Was recently asked why my rates were "so high" by a contractor who said "there's only you not two people". I begrudgingly explained to him that my rates were consistent with the amount of work I can complete in an hour factored in with the level of liability. He claimed most guys were doing it for 85/hour and that 125/hour was too much. I politely told him I could not get to that level. Which all begs the question: how do you justify your rates to your clients (I know we should never have to) who are upset that they're "too high".
A contractor complaining about prices, how about that? 😉
But seriously, you have no explaining to do. That's the price, take it or leave it.
I am a solo guy but I don't charge by the hour. I work on a lump sum basis on every project. They agree to it and sign a contract before I begin any work. If it takes me less time than I thought, I make more money. If it takes more time, I make less. But everything is out in the open and up front and my clients appreciate that.
Wow, that's a very high hourly rate for my neck of the woods. May be a competitive rate for your area, though.
I know of one surveyor in my area that charges 60/hr for himself and his helper, and some larger companies with big corporate clients charge 140/hr.
I have no idea how a solo practitioner would figure out what to charge around here.
I am an RPLS. My resume, experience, and qualifications are available to anyone who asks to see them. I see 100% of every job, and take full responsibility for everything. Why is that worth any less than 2-3 significantly less qualified guys working under the supervision of a surveyor who most likely won't ever set foot on site, and who may be directly involved at some level around, oh, 50% of meat and potatoes at best?
If all other things are equal, then they're equal.
> Was recently asked why my rates were "so high" by a contractor who said "there's only you not two people".
The obvious answer is "I've learned from experience how much I have to charge to do quality work and remain in business and my other clients appreciate that fact."
I mostly do lump sum work, but estimates are based on a bill rate that's admittedly high for around here (higher than anything listed on this thread so far). I've lost some bids, but I can't think- off the top of my head- of one angry client. I'm sure there is one (or two maybe), but they're not crying to me about it.
Most of my work is lump sum, but after going solo I did not change my hourly rates. Then, after I saw how productive I was in the field, I even raised my hourly rates. I was asked the same thing on a construction layout job and I just reminded my client that he was paying for results and not warm bodies.
> Was recently asked why my rates were "so high" by a contractor who said "there's only you not two people". I begrudgingly explained to him that my rates were consistent with the amount of work I can complete in an hour factored in with the level of liability. He claimed most guys were doing it for 85/hour and that 125/hour was too much. I politely told him I could not get to that level. Which all begs the question: how do you justify your rates to your clients (I know we should never have to) who are upset that they're "too high".
My first suggestion is to consider going lump sum when you can. That allows you to charge for something other than your time.
Short of that you might try telling the contractor that you can cut your hourly rate in half. But that also means you will have to use older technology. The older technology will mean it takes you 3 times longer to do the work.
I doubt you will have any contractors who want that bargain.
Larry P
> > Was recently asked why my rates were "so high" by a contractor who said "there's only you not two people".
>
> The obvious answer is "I've learned from experience how much I have to charge to do quality work and remain in business and my other clients appreciate that fact."
:good: Pretty straight forward and simple as that.
Any discussion about rates is painful when dealing with people who have a far lower per hour pay rate. First, they forget that as a solo operator you have to pay for all of your so-called benefits that their employer subtracts from their true cost of employment to arrive at their hourly pay rate. Second, they have no input costs such as vehicle expense, insurance, supplies, equipment purchase and maintenance and about 50 other costs of doing business. Third, you have the right to charge any rate you feel is comparable with your abilities so long as you don't price yourself out of business.
Any discussion about rates with people who make far more than you annually suggests disrespect for you and your product. You represent lost profit to them. Also, you are clearly their educational, social and career inferior to them in their elevated sense of ego.
In either situation it is best to downplay the numbers and focus on the value of the product they need.
It doesn't necessarily jusy apply to "solo" operators
Clients that just can't get their heads around the cost of a survey don't understand the importance of the survey. If they don't understand the work and liability involved or simply the costs of doing business nowadays, they're gonna bitch, no matter if you are a solo operator or give them a six man crew.
It reminds of the scenario when a client discovers that the survey cost approaches the cost of the fence itself. The client becomes indignant.
In this case I do see a little divine humor in a contractor complaining about what someone is charging him. That's a good chuckle...:-P
Try this:
Base hourly rate (what you pay yourself), plus
Annual Insurance Costs divided by 2000, plus
Cost of annual materials divided by 2000, plus
Cost of annual office rent/mortgage divided by 2000, plus
Cost of annual fuel divided by 2000, plus
Cost of all equipment divided by 10000, plus (5 year replacement)
Cost of all vehicles divided by 10000, plus (5 year replacement)
Cost of annual employees divided by 2500.
It should at least get you close.
Sidenote, employees are expensive. o.O
Do Not Divide By 2,000 For All Things
Most solo surveyors cannot work 2,000 hours a year in the field. You get a closer number to actual field expenses by dividing everything by 1,000.
It has been fairly typical that for every hour on field survey work there is an hour in the office. Both field work and office work have become more efficient over the years, and based on my work, the ratio still applies.
Also remember that overhead costs are divided by billable hours and the solo surveyor ends up with 100% of the non-billable work also.
Remember in order to do that $125/hr. work in the field there is all the prep and calculation time that the contractor never sees getting done.
Paul in PA
Do Not Divide By 2,000 For All Things
I agreed if you are going to have a separate field and office rate, but what if you wanted to charge the same thing all the time. I would probably only have one rate if I was "solo".
One thing missed is to allow for profit. You need some profit above your hourly wage if you ever plan to expand, hire others, etc.
:good: :good:
I wholeheartedly agree. A PLS that is intimately involved in every aspect of a boundary survey is worth far more than the typical crew in the field/PLS in the office situation. Most all of my clients agree.
Do Not Divide By 2,000 For All Things
150$hr + 50$hr for gps/robotics up here in alberta for one man operation. Fully Licensed. There are alot of one man construction layout operators here that arent licenced and contractors are starting to use them more and more as they are able to offer a MUCH lower price. but when something hits the fan alot of them just vanish.
I'd have told him that my regular rates are $100, but you contractors are such a pain in the arse that I have to charge extra.
I can't address the best thing to say. I thought Kent's response was good, and concise. (You might have to charge $125 if they want an hour-long explanation)
As to "I know we shouldn't have to". I disagree. The customer has a right to know what value their getting for your rate. Maybe many just want the "lowball" bid, but maybe some of them might want to understand. I know I try to get the best value for my money.
Real response
I am worth $40 an hour more than the other guys.
I provided a proposal to a real PIA for a sewer connection plan. I was $400 over the next guy. The PIA comes back with a WHY? I told him I was worth $400 more than the other guy expecting the PIA to go away. He had a contract and check to me the next day.
Our sewer connection plans have a little more detail than the other guy, but they are both adequate to get the pipe in the ground.
