimum billing.  That helped, but didn't cure the problem entirely.

MiketheEngineer, how do you get $1,000 for a house design with no drawings?  What do you mean by that?

RE: billed time

PatBethea -

Architect or drafts person does the actaul final drawing.    

RE: billed time

I don't bill by the hour, I always give the client a fixed price. I estimate a time, multiply by my hourly rate, and add 20-30% for "miscellaneous" (this is not listed in the proposal). If a client or his contractor calls, I have at least some compensation. As PatBethea mentioned this doesn't cure the problem completely, but then there are the jobs where nobody ever calls.   
This approach also saves a lot of time and nerves as I don't have to keep track of time spent on the phone. After all, I make my living with engineering and not with bookkeeping.       
Don't underestimate referrals, even if you think these clients won't come back. I get a lot of jobs where the guys got my phone no from friends or friends of friends.
If you have a reputation to charge for every call, you wil never get there. If you go with a lump sum, they will say that you stayed within the budget. Clients like that
(>>>>> good karma, as somebody mentioned above)   

RE: billed time

That is amazing, I know I work in a different field of engineering and in a different country but if we added 20-30% to a realistic quote we would never get any work.

To say I am jealous doesn’t begin to describe it; you must be living the life of Rielly.
 

RE: billed time

ajack1,

we are talking about small jobs here(<$500.00), that is where I apply a 20-30% increase. If these clients look somewhere else, I don't mind. After all these mini jobs slow me down on the larger ones, that pay my bills. Reality is, I still get 8 jobs out of 10 proposals for these low budget jobs, so I still might quote too low.

Here is another story: Recently, on one of the larger jobs (in the $3,000.00 range)I didn't add anything to what I thought was realistic, and ended with an hourly rate of $4.00 (in words: four dollars per hour)due to my fixed price approach. Barely the life of Rielly. Still jaleous?

RE: billed time

I've wondered about hourly rates, never having been in an hours-tracking position.  I'm a "coast and burn" type person--I work *very* quickly, but with periods of uselessness in between.  If I just counted the hours being hard at work, I'd probably take rather less time than the average bear.  Would I bump up the hours to include some of the "coast" time as part of my normal work process?

Another way of asking it--do slow workers get to bill more hours (within reason)?

Hg

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RE: billed time

I use Quickbooks to track my time on projects and if I am not being productive on a project, I can look at what I am doing, and why, and adjust my proposals accordingly.  An architect friend of mine told me after a couple of projects I was not charging enough.  As I learned, I slowly raised my rates - nearly 100% since 2002.  And I also factor an extra 15% to 25% depending on my perceived risk with that client.

Don Phillips
http://worthingtonengineering.com

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