Pricing Hydronic

Paul Pollets

I haven't found any magic wand over the years. I'm with Mark E....Setting the correct selling price and determining the appx labor hours are perhaps the most important tasks we do. If you miss...you lose money. Smaller shops or one man operations have much more to lose if not dead-on with the cost and time of the job. I've managed to fine-tune my estimating spread sheets over the years with job tasks that closely match the crew time for each component or section of piping. Since I've calcualted the cost of the overhead per billable hr., those costs are also in the pricing, as well as commisioning time, travel time, and "warranty repair time". It's not uncommon for talented mechanics to get frustrated with the process. To those I'd certainly consider working for someone who has the background and track record, rather than be always short on time and money. That's not what life is about. This business is too risky and stressful not to be profitable. Think about it.

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Wayco Wayne_2

Was talking to a friend yesterday

who is an HVAC contractor up North from me. He does very nice work and is a quality driven personality. He told me he no longer is doing hydronic work. He said he could never bid the job right because each job was different and unexpected things would come up that he hadn't expected and priced for. I know what he means. I have had similar experiences far too often. I just had a boiler install last month that went 2 days over and burned my butt. I did an in slab radiant floor last week but I priced by the hour since I couldnt predict how long it would take. How do you guys keep it real? I try tracking my hours but every job is different. Any helpful ideas? WW

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hr

Let me know if

you figure it out. i've been at it for almost 30 years now and I still miss labor hours from time to time. sometimes big!

More often than not jobsite conditions, change of floor plan, damage by other subs, etc.

Sure in a perfect billing world you would charge fellow subs, or create change orders for every single change, but at my small level that never happens.

I'd have a hard time charging an electrician of flooring installer every time they make a mistake. I've damaged their work also.

I suspect in the end when I'm 6 feet under it really won't matter.

It's a business decision. Are you happy with your self employment and year end profit?? We all have to make this tough choice. Personally I'm still pleased to be my own boss, through the good and bad.

I fell your pain. And gain

hot rod

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hr

Let me know if

keith

experience

is the only answer. Sometimes it can be costly. If you learn from the experience good or bad it's a winner.

I agree with Hot Rod. How do you charge a fellow tradesman for an honest mistake?

Unless the scope changed considerably I don't put in for change orders either. Alot of our install work is done for clients who also give us their service work. In the end it works out.

Keith

Wayco Wayne_2

On another thread

Mark Eatherton suggested using The Plumbing and HVAC Estimator book. I never seen it before. Do any of you use it? What does it give you to work with? WW

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hr

An estimator book

may be a guide for number of hours a task may require. But the actual costs need to be build around YOUR cost of doing business. This varies greatly from shop to shop.

Now if you ever get worn down from being self employeed, I'll bet Dan Foley would have, or make an opening for you

That option crosses my mind from to time to time these days!

hot rod

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Adam_12

Time and Material

Is the only way not to get burned but it is hard to price the unknowns.A frequent problem is supplier shortages that some times mean you have do your job with what you can get within reason.I guess the problem is that our prices are scrutinized by our customers and there is always somebody out there that is going to do it cheaper.
Our consumer driven culture demands best service at cheapest price.The working mans bill is always under suspicion, while the "professionals " {lawyers ,accountants}bill is taken at face value.I price fixing by our industry would solve this problem but Iam sure it would create other problems.I guess your going to win some and lose some,hopefully you win more than you lose.

Wayco Wayne_2

It's like

you're reading my mind. Dan came and talked to my hydronics class the other day and I found myself thinking about it. Dan's a great guy, and they do some wonderful interesting stuff. Something to consider. WW


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[Deleted User]

I've been trying to read your mind too...

and I keep getting a blank screen...:-) Just kidding!!

Wayne, I've been doing what I'm doing for the better part of a third of a century, and I still miss crap. You can't cover every contingency. $#!T HAPPENS in the field. You also won't find anyone willing to allow you to work willy nilly at time and material, because they HAVE to know what kind of cap to place on the project, and then theres the "dairy farmer" aspect of T&M (Is he milking this job or what?)

As a contractor, we try and take every reasonable contingency into account in our bidding process. If something crops up out in the field, and it was not shown on the plans, then its time to start talking change orders. I know a lot of contractors who bid extremely low, then once on the job, make a lving off of change orders. Not us. We're a "turn key" operation. One job, one price.

However, having had said that, most recently, to "comfort" the end consumer, and to allow them to share in the risks of contracting, I have taken a few large dollar jobs at T&M "not to exceed". I always also tell the consumer, that try as we may, I've never had a job come in under budget as it pertains to labor. The materials are easy. You do an accurate take off. The labor is a guessing game. If we guess high, we take a bucket of money away from the job. If we guess low, the bucket is empty at the end of the job. It's a risk we assume as a "turn key contractor". Some jobs make up for others.

If you're losing money because you missed materials, that's a whole nother problem. That is what frosts me about some of these companies using "salesmen" to estimate their systems. These guys don't know their butt from a hole in the ground for the most part. Ownership just keeps rolling along, hoping that they'll make money on SOME job SOME day...

WHen we estimate a system, we use a spread sheet program that my partner developed when he was laid up from an auto accident a long time ago. We've modified it many times since, and it requires continuous updates as it pertains to material and labor costs.

We also track all of our field labor using the same labor categories that come out of the spread sheet. It gives us the ability to analyze each job individually and seee where the guys are getting faster or slower. We can then discuss this with them and adjust our spread sheets accordingly.

Shooting from the hip can cause you to shoot yourself in the foot. I know, because I've got the wounds to prove it!

Why do you think they call it estimatng... If it were a perfect science, they call it PRICING.

Hang in there. Just keep your eyes and ears open and track everything you possibly can. The Labor Estimator software from PHCC is just one way to start fine tuning your numbers.

ME

Wayco Wayne_2

If you saw a blank screen

reading my mind, you got a clear picture. Although there might be some food or pictures of pretty girls in there somewhere. Thanks for your support. I spend some days feeling bad about my shortcomings as a contractor,and then I get up off my duff and do something about it. It's an endless cycle. I've got a weak and a lazy mind it seems, but endless enthisiasm for what I do. I guess I feel like Hot Rod. I like what I do. I just got to take control a bit more. WW

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Mike Kraft_2

One Man Shops!

You call???I feel like a check chaser.I recently replaced a system I installed 12 years ago:)New HO's.I felt comfortable with my number until it ran 2 days over.I called in reinforcement..............had to.Still with my favorite sparky jerking MC cable I went over.There were added materials I didn't plan on installing and did without discussing with my client.

My client and I spoke twice daily through the install(could of used Ron Jr.).Long and short is after the dust settled my client reckognized what we did and what they got.He blessed me with a substantial reward.I was delighted and so were they.

This isn't always possible and I deem as a flag on the play.But in this particular instance it was welcome.I have been fortunate to work for clients who appreciate the work I do.A good reputaion is worthwhile.Cutting corners will put you down.

cheese

scott inM.E.

Stick with the same brand

After half a dozen installs and change outs, if you stick with a boiler package and bounce around with 3,4 or 5 zones depending on the job you should have a good idea what your cost is going to be. What kills me is when I got an issue with a new install and there is more time involved dealing with a warranty and then tech support and dealing again with the wholesaler. When we are 6 feet under it may matter because there will be a new generation of deadmen seminars, keep smilin!