flate rate/billable efficiecy

Richard_4

I think you are correct, it doesent seem to add up to much, concidering that 52 hours is sometimes difficult to achieve in a service only type shop. What I find to work well in our insentive program is shairing the profits, usually around one to three percent. (cash if you can). We do not have an offical "insentive program", but at the end of each month each man is given a little extra $$$. everyone is happy when they recieve our "GIFT" of appreation, and we also make CHRIST MASS and vacations gift extra special. Lord willing, the classafide section of the local paper will not be an option. So far so good.

Mr. Blonde

Interviewed with possibly a new employer the other day and he was telling me about a new program that his company is starting. I don't remember the name but it has a flate rate price book and tracks billable efficiecy to pay incentives. Billable efficiency is the amount of hours billed to customers in relation to total hours paid to the employee. Anything above 53% billable efficiency pays incentives to the employee of $2.00 per billable hour. As the percentage of billable efficiecy goes up so does the incetive per billable hour. The service manager also has a simmilar incentive. Has anybody heard of this or doing something like this? what are your thoughts on this type of system? I'm looking to eventually work into a service manager position with him and I'm not sure of i like this system and i don't know if the incentives will amount to much.

just me

billable hour

I wish I was in more of a mood to write, but I'm not, So, I'll give you the readers digest version.

Billable Hour Eff. can really work well when you are in a company using a flat rate manual, IF>>>>> THe Billable hour is not out of this world and IF>>>>> The travel time is kept to an absolute minimum.

You see, when the Billable Hour is extremely high, like let's say 475.00 Per Hour (Don't Laugh) that's what we charge, One out of every three customers will say yes to a repair, but the other 2 will tell you to take a walk. So let's say you work 8 Hours today and your Billable hours for the One Job that said yes,was 4 B.H. Now, you traveled 1 hour there and one hour back. Plus you went on 2 other calls and and they were no sales. What do you think your billable hour effeciency comes out to?
Another thing to find out is.... Are you being bonused on your BHE no matter what the Shop BHE is or does the shop have to meet a certain BHE befor a bonus kicks in. I can tell you I have busted my knuckes, worked fast, charged High and "Did not charge my boss for the travel time from job to job and came in at 69% eff, BUT the shop had a bad week and the Shop did not meet the minimum, so I lost my bonus.

I guess what I am really trying to say is... The B.H.E. is just a ploy by soe companies to get you to Give up the Travel Time, Time spect cleaning your truck and getting you in and out with a minimum of delay. If you do all this and the shop does good, you get a bonus....But look at it this way... If you charge for the Travel time, the truck cleaning and you spend more time on the job, ( Not lazy time, but Quality assurance Time) you beat your bonus in overtime alone.

In closing, the best thing this company seems to have is a Flat Rate Manual. This without a doubt should be a standard in the industry. Now that I have used one for about a year, I just can't go back to the old way!

Hope this was a help, Maybey if I feel like writing tomorow, I'll Get a little more detailed.. ( Sheeesh!)

Mad Dog

Ya did alright for not bein' in the mood

Wow! they really get that much? Is that in a very affluent area? Mad Dog

To Learn More About This Professional, Click Here to Visit Their Ad in "Find A Professional"

heatboy

If you think about it........

evryone who frequents this site should have a different per hour rate. Each of our business have different overhead and needs. I could care less what the guy down the street charges, since he doesn't have access to my books. Why let him dictate what you charge for your services. If you are worried about what he charges, you might just well pull down your shingle and go to work for him. The key, which most contractors have yet to grasp, is know how much it costs to keep your trucks on the road and your door open. Charging $100 per hour does no good if it costs $110 per hour to run your shop. Even if the guy down the street is only charging $75 per hour you're still losing money.

just me

Not Really

As the fellow after you said: It depends on the shop costs. For instance, in our shop we have 6 Fully stocked 14' "Super Trucks" with everything from an elbow to 1 100,000, BTU Boiler, on it. We advertise in all the Major yellow pages, Full Page Ads and have a 24 Hour Dispatcher, Health Insurance and a Pension Plan. It Cost alot for all this and that's why the B.H. is so high. If you decide to go to billable Hour and the Cost seems to high, I suggest you "Trim" the fat. An example would be asking your self some questions like: Do I need maps and a Map Program at 49.00 per week on my Cell Phone?, Do I Really need to carry 20 different faucets on every truck or will 5 be okay?. Billable hour works, but as I said, Only when the B.H. is not way to high. Some guy's say they try not to worry about the competition, but if you look at billion dollar Corps, like United, Mc Donalds and so on, you will see that they "Are concerned with the competition" Of course if the competition does not offer what you do, you should be allowed to charge more. In example, 24 Hour rapid Response, No Waiting for a New Boiler, Furnace, or Hot Water Heater. A Full Proof Guarantee, Etc. I'm sure you get the idea.

michael_15

rate per hour

The biggest all-service contracting company here (which isn't particularly affluent, but rather dominated by landlords who own multiple properties and just don't want hassle) (heck, I may be thinking of the very company "just me" works for) does that. They drive nothing but big trucks with tons of supplies on them and have a big book with flat rates. They have plumber trucks, electrician trucks, etc.

The first (and last) time I had them over (I hired them 'cause they're well known/heavily advertised) I paid about $1200 for literally about 60 minutes of work (and two 1/2 inch pipe plugs). I've since not hired them since I'm just a homeowner and have decided my own convenience and time isn't worth the money, but they have tons of customers for whom the ultimate convenience and competence they offer is worth the money.

It's actually a pretty good business model on their part -- or at least, they're very successful. Incidentally, I just got a packet in the mail from them, telling me that the non-heating season is the best time of year to fix your heating system since you can go without heat while they fix it. It came with coupons to update the heating system that expire in April. . .