Prices!

[Andy78]

Ha! Already confused!

I did a job which lasted 7 hours today, got home and started the invoice and got a little confused!

I wrote it out as £35 first hour followed by 6 hours @ £30, but then thought that doesn't seem fair as my day rate would be £200, so I lowered it.

I think whats confusing me is 'when do you use your day rate?' Do you use it whenever you have done a single job which has lasted a day or would you use your hourly rate for that, and only use your day rate for larger jobs that are perhaps taking 2+ days?

When you have agreed to it with the customer before starting work. If not and they have agreed to your hourly rate then that's what you charge them.

I offer a "reduced" day rate too as my hourly rate is set up for smaller jobs that have not been pre priced and accepted.

This is bizarre to me to be honest. Every job I do I give a price for or agree to a rate before starting. How else does the customer know what you will be charging them ?

 

[vxwestie]

Everyone is going to find it different.
If I do one 'priced' job a month then I'm lucky. The rest of the time everything is time and materials. (And yes, I itemise my bills too). After 25yrs self employed it's what my customers expect.
I don't actually remember the last time I was asked my hourly rate either, to be honest.

 

[HappyHippyDad]

This is quite interesting. You have Andy who will always make his rate clear before working and Westie who has never mentioned his rate. I guess everyone does it differently. I generally get asked to quote for a job before undertaking it, so that's what I do. However, if not asked I 'generally' don't mention a rate before carrying out the work.

 

[vxwestie]

This is quite interesting. You have Andy who will always make his rate clear before working and Westie who has never mentioned his rate. I guess everyone does it differently. I generally get asked to quote for a job before undertaking it, so that's what I do. However, if not asked I 'generally' don't mention a rate before carrying out the work.

absolutely, everyone's business is going to be different.
I just rarely get asked to price work, 95% of my work is just 'there is is, get on with whatever needs doing" from my customers.
I consider myself to be lucky, Most of my clients have total confidence in what I do and what I charge. ... But that does sometimes limit what profit I get to make.
I'm fair in what I charge, and it's why I rarely pick up new customers, and that's down to the service I provide. I'm certainly never short of work and consider myself to make a good enough income from my business.
I've NEVER asked for money upfront, and it's been years since I've done any work under contract. I haven't issued 'terms and conditions' for a client for years, nor have anything in writing drawn up.

An an example of this was just under two weeks ago, I large company I work for called me to ask me to get them out of the cr@p on two big 3phase 600a installs. Money was never discussed, no prices asked for on the materials or my labour charges. I pulled out all the stops and got the job done in around a week. Billed it at just over 17k on Wednesday.... It was paid by bacs yesterday morning.

Happy days

 

[Andy78]

This is quite interesting. You have Andy who will always make his rate clear before working and Westie who has never mentioned his rate. I guess everyone does it differently. I generally get asked to quote for a job before undertaking it, so that's what I do. However, if not asked I 'generally' don't mention a rate before carrying out the work.

Aye, different businesses require different approaches. Sounds like Westie has a well established business with regular customers and the working relationship is already well placed in a position of trust. An ideal position to be in I might add and credit to him.
My business is still less than 5 years young and although I have regular customers now who know my working practices and rates, the main bulk of my work is still new enquiries.
I feel I need to set out rates when not working to a price as a few awkward customers early on in my self employed days felt the need to haggle me down from fair rates to a pittance. They used the excuse that I hadn't stated rates before starting work, which was fair enough and I soon learned from the mistake.
I now quote rates to all new customers before even attending a callout or a viewing for a quote. I have learned that the ones that don't call me back are the ones that want me to "have a look and see what the problem is" for free. Works as quite an effective skinflint filter for the 5% who want rock bottom prices and sod the workmanship.

It's also worth mentioning that my rates vary with my customers. I work in a very saturated local domestic market and so have to be quite keen in that sector. My commercial customers however I can do quite well with as being a sole trader I can generally offer a lower rate than local firms that have higher overheads, so different rates apply.
For example I did a callout this morning to one of my commercial customers on pre arranged "out of hours" rate. I wouldn't charge any of my domestic customers that rate as I would be pricing myself out every time.

Every day is a schoolday in business I find, and you will never get rates that suit every customer every time, so be prepared to tailor your charges and just wing it every now and then.

 

[vxwestie]

I totally respect what Andy is saying, it just wouldn't work with the business I have built up in my area.
It may work for others but I just can't agree with the idea of tailoring charges between customers or jobs. I work in an area, where all my work is based on 'word of mouth' there would be nothing more damaging than my clients finding out that my charges vary, either between their jobs or between themselves and others. That's one of the main reasons why all my invoices are itemised.
I've NEVER charged an 'out of hours' callout,my customers would never stomach it and my business wouldn't survive if i did. Yes, maybe I could earn more short term if I did, but in the long run they always want more doing. I do however, 'make it up' in other ways..... If you know what I mean. People are far more likely to query costs if you've charged 'out of hours' fees or varied the hourly rates.
Its all about customer satisfaction.... Keep them satisfied and they'll be back. I'm certainly not the cheapest around, but I'm nowhere near the dearest.
My troubles do not come from making enough money, or dealing with the crap customers bring, but it does come from keeping a sensible workload that I can handle.
Like eveywhere we're saturated with domestic sparks, but if you find you have to be frugal in your charges you'll only make life difficult for yourself. If they want a cheap job, let them find a cheap sparks. They'll only look for the cheapest again the next time they want something done.
Like I say, I'm far from perfect, far from earning a fortune, but it works for me and I've never been short of work.