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[Bain]

Wha?

Well, except for Mike O. He really is a crank-pot curmudgeon.

I do crank and pot?!!!

Eating Cheetos at the speed of light.

I can actually envision Mikey gnawing on his Cheetos while furiously scribbling in his camo notebook. And he's wearing glasses. Absolutely wearing glasses.

Mike, if you feel a need to respond, no more than two paragraphs. Please . . . .

[Tom Raymond]

If that patio door took me 4-5hs to put in, I'd shoot myself! And that would cost $250.

And there in lies the problem. You've been underpaid for 17 years. This is gonna be a hard lesson.

To remove an existing door, assemble and install a new one that fits, fabricate and install appropriate panning, flashing and trim, case the interior, and clean up the mess takes my guys around 4 hours. The labor rate for that is $700, and thats after I've made a very comfortable margin on the door. BTW, add at least an hour to that if the job has lead paint to deal with.

If you can do all that in a couple of hours:

First, why would you spend twice as long on an inspection for less?

Second, your work isn't worth $250. That's not a dig.

Slow down, do a thorough job, and pay yourself accordingly. The quality of your work will improve, and so will the quality of your clientele.

[Ben H]

If that patio door took me 4-5hs to put in, I'd shoot myself! And that would cost $250.

And there in lies the problem. You've been underpaid for 17 years. This is gonna be a hard lesson.

To remove an existing door, assemble and install a new one that fits, fabricate and install appropriate panning, flashing and trim, case the interior, and clean up the mess takes my guys around 4 hours. The labor rate for that is $700, and thats after I've made a very comfortable margin on the door. BTW, add at least an hour to that if the job has lead paint to deal with.

If you can do all that in a couple of hours:

First, why would you spend twice as long on an inspection for less?

Second, your work isn't worth $250. That's not a dig.

Slow down, do a thorough job, and pay yourself accordingly. The quality of your work will improve, and so will the quality of your clientele.

Gospel.

[ericwlewis]

If that patio door took me 4-5hs to put in, I'd shoot myself! And that would cost $250.

And there in lies the problem. You've been underpaid for 17 years. This is gonna be a hard lesson.

To remove an existing door, assemble and install a new one that fits, fabricate and install appropriate panning, flashing and trim, case the interior, and clean up the mess takes my guys around 4 hours. The labor rate for that is $700, and thats after I've made a very comfortable margin on the door. BTW, add at least an hour to that if the job has lead paint to deal with.

If you can do all that in a couple of hours:

First, why would you spend twice as long on an inspection for less?

Second, your work isn't worth $250. That's not a dig.

Slow down, do a thorough job, and pay yourself accordingly. The quality of your work will improve, and so will the quality of your clientele.

remeasure opening after removing interior casing- 10 minutes

remove door-15 minutes

clean up- 10 minutes

remove packaging-5 minutes

remove doors from jamb-5 minutes

carry frame around to back of house and test fit-5 minutes

place manufacturer specified caulking/flashing etc- 10 minutes

place frame in opening/plumb/level/shim/tack in place-10 minutes

reinstall doors-5 minutes

check operation of doors-1 minute

adjust if needed and secure-10 minutes

reinstall interior casing-3 minutes

caulk interior trim and where indicated by manufacturer-10 minutes

Looks like I was mistaken if I implied it takes a couple of hours. 99 minutes covers it in my estimation. This is of course if it is a pre-assembled door, delivered by the supplier, on a conventionally framed house, for the same size door.

First it seems like "your guys" (#?) take alot of smoke breaks.

Second stating my work is not worth $250 IS a dig.

PS Tom, you were not one of the fellas I was thanking earlier and what you're smelling isn't a hoax.

[kurt]

I'm seeing a pattern here........

Add up what you imagine the time is for a given task, then use that imagined number to determine cost. No mark up, no margin calculation, no logistical consideration, no nothing. Just a little arithmetic based on imagination.

Not choosing sides here, just making straight observations. I have spent my life trying to understand what it costs to do business as a contractor and a home inspector. I know a little bit about it.

Every time I've punched a number out there for everyone to question, Raymond has consistently come in right about where the number should be.

OTOH, we have Eric consistently punching out numbers that don't make any sense, and insisting that they do.

Dude, you're in exactly the right place with a bunch of very experienced folks telling you exactly what you need to hear, and you're telling them they're wrong, or something akin to wrong.

You might want to slow down and listen.

[Jim Katen]

. . . remeasure opening after removing interior casing- 10 minutes

remove door-15 minutes

clean up- 10 minutes

remove packaging-5 minutes

remove doors from jamb-5 minutes

carry frame around to back of house and test fit-5 minutes

place manufacturer specified caulking/flashing etc- 10 minutes

place frame in opening/plumb/level/shim/tack in place-10 minutes

reinstall doors-5 minutes

check operation of doors-1 minute

adjust if needed and secure-10 minutes

reinstall interior casing-3 minutes

caulk interior trim and where indicated by manufacturer-10 minutes

Looks like I was mistaken if I implied it takes a couple of hours. 99 minutes covers it in my estimation. This is of course if it is a pre-assembled door, delivered by the supplier, on a conventionally framed house, for the same size door. . . .

I think your estimates are off, but let's set that aside for the moment and say that your estimate accurately reflects the time for a worker to complete the job. From the perspective of a *worker* looking at a *salary*, it might be a good deal to collect, let's say $175 for that job. However, if you shift your perspective and look at it from the point of view of a *business*, that kind of fee just won't cut it. Businesses have billable time, unbillable time, overhead, and profit to be concerned about. The billable time has to fund the unbillable time, the overhead, and the profit. It can't just pay the salary of the worker or the business will go broke. Lots of contractors never understand this equation. They go along for years thinking that they're doing fine but not understanding that they're earning McDonalds wages because the *business* is sucking their *salary* dry without their knowledge.

In your example, you have to charge a high enough fee to pay your worker a decent wage, but you also have to charge enough to cover things like the cost of your vehicle, tools, computer, advertising, insurance, continuing education, and professional library (new code books every year, Journal of Light Construction Subscription, etc). That fee also has to cover the cost of unbillable hours including those you spend answering the phone, working up bids, doing bookkeeping, travelling from job to job, and otherwise just generally running your business. On top of that is the cost of a few weeks of vacation that you deserve each year as well as a yearly contribution to a retirement fund and a medical plan. And after all of that, the fee still has to be high enough to fund some profit each year. The business needs profit so that it can grow.

Oh, wait, I forgot taxes. The fee has to cover the business's tax liabilities each year too.

When you add all of this up, you'll find that the bitchin' fine salary you thought you were making is really slave wages -- and you didn't even know it.

Stop thinking in terms of a worker earning a salary and start thinking in terms of a healthy business model.

- Jim Katen, Oregon

[mgbinspect]

. . . remeasure opening after removing interior casing- 10 minutes

remove door-15 minutes

clean up- 10 minutes

remove packaging-5 minutes

remove doors from jamb-5 minutes

carry frame around to back of house and test fit-5 minutes

place manufacturer specified caulking/flashing etc- 10 minutes

place frame in opening/plumb/level/shim/tack in place-10 minutes

reinstall doors-5 minutes

check operation of doors-1 minute

adjust if needed and secure-10 minutes

reinstall interior casing-3 minutes

caulk interior trim and where indicated by manufacturer-10 minutes

Looks like I was mistaken if I implied it takes a couple of hours. 99 minutes covers it in my estimation. This is of course if it is a pre-assembled door, delivered by the supplier, on a conventionally framed house, for the same size door. . . .

I think your estimates are off, but let's set that aside for the moment and say that your estimate accurately reflects the time for a worker to complete the job. From the perspective of a *worker* looking at a *salary*, it might be a good deal to collect, let's say $175 for that job. However, if you shift your perspective and look at it from the point of view of a *business*, that kind of fee just won't cut it. Businesses have billable time, unbillable time, overhead, and profit to be concerned about. The billable time has to fund the unbillable time, the overhead, and the profit. It can't just pay the salary of the worker or the business will go broke. Lots of contractors never understand this equation. They go along for years thinking that they're doing fine but not understanding that they're earning McDonalds wages because the *business* is sucking their *salary* dry without their knowledge.

In your example, you have to charge a high enough fee to pay your worker a decent wage, but you also have to charge enough to cover things like the cost of your vehicle, tools, computer, advertising, insurance, continuing education, and professional library (new code books every year, Journal of Light Construction Subscription, etc). That fee also has to cover the cost of unbillable hours including those you spend answering the phone, working up bids, doing bookkeeping, travelling from job to job, and otherwise just generally running your business. On top of that is the cost of a few weeks of vacation that you deserve each year as well as a yearly contribution to a retirement fund and a medical plan. And after all of that, the fee still has to be high enough to fund some profit each year. The business needs profit so that it can grow.

Oh, wait, I forgot taxes. The fee has to cover the business's tax liabilities each year too.

When you add all of this up, you'll find that the bitchin' fine salary you thought you were making is really slave wages -- and you didn't even know it.

Stop thinking in terms of a worker earning a salary and start thinking in terms of a healthy business model.

- Jim Katen, Oregon

Here's a pretty good example, Eric:

I used to be the general manager and estimator of a three crew (and sometimes four) masonry outfit. We did high end custom home masonry to medium sized commercial work.

Masonry is EXTREMELY labor intensive - not a lot of variables other than how fast your guys can reasonably get the material in the wall. The cold hard reality of masonry is: money is coming in or going out by the minute.

Because masonry estimators know this, the bidding is particularly tight and fierce in that industry. And, because wise general contractors (there's an oxymoron there, because probably eight out of ten general contractors are living on the float, but we'll press on) know this, they are very reluctant to take the low masonry bid - especially if it's real low.

Here is what, over the years, we came to understand regarding our business: If we established our real field labor cost and DOUBLED IT, we'd be in the ball park to cover all of the associated costs of doing business including a meager but acceptable profit. To the guys in the field, who were quite production minded, that formula seemed shocking, but in the real world, it was a struggle to make it even at that.

I think the most important thing that Jim and Kurt are touching on is this: You MUST NOT think in such short-sighted terms as minutes or hours. That's deadly. You must think in terms of days, at the minimum.

The smart thing to do is: 1. Establish your raw field labor cost. 2. Arrive at a multiplier that reliably meets your associated costs of doing business including a reasonable profit. 3. Establish an annual amount needed to stay in business based upon that understanding. 4. break that down into a daily amount needed, and then never, Never, NEVER make less than that, or you're going backwards.

That's why small jobs MUST be pricey. If you do small jobs, you need to have a minimum charge of: a day and get it done in a day; half a day and commit to getting two done a day; or a third of a day, with a commitment of getting three done a day. ONE WAY OR ANOTHER, you MUST bring in that figure per day or loose money.

There is a reason that four out of five businesses fail within five years or less - they don't get all of this until they're in a hole so deep that the only thing left to do is jump ship.

I can assure you that almost every home inspector on this forum knows what they must make a day, a week, a month and a year to keep afloat. Those are manageable mile posts.

[kurt]

Stop thinking in terms of a worker earning a salary and start thinking in terms of a healthy business model.

- Jim Katen, Oregon

Yes. Exactly.

That is a perfect encapsulation of the problem of most small independent vendors trying to transition into a successful business.

[Marc]

remeasure opening after removing interior casing- 10 minutes

remove door-15 minutes

clean up- 10 minutes

remove packaging-5 minutes

remove doors from jamb-5 minutes

carry frame around to back of house and test fit-5 minutes

place manufacturer specified caulking/flashing etc- 10 minutes

place frame in opening/plumb/level/shim/tack in place-10 minutes

reinstall doors-5 minutes

check operation of doors-1 minute

adjust if needed and secure-10 minutes

reinstall interior casing-3 minutes

caulk interior trim and where indicated by manufacturer-10 minutes

Looks like I was mistaken if I implied it takes a couple of hours. 99 minutes covers it in my estimation. This is of course if it is a pre-assembled door, delivered by the supplier, on a conventionally framed house, for the same size door.

First it seems like "your guys" (#?) take alot of smoke breaks.

Second stating my work is not worth $250 IS a dig.

PS Tom, you were not one of the fellas I was thanking earlier and what you're smelling isn't a hoax.

Dude, you must not have been successfully engaged in contracting for long if this is your way of calculating costs. Putting flat rate pricing on steroids that way and using it for minute details simply doesn't work. Got tons of unseen variables involved.

Marc

[Chad Fabry]

The other night I was arguing about Obama's performance with a liberal friend of mine. This thread is like that.

[hausdok]

Hah,

Chad doesn't like this discussion or is bored with it, so he tries to make it political in the hope that it will get deleted.

Seems to be a trend going around.

I've figured out your nefarious plan, Chad. You can forget about getting this deleted. You're going to have to sit there and endure it. [:-dev3]

ONE TEAM - ONE FIGHT!!!

Mike

[Chad Fabry]

I'm not bored with it and I really wasn't trying to make it political.

Instead, I was pointing out that it's difficult to get people to think differently, especially once they've made their opinions in writing. Sometimes, we become so entrenched in our beliefs that we stop listening and learning. Ego is a pain in the ass.

[kurt]

Arguing about the "performance" of politicians............there's a non-starter.

There is the idea that "getting people to think differently" might not be an effective debate tactic. It's usually more instructive to lay out facts, and dissect them to determine fallibility. The result is coherency, and indisputable.

I think Katen's encapsulation of the the variance in mental approach to being successful in business is reason enough to leave this thread right where it is.

Everyone should ponder that concept daily.

[mgbinspect]

Ego is a pain in the ass.

What?!.. There are people here that have an ego?... [] Nah.... [:-snorkel

[ericwlewis]

last post from me on this topic!

This was not an exact timeline, just a realistic best case scenario for our company. I'm not sure what we charge for this sort of thing because it is my brothers job to determine that.

We (all 4) take 3 weeks of paid vac per year plus the occasional day off.

We work 5 days a week, 8 hours a day-ish (never more, sometimes less)

Our reasonable prices have kept us working 5 days a week for 17 years with many repeat customers and ONLY word of mouth referrals. There have been only about 20 days in those 17 years that we wanted to work but didn't have the work, even then we had the capital to pay ourselves for the downtime. We are not well off but comfortable with children in college and money in our individual accounts for taxes, emergencies and retirement.

The problem isn't with the contracting. The original question was about home inspection and I feel I got ALOT (overwhelmingly so) of good information to work with. I am going to implement many of these suggestions asap. Don't worry about our contracting buis, it's running well.

Oh, it doesn't seem to matter who the politicians are before they are elected, we're not usually happy with them after

[randynavarro]

It appears there is a signficant cost-of-living factor in Indiana that is being compensated for.

[Gibsonguy]

I haven't really posted here in a while, but I do lurk, read and research in here enough to know that the cumulative years of experience in this forum is unachievable for me in my lifetime.

I am in the same place in my own HI career, graduating from a CAHPI certified training course in 2007-2008. I too have 90% of my work from word of mouth, although it doesn't seem to be near as many mouths as a few of the others in here. I charge $400 to $550 for a detailed narrative report with pictures for an average sized detached cottage and $150/hr for consultation or specialized inspections (ie: roof inspection or locating water infiltrations etc...)

Hypothetically, if you needed a lawyer to save your butt, would you hire the lawyer who charges $300/hr or the one who charges $37/hr? A professional gets paid professional wages. You will always be known as being the "cheap inspector" and you won't be able to get out of it.

[Tim Maxwell]

I met and became friends with a local competitor. I already knew he was the "cheap inspector" when I met him. He turned out to be very nice and quite knowledgable. So I began to slowly talk about work and prices, sharing stories and all and started telling him he wasn't charging enough.

He'd complain about the clients and agents that he worked with and the quality of the houses that he was inspecting. I told him it was all a result of the low ball pricing and the agent, client, and houses that he was getting to work with. He never listened and after 7 years he finally went out of the inspection business.

Many experienced folks told me when I started that you don't have to be the highest, but you DO NOT want to be the lowest when it comes to pricing. You'll end up working with the lowest price seekers.