need help fixing my price structure

homesweettheaterhomesweettheater Posts: 1subscriber
edited November 2006 in Business Planning
Hello all!I recently launched my business as a freelance Home Theater installer/consultant and I need some help and advice for my pricing.I am in need of a change of plans caused by an unforseen issue with my first client. First a little background on what I had in mind for my pricing. I was charging $50 for the house call/trip-fee. Then $35 an hour thereafter. +$10hour additional if I had to get in the crawlspace or cramped attic.The issue came with the fact that I completely underestimated and under-bid the job. It was a rookie mistake I expected to happen (Not to the extent it did, but ok.) I realized that to make scheduling possible at all with the time involved in a sizeable wiring job, I would need to account for projects to be broken up into smaller appointments.I don`t feel right charging a trip fee for every appt for the same project. I could eliminate it and use a higher hourly to compinsate for the difference. That seems like it would be too high to keep longer appointments affordable, but just enough to make up the difference on shorter ones. A separate "multiple appointment" charge on the bid would seem like nickel and diming the customer with fees. I`m stuck! Any help would be great. Thanks as always in advance!shawn

Comments

  • TheButtonStoreTheButtonStore Posts: 1subscriber
    When you quote a project, do you quote a time estimate, and then bill by that?  Or do you actually charge for total hours worked, regardless of it being over or under the estimate?
  • homesweettheaterhomesweettheater Posts: 1subscriber
    Well. that was the problem on this one. I bid 4 hours on a job that ended up taking over 6. I know experience will help with the bidding part, and I was expecting to eat some labor while I got a better idea of how long things would take. I hurried myself on this project to get in at budget and had to finish the last hour on my own dime because I under-bid. Not to mention, as a new business in a small market, I threw in a follow up appointment to get back under the house and do some more wire-tacking and clean up for posterity`s sake (of course at no charge as well, because felt it was only fair.)The client Has some more work they would like from me, and is willing to pay. But I have to take into account what I told them my rates are and still explain the change in rates due to realizing I need multiple appointments for such a lrge job. Thanks as always!shawn
  • TheButtonStoreTheButtonStore Posts: 1subscriber
    Do you really need to be billing on an hourly rate chart?Would it not make sense to simply quote a job at a cost. In the sense that, you still figure out pricing based off your rate, but the client doesnt know you meant that price at 4 hours.  They just know this is what you are charging?  If you go over on time, your loss and you learn to quote better, if you go under, then you`ve made better margins.The problem I see with your current system, is that you are eating the cost if the job takes too long, but what if it takes less time?  Are you going to reduce the charge?  As the client would probably be expecting as he is assuming you are billing hourly.Charging based on a quote makes more sense, as you can pad in say a %15 overtime fee to every job, which gives you space for overages.
  • homesweettheaterhomesweettheater Posts: 1subscriber
    ButtonStore,That is about the best idea I have heard yet. That would also help me ease into the change with the repeat client I already have. Thanks much! Any other ideas or tips, let me know. I am always up for great ideas.shawn
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