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Author Topic: percentages vs flat rates
Ralph-
Malph
Greenhorn
Posts: 3
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Post percentages vs flat rates
on: March 23, 2012, 21:05

Hey guys, I mostly do small jobs and I charge flat rates. Question, is it better to work on percentage? Does it really make you more competitive? Any thoughts appreciated thanks.
woofer
Greenhorn
Posts: 2
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Post Re: percentages vs flat rates
on: March 28, 2012, 19:40

It really depends onthree things: personal preference, how complex your jobs are and what your overhead is. If you have a tight handle on your expenses, you can be just as competetive and profitable charging a flat fee for work as you can doing cost plus. The real downside to doing flat rate is that it boxes you in. You need to be flexible for jobs that expand and become more complex, and a cost plus contract can do that for you.
Contractor-
sBookkeepi-
ngService
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Posts: 1
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Post Re: percentages vs flat rates
on: May 23, 2012, 19:32

Ralph,

From what I see looking at hundreds of QuickBooks construction companies is the following:

Flat Rate seems to be more profitable in small jobs where the risk of error is lower. For example under $1,000 per item. Which means if you developed a flat rate book or menu and listed several items like wall patch, paint a 10' x 10' room, install a garbage disposal or water heater. Those type of small items then you could build an invoice into something substaintial or leave it small.

Percentage seems to be more profitable in larger design build residental and commercial remodel or anything where the contract could exceed $10,000 and it is best to have a Work In Progress (WIP) system in place to track the baseline agreed upon price, deposits, payments and change orders that is updated for each payment draw request.

Hope this helps
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