Is my Rate too high or is the owner high?

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engnewbie
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Is my Rate too high or is the owner high?

Post by engnewbie »

I have been working as a contract engineer for some stations in my state for about 5 years with a $120 retainer and a $120 site visit fee. I was asked to take over chief duties at a station in another state and 2.5 hours one way. The station is in an isolated part of the state and no engineers live close by that are looking for work. I asked for a $250 retainer monthly and $100/hr., including travel time, and the owner had a coronary. Am I out of line with my rates for the distant station?

I offer engineering AND IT and even restored the station phone service, but he felt I should go to confession for even suggesting that rate, and suggested that travel should be free.

Setting rates was never my strong point, but why should I give away road time or charge less than $100 onsite just because it I charge to get there?

Your thoughts would be greatly appreciated.

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Deep Thought
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Re: Is my Rate too high or is the owner high?

Post by Deep Thought »

My situation is a little different than yours but here's a couple ideas:

You can either charge them a mileage fee which includes the expenses and time (at a reduced rate) or you can just charge by the day. I tend to do a little of both. Let's say, for example's sake, that you need 30¢ per mile to cover driving expenses and $50/hr for your time. At a 60 MPH average the driving time comes in at 83¢ per mile so your total would be $1.13/mile. Round that up to $1.20. Let's also say the station is 150 miles away, so that's already $360 before you even do any work. That the station is 150 miles distant is just something the owner has to account for. Your time and expenses to get there and back need to be covered.

Due to the nature of what I do, I tend to be on site for several days at a time so I charge by the day instead of by the hour, and don't worry about the transportation time aspect since it is built into my "day rate". I do have a minimum charge of 1/2 day, which at my "rack rate" is $875 (half of $1,750 per day). When I'm on-site I usually work 10 hour days, which breaks down to $175/hr. Regular clients get a discount...some rather substantial...depending on how much work I've done for them over the years. I also quote projects as a whole, which can run into five figures.

$100 per hour is very reasonable especially if you are expected to do on-call repairs. Those should be billed at a premium rate. Your $250/mo retainer is also reasonable. I do that for some clients who tend to pepper me with "what if" questions and have it billed directly through a recurring credit card payment.

Can you set up a schedule (which you control) for x days per month? Have them keep a list of things they need done and you work through those on that schedule. That way you can give them a fixed monthly cost which they may be able to wrap their minds around. Having to drive five hours round trip doesn't leave much time to work, though.
Mark Mueller • Mueller Broadcast Design • La Grange, IL • http://www.muellerbroadcastdesign.com

engnewbie
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Re: Is my Rate too high or is the owner high?

Post by engnewbie »

Thank you for the valuable response. Based on your comments, I don't think I am overcharging. If I have to cut my rate, I usually just walk away, but since this was a bit more (with travel) than I usually charge I thought maybe I've just gotten greedy.

I greatly appreciate your time.

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Dale H. Cook
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Re: Is my Rate too high or is the owner high?

Post by Dale H. Cook »

I charge $50 per hour for stations paying a monthly retainer and $100 per hour for those not under retainer. I charge mileage for stations outside the local area. Stations not paying a retainer get me when I'm available - they don't get the emergency service that retainer stations do. I am also very fussy about who I take on. Some stations have a poor payment record and I don't work for them. Some have such a bad history of violations and files that I don't work for them.
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kkiddkkidd
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Re: Is my Rate too high or is the owner high?

Post by kkiddkkidd »

Note to self: I need to raise my rates...

I charge $75/hr in our local small markets and up to $120/hr in larger for day-to-day engineering. I charge $850-1250/day (plus expenses & mobilization) for minor ground system work depending on the market size but prefer to give a total quote. I typically charge perdiem at GSA+30% (GSA is Fed discounted about 20% but is a good reference). I typically work 8hr day including documentation and training. Sometimes documentation and labeling takes as much time as the electronic work and takes place in hotel rooms, under a shade tree or my office.

I charge a 4hr minimum including travel but that is very, very rarely a consideration due to many of my clients being 1-5hrs away.

I charge .50/mile round trip mileage to everyone ($1 if pulling a trailer) and either half or full labor rate for drive time (depending on who and where). I have mileage charges to most of my clients cities tabulated in Quickbooks so that I can just enter x number of mobilization's to xxxxx on an invoice.

For decades, I provided free telephone support for my regular customers but now have started charging for significant telephone/remote computer support at slightly reduced rates. There are so many issues with modern equipment that I can fix or reset remotely that I was working on clients stuff for free for sometimes several hours a day.

Over the past several years I have become much more selective in my regular engineering clients and have offended a few potential clients by telling them that I wasn't interested in providing their daily engineering unless they agreed to major upgrades. I will do emergency work for anybody anywhere but am not interested in being associated with never improving POS stations. Piles of junk with no plans to upgrade are off my radar. Salvaging wire, XLR's and 1/4in stereo plugs to rebuild a new studio are off my radar...

I have exactly zero retainer or monthly contract clients and probably will never have another. Radio clients around here think that if they pay you anything per month that you are married to them and must respond in seconds at any time of the day or night. At one time I had well over $2k/month contracts and retainers and found that several months per year they were costing me money to make sure that they were covered if I was out of town on a large project. Ironically, some of the most vocally unhappy retainer clients that I had were perfectly OK with spending more on average at T&M rates.

Good Luck,
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Kevin C. Kidd CSRE/AMD
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engnewbie
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Re: Is my Rate too high or is the owner high?

Post by engnewbie »

Dale and Kevin,

Thanks for taking time to respond. It is very helpful to hear what other engineers charge and the pay structures they use. I am now thinking maybe the retainer isn't worth it for the expectations it brings.

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Deep Thought
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Re: Is my Rate too high or is the owner high?

Post by Deep Thought »

Retainers are kind of a pain but used with discretion they can weed out some of the underbrush. I do not do on-call so that hasn't been an issue but I can see where it could make some think they're entitled to 24/7 support. I solved that problem by raising my rates enough to get rid of the bottom feeders.
Mark Mueller • Mueller Broadcast Design • La Grange, IL • http://www.muellerbroadcastdesign.com

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kkiddkkidd
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Re: Is my Rate too high or is the owner high?

Post by kkiddkkidd »

Deep Thought wrote:
Thu Mar 05, 2020 12:51 am
I solved that problem by raising my rates enough to get rid of the bottom feeders.
Several years ago I raise my rates another $10/hr to try to weed out the cheapskates and none of them left. Some had complained about paying $55/hr but continued to pay $65/hrs. Since then, I have gone up another $10 and a lot of them are still with me...
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Kevin C. Kidd CSRE/AMD
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Re: Is my Rate too high or is the owner high?

Post by NECRAT »

I won't discuss what I actually charge per hour here, where I work, but it is very very close to the numbers both Mark and Dale mentioned, within $20.
Because my work is strictly part time side work and I have a full time job, I really can't take on any retainers.

I dropped one semi-national religious outlet after they nit picked, nickel and dimed me on payment for an installation I did for them, and another one LPFM who continually flaunted the rules.

Seems to me the guy who had a coronary is one you want to avoid, as he sounds like the type who will eventually nickel and dime you over small work and not pay for the PM stuff you need to keep up with.
http://www.necrat.us

"Arguing with an engineer is like mud wrestling with a pig. After a couple of hours, you realize the pig likes it"

rfn
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Re: Is my Rate too high or is the owner high?

Post by rfn »

Fascinating!

At age 78 I still do pro-bono for one station I've worked with since 1972. Even for them I don't mess with automation systems. Just tell 'em that even for my wife I DON'T DO WINDOWS! So far nobody's come up an OSX automation or control system so I'm safe. It's just a matter of time.....

Due to my extremely remote location I discourage the few requests I still get occasionally with a rate of $1,000 per 8 hours with all lodging and airfares prepaid directly, not to me. Of late they're not just hanging up and start trying to negotiate so maybe it's time to raise my quoted rate.......

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Bill DeFelice
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Re: Is my Rate too high or is the owner high?

Post by Bill DeFelice »

While I'll do pro-bono or "giveaway" work on occasion I'll gauge my rate on how easy / difficult it is to work with a station and its staff. Some places have taken care of my with kit gloves, even after paying me they'd give me goodies from the prize locker or do some other appreciative gesture. Some stations you couldn't get me to set foot in the door for a million bucks!
rfn wrote:
Thu Mar 05, 2020 9:42 pm
So far nobody's come up an OSX automation or control system so I'm safe. It's just a matter of time.....
Guess I shouldn't tell you about Radiologik for Mac then, eh?
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Deep Thought
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Re: Is my Rate too high or is the owner high?

Post by Deep Thought »

Bill DeFelice wrote:
Fri Mar 06, 2020 5:47 am
Guess I shouldn't tell you about Radiologik for Mac then, eh?
Or the ones which run on Linux. :)
Mark Mueller • Mueller Broadcast Design • La Grange, IL • http://www.muellerbroadcastdesign.com

COMMENG
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Re: Is my Rate too high or is the owner high?

Post by COMMENG »

engnewbie wrote:
Tue Mar 03, 2020 7:05 pm
I have been working as a contract engineer for some stations in my state for about 5 years with a $120 retainer and a $120 site visit fee. I was asked to take over chief duties at a station in another state and 2.5 hours one way. The station is in an isolated part of the state and no engineers live close by that are looking for work. I asked for a $250 retainer monthly and $100/hr., including travel time, and the owner had a coronary. Am I out of line with my rates for the distant station?

I offer engineering AND IT and even restored the station phone service, but he felt I should go to confession for even suggesting that rate, and suggested that travel should be free.

Setting rates was never my strong point, but why should I give away road time or charge less than $100 onsite just because it I charge to get there?

Your thoughts would be greatly appreciated.
I had one station owner that balked at similar rates for a two hour drive to contract his night-time D, daytime ND 5kW station. I mentioned to him that if they had a multichannel 100 MHZ scope, a Spectrum analyzer, a FIM, an OIB, DMM's, years of experience, and a full supply of replacement parts on site, then I could reduce my fees.

Contract signed. :)

COMMENG

rfn
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Re: Is my Rate too high or is the owner high?

Post by rfn »

Thanks to all for the info on the automation system for OSX....no, I hadn't heard about it! I'll check it out but the Linux concept seems a bit much for my advanced age and disposition. The one station for which I do pro bono is a non-profit AM/FM deep in the throes of Zetta (until recently I thought that was the name of an obscure social disease; I still harbor suspicions....) so unlikely to change now. (He heaved a sigh of relief........)

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