That was the point.
I think a pricing strategy that is based on costs is backwards. First determine the market value and then see if you can make it work. And in some cases the value might be much more than a price based on costs.
Rates for residential roof and building inspection?
- Thread starter RickMC
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That was the point.
I think a pricing strategy that is based on costs is backwards. First determine the market value and then see if you can make it work. And in some cases the value might be much more than a price based on costs.
That is also a good premise as nobody remains in business if nobody will buy their product or service.
Identify and target specific customer groups where you service is affordable when it fulfills or exceeds customer needs. Aerial outfits do not need to work cheap, they just need to work smart. There are numerous aerial outfits charging from $1,500.00 to over $8,000.00/ flight hour that are quite successful. They are the exception rather than the norm but they accomplished that through customer selection, professionalism, and excellence of service.
People also have to factor in scale. Someone flying 100 hours a month using inexpensive machines can certainly set very low rates because they have the volume to spread out their costs. People flying only a few jobs per month will either elect to work for a loss or elevate their rates in order to pay for their equipment, licenses, and insurance. Those that don't have a business license or insurance are not included for this discusssion as they choose to operate illegally and "under the table" and don't follow any common or standardized rules. Realistically it's pretty stupid to set job, hourly, or day rates that will not ultimately cover your costs while allowing for profit. The IRS views such activities as a hobby business and generally disallows expense deductions when taxes are filed. They will allow showing a loss temporarily for a start up business but they set a maximum time period a company can run at a negative and still qualify as a business.
The rest of us need to decide if our time and equipment has less or more value than what we earn in our normal day jobs. Those satisfied with earning less than the minimum hourly wage will establish the floor for general market rates. Those that understand how a business works understand what I've been trying to get across, which is itemize your costs and develop some factor that includes them in your rate schedule. Every successful business knows pretty much exactly what they require in the cost of doing business. Develop a business plan to guide you in growing and administering your business.
Those that don't understand how to run a business, or the difference between profit and wages might gain some understanding from all that has been written. Then again, there are a lot of people that just aren't capable of understanding how to run a business, thinking that obtaining a business license and receiving any compensation at all is all they need to know. From here on I'm out of this thread as I don't want to participate in a debate over how low you can go. That's a race to the bottom, something the majority of multirotor businesses are competing in, and every one of them will go broke.
Identify and target specific customer groups where you service is affordable when it fulfills or exceeds customer needs. Aerial outfits do not need to work cheap, they just need to work smart. There are numerous aerial outfits charging from $1,500.00 to over $8,000.00/ flight hour that are quite successful. They are the exception rather than the norm but they accomplished that through customer selection, professionalism, and excellence of service.
People also have to factor in scale. Someone flying 100 hours a month using inexpensive machines can certainly set very low rates because they have the volume to spread out their costs. People flying only a few jobs per month will either elect to work for a loss or elevate their rates in order to pay for their equipment, licenses, and insurance. Those that don't have a business license or insurance are not included for this discusssion as they choose to operate illegally and "under the table" and don't follow any common or standardized rules. Realistically it's pretty stupid to set job, hourly, or day rates that will not ultimately cover your costs while allowing for profit. The IRS views such activities as a hobby business and generally disallows expense deductions when taxes are filed. They will allow showing a loss temporarily for a start up business but they set a maximum time period a company can run at a negative and still qualify as a business.
The rest of us need to decide if our time and equipment has less or more value than what we earn in our normal day jobs. Those satisfied with earning less than the minimum hourly wage will establish the floor for general market rates. Those that understand how a business works understand what I've been trying to get across, which is itemize your costs and develop some factor that includes them in your rate schedule. Every successful business knows pretty much exactly what they require in the cost of doing business. Develop a business plan to guide you in growing and administering your business.
Those that don't understand how to run a business, or the difference between profit and wages might gain some understanding from all that has been written. Then again, there are a lot of people that just aren't capable of understanding how to run a business, thinking that obtaining a business license and receiving any compensation at all is all they need to know. From here on I'm out of this thread as I don't want to participate in a debate over how low you can go. That's a race to the bottom, something the majority of multirotor businesses are competing in, and every one of them will go broke.
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I agree with you 100% that you need to evaluate the costs. Some people think that their only cost to travel somewhere is the cost of gas, which is only a small part of the story.
Anyway, When I used to do a lot of aerial photography by airplane, sometimes I would add on at the last minute a couple of extra customers, and adding them into a mission where I was already going was very cheap for me, yet I charged them the full price. It might have taken me an extra 10 minutes to do the photography and another 30 minutes to do the invoicing and send them their images, but they still paid $500 or so for my work, the point being that I was not charging by my time and costs but what the market would bear.
Anyway, When I used to do a lot of aerial photography by airplane, sometimes I would add on at the last minute a couple of extra customers, and adding them into a mission where I was already going was very cheap for me, yet I charged them the full price. It might have taken me an extra 10 minutes to do the photography and another 30 minutes to do the invoicing and send them their images, but they still paid $500 or so for my work, the point being that I was not charging by my time and costs but what the market would bear.
R.Perry
Well-Known Member
I guess I'm one of those guys that got bored with retirement and decided to look into other things to do other than fishing, hunting, playing golf, and pissing my wife off. A friend got me started in the home inspection business and I made a few buck, average inspection for home up to 2500 sq ft $350.00, 1 1/2 hr inspection another 1 1/2 generate inspection report, and yes that included a drone roof inspection, especially where you have 5 and 6/12 pitch roofs.
Then along came a job doing construction documentation, much easier work, and less liability. Turned the inspection business over to grandson. So I work two days a week at UC Merced and I'm paid very well for it.
My point to all this is yes, many of us retirees are playing with drones and trying to make a few extra bucks. But I DO NOT give my time away. I tried the real estate photography business because I'm a very good photographer, but here again people wanted me to work for nothing, not happening.
I've seen the job ads for $60.00 to go out and shoot a few pictures with your drone, Maybe if the house was next door it might be worth it. Last offer I got was 45 miles away up in the mountains, so that is two hours travel. Again if you had five or six at $60.00 with nor more than two hours travel it might be worth it, but it just don't happen that way, at least not where I live.
Heck if I'm going to waste two or three hours, I'll go play a round of golf.
Cheers
Then along came a job doing construction documentation, much easier work, and less liability. Turned the inspection business over to grandson. So I work two days a week at UC Merced and I'm paid very well for it.
My point to all this is yes, many of us retirees are playing with drones and trying to make a few extra bucks. But I DO NOT give my time away. I tried the real estate photography business because I'm a very good photographer, but here again people wanted me to work for nothing, not happening.
I've seen the job ads for $60.00 to go out and shoot a few pictures with your drone, Maybe if the house was next door it might be worth it. Last offer I got was 45 miles away up in the mountains, so that is two hours travel. Again if you had five or six at $60.00 with nor more than two hours travel it might be worth it, but it just don't happen that way, at least not where I live.
Heck if I'm going to waste two or three hours, I'll go play a round of golf.
Cheers
skiptv
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While you guys were all discussing this. I just did 6 houses at $150 each. Each location took 15 minutes from take off to landing. The locations were within 30 miles of my home, I spent, 1 hour and 30 minutes in my car round trip including going to each site, in a vehicle that gets 40mph, that is paid for. I spent $1500 on car repairs this year, but its my personal car so although those repairs came from day to day use as in going to the store, gym, etc. My money I make flying drones paid for those repairs. My time spent on the project (1:30), add travel (1:30)= Total 3 hours. I had an adjuster with me, who hired me for the photos, I gave him the Micro SD Card 16gig, $4.99 at Amazon when we were done. Job= $900, 80 miles total, 2.5 gallons used $3.30 per gallon = $8.25, Liability Biz Insurance, $27 per month/ one day $1.00, Drone=Mavic 2, $1800, already paid off 5 months ago, from previous jobs. So I made $295 per hour for a total profit on this shoot of $885. So I am connected to a few adjusters, and realtors. I got started by doing one house, then two, Now dozens. But I did take those first jobs and lost money, but the plan was never to just do 1 house for $150, it was to do many houses at $150. it's called marketing.
If your business model works for you and you are happy, what else matters? Enjoy.
skiptv
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Well I just wanted to show the other side of the coin, since some people here were giving Literal economic information on running a business. I thought practical information on running a start up might help the guy asking the question. I would also like to add, that getting panos to fly, is also getting paid to practice, and playing golf as some have stated in these post are not doing your flying skills any good.
No hate messages. You are absolutely correct. And people have run afoul of surveying regulations in various states by calling their services, "surveys" instead of "modeling or mapping services". It really pays to know your state's regulations and even call the licensing agencies or speak with an attorney to ensure that you are not improperly rendering an opinion that could lead to massive liabilities and lawsuits down the road. Please feel free to chime in on this.
Good post. If you had priced your first jobs according to your time, etc., since you were only doing one at a time, you would have priced yourself out of the market before you got started.
Skiptv,
If you were to call a plumber to fix your toilet and he had 6 other stops to make that day going your general direction, do you think for a second he would discount his rate for your stop because he was going to be out and in your area?
His rates were established by performing the math necessary to determine his costs of doing business while paying himself and setting aside a profit margin. If he generates more profit on some jobs than others is a good thing. Unless you pulled some number out of your butt your rates were established in a similar fashion. You didn’t mention self employment taxes in your post so cut your clear wages in half or reduce your “profit” accordingly.
If you elect to lose money while you get yourself established is a personal choice. Those that can afford to operate at a loss might eventually obtain success that way.
It’s a fact of life new businesses spend more than they will make in the beginning. A smart business person will use that period to refine their cost and rate structure. The purpose of my ling post about cost breakdowns was to provide a reference for people to establish their cost basis. Evidently you were unable to recognize that.
The question that started this thread was asking if $150.00 was a good rate to charge for a roof inspection. For some it could be, for others it’s not worth getting out of bed for. Each has to determine day, hourly, or site rates as they find appropriate. If people establish a cheap, low wage, no profit rate in the beginning they will find that’s what they will always be working for. You can reduce a rate easily but play hell trying to increase one. If you do free work to get established you will find it hard to get a paying job as many potential customers will ask you that as you did so and so’s job for free, why not theirs?
If you were to call a plumber to fix your toilet and he had 6 other stops to make that day going your general direction, do you think for a second he would discount his rate for your stop because he was going to be out and in your area?
His rates were established by performing the math necessary to determine his costs of doing business while paying himself and setting aside a profit margin. If he generates more profit on some jobs than others is a good thing. Unless you pulled some number out of your butt your rates were established in a similar fashion. You didn’t mention self employment taxes in your post so cut your clear wages in half or reduce your “profit” accordingly.
If you elect to lose money while you get yourself established is a personal choice. Those that can afford to operate at a loss might eventually obtain success that way.
It’s a fact of life new businesses spend more than they will make in the beginning. A smart business person will use that period to refine their cost and rate structure. The purpose of my ling post about cost breakdowns was to provide a reference for people to establish their cost basis. Evidently you were unable to recognize that.
The question that started this thread was asking if $150.00 was a good rate to charge for a roof inspection. For some it could be, for others it’s not worth getting out of bed for. Each has to determine day, hourly, or site rates as they find appropriate. If people establish a cheap, low wage, no profit rate in the beginning they will find that’s what they will always be working for. You can reduce a rate easily but play hell trying to increase one. If you do free work to get established you will find it hard to get a paying job as many potential customers will ask you that as you did so and so’s job for free, why not theirs?
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Regardless of why the thread was started and various responses, a good point was made.
It's short-sighted to say one should charge, for example, $500 to do a job because of all the travel and costs associated with it, when in reality it could be a $150 job if multiple jobs were lined up, as they should be.
It's short-sighted to say one should charge, for example, $500 to do a job because of all the travel and costs associated with it, when in reality it could be a $150 job if multiple jobs were lined up, as they should be.
100% agree. Every market and every business is different. Can't set Las Vegas prices in Hooterville.
I like to encourage everyone to follow their dreams. Once they are in business, they'll "get it".
All this race to the bottom chat means nothing to me; quality, reliability and product delivery is key and will screen out poor service. What others claim they charge on forums is meaningless, I began my business in 2015 w/ a 333 and saw my first net revenue in 2017. It takes time and learning to ignore the posters with comments like "I don't leave my house for less than $1,000." Meaningless hype.
To you new comers; pay attention to your business plan and charge whatever your local market will bear.
"According to the Small Business Association (SBA), 30% of new businesses fail during the first two years of being open, 50% during the first five years and 66% during the first 10. "
Anyone can fly a drone; not everyone knows how to build a business.
So do the math and work hard , understanding very few people make a full time living at this! Take a business or marketing course at your local community college. Take advantage of free new business advice offered by many colleges and counties.
My two centavos....
R.Perry
Well-Known Member
Skip, you are in Hollywood, how close to Burbank airport were your jobs? If you can turn those kinds of jobs that is great, and I wish you continued success. Considering the price of real estate in the Hollywood, and the cost of living there I can see where those would be very realistic fees per property.
The other question I had for you, was how many properties are you shooting a month. It is great to get a big money maker one day, but what is your average?
The other question I had for you, was how many properties are you shooting a month. It is great to get a big money maker one day, but what is your average?
Personal Drone Repair
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PatR
Great insight and clear description .
I have been pondering the answer to that question lately . Where I live , this market has become fluid .
This info gives a great fulcrum .
Great insight and clear description .
I have been pondering the answer to that question lately . Where I live , this market has become fluid .
This info gives a great fulcrum .
