just curious we do 150 but in this economy im wondering if we should lower so i ask you fellas.

Seems like this has come up before, but I did a quck search and didn’t find a thread.  Of coarse it depends on your location.  You mention that your rate is $150/hour - where are you based?  It also depends on the task.

We’re based in Los Angeles and Ventura Counties.  This area can probably handle some of the highest rates (New York I believe is at the top of the scale).

Our rates range from $75 - $200 per hour. Depending on the task.  The other variation I have seen is how companies handle tracking billable hours.  Just because we could charge $150/hour doesn’t mean we’ll get 8 hours @ $150 per day.  So calculating where that number needs to be is an important excercise and will vary depending on your specific practices.

If getting $150/hour is becoming more difficult could you change things so that the perceived value is better but your bottom line is not affected?  Perhaps implement a trip charge.  Or a fuel charge.  Re-evaluate handling design fees.  Increase technicians efficiency so they increase their % billable time.  That way a reduction in hourly will be balanced with an increase in # of billable hours.

Many of the business management classes through Cedia focus on the importance of metrics.  If you aren’t tracking it - you can’t manage it.

Now let me remind myself to take some of that sound advise. 

I agree with Morgan, but as an average we’re at $125.00 per hour per man.

Our basic rates are 175.00 per man hour for onsite installation. programming/design is 225.00 per man hour. administrative is 135.00 per man hour
our standard rate is 175.00-225.00 per man hour billed to the client. We currently only take on new clients that are referred to use by an existing client or other contractor. We are not a retail environment and run credit checks on 100% of our new clients to see if they fit our business model. We currently have a full work schedule that takes us into November and turn away new work on a weekly basis.

Our business model in review 2009
46.1% profits per project. we have increased our bottom line with reocurring revenue almost on every project. We project the costs to manage and maintain a system at 5 years to be roughly 8-12% of the total job costs. We account for 100% of every moment a man hour/minute is billed against the project. We have consistantly adjusted our rates and our processes to raise our bottom line.

Waw, I definitely have to move to the states. Prices in Europe are way below that!!

Now, I am a new business owner with a new AV company.  I am working out of my house, basically.  I am currently charging $65 an hour.  It’s not enough.  I can sell the higher price to my more affluent customers, but since I am just starting out, I have to take anything I can get to support myself and family.  Certain customers are not as well off, do I still go for the $100-150 an hour?

We are a small 2 man operation in the midwest and we charge $75 per man hour.
I previously worked at a custom retailer that charged the same.

Here is another thing to think about.  Like other service businesses we have to struggle with what the market will bear for the services we offer.  A plumber will probably not be able to charge $200/hour, for instance (perhaps no trade for that matter).  So you’ll find that the large operations make up for it by marking up product or not even selling based on hourly - but by the job and then getting it done quickly so the hourly works out to more.  But a Lawyer can charge hundreds an hour.  Or a doctor.

As with any commodity you then have to either a) ramp up your selling skills so you can make more than the average A/V guy an hour to continue to increase your income or b) scale your business in such a way that you have multiple crews and therefor make more by increasing the number of man hours you can bill in a day.

Keep enjoying the challenge!

We are in So Cal (Newport Beach/Irvine area), but 98% of our clients are out of state, 1% out of the country and 1% in state. With that said we charge a minimum of $175 per hour up to $375.00 + travel expenses depending on where the client is located and what the client is requesting.

But instead of focusing on the hourly rate, one should focus on services that can produce reoccurring revenue to lock a customer in and ensuring you have a steady stream of monthly revenue. We have been in business for 15+ years and starting from day 1 we offered services that had reoccurring monthly revenue and every year since then it has grown about 20% - 50% per year. For 2011 reoccurring revenue was in the mid 7 figure rage.

The hourly rate does not really mean anything if you can not get it on a consistent basis. Focus on adding services that generate reoccurring revenue so you do not have to depend solely on the hourly rate.

For the record we are a very small company only 5 full time employees and that includes my wife and I.

Fascinating structure you’ve got going.  98% of your business is nowhere near you.  That’s probably polar opposite to most integrators, although I’ve never seen statistics on this that I recall.  Looking forward to your contributions here on CEPro.

First off I should make it clear, a majority of our clients are commercial. Also, almost all of our clients are in the U.S. but out side of CA. In CA we have about 3 or 4 clients with only 1 being local (in the same area). Outside the US we have about 5 or 6 mostly in Europe. The rest are in various states in the U.S.. Currently, we are working with our first Canadian client, a hotel in Vancouver, Canada.

As far as the “Fascinating Structure” I don’t think it’s fascinating. We, my wife and I, have always worked with/had clients that were out of state/country so for us it’s the norm, we don’t know any other way. We feel, with the way the business world is now, if you are not looking beyond your geographic area then you are passing up a lot of jobs and money. If we only worked locally in Southern California, our reoccurring revenue would not be what it is. There is NO WAY we could generate that type of revenue if we just worked locally,there is too much competition here.

Do you target market to a particular type of business?  Your web site makes it look fairly broad in terms of the audience, which makes sense for a web site.  Although - to get national and even international big jobs seems like you must be advertising in a very successful way.  Congratulations to your success and what sounds like some challenging and interesting projects.

TheTechSource - 02 February 2011 09:35 PM

Do you target market to a particular type of business?

We focus on the hospitality industry, and we ONLY work with interior designers, architects and general contractors exclusively. Although we focus on the hospitality industry, we will do other commercial and residential jobs as they come up and if they fit our criteria. We are currently work on a job in Canada (hospitality) which will be completed this month. and we have been working on a job for one of the largest Aerospace companies in the world off and on since 2010. We started and finished the first leg of that job in December 2010 and will resume the second leg in April 2011.

We do not do any advertising or marketing or even interviews, we are a very low key company (by my choice) but we do a lot of networking with interior designers, architects and general contractors and thats how we get all of our jobs. We do not take any clients on directly.

Thank you for explaining your strategy.  It is very informative and always beneficial to hear specifics behind a successful business.  Do you hire your labor locally?  Do your employees mostly design?  Or do you also install with in-house labor?

And to others following along, what strategies have you tried that worked, or failed?  Do you market to the end user?  Or like DSW do you only network to other businesses (B2B)?

Lots of different variables.
first and foremost would be “Are you a legitimate company or are you a “TRUNK SLAMMER”.
Insurance ,workers comp,gas, tolls, administrative… its never ending.

Always stress to your clients how having an insured installer is the best thing in the world..