Does working by the hour ever work out?

[Rio_Grande]

I have bid 2 jobs by the hour because people requested it that way. We have a 4 hour minimum. Basicaly we loose money the first hour, by the end of the second we are making a profit and by hour # 3 we are doing great.

The most recent hourly bid ended up up being the saw clearing job that is too steep for my machine. My plan was to start the day a helper and I running the brush saw to clear the stuff the billy goat wont cut. After the rental place opened I would sed the wife to get the goat. Normally I show up with all my equiptment but we are trying to beat the 100 deg heat expected tomorrow. Call lady up and lock things in she starts trying to alter our plan and mentions she can get somone for 15.00 an hour to do it with her equiptment but was only hiring us because we have special equiptment....... My wife does all my calls for me to justify her paycheck.......... So when she told me my first reaction was to tell her to pay sombody 15 an hr and loose my number. But as I sit here thinking about it, I am becoming more convinced that I should tell her to call someone else.... there isint enough profit in this for the headache. I can sit home and not loose money.

[MrPete]

If you can't at least break even there is no sense of spinning a wheel!

[MikeInEburg]

When someone tells me that they can do a project cheaper, I let them know that they are welcome to do so. However, I try my best to not burn any bridges.

[Rio_Grande]

There would have been a couple hundred dollars profit IF she didnt let us work for 2 hours and say that was good enough. Bottom line is we told her 4 hour min that dosent mean she honors it. we would have had 200 in the job when we left the house. I real respectfully told her I thought there was some miscomunication and think she should find somone to do it for 15 an hour. She was mad I was bringing a brush saw, I dont know how else she expected us to take out the 300 3 inch trees she has on the hillside in her back yard.

[skidshear]

I tell them in a professional way that I need a set-up fee of $$$ when I show up with my equipment. The fee covers my time and expense to mobilize my equipment and the first 4 hours of clearing. Generally you can get a feel for expectations of the client during this time by asking them if this is what they were looking for. I've never had anyone refuse to pay or try to run me off so I guess I'm doing something right....

[Rio_Grande]

That is an idea. I can see it working. This was an older lady and after some thought she was having other work done and I think she may have gotten confused. I think we will approach this diffrent in the future. To date, and I havent been doing this long, we have not had an unhappy customer, even have a couple pay more than we agreed on. But this is the second hourly bid that we chose to walk away from.

[joshuabardwell]

There would have been a couple hundred dollars profit IF she didnt let us work for 2 hours and say that was good enough. Bottom line is we told her 4 hour min that dosent mean she honors it.

That is, flat-out, BS. Not my job to tell you how to run your business, but here is what I would say, if it was me:

"Ma'am, that is just fine if you only want us to work two hours. However, as we agreed, there is a four hour minimum, and that is what you are going to be charged."

"WELL I'M NOT PAYING YOU FOR TWO HOURS YOU DIDN'T WORK."

"Ma'am, I understand, and I am more than willing to keep working for two more hours, or longer if you have more work you want me to do. But we agreed that there was a four hour minimum, and that's what I'm going to be billing you for."

If she still insists on paying only two hours, pack up, say have a nice day, and file a claim against her in small claims. The moment she gets served, she's going to start thinking twice.

I have done a lot of work with people who do verbal agreements, and it has been fine, because I'm not a jerk, but if I was doing business like this, I would seriously consider giving written, signed estimates. The estimate would say something to the effect of, "This is only an estimate. Actual charges will be based on actual time worked." At the bottom, in little text, it would say, "Four hour minimum charge, due upon commencement of work," or something to that effect. That way, if things go wrong, you have a piece of paper with their signature on it, where they have acknowledged the four hour minimum charge. That won't stop someone who's a jerk from trying to claim that you did bad work and they shouldn't have to pay you, but you do what you can.

EDIT: And, if you feel like your customers would support it, by all means charge the minimum up front. I mean, don't even roll the truck until you have received and processed the payment. But I understand that some businesses would go under if they did that, and so it's not right for everybody.

[joshuabardwell]

When someone tells me that they can do a project cheaper, I let them know that they are welcome to do so. However, I try my best to not burn any bridges.

My dad has a saying: "GO AHEAD!" Well, you've kind of got to be there. Customer says, "Your bid is too high. I have a buddy who says he can do this for $15 an hour." GO AHEAD. Well, we don't actually say that to the customer. We just smile and say, "Look us up if you decide you want our business." But when we get back to the car, or off the phone, we both look at each other and say, "GO AHEAD!" We know we're worth what we charge, and we know if you get some schmoe to do it for $15 an hour, you're probably not going to be happy with the results. But it's not going to do us any good to stand here and bad-mouth your buddy who's going to work for you on the cheap, so here are our credentials and our experience, and if that's not good enough for you, there are plenty of other jobs for us to do.

[Woody65]

When I get asked to bid the project by the hour I tell my prospective customer that just because I can get it done in half the time as another contractor doesn't mean I can do it for half his quote. I might have better equipment, more experienced operators and a better or larger crew. I estimate the cost of my equipment, materials, labor and the amount of time spent on the project. If I figure 5 days and we get done in 4 i win. If it takes 6 days I make a little and honor my quote. I have found that if you agree on an hourly scale the customer watches you and if you take a breather or stop to fix your equipment they have a problem with paying you for that time. I am sure they asked how many hours it is going to take to complete the project, and if you don't complete it within the hourly limit what is to be done now? They don't want to pay for set up and break down time at the beginning and end of the work day. I think you did the right thing by walking away. No point in busting your butt to make gas money for your truck and equipment.

[whistlepig]

I've done some custom brush hogging for several years. I always priced by the hour. The estimate included my travel time to and from. I really don't think there is a better way than estimating by the hour. I have done some horror story mowing. On these I left price open until I was done. Again charging my hourly rate. It had to be done that way for me. Or I just wouldn't fool with it. The demand was high. The customers brutal. Still there is good money to be made here.