How do plumbers decide on what to charge?

Discussion in 'Plumbing Forum, Professional & DIY Advice' started by Maxine, Dec 18, 2006.

  1. Randyj

    Randyj Master Plumber

    Joined:
    Nov 25, 2006
    Location:
    Alabama
    Kordts... I've been in other business before. The BIG thing to making money is to keep your operating expenses as low as possible. Payroll for employees works for some, commission works for others. For me, it's a van and a tool box with no more insurance than is absolutely required. I don't have a shop to work out of. I do all of my own vehicle repairs... have oil changed at Wal-mart. I paid $1300 for a 40 ft semi trailer that I keep tools in and can use as a makeshift shop when needed (recently wired it with lights and outlets). I have a friend who is in the sign business. He used to have an old crane truck and worked out of his basement and was making $50k/year in the 1980's. He decided that he wanted to be a big time sign company, bought a new crane truck and built a big shop building, hired 3 guys... took him 15 years to get back to where he started and still is not doing much better than the $50k/year although he has gone from $45/hour to $80/hour. I might spend $1k per year on new tools/equipment... usually far less than that. I'm just starting out in a new community and yesterday did the gas line job I was asking about. I took about 4 hours traveling, gathering materials and figuring out how to do the job...then 4 hours on the job. I made $140 above cost. WHY only $140? It was for a key person who can promote my busines. I've got to get my name out there. He can give me lots of references and posts on the same forum I do which is read by lots of people in this vacation community. So, for about $15 per hour that I made I could potentially see many thousands in business next year. I could have made $600 on that job but there was something much more important to me here than just the money.... it was an investment.
     
  2. Cass

    Cass Plumber

    Joined:
    Nov 12, 2005
    Location:
    Ohio
    You can get $10,000,000.00 worth of Ins. for around $800.00 / year. So the cost is not that great.

    The problem with doing jobs for low $$$ is when you go up in price the people who called you because you were low will not call any more, they will go to the next lowest priced person then you don't have that customer any more and have to find another one to tale their place..
     
  3. Cookie

    Cookie .

    Joined:
    Oct 7, 2005
    Location:
    Home

    Cal, I am not sure what 3 inch pipe you are talking about. The black thing perhaps? It can't be supported from underneath, their is no space for it to put even one small board. The upstairs toilet just moves alittle. The basement one is the one that rocks and rolls, so, if so, it will just wet the basement floor and go down that drain. That is the place for this to happen.
     
    Last edited: Jan 7, 2007
  4. Randyj

    Randyj Master Plumber

    Joined:
    Nov 25, 2006
    Location:
    Alabama
    That tends to be true... I don't do the low price thing for everyone... normally I don't get out of bed for less than $50/hour... the going rate around here is roughly $60. If I quote a job I double on what I estimate. Recently did a kitchen sink swapout... $175 plus materials...took about 1 1/2 hours. But, that customer was not a key person for advertsing purposes. I had nothing to gain by giving them a break. Some of the locals who call themselves plumbers are $25/hour. I've seen their work, you don't want it. Realestate agents want someone $15-20 per hour to work on fixer uppers and do maintenance... they don't get me.

    In the big city it's $120...70 miles away... and the inspectors are pure hell.... Around here lots of plumbers underbid and I've seen jobs that 3 plumbers have walked off of because they realized they were not making money after they got started.
     
  5. Master Plumber Mark

    Master Plumber Mark Sensitivity trainer and plumber of mens souls

    Joined:
    Feb 6, 2005
    Occupation:
    Sensitivity trainer.. and plumber of mens souls
    Location:
    indianapolis indiana - land of the free, home of
    service work for me only please

    I have done it all and got the
    Tee shirts and lumps to prove it....


    The new home building contractors are the worse...
    they are the absolute skum of the earth......stay away from them at all costs...

    Commercial work is always underbid......

    Getting paid and getting the retainage back
    from those commercial companies can take forever.... if you like to dig and do slab work ....go for it...


    Having EMPLOYEES is the absolute worse nightmare
    anyone can experience.... they will run you into the ground
    whineing about everything..from payroll to health benefits, vacation days.
    and a X-mas bonus
    the more you try to build up your business,
    the more many of them desire to see you fail.....




    just let me go out and install water heaters,toilets, faucets,
    and all the other delights that go along with plumbing...

    that is one of the advantages of being in a mid sized city of 2 million,

    somebody is stopping up something somewhere every day and night...
     
    Last edited: Dec 24, 2006
  6. Cookie

    Cookie .

    Joined:
    Oct 7, 2005
    Location:
    Home
    I hear what you are saying, Mark, but in one respect, I have to add something. People I think are underpaid. I think that is alot of the problems, why people steal, etc, want more bennies than entitiled to, call in sick, etc. Now, some time ago, I road thru Mickey D's, and ordered a coffee. Not black, but with cream, no sugar. I would like a stirrer, cause my finger doesn't stir well in 3,000 degree temps.

    I yell in the clown's face, one large coffee, 2 creams, no sugar, one stirer.

    I get up to the window. I grab the cup, and leave. I am driving down the road, and I open it up. I got a cup of hot water.

    Nice.

    The next morning before work, since I am a creature of habit, I drive thru Mickey D's. I yell into the clown face. Same order. I drive up to the window, new girl, grab the cup and leave.

    I am driving down the road, I open the cup up, and, WOLA! TEA.

    Next, morning, I get up. I am not only a creature of habit, I am a glutton for punishment. I drive thru Mickey D's. I yell into the clowns face, same order. I drive up to the window, new girl. I pull up, look in the cup, and see something black. I smell it. Smells like coffee, now where is the cream? I drive back thru, yell in the clown face I need 2 creams and a stirrer. I drive up to the window, the arm extends out, a bag. I start down the road, and I open up the bag. Gee, I got an egg McMuffin.

    I eat the Egg McMuffin, and drink the coffee black.

    Next morning, I am now on a mission. I drive thru Mickey D's. I yell into the clowns face, same order. I drive up to the window, new girl. I said, " where is the girl from yesterday?" I was told she quit. I grab the cup, and got a bag also this time, and I pull off to the side, open it up, and I got another black coffee. Now, I am thinkingl...ok, they didn't put the creme in, it is in the bag. No such luck. A whole bag to put a stirrer in. What the sam hell was I supposed to stir?

    I parked the car. I walked in. I am standing in line and I ask the man/manager, why is their such a turn-over of people here, and no one can get a simple order right. "WELL, it is like this...we pay them peanuts, they stay a week and quit." He said, " here take this for your trouble."

    I got outside, stirred the creamers into my coffee and then, looked at the card he gave me. It was his phone number.

    Just exactly what was I getting for my trouble? I never called it. I don't think I want to know.

    The next morning, was a Saturday. I drove thru yelled into the clowns face, and waited at the window. Honest to God, their was 2 people working the front. The woman told me, no one showed up.

    I left. Never been back since.
     
    Last edited: Dec 22, 2006
  7. Master Plumber Mark

    Master Plumber Mark Sensitivity trainer and plumber of mens souls

    Joined:
    Feb 6, 2005
    Occupation:
    Sensitivity trainer.. and plumber of mens souls
    Location:
    indianapolis indiana - land of the free, home of
    is 20 per hour not enough??

    when you pay people peanuts I guess you cant expect
    much more than monkies working for you....that is true

    I gave up trying to figure it all out... especially when you
    pay someone 18- 20 per hour , give them health ,
    and usually a x mas bonus of around $1000

    a truck to drive, and dont ask them to do anything that
    I would not do myself.....

    and they refuse to work overtime....and act like that they are
    doing me a favor showing up in the morning????

    probably because they need the weekends off to
    do all the side work that they lined up during the week
    with my custoomers.......


    I dont care anymore.....to hell with them

    they can all eat URINAL CAKES...
     
  8. kordts

    kordts In the Trades

    Joined:
    Oct 15, 2005
    Occupation:
    industrial service plumbing foreman
    Location:
    exurban Chicago
    A urinal cake is also called a piss mint in some areas. You don't wanna know how long the flavor lasts! Randyj, I have had way too many people want a low rate because of all the work they are going to bring me. I tell them, "I can go broke looking out the window, so why do I want to go broke bustin' my ass?" I have never, ever made any extra money by giving some clown a break. By taking in less money on a job, I have to make it up somewhere, which means screwing somebody else. No thanks, I charge everybody the same, except vets and their widows, who get 10% off; and that comes out of my pocket. I don't jack up my rates so I can give phony discounts.
     
    Last edited: Dec 23, 2006
  9. kordts

    kordts In the Trades

    Joined:
    Oct 15, 2005
    Occupation:
    industrial service plumbing foreman
    Location:
    exurban Chicago
    If your husband was a vet, you still get the discount. My stepmom, who is the village clerk, tells me that many of the widows who I have done work for, come in to the village hall to pay their bills and tell her how nice of a person I am and how good of a plumber I am. My dad took care of the water and sewer in town for 30 years. He did a lot of stuff for free after work for people who didn't have the money to pay. It makes me feel good that I am earning my own good reputation. Widows and orphans have a special place in my heart, because they have a special place in God's heart. There are some wealthy widows that I charge full boat, and others who are on a tight budget, who get a bargain. If I bill 30 hours a week, I break even. Over that, and I make money. Some weeks, I can be more generous than others. I have too much money in accounts receivable for my liking, I haven't been able to tithe to my church as much as I like.
     
    Last edited: Dec 23, 2006
  10. Randyj

    Randyj Master Plumber

    Joined:
    Nov 25, 2006
    Location:
    Alabama
    I'm just trying to survive on what I make and pray that I can keep on working for at least 10 more years...then I'll be 65 and can get medicare...I'm definitely not trying to low ball the big guys. I just hope that I can establish a good enough clientel and reputation that I will never even think of the possibility of having to take a job so I can make enough money to pay bills. As for vets and widows... I don't have a pricing structure so I'm pretty much calling it as I see it. The only way I would have employees and pay one $20 per hour is if that person produced enough to cover his own overhead plus at least an extra $20 per hour to cover bonuses and all the days that he leaves me hanging one way or the other. If it is like I've seen in the past only 1 out of 10 applicants are worth hiring and 1 out of 10 of those are worth keeping for more than a few months and 1 out of 10 of those are worth considering as a permanent employee. Until they've been there they have no idea of what it takes to operate a business. If you charge $120/hour you can hardly pay an employee $40/hour for the time he/she actually works which is about 1/2 the time... so $20/hour...or a busy person on a 30%-40% commission is what it is going to take to keep a business afloat...because if you can't pay $20/hour you're not going to get much out of a good employee and if he's not worth $20/hour then you don't need him/her. Local car dealerships charge $72 per hour in their garage. It cost me only $135 to have my taxes done (I already have them prepared...they just plug my numbers in...very easy...takes less than an hour)... To talk to my niece, who is an attorney, costs $175/hour. People around me are paying $100k-$200k for lots and the price of this property is skyrocketing. Lots of these houses are going for millions.... and I'm sure that in the not too distant future I'll feel just fine charging $120/hour and not worrying about being called back. As for accounts receivable....I receive at the time of services...only exception is two regular customers who I KNOW will be paying in less than 60 days...and one of them is the State of Alabama. Hey... I really thank all of you guys for your input on the pricing ideas, prices, etc. Although I've been doing plumbing for many years I'm still new in the business and it has been really good to me. I love it...or am a glutton for punishment.
     
    Last edited: Dec 22, 2006
  11. Cookie

    Cookie .

    Joined:
    Oct 7, 2005
    Location:
    Home
    That is all anyone is trying to do, is to survive. In all professions their are laws regarding reasonable charges. I don't know if everyone realizes that. I learned that recently when I sued this plumber. Because his charges were not reasonable or fair. So, it is there. Not trying to be smart. The lawyer I just paid for was half that cost. He was 90 an hour. And, I won. I do my own taxes. If you only have to fill in the numbers, Randy, I would do it myself and save that money. Some of the tax laws are being changed, so you may have to read up for next year.

    One of the tax laws that is being changed concerns donations. I read where you will need to show proof of those donations, instead of being able to take a standard deduction. So, anything you donate, cars, clothing, puters you will need those slips of papers. The article I read also, went on saying, you will need to show, why it is worth that much. Their were other changes as well.
     
    Last edited: Dec 23, 2006
  12. Randyj

    Randyj Master Plumber

    Joined:
    Nov 25, 2006
    Location:
    Alabama
    yep... I know about the donation changes too. The biggest reason I go to a tax places is... I like the comfort of having someone else's name on that bottom line! I've been self employed for many years now and have NEVER been audited... wanna keep it that way....
     
  13. Cookie

    Cookie .

    Joined:
    Oct 7, 2005
    Location:
    Home
    I look at it this way, if you are audited, you get your mistakes corrected for nothing, lol. Like being in school.
     
  14. Randyj

    Randyj Master Plumber

    Joined:
    Nov 25, 2006
    Location:
    Alabama
    If I should ever get audited I'd probably be doing serious time. I do keep impeccable books but have a very difficult time doing it. Usually end up putting a whole years worth of tickets and receipts on the computer in one week then sorting them... all on a spread sheet...no canned programs.
     
  15. molo

    molo Member

    Joined:
    Sep 23, 2006
    Location:
    Cold New York
    Plumber's Moral Quandries

    Hello all,

    Ignorance is bliss. A plumbers knowledge often forces them to face ethical decisions. This usually happens when the customer has limited resources. I saw this problem when I worked for a family-owned plumbing business. My uncle and I would get called to some poor-persons home for an inexpensive repair. We would get there and discover all sorts of safety problems with the existing gas lines, furnaces, hot water tanks, etc. Then you have to tell the customer, only to scare them out of their mind about how they're going to go broke to get this stuff fixed. The customer often would say that they can't afford to fix it right now. HEREIN LIES THE PROBLEM....... What do you do? 1. Fix it anyway for no pay? or 2. Leave and hope nothing happens to the family living there?

    Interested in the pros opinions on this one.
    Molo
     
  16. Master Plumber Mark

    Master Plumber Mark Sensitivity trainer and plumber of mens souls

    Joined:
    Feb 6, 2005
    Occupation:
    Sensitivity trainer.. and plumber of mens souls
    Location:
    indianapolis indiana - land of the free, home of
    tell them and walk away

    you did n ot make the plumbing mess that they live in.....

    and possibly you dont know anything abou them either...

    you can only menton the problems to them

    and note it all on your work order-bill......


    It also depends on what is wrong and how charitable you are feeling that particualr day.....



    remember
    no good deep ever goes unpunished...
     
  17. Dunbar Plumbing

    Dunbar Plumbing Master Plumber

    Joined:
    Apr 18, 2005
    Occupation:
    Service Plumber, Outdoor Temperature Relief Owner
    Location:
    Northern Kentucky/Greater Cincinnati Area

    Can you imagine the guilt involved if something does happen and you find out by the local news?

    Here's how those situations go: If you can afford a house, you can afford the repairs. Usually a quick look around in most of those cases you'll see the vices that got them there. Not all but most. Talking from 20 years dealing with John Q. Public to make that statement.

    I did one of these types of job that involved 3 hours and $85 material only to find them in front of me at Arby's loading up. :confused:

    Anytime I see a water heater or furnace that is venting improperly in a home.......I wait a few days and contact the local utilities that there is a situation. It forces them to deal with the problem/correct it so that there isn't operating in an unsafe manner anymore. People assume that because no one is dead yet that it is okay. It's not.

    There is a church I did work for in my area that keeps dodging the bullet about a water heater ran in 14/2 jumped off the 110 leg of a electric stove circuit which is a 50 amp breaker. <<< Tell me what happens first; the wire frying or the breaker tripping? You already know.

    Since it is a church they feel "protected" by God and they will be okay in the event that heater thermostat decides to trip.

    Since I feel I was a representative of good faith involving the matter and its seriousness, I've refused to do any more work there until the electrical problem is resolved with that water heater. Plenty of sunday offerings there to protect a building of innocent people expecting that water heater to be installed correctly, not because the church is running on broke and a member put the heater in like a vaccum sweeper.


    My point for rambling is if that house is not fit for human life, contact the appropriate people and let the powers that be sort out their fate. You would expect it from others if you indirectly didn't understand how dangerous your present situation really is.
     
  18. Randyj

    Randyj Master Plumber

    Joined:
    Nov 25, 2006
    Location:
    Alabama
    Yeah..but I do have to wince when I see they have DSL, a big screen TV, Dish Network and a shined up escalade...and on section 8... but don't want to pay my very reasonable rate.....while there are 5 kids running around and "she" has never been married. It has happened to me...
     
  19. kordts

    kordts In the Trades

    Joined:
    Oct 15, 2005
    Occupation:
    industrial service plumbing foreman
    Location:
    exurban Chicago
    Cookie,
    while your attitude that plumbers should fix stuff for free is admirable, what about me, my family, employees and church, not to mention the other organizations I give to on a monthly basis? I have commitments that I must honor. I need to do work that pays the bills so I can keep the wheels turning. I guarentee you that there enough people out there who "can't afford" my services that I could work for free from now til the Lord comes. It's a lifestyle decision, plus poor budgeting and neglected maintenance that leaves people unable to afford plumbing. The people that truly can't, I discount, the slugs gotta pay.
     
  20. Randyj

    Randyj Master Plumber

    Joined:
    Nov 25, 2006
    Location:
    Alabama
    My one customer today works in a bank, drives a BMW, and I was working on his modest vacation home... was in shock when I mentioned that the company my son works for charges $120 per hour. His son vouched for my comment. Yet, he still was a little uncomfortable with the $150 I charged for repairing a frozen/busted 3' CPVC which I had to build 1 female adapter & 3 ells...then removed two toilets to auger out all the way to the septic tank. He had NO VENTS....still he did not hesitate to pay for my 3 hours after I mentioned the price other guys charge and I'm sure I could have pushed for double that amount...but would have a hard time finding more work in the neighborhood.
     
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