We're basically contractors. There are two ways to price: Fixed bid or time and materials (or a combination of both which can be appropriate). Where you are able to accurately predict the time, flat bid is better because customers are more comfortable with knowing what the cost will be upfront and you'll lose fewer new customers who are uncomfortable with the uncertainty. Some jobs, such as regulation and voicing, can't be done on a fixed bid because there is too much variability in the requirements. In that case time and materials is more appropriate and the customer should be given a range so that they know what they are likely to have to pay. If you leave it totally open ended they won't be comfortable and may very well not hire you. Larger jobs such as rebuilding an action or a belly are more complicated. If you've done a lot of them and have a standard procedure you can do it on a fixed bid. Even if you haven't done a lot of them a fixed bid is probably appropriate because it would be wrong to charge them a premium based on your inexperience and therefore your inefficiency. On both of those I provide a fixed bid with caveats. The caveat is I might discover something when I take everything apart that might require some additional cost. Since most of the jobs I do are all inclusive (I don't do partial jobs or try and cut corners) they are fairly predictable. But there are occasionally things that come up. I guarantee a price within 5% of the fixed bid mostly to cover variations in material costs. Above that requires an approval from the customer. In the terms of my agreements this is all spelled out including the fact that there are some unknown factors. Most of what we do, however, bushing jobs, backcheck replacement, replacing a set of bass strings, can all be done (or should be able to be) on a predictable basis and so the cost can be anticipated. For customers fixed cost is best but it requires some experience on the part of the tech so as not to get burned. Usually those same experienced techs are also faster and more efficient. Time and materials is usually better for the tech because they aren't constrained by a bid which might have been done in error but are more uncomfortable for the customer since they have no idea what they will end up paying. It's up to us to choose the most appropriate form of estimating that suits the situation balancing covering our own interests (time and money) against the customer's interests (time, quality and cost). Balancing those three items is tricky (time, quality and cost). Customers always want all three, that is shortest time, highest quality and lowest cost. They can't have all three. Shortest time and highest quality will result in higher cost. Highest quality and lowest cost will require the longest time (as the work will be done when there is nothing else competing for the time). Shortest time and lowest cost will result in lower quality. Don't get caught promising all three. David Love www.davidlovepianos.com In a message dated 7/21/10 9:49:40 PM, bill at a440piano.net writes: ??Formula?? Hours x Hourly wage = price Thing is, hours is variable from one piano to another so there are additions/subtractions, and my skill is reflected in my hourly wage. Of course it's not arbitrary, no one has suggested that. Not me, not Jack, not anyone. We each determine a cost of a job in our own way, reflecting our own experiences and skill levels, either as a straight hourly rate or some configuration that involves hours, difficulties, hazards, etc., etc. Just because I don't understand how Jack or anyone else arrives at their prices, doesn't invalidate them. -------------- next part -------------- An HTML attachment was scrubbed... URL: <http://ptg.org/pipermail/pianotech.php/attachments/20100722/d912196a/attachment-0001.htm>
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