Econ 101 meets a Surveyor

I don't know what job you would get in your area but I assume the $15/hour is total compensation.

You just show up, do your job, no worries, no bill collecting, no liability, no lawyers coming out of the woodwork with some odd theory to sue you, no stepping into the middle of the neighborhood feud.

If you can get a job (say a roto rooter guy which is what our chainman did after the big meltdown of the early 90s) paying that I would do that rather than sell surveying for the same price. You should get at least 3 times that for a self-employment gig and that remind me, the self employment tax.

Liability and the future need to replace worn or outdated equipment are the two best reasons I can think of. That being said, I've certainly taken less than I would like on a lot of jobs over the past few months because I couldn't risk losing them.

Thoughts?

I think that far too many surveyors have this connection in their mind between what it costs them to provide a service and what they charge for that service. (Very often that connection leaves out semi-hidden costs like Professional Liability Insurance, Fund for the replacement of equipment as necessary, retirement savings and a whole list of others.)

Instead of looking at client price as a function of our cost it would be so much better if we connected the price with the value of the service to the customer.

Larry P

I agree with Larry, but what you may be getting confused by (or maybe your buddy) is what is commonly known as opportunity cost. In other words, what would you be earning investing your time at another job?

Yes, if you are loading garbage into a truck for $15/hr compared to sweeping floors at $15/hr (assuming you wouldn't be part of a parasitic public employee union) there may not be a difference. The big difference here is that as a professional surveyor, you are (or should be) providing a valuable PROFESSIONAL service. The cost however, is still determined by what the client is willing to pay, and what you are willing to accept - simply - supply and demand.

Another difference is that loading garbage for $15/hr really isn't damaging the garbage loading profession, where if you were to survey for $15/hr, you are arguably damaging the surveying profession.

"my overhead is stupid low"

I hear this alot, and I know what you mean, but it really isn't from a business standpoint. You can consider it so from a survival standpoint.

"everything is paid off"

See above comment.

The problem with survival mode is that there is always someone else who can survive longer. The surveyor across town who has a bunch of money from daddy, or the larger company that is multidiscipline and can run the small boundary jobs at a loss in order to keep crews on between the larger jobs. But these competetors will still be keeping up with technology while you fall behind. When you charge 15 an hour they can charge 10.

So, you may eventually have to go get a job for 15 an hour. But first, try spending some quality time with potential clients. These may be unbillable hours (but we've already determined you don't take into account overhead anyway) that you could spend fishing. Try meeting with the client at the site of the 3.5 acre job, have some coffee, show them you are interested in their project and them as people. Tell them you can't compete on price but will put them first and make sure their project goes smoothly. You still might not get the work but if they have a bad experience with the quick and the cheap you might get some good publicity or referrals.

If you like what you do you still need to make a profit to continue. The odds are against mere survival in the long term. Heck, in this economy the odds are against making a profit too, but there are things you can do that your competition can't. You need to figure out what those things are and try them before you punt.

I used to use different brochures for different markets. Leave them at local codes offices. In the vacation home area I mentioned color frameable maps with classic lettering that some clients like to hang over the fireplace. Sure enough I received quite a few jobs because the clients wanted that to impress friends and family of their holdings, and have a conversation piece (thereby making my claim come true:)) No one else was doing color at the time and no one was using fancy lettering. The idea is that if they have to have a survey because of some regulatory demand or transfer, then try to offer some way for them to get something they actually want out of it (even if they don't yet know they want it). These clients did not want a survey, they were told they had to have it. I gave them an option where the survey remains a part of their camp life rather than a throw away item needed in order to build an addition.

Hope this helps, I know it's tough out there.

Well said Mr. Frymire.

Think about giving the client more value, not less. Then charge for that value not because of what it cost you to provide the value, but because it is worth more to the client.

Mr. Frymire is 100% right when he says you can't compete with the folks who are giving away their services. That is, you can't compete with them on price alone. But I bet you can find ways to better serve the needs of the clients and make a fair profit for yourself.

Larry P

The other side of the debate

One should also keep in mind what they are not earning by doing survey work. This is exceptionally true for solo operators and one L.S. businesses.

You may get a Tim Taylor manly grunt (Remember Tool Time?) out of clearing line and climbing over rocks and canyons, but what more economically rewarding activity might you be doing with that same amount of time? How little would you have to pay someone else to enjoy the Tim Taylor moment? Just because you get a thrill from digging a hole and finding a stone does not mean you can't be onsite watching while performing other valuable functions via computer or cell phone.

FLAME ON!

The other side of the debate

No flame here. At some point one has to consider what is the most valuable use of their own time. But it may be the Tim Taylor line cutting is it, and there's nothing wrong with that. Some might hire a younger team for field work, but some might be better hiring one good at public relations and office tasks.

Larry hit it!!!

nuff said

I don’t think I get this “value price” versus time costs. I can’t help but think that means you would charge more for a glass water in the desert and thirsty people, than you would at an oasis. Even if your cost of providing the glass of water was the same. I am for making a fair profit and with God’s blessing we do OK. But the only factor I consider when preparing a proposal is cost and time. We do not factor in any “added value.”

$15/hour (net) assuming you are 100% booked for at least 2040 hours per year. If you have less business than that, say only 1020 hours per year, you would have to get $30/hour, etc. Add all of that your out-of-pocket expenses, truck maintenance, taxes, etc., and you find that you HAVE to charge the same as other self-employed professionals.