Billing Rates 8

[XR250]

I'm curious what others charge per hour.
I'm in central NC and charge $225 for design and drafting.
Just had a plumber come by and charge me $155 per hour.
I was thinking I need to raise my rates!

 

[TheDW]

I price it by project value rather than time.

Is that working well?

The older guy in our office says decades back, they would price everything on 0.5% (.005) of estimated construction cost with a ballpark $/sf figure.

I know material costs have come back down but that rule of thumb would still have us almost doubling our fees on most things. If its a project I am not confident on how much time it will take, I'll start there, laugh at how nice it would be to charge that much, and take a random fraction of that fee.

 

[XR250]

I am quoting $1.50 to $3.00 sq/ft right now for houses.

 

[phamENG]

It works really well if you have the right clients. I have a few clients that value me, and are willing to pay it. I've certainly lost some jobs - and clients - but I'm okay with that. I have enough work, so there's no point in working people who want to beat me down on my fees (especially since I know they are charging the owners a % of estimated construction cost).

 

[phamENG]

XR - I'm right there, too. The high end for my usual fare.

 

[XR250]

I imagine your jobs are more complicated from a lateral stability standpoint. Although it seems that half the houses I get nowadays require a moment frame.

 

[TheDW]

Sounds like I need to raise my lump sum fees a bit then !

 

[Eng16080]

I very recently started my own company. Based on hourly rate, apparently I'm much closer to being a plumber than an engineer! (To be fair, I'm moderately good at plumbing, with the exception of soldering.) Most of my jobs are not hourly, so the hourly rate isn't that important, but reading this is certainly encouraging. I didn't realize so many of you are charging that much.

Like XR250, I'm usually somewhere in the $1.50 to $3.00 per SF range for residential, often more if it's not new construction.

 

[phamENG]

TheDW - your $250/rate...who bills at that rate? Is that a principal? Senior Engineer/PM? Project Engineer?

 

[jerseyshore]

I've never priced a job based on estimated construction costs, but that's a thought to consider going forward. I know houses are a minimum $350 sqft these days, but not sure about commercial/ retail/ multi-family.

It's definitely not one size fits all when it comes to pricing just based on the nature of our business. So many variables and unless you have a narrow focus of work, pricing a 10k sq ft new house vs a two story office building etc. are going to be different approaches. Market rate in your area sets a lot of it too.

I've certainly lost some jobs - and clients - but I'm okay with that.

This was one of the hardest things to get over when I started my own business. I wanted to get every job and I could afford to be dirt cheap because I was just working out of my basement. But I didn't want to devalue my experience so I wanted to charge what I felt was appropriate. I lost a couple of jobs really early on and after being pissed for a while I settled on the "I'm okay with that" feeling. Really helped me price stuff out and raise rates and fees going forward.

There's always someone willing to work for less. Just don't want it to be me.

 

[TheDW]

TheDW - your $250/rate...who bills at that rate? Is that a principal? Senior Engineer/PM? Project Engineer?

All of the above, we're very small with 2 principals functioning as PM's and a handful of EITs, everybody is $250/hr. We've talked about breaking it up but haven't gotten around to it.

 

[XR250]

OK, just quoted my first job at $235. Thanks DW. I'll send you a cut.

 

[ResidentialStructGuy]

Our firm in California Bay Area bills $250 for principals. Most of our work is in residential construction.

 

[NorthCivil]

I work down under
sole proprietor doing specialist work - (structural - buildings - niche sub-specialty)
I charge 280NZD or 170USD /hr
the big players charge up to around 350NZD or 210 USD.

whats interesting is rates havent really moved in the last 7 years or so, generally.

 

[geotechguy1]

Hopeless is charging up to $330 NZD /hr for people with 6 years experience lol

 

[NorthCivil]

Who is hopeless?
billing rates really depends on specialty/industry
building construction being quite a lower paying industry, generally, though maybe one of the higher paying industries in NZ (due to our lack of any other big resource economy)

 

[WARose]

$185/hour (in the upstate of South Carolina).....mainly for industrial design.

 

[BulbTheBuilder]

Our lawyer charges minimum 15 minutes of his $500/hr every time we send him an email. Answering contractor calls and emails for field issues takes up so much time with these types of projects, controlling that time and trying to somehow get compensated for it is a constant battle.

It is never too late for me to go to law school.

I am a noob when it comes to this topic but always eager to learn. What are primary factors that drive up billing rates? Certainty isn't about your skills or knowledge as some smart guys still be losing jobs to wack "engineers" (engineers in quotes). It seems other trades have figured out billing rates. What parameters do you use to bill? Obviously, not all sq-ft will be billed the same, right? I don't expect an engineer to charge say same $100/sq-ft for a job in Mississippi compared to a 180 mi/hr wind zone in Florida.

Does the "market" (market here mostly referring to client) determine the prices? Is insurance a factor? Do you consider the job being high-profile or its complexity? Or the license of application being used (revit fees being higher than Autocad) or even the tools used?

 

[Enable]

When we're on T&M our rates are as follows (Ontario, Canada):

Senior Engineer (me): $190 CND / Hour
Welding Engineer (brother): $395 CND / Hour

On the engineering side I mostly do designs for our own purposes (as a contractor) or as a temporary works engineer for outside contractors. My brother does consulting as weld engineer primarily for those attempting to weld reinforcing steel to other things. Mostly our rates are based on what a few small but reputable firms around these parts charge so take what you will.

 

[NorthCivil]

@Enable is on the money.

What determines rates?

of course market forces are a big factor. location, supply/demand.

but within a particular market, i find the two biggest drivers of pricing are:

1. Specialization.
2. Level of service.

If you do the exact same thing as 50 other firms in the same town, all it takes is one slow-down to really set a firm bottom on pricing. once a bottom is set, it tends not to rise very much. Charging much more than the commodity rate is tough. You can charge a bit more for good and fast service, but the "good & fast" market will also have competitive price pressure.

If you are a true specialist, you will not have much competition. These guys are often busy, and thus not often very fast. So consumers of the specialist service, who want it good, and fast, often don't mind spending more to get it.

I think a good parallel to look at is doctors. General practitioners often dont make that much money. But brain surgeons, anesthesiologists?
Specialize, specialize, specialize.

 

[Electic]

1) Many decades ago, I worked for an industrial consultant doing large (i.e.: $60M T.I.C.) jobs for $60 per hour, billing 100% of our time.

2) We rented local office space (near a customer) from a commercial consultant that would boast about their $100 per hour rate, but billed only 60% of their time.

RESULT: By the end of each year, the low rate industrial guys had worked about 45 hours per week and made double of the commercial guys who had worked 60 hours per week. Also, since going on my own, I learned that bidding fixed fees cost me a lot; they ALWAYS added scope and then argued like crazy; life is too short.

INTERPRETATION: That was not the result I was hoping to discover, but it is difficult to argue against reality.

I now bill low: $130 (probably at 75% of local market rates). I try to bill 100% of my time (but often eat many hours). My monthly income is doing well. It is not a get rich quick scheme but can be a satisfying career, well rewarded.