Custom
Estimation Systems for Electrical Contractors
2nd Edition
Q & A
Section
Welcome to the Q & A section for our Flat Rate Pricing System.
Below you will find common questions directly related to the customization & use
of this system, along with their corresponding answers.
You are encouraged to submit your individual Flat Rate questions
by using the form at the bottom of this page (use the
contact us form for all other inquiries), and I will do my best to answer them as concisely and
expeditiously as possible.
Q - I loaded the program, now what? -
Bob
A - Make sure that you've make a copy of the original
file and keep it in a safe place in case you need to refer to it again. Look
through the different categories and make sure that no parts are corrupted
(everything looks normal). Start with the Read-Me, Home Page and Copyright
sections, then go to the Setup page and begin by answering the questions on this
page.
Q - I know I can add categories and
tasks but can I rename the existing ones? - Carlos
A - Yes you can, but I would be very careful about which
ones, since some values are dependant on cell values from other pages. I would
not recommend that you alter the Setup or Copyright sections, as these will
affect the program's function.
When a value is dependant on a cell value from another page,
then the name of that particular page is part of the cell's formula, so if you
change the name, then the program won't be able to find it and will return an
error. An example of this is the formula in cell D19 in the Appliances category.
The formula looks like "=PRODUCT('SETUP PAGE'!$C$57,'SETUP
PAGE'!$C$55,77.5)". Notice the 'SETUP PAGE' in the formula.
Now if you were to change the section's name to STARTUP PAGE,
then the formula would also have to be changed, otherwise it won't find the
value it's looking for.
Q - Why is the spacing between the
tasks all different in each category? - Rocco
A - The spacing has to do with how it would print. On the
computer it looks like the spacing is different (& it is), but it is positioned
to print out correctly. If you're not sure about how it would print out, then
just click the print preview & then scroll down to see what the pages would look
like when printed. Remember that presentation is important, so always check to
see that the pages look symmetrical & clear before printing.
Q - I was entering a price into the D
column in the Ballast section and accidentally erased the formula. What do I do
now? - Claudio
A - You can look at the corresponding formulas in the D
column and replace it from one of these (remember to change the price), or you
can copy the formula from the original file that you should have saved
unaltered. If you're copying the formula from the D column but from another
task, then make sure to replace the corresponding instant rate change
cell in the formula. For example, if you're replacing the formula in the Ballast
section in D34 with a formula from cell D66, then you will need to change it as
follows:
The 225 is changed to 100 since this is a price change
corresponding to the price in cell D34 , and the $C$77 is changed to $C$76 since
this task is dependant on the instant rate change value in the cell C76 in the
Setup page.
Q - If I add a category or task, how
can I have the instant rate changes work with it? - John
A - You can add a value to the instant rate changes
section and then paste a formula from another task to this cell, then you will
have to change the instant rate change value (as discussed above) to the
corresponding instant rate change cell. Or you can simply use an instant rate
change value from another task. There are many ways to do this, just remember to
have the corresponding cell values in the formula.
Q - Are the prices that come with the
system, the actual prices I should be charging? - Walter
A - Definitely Not! Remember that these prices are there
as samples (clearly stated!) and not for actual use. This is a customizable program so you
need to enter prices that work for you and your customers. In the future, I may
be including (or selling separately) localized pricing for set tasks, but not in
this edition.
Q - I'm not sure I understand how you
price out a wiring job. What do you mean by point to point pricing? - Mark
A - You need to look at a job in parts instead of as a
whole. You break it down into different tasks and then add them up. This will
take a little longer, but eventually you may be able to average out your prices
for that particular wiring task and then you can set a definitive price without
having to break it down into separate steps (tasks).
For example a customer asks you to wire another 6" recessed
light to an existing 15 Amp lighting circuit.
So you would add the separate tasks of :
Wiring from an existing light to another light (1st
task), then
Installing the Recessed fixture (2nd task).
So this job would be priced as (based on the prices that came
with flat rate guide):
WR RX 15 at $220 (including service call fee)
+ (plus)
FX LN RC6 ST IC at $175 (the add-on rate)
So the total will be $220 + $175 = $395 (to wire & install a
standard 6" IC Recessed light to an existing lighting circuit)..
Service contract members would have a discount (say 10%) so
their price would be $355.50
If you're already there and they added this task, then the
price for the WE RX 155 would not include the service call fee ($75) and
instead would be $145
So then the job as an add-on would have been $145 + $175 = $ 320
and the member discounted price is $288
Q - How would you recommend I print
this? - Mark
A - I would highly recommend that you print this out in
color and on quality paper. remember that the customer will be looking at this
so it needs to appear professional. Use a nice binder and follow the relevant
instructions on the Read-Me section.
Q - Why do you have the TM in the book
if you are not showing the times? - Robert
A -As I explained in the comment section in cell
E18 in the Appliances section. You don't need this for the customers. It's just
for you and your employees to keep track of how long a specific task
should take. So if you have an employee that likes to takes his (hers) time
doing a job, this way they'll know what's expected of them. It's also a way for
you to weed out the slower non-productive employees that you may have in your
company.
Remember that time is money, so the more work your employee
does, the more money you both make. Using a flat rate system is generally
better for faster employees. You also keep track of the quality of the work by
sending them back to fix screw-ups at no costs to the customer, and you can even
charge them (the employee) by deducting from their end a % off the job the they
completed just for wasting company's time / truck, etc.
Remember you're not only loosing potential profits by not having
them available to take on another job, but it cost money to have them drive back
to the customer and repair something they should have gotten right the first
time. It sounds a little harsh, but to make money you'll need to get rid of the
nonproductive employees.
Q - You have abbreviations for each
task, what am I supposed to do with these? Do I have to memorize them? - Bob
A - No, not necessarily, even though the more you use the
book the easier it will be for you and / or your employees to remember them.
It's a good habit to try using them when writing out a job receipt, this way
it's easier to track.
Q - In the conduit section you have an
additional charge of 10% for each 10ft of added conduit above the 50ft initial
run. This 10% charge doesn't seem to be enough in many cases. What would you
suggest? -Gerry
A - As I've previously stated, the prices are determined
by the user. So I would suggest that if you don't feel that 10% is enough then
you can simply charge more (i.e. 15% or 20% or 30%). Whatever works for you and
your customers. Keep in mind that the best systems will be the ones that are
tweaked from time to time, so don't be afraid to adjust your numbers up or down.
Q - What is included in Hard wiring SF
Dryer (Is this just labor or are the basic parts included)? Replacing a breaker
is the breaker cost included? - Glen
A - The prices for the appliances are Hook-Ups & not
wiring from panel & breakers, etc. The only thing included in the hard wire
should be connectors, bushings, etc. Whatever you would actually need to take
the existing wire and hook it up
to the appliance. The CPC (cord & plug) option should include the price for the
cord & plug. If you need to change/add the receptacle, then you should add the
cost of installing / changing a receptacle (use the add-on price).
The prices for the breakers should include the costs for the breakers and
connector (if necessary). This task is simply replacing/adding a breaker, and
should not include any wiring to the breaker. The wire should be at or in the
panel.
If wiring were required, then you should go to the circuit or cable wiring
sections and apply the appropriate fees based on the criteria in those sections
(ampacity of wire, length, etc.)
Remember, that the objective of this system is to provide a foundation for
customization and expansion, so everyone using it, should absolutely make any
additions and/or changes they may feel are necessary for their own use.
Q - We purchased the Flat Rate last
night and think it's a great fit for us. Two questions: On the Disconnects page
these
(DSC-SF-240-30C), appear to be the same task but the prices vary, why?
Can you please tell me the hourly rate you used to figure the flat rates so I
can adjust the multiplier according to our figures. Also, I was surprised that
there wasn't anything for 2*4 and 2*2 fluorescent lay-ins categorized in the
software. - Ryan
A - Hi Ryan, thanks for your purchase and glad to hear
it's a great fit for you.
Regarding your questions:
1) Individual tasks are intended to be used as-is and/or be
customized by each owner. There are approximately 600 tasks, and most are
distinctly different.
In some areas, I have repeated the task in order to expand
the layout on the page. This allows the individual owners to add or change the
task, without having to duplicate the page layout within that category. In other
words, in the Disconnects category, where you see the same abbreviated task, you
can change the type of disconnects or if you don't need to add tasks to this
particular category, then just place 0 (zero) in the main formula for these
specific tasks (as per the instructions in the Read-Me section).
It’s important to remember, that the prices are examples
and not actual prices that you should use with your customers. Also, you should
not calculate your prices based on your hourly rates. The main point of using a
Flat Rate system is to make more money than you would by a T & M method, so you
don't want to calculate your prices solely based on an hourly rate.
The instant rate multiplier is to be able to increase /
decrease (by any specified %) entire tasks and / or categories all at once, and
is not an hourly rate multiplier. That’s why the TM column is not used for any
calculations but is there solely to keep track of the allotted task time.
2) The fixture category is one of the largest in the book
with over 120 individual tasks already listed. As you can see, it’s easy to add
or adjust any tasks that you may want within any category.
Also, from time to time, individual owners provide us with
some of the additions and changes that they’ve made to their systems, and these
in turn, are made available to all of our other users.
Q - I specifically want to address
the pricing set up. I am unclear on how this works as far as customizing our
pricing to fit the Des Moines, IA market. I noticed in one of your Q&A pages
someone had also submitted this question, however I am still unclear. It seems
to me that you have to be able to use an hourly rate + material costs in order
to ever come up with a price and if there is not a place to make a global
adjustment to the hourly rate how can I customize the pricing without
calculating it based on past experiences? - Jeremy
A - Hi Jeremy, the Estimating software is a guide /
foundation for you to apply your prices to specific tasks and then have it
printed out in a Price Book format.
The program will automatically calculate many things for you, but the price of a
task is something you'll need to calculate & enter.
To begin with, the whole idea of using a different system (other than T & M) is
basically to make more money.
This being the case, you don't want to charge an amount for a task that was
arrived solely by using T & M, because then there's no other purpose to using
this system other than mere simplification.
Now, although prices vary from place to place and from time to time (& they
do!), you should arrive at a price that is roughly (and at least) 50%-100% more
than your current T & M price.
Some contractors hear this and think, there's no way my customers are going to
pay that much, and maybe some won't, but ultimately most will if you're using
this system correctly. Additionally, you should be selling Service Contracts,
which is an additional source of revenue.
Now, since you are not calculating your prices based on T & M, there's no point
in having a global adjustment based on the time spent performing the task.
You do not want your customers to be looking at their watches timing your work,
and likewise they don't want to be doing this either. That's why they're paying
you more money than T & M, because it's a set price and an insurance policy
against too much T & M.
The question of what your prices should be is not an easy one to answer. Setting
prices for your location, type of work and clientele should be a dynamic process
over time that is completed if and when the ideal or maximum profit is realized.
In other words, you should be tweaking your prices up & down until you’ve found
a point of least price resistance and maximum profit.
Flat Rate systems are a little counter-intuitive (customers willing to pay
more), but it ultimately does work.
Regarding this system, your prices are entered in each individual task and can
be adjusted automatically by specified % up or down on a Categorical or
Individual Task basis through the use of the Instant Rate Multiplier.
Q - Lets say I charge $50 to
install a square D Homeline breaker. So all I do is go to column D and place the
$50 into the last space on the formula. Also If I do not charge for a same day
service I would type in 0 for that on the setup page to make the pricing lower
for the services. - Thanks Steve
A - Hi Steve, yes you would enter the price as the last
number in the formula (as shown in the Read-Me page), and you would leave cell
D4 set at NO.
The Same Day Service Call fee is a manual input fee. This is done by placing
Yes in cell D4. Leaving it as No (the default) means that any price that you
have entered on the setup page for Same Day Service Call, will not be added.