How would you charge? If you being charged, how would you EXPECT to be charged?

[peter halle]

There are so many people here whose opinion I relish and trust, so...

I have a dilemma.  I am doing invoices and it is time to bill a client for a job.  The problem is that the invoice is ridiculous in comparison to the amount of work to do the job because the client wanted it done now.

I was asked to come and repair a closet shelf that had fallen down due to too much stuff on it.  No other details on the phone.

I drive 10 miles to their home.  They have a ventilated wire shelf that has pulled out of the wall and bent the diagonal braces.  I explain that I can fix it but that I will have to go get parts.  The owner says her husband has bought the parts.  Wrong parts.  I explain that I can pick up the parts on my normal travel and come back in a couple of days to fix.  She wants it now.  I explain that I will have to drive 15 miles each way to get the parts - with my helper.  She says do it.  She is going out of town and wants it done before she goes.  We mix up some twenty minute compound and fill the old holes before leaving.  We go get the parts and come back and complete the installation as quickly as possible.

The bill is ridiculous in my mind because of the travel to get the materials.  What would you do?

Bill the real amount?

Bill a reduced amount?

As a customer, what would you expect me to do?

The customer is not a regular customer and can't be counted on for leads.  Three jobs in 5 years - all dirt cheap because I was in the area and it was an add-on to other jobs next door.

Your comments and thoughts will be appreciated.

Peter

 

[FEStastic]

Hi

Did you agree on anything before starting ?

No matter how good or long standing a customer I never ever do any work without prior agreement .
Not following this is the best way to get into trouble.
People often say things like "just get it done" "what ever it takes " not realizing what that means to you 
when you give them the invoice they say "well if I  had Known I would have waited " etc etc ...

Give then the real invoice as your overheads are real.  [smile]

 

[danrush]

Peter,

I know it's too late now, but I would quote her a fair price prior to running back and forth to the store, etc.  If she says yes, all's good.  If she say's no, all you're out is the first trip.  Now you are in the position of collecting whatever she is willing to pay.

Perhaps a printed price list showing: labor rates, basic (shop) materials rates  ( nails screws, glue, etc)  just like an auto repair garage, and travel time rates.  If you have this sheet to show the customer on the first visit, then offer her a "discount"  if you can complete the job during your normal travels,  she may be more willing to wait the day or two.  Plus you're not in this pickle.

To answer your specific questions, I would bill the real amount, offer some kind of "cash" or "previous customer", or equivalent discount to give something to the customer, and realize that no matter what, the customer is going to think you are overcharging.  

ALWAYS quote before work, my friend.

Dan

 

[chrisrosenb]

It was a rush job. Invoice accordingly.

 

[Dan Clark]

Peter,

That's a dilemma.  In my industry, there's a standing joke - "You can have fast, good, and cheap...  Pick two."   Some contractors don't like to talk about cost.  I ALWAYS talk about cost.  Nothing is free.   The customer has to make the choice of balancing the schedule, quality and features, and cost.   It's not mine decision to make and I ensure that the customer makes it.  

It appears that she accepted that fact that you needed to get the parts, which means she wanted some minimum level of "quality".   And she definitely wanted fast.  In fact, she specifically authorized fast.  

IMO, there are two issues...

The first is whether she understood that she would have to pay the extra cost for the timeframe and quality she wanted.   If yes, then charge what you feel is appropriate.   If not, that's another issue.  

Assuming that she understood that time is money and given the situation, then she understands that she's not just paying for the job.  She's paying for the HIGH SPEED delivery of the job.

The second issue is the invoice - I'd suggest breaking up the invoice as you normally would, but add an extra line-item for - extra labor time to travel to meet the RUSH SCHEDULE - maybe something like "Travel time for expedited installation" or something similar.  Spell it out.

If you lump it all together, then it looks like you're overcharging.   If it's broken out, she'll see that HER DECISION to get it ASAP cost her a lot of bucks.  

I hope this helps.

Regards,

Dan.

p.s. Old TV repairman joke... 

TV repairman goes to customers house.  Customer says "Pictures sucks!".    TV repairman say, "Yep.  Looks awful."  TV repairman walks over to the side of the TV, licks his thumb, lays a nice, wet thumbprint on the side of the TV 11 inches off the floor.  Then he hauls off and kicks the wet thumbprint as hard as he can - "Bang!"  The picture is now perfect!!!

TV repairman says to the customer, "That'll be 50 bucks."  The customer says, "That's ridiculous!  I'm not paying $50 for you to kick my TV!!!"  TV repairman says, "I'm only charging you $1 to kick the TV.  I'm charging you $49 to know WHERE to kick the TV!"  8)

 

[peter halle]

All who have replied so far - Thanks!  The image in my mirror is appreciative and smiling.

All those who haven't voiced a thought - Please.

I am going thru a reformulation of what I do and how to do it from a business end.  I have been blessed over the last 9 years to only get abused by a client once - out of 1500 plus jobs working alone.

I can look in the mirror and see that I have survived based on my skills, but that may not be enough.

I need to get out of my comfort zone and others here have done that before.  That is why I ask for all your sage advice.

Peter

 

[Wood_Junkie]

"I explain that I will have to drive 15 miles each way to get the parts - with my helper.  She says do it"

At the point she said "Do it" you're on the clock.  So basically 30 minutes round trip, for both of you.  Time is money.  If Mr. Husband had gotten the right part, they would've saved some money.  Their/his mistake is not your penalty for your time.

I would charge for this, to the pro-rated minute for both of your time, and as others have stated, show it as a specific line item.  Maybe waive any 'house call' or fuel fees you have, but put that on there (as waived) and state she's a valued customer, blah blah. 

The bottom line is, it was on her schedule.  If you had been forced to miss or be late your kid's music recital because of this job you probably wouldn't question this.  But since it wasn't technically an inconvenience, it seems more like you should 'do a favor'.  Favors are for friends (and maybe *valued* customers).  Sounds like she is simply a customer.

 

[mwhafner]

If you feel that you are charging a fair price for the work performed, then send the invoice.  Focus on the costs, not the bottom line. 

 

[Dane]

I faced this sort of thing all the time when I was doing work in the Los Angeles area.  I would get a call from a customer needing some kind of repair work and it was often very unspecific.   In LA you can blow an hour just going to a customer's house and you can't afford to be driving all over creation on your own dime.  So I decided that I didn't go to anyone's home for less than a half day's pay.  I had a rate for that half day and I told them that they were welcome to add on other tasks to fill the balance of that four hour period if I finished the job early, but that my minimum billing period was a half day. They usually have some various things that they have been meaning to get fixed.  In five years, I never got turned down for a job because of this policy.  Folk understand that you make your money based on your time and as long as you can give them some idea of what to expect up front, they are usually willing to compensate you fairly.  It is actually really hard for folks to find someone who is competent and honest and willing to come to their house for small tasks.  When they hear that for it to be worth it to you you need to get a half day out of it, they don't mind.

 

[ward]

Peter,

I was not going to chime in, except that you seemed to ask for it. . . All the posts iv read are wise and thoughtful. I've been fairly successful in business for about 18 years as a C-15 (specialty contractor) after a 12 year apprenticeship where i stayed, in part to learn about customer relations.

Your time is valuable, stop worrying about the past and bill for it, and follow up with a phone call, or call first and go over it. I prefer to bill and charge high and go down if i have to rather than low-ball and go up. I think that's bad for the industry and my integrity.

Anyway, I'd definitely bill for the T & M and, as others have noted, break it out so the client can see the cost of theirs choices. If they flip out, ask them to think it over and call them back and agree to whatever they want. Essentially that's the reality, from my perspective. I've almost always gotten paid my full prices, but, i almost always through a number out, so they are prepared.

Communication is generally where we fail to satisfy our clients. I'd rather bother them than detail, than deal later with a complaint because i did not ask what or how they wanted a detail. I enjoy my contact with my clients as much as my work; it's all one to me.

If I am not learning it's because I'm not paying attention. There is lot's to learn every day, mostly about ourselves. . .

Thanks for asking.

 

[timcgibbs]

Peter,

All good advice.  I'll second most of it: be as clear about financial expectations as possible (ideally a written contract), since that ship has sailed, I consider you still in the right to charge what you see fit.  All you can do is ask, and don't lose sleep over it.  [wink]  Good luck!

 

[mastercabman]

Just charge her what you think is fair.If she think it's too much she 'll let you know.At that point you can explaine all the work you had to do to get the job done.

 

[Holzhacker]

Customer wanted it done 'NOW', that request eliminates all discounts. "Now' establishes the full price. Charge for your time as it was used up. You could have been on another job making that money. If you don't charge for it you lose.
You'll probably have to explain the bill. Next time the customer might be more realistic. If you don't charge full freight you run the risk of setting a bad precedent for future calls.

 

[harry_]

Peter,

I am going on the presumption that you know what you need to charge to operate your business profitably. That being said, charging anything less than that is charity.

I had commented about pricing on another thread. I think that it applies here as well.

 

[Jesse Cloud]

First of all, you gave outstanding service by responding so quickly.  Charge accordingly.

BTW, I have been in the customer's shoes in situations like this a couple of times (e.g. calling a plumber on New Year's Eve [eek]).  My attitude was at least I'm glad money could fix the problem.

You offered several options to lessen the cost, she declined.  Her choices.  Her bill.

 

[ericbuggeln]

Peter, you should have opened with "I charge X amount per hour per man from the point we start til the point we end, pick up and delivery of materials included"  You should have your helper drive his own car, so you don't feel obligated to charge for wasting his time or if the item is easily picked out by your guy, send him while you begin work.  No one wants to pay for two guys to get something.  My lumberyard charges $65.00 for deliveries under a $1000.00, which most repairs fall under.  I can go there, pick up and get back in less then an hour, which actually saves them a few bucks.  If they dont like my policies get someone else to do it.  Never tell them its on your way or easy.  Nothing is easy or quick.  If a client says those words, 90% chance they dont think your time is worth anything, so you should never say them.  If you arent signing a contract for xyz, get at least half up front in case a situation arises where the client feels they dont owe you that much money, at least you have enough to pay your guys wages and materials. 

I would definitely charge full price if you value your time, but without a contract, it is her option to pay you that or not, good luck Eric 

 

[tigger]

Okay Peter

My 2 cents worth - Coulda, shoulda, woulda! If you think the invoice is fair, Hand it over. Just be specific on the invoice so that it is clear what you are charging her for. If she cries, so be it.

Not have given rates beforehand etc, etc is all 20/20. I've had 2 separate clients stiff me last year for a total of R 128 000.00
(about $17 000.00) and that was with a written bid, which they both accepted and paid deposits on!

So now I charge what I think is fair. Sometimes I cringe handing over the invoice because I think it's a bit high, but am still amazed at how many people pay with no hassle- and they call me back to do more work for them.
I do my best not to assume my clients are idiots! They call and want it done NOW. Then I'm sure they know it will cost more, even though I always do give them an estimate first. But I never assume they will bitch about price.

After all, we use Festool's to do the jobs and they don't come cheap!  [big grin]

Go on - give her the invoice. She might surprise you and pay cash with a smile.

 

[Guy Ashley]

How you present the invoice or how much hassle you expect justifying your costs is a judgement call on the character of the individual. Like the last post you may be suprised and she will pay up without question.

Even with up front quotes some people still argue the toss, you work 2 x 12 hour days instead of 3 x 8 hours and some folk will hit you with "but you were only here for 2 days!!!!"

I recently had a client wanted some remodelling on a bespoke oak kitchen, (rip out undermount wine rack and replace with oak panelling to make small breakfast bar). Their house is worth GBP 2.5 million and both the client and her husband drive brand new Porsches and bank with Coutts & Co (the Queens bankers & you need a minimum of GBP1 million to open an account)

The work was easy and the material costs were reasonable and the invoice was broken down into labour and material costs and totalled GBP 454-54 pence.

SIX weeks!!! later I got a cheque for GBP 450-00!!!.

I misjudged them, didnt get mad just laughed to myself.

Maybe you will be equally suprised and not get a kickback [unsure]

Good luck!!  

 

[Wood_Junkie]

Just another thought on this...  And this is from personal experience with a plumber we use somewhat regularly, but for *all* our emergencies.

It is comforting, in a way, to know that you can have a skilled professional on-call.  If it costs you a fair amount (even a little sting perhaps), you (the customer) get the double benefit of:  1) quality work, 2) on-call demand = comfort

I've called this plumber three times for need-you-right-now tasks.  One time he showed up with his girlfriend (!) 'cuz they were on their way somewhere (it was a Friday night, after all).  It only took about 30 minutes for him to do his thing.  He asks for a very fair fee, and I happily fork over what he asks for, sometimes thinking to myself it seems ridiculously cheap.

Neeless to say, his number is on speed dial in my cell and my wife's (and my parents and my sister!)  We've all thrown him our business with a smile.

Regarding Guy Ashley's post about the miserly bajillionaires... How do you think they get so rich!?  They probably took a full tax write-off using your invoice for the additional GBP 4-54.  I've seen this before with people who don't understand the 'real' worth of money.. to them that GBP 4-54 is nothing.. meaningless, so they think  nothing about underpaying you. 

I knew a business owner a long while back who often was carrying large outstanding accounts receivables for his services..  He changed his contract to institute late penalties based on the *full amount* of the invoice, not just the unpaid balance.  So if someone underpaid and was grossly late by $50 on a $5000 charge, he dinged them with the penalty % based on the $5000.  I dunno if that was even legal, but his ARs stopped stressing him out (e.g. they got paid, on time and in full!)

 

[woodwrights_corner]

In this day and age with all our ability to use technology to communicate, prepare estimates and price sheets our customers should not be "surprised" by the final price.

Also, while you are going through your "rethinking process"  you may want to give thought to change orders. An awful lot of wasted time and hard feelings can occur in this area of our business.  It may deserve a thread of its own.