Pricing per hour or per job?

[nitroxn]

I am looking for advice on PRICING and ways to ensure customer satisfaction . I am NOT looking for LEGAL advice.

I hate to even say it that way but I don't want this to turn into a legal opinion thread and miss my whole point of posting.

I have a well paid lawyer just for such things.


I live in East Tennessee and am looking for opinions from home owners and other prospective business owners on pricing jobs. Right now I do tractor work ( plowing, tilling, post holes, mulch and gravel spreading and backhoe work) as a side business. I use my Kubota B7510 Compact tractor and properly sized implements to do work for $40 dollars per hour in my area. If I travel to another city/town I usually split the drive time with the customer. (If I drive an hour to the job I bill for 1/2 hour job time) Naturally I go over this by phone with everyone outside my area. I also explain the size of the tractor and implements with the customer and explain the advantages of a smaller less intrusive machine. My ad I place both locally and online both explain digging depth of my backhoe and approximate times on tilling an existing or plowed garden per sq ft. Those of you who have experience whether as a customer or from a business standpoint on pricing jobs. Also if you have a story about a job you have done/had done that didnt work out, I would love to hear it, hopefully it would keep me and my customers out of trouble.


Thanks
Curtis

 

[bcp]

As a customer, unless I know you, I worry about hour pricing. I've seen some VERY slow workers. What I want to know is what the job will cost me. But from your viewpoint, you don't know what hidden problem you may find.

Maybe price by the job, expecting some problems, and if the problems don't happen, reduce the bill. "It took less time than I expected, I'll take an hour off the bill." That always makes customers happy.

Bruce

 

[smstonypoint]

I agree with Bruce -- most customers seem to prefer knowing their costs upfront. However, most of the people providing similar services seem to prefer pricing by the hour. Also, I like his idea about estimating prices.

BTW, do you have a good handle on your costs (operating and ownership), including your labor? Your rate seems low to me.

Steve

 

[dave1949]

I would prefer to know what the job will cost, or, about how much can get done for $XXX.

The guy I have hired to do excavator work charges by the hour, he gets a lot done in an hour too. I think I can trust him to tell me what X amount of work will cost, give or take an hour or two on larger things of course.

Realistically, there is usually only so much a customer can afford to spend, and they need to know if that amount will enable them to get done what is needed. It's up to the customer to decide if they are getting a good value for their dollars, but maybe some conversation about the customers needs, expectations and budget would help head-off problems later on.

If you can lead them to solutions that fit their budget, that is probably a good thing to be their problem solver. Some finesse is required though. It's a real turn-off when someone asks like a used car salesman, how much can you afford to spend?, unless the customer really trusts you.

 

[LD1]

I agree with the charging by the job. Its okay to have a target of $xx per hour to shoot for, but I dont tell the customers that.

First, we all know our tractors, and equipment, and time isnt cheap. But when you tell someone you are charging $40-$60 an hour, most think that is insane as they only make 15-20 an hour at their job and they think you are just the guy who cannot find a job and is doing side work.

And those that do understand that those prices are reasonable and dont flip out, the next question is always "how long do you think it will take"? IF you tell them about 5 hours, and it takes you 6, you can bet they'll flip out about that extra hour.

So instead, after a long talk getting to know the work to be done (or a on-site visit), I estimate how long "I think" it will take, and I know my "target $$ per hour" and then just shoot them a flat rate. Then they have no vested interest in watching you like a hawk and seeing what you are doing every minute on the job as if they are "paying you by the hour". And theres no complaints about going too slow or milking it, and you dont have to feel like you are rushing a job.

So if your target is $40, use that, estimate the hours, and just quote a flat rate. If you happen to get dont in 4 hours instead of 5 like you were thinking, keep it. Because the next job may take an hour longer than you were anticipating.

 

[/pine]

...Compact tractor and properly sized implements...

IMO this is the key...some jobs a smaller tractor is best and others a larger tractor can do the same job in much less time...

 

[paulharvey]

I agree with pretty much what others said BUT if I'm going to give a bid I pad my time estimate (6 hour job x $40=$240, but I would round it up to $300 if giving a lump sum bid). Also both sides need to be clear on the expectations of the finished job (home owner throws out at the end that a proper tilling job would be double tilled or that a swale needs hand raked, or whatever). Another option would be say a $240 dollar minimum, and $40 for anything past 4 hours (if its mostly small stuff).

 

[NorTracNY]

I'd agree with most of what is posted here. Your rates seem pretty low also. I don't have a problem paying someone a large rate, but many people do. I've worked with people who have done both.

The people I have liked the best are the ones that are slow and thorough, but charge by the job, and those that do an amazing amount of work in short time, and charge by the hour. Which category do you honestly think you fit into?

 

[clemsonfor]

What size is your implements. Some have said that they charge $10/ft of mower, so if you have a 4ft bushhog thats right but if you have a 5fter i think your low. HOnestly looking at your stuff in the pic i think your low.

That said i have a buddy i went to school with who he and his dad do tractor work as a side biz, both do VERY well at it. He has a fed Government job for his 630-300 job but does the tractor thing on days off and nights/weekends. They will go were ever, you pay travel one way and time starts from the time he starts unbinding his tractor to the time he puts up the ramps on the trailer. He will tell you this all up front, give you an estimate of work per hour that he can do. He has a like 60-80hp kubota tractor. His dad does or larger too, they have it all grain drills disks packers..... THey bill $80/hour or if its food plot planting in existing plot i beleive its around $300/acre depending upon what is planted. But those are drilled grains and planted corn, not broadcast. I think you can choose either that you want them to do.

Again he has a large new tractor and they have all the implements a farmer would have he pulls with an F350 and pulls a gooseneck trailer.

 

[kenmac]

It's not related to tractor work ,but I'll give the cust. the option. By the HR or by the job. Some like having the option. You say you split your travel time ?? I don't split or give any travel time. All my time is charged