Getting paid by billable hours

[oil lp man]

I guess billable would be ok if I was taking half. And half of the markup on parts.
Or maybe we could do a straight subcontract and you could forget about benefits and I will supply my own van and parts and I will give you 10% of billable time only. But if I'm busy with my own customers I will give your customers(soon to be my customers) a window when I will be there.

Let me discuss it with my calculator, I will get back to you.

[ARPA]

Very interesting thread. Amazing how we all do things differently in this trade when we are just a state or two away from each other.
I guess the saying goes "different strokes for different folks" applies.
Another saying pops into my mind from a wise old man, " If you accept my job offer, don't *****, as YOU accepted it.

Starting out in this trade, years ago, one of the best employers that I ever worked for paid this way:
Flat rate, and you made what the flat rate book called for a particular task, in hours. It was a flat rate book that the owner tweaked and adjusted.
For an example.
There was a task/hourly for stocking your van.
There was a task/hourly for training.
There was a task/hourly for van maintenance.
There was a task/hourly for shop time.
The above had to be initialed off by the service manager.

Any call back, if it was yours, you did, free of charge labor, just charged for parts.
Unless it was not a real call back, then flat rate kicked in.
Warranty, you went hourly.
Or in other words, any time you put on your time sheet that was not billable to a job, must be signed off by the service manager, or you did not get paid for it.

Our service area was rather small. We were guaranteed 40 hours, year round. We might have to sweep the shop floor, make metal pieces, wash and wax our van, etc in the winter, but all the techs could rest assured that they would get their 40, at minimum.

Back then, 20 years ago, his flat rate was 120.00 an hour...

For an example:
Arrive and diagnose a burnt out condenser motor, ground level unit. (If the unit was in a hard to reach location, attic or on the roof, ladder use, this added a multiplier to the task.
You had one hour for diagnose and travel. (travel to any location in our area at most took 1/2 hour.
If I remember right, there was not a task that any competent tech could not do in the allotted time.
The time allotted for this task was 3 hours.
(Really only 2, as 1 hour was eaten up for travel and diagnosis)
So, 3 hours for a call to get there, diagnose, get approval to change "just" the fan motor and do it.
A cap was another task, a blade was another task.
IF, you did not have the motor on your van, you charged the customer $75.00 to go get it.
This was all thought out beforehand by the tech, so he knew exactly what to charge the customer, and write down.
I loved this scenario as I can't remember a day that went by that I did not get at least 10 hours for an 8 hour day, minimum.
But, you had to be fast, you had to be efficient, and you had to be "good".
Some techs were just plain slow, or tried every which way to screw the boss, but, this system worked in a way that if you kept up, you did make nice money.

In a way, I am glad that his kid graduated high school, he brought her into the business, and then she decided to change things around, and keep all of this money for herself. In less than a year they had a complete turnover.
If this would not have happened, I would probably still be working for him, and not have started up on my own.

[isitfixedyet]

Originally posted by oil lp man
I guess billable would be ok if I was taking half. And half of the markup on parts.
Or maybe we could do a straight subcontract and you could forget about benefits and I will supply my own van and parts and I will give you 10% of billable time only. But if I'm busy with my own customers I will give your customers(soon to be my customers) a window when I will be there.

Let me discuss it with my calculator, I will get back to you.

now thats funny!
i totally agree!
Ill pay u 18 hr togo chane a fan motor aat 1.5 flat rate, and u can get paid 27 big bucks, while i charge three in my hidden flat rate, and mark it up u know at least 100 percent? flat rates not bad, if u allow the warranty industry standard, and manufacturer standard allotted, time, alot of companies charge the ho and the manufacturer, and dont say anything,,, shhhhhh

[neophytes serendipity]

arpa-

I bet if you pay your techs like the company you worked for 20 years ago, that they are reasonably happy and willing to go the extra mile....

[ARPA]

Originally posted by neophytes serendipity
arpa-

I bet if you pay your techs like the company you worked for 20 years ago, that they are reasonably happy and willing to go the extra mile....

I modeled my business to copy his on numerous things.
My techs are very happy, or so they tell me....
After all, it is about the techs, I try to keep them in mind when I do something.
To me it is a two way street.
They take care of me, I take care of them.

[jrmech]

billable hours is a big scam!!!!!!

I currently work for a company where we get paid billable hours and nobody wins but the OWNER of the company.

-We constantly have to overcharge the customer just to make our regular 8 hours
-everything is a rush job because nothing is properly quoted
-when you are doing some other techs recommendations and they messed up with, u take the hit and work for FREE

the list goes on and on, in a few months I am leaving, I got excellent experience working here but its almost time to move on.

on top of all this, our hourly rate is the same or less then I could make at a shop were they paid properly, absolutely no bennefit to working for this type of company. Once I leave I will never do it again.

[alpha480v]

It looks like to me that some posters on this thread are misunderstanding the difference between Flat Rate and Billable hours.

Billable hours to me is portal to portal, meaning you are paid from the time you get dispatched until the time you get home. This means gassing up the vehicle, picking up the parts, Driving to the call, diagnosing the call, making the repair, writing up the service invoice, and finally the drive home. Many commercial contractors operate this way. How do you as a tech lose out on hours this way? You are paid for everything that has to do with that particular call. How does the owner lose out on this? He charges the customer for every minute that is on the techs service invoice. This is win-win to me.

My understanding of flat rate is every call has a code that can be found in the magic flat rate book in the truck. This code has the price of the repair, along with the allotted time allowed for the repair. If you can get the repair done in the time allotted, great! But if something unforeseen goes wrong with the call, a bolt snaps, somethings too rusted, it takes longer to get apart, and you take longer than the allotted time for whatever reason, well you just lost pay old buddy! The customer and your boss still make out though, because they were protected by the magic flat rate book.

The only way that I can be convinced that a flat rate system would work would be is if 1)the contractors coverage area is small, maybe 1/2 hour or less, and 2)he is residential. I can't see a commercial refrigeration outfit with a 300 mile area coverage using this system and keeping good techs. Too many variables in the supermarket side that can go wrong to bill flat rate. And try explaining to the on call tech that he won't be paid for the 65 miles travel time for the 2 am call that he took on Saturday for that walkin freezer. Good luck keeping good reefer techs with a flat rate system!

And finally, Nobody has yet explained who stocks the trucks and gases them up under a flat rate system if your not paying the techs to do it? Or is this covered in the magic flat rate book?

[oil lp man]

Alpha,
How can you call picking up parts, cleaning out the van, stocking the van , turning in invoices, washing the van, picking up special tools to do a job, meetings, training, etc. billable to the customer? They only want to pay for the time you are there and maybe 1/2 hour travel at most.

[ARPA]

Originally posted by alpha480v
It looks like to me that some posters on this thread are misunderstanding the difference between Flat Rate and Billable hours.

Billable hours to me is portal to portal, meaning you are paid from the time you get dispatched until the time you get home. This means gassing up the vehicle, picking up the parts, Driving to the call, diagnosing the call, making the repair, writing up the service invoice, and finally the drive home. Many commercial contractors operate this way. How do you as a tech lose out on hours this way? You are paid for everything that has to do with that particular call. How does the owner lose out on this? He charges the customer for every minute that is on the techs service invoice. This is win-win to me.

This is how I understand billable hours are done, It is how I do commercial work.

The only way that I can be convinced that a flat rate system would work would be is if 1)the contractors coverage area is small, maybe 1/2 hour or less, and 2)he is residential.
And finally, Nobody has yet explained who stocks the trucks and gases them up under a flat rate system if your not paying the techs to do it? Or is this covered in the magic flat rate book?

Hmm,
I am pretty sure in my post I did mention how flat rate works for my residentail....

[dhvac]

arpa
do you have any more info you could send me on how this works this looks like the perfect setup

i like that it pays you for what you do not how long it takes you to do it

i also like the fact that good techs would make money and the bad ones will leave due to going broke

any help at all would be greatly appriciated
thanks
dave


ps my email adds is in my profile if you could send anything

[oil lp man]

That billing the customers for miscellaneous stocking the van and other stuff I mentioned won't fly with "residential" customers.

[ARPA]

Dave:
sent.

[cg2]

[i]

Back then, 20 years ago, his flat rate was 120.00 an hour...


[/B]

There's what made it work, charging enough to pay the tech well and still make a profit. Too many people in this biz cant do enough math to figure what they need to charge to make a profit. 2 times hourly wage? 3 times? more?