The debate over which way you price a job is largely dependent upon how well you can estimate your hours and what rate you use.
Setting a price for your service is one of the most difficult tasks when setting up a business.
The second most difficult task is estimating how long it will take you to do it.
I was working with a painter once and a customer asked him how he estimated his painting jobs and he replied, “By the brick.” Even though this method may give you an accurate price, I think it might take you just as long to quote the job as it does to paint the house.
If you do jobs by quote, proposal or bid. Make sure you keep a check on whether your price is correct, especially when you are bidding jobs. You have the opportunity to correct wherever went wrong on the next job. This is the beauty of a contact price instead of an hourly rate.
You may like charging by the hour, but most clients have a budget and probably have experienced runaway cost on projects that are paid by the hour. Clients prefer contract price and/or not to exceed limit on projects.
It is very important to do a post-mortem on contract jobs. That requires you to record dates, hours and rates prior to the job. It requires you to track dates and hours during the job. If you do it properly, you can also see if the job is on target. If it isn’t, you might be able to change some tasks to save the current job and make changes to the next quote you do.
The best reason to track your hours is to get the facts and eliminate guessing and gut feeling. I find when clients actually track what is happening with the job, they are surprised how much time they are spending on the job.
I have a beautiful easy worksheet to track your quote and actual hours, just give me a call and I will send it to you.
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