OT: marketing your business

brucechase said:
GIT,

I wouldn't dream of doing anything without some kind of insurance. I would also think that most companies that you would deal with (yes the smaller ones) would still want you to have some kind of insurance before you start work (that is where some other owner of an existing business might come it)


You are dead on here. My company 'downsized' 10 days before my wedding. I called one of the plants that I serviced regularly and they offered to create a job position for me. During the conversation they also mentioned that they'd be interested in using me as a contractor. That was the seed that started everything.
Not too mention my previous employer playing durrty and trying to hold out thousands of dollars from me, etc....
So.. I had to make ends meet and also can't deny that there was more than just a little bit of anger.
I started my company a couple of weeks later, after I had set up insurance. It seems that most plants require a minimum of a million dollar liability insurance to do any work on site. Though depending upon your relationship with the client, and the nature of your specific work, you might need to also get 'errors and omissions' insurance as well. I don't have it, and I'm going to be creating an automatic bake out on 2 RTOs this week, as well as supervise a couple of contractors doing work for me.
I'm far from out of the woods, but I ain't starving. I'm humble about my little bit of success and am looking forward to the next opportunity.
 
Peter Nachtwey said:
Find a good account, lawyer and insurance salesman. They are important. The trick is to avoid problems, not get out of it.

Actually you need to find THREE good lawyers. 1) Liabity defense; 2) General busniess issues; 3) Contracts & Collections etc.. A possable 4th is a patent attorney.

You wouldnt go to a proctologist for a nose job...
 
CaseyK said:
..I now have a contract. I will try to attach a copy of it..
Please do.

Thank you all very much,



One last thing Bruce already brought it up, safety…

Do you ever have anyone review your ideas/concepts? I have a few friends that would help review a project and I’m sure you guy’s would, I’m very cautious when it comes to other people.

And that is one of my biggest fears is someone getting hurt with something I caused or lack of precautions that I did not foresee.

I know that the insurance would protect the funds, but no amount of money is worth the guilt of someone getting hurt

So what are some of the precautions that you do, do you have a check list that you follow? Do you have it reviewed by your customers and then signed off by them?
 
GIT,
What do you do now for safety? I'll assume you are safe now so why should it be any different.
 
Hi Bob,

Yes I am safe now (give it my best), but I have many people that are experienced that work with me corporate wide, we perform NAPER’s (I forgot what it stands for New something) but anyway there are several people that are responsible. With this new adventure, I would like to start it off the correct way and follow correct procedures (develop them first) and I think that there should (maybe) some checks and balances, if that make sense.
 
It does and please, don't get me wrong, my reply was meant for "don't sell yourself short on what you do now because I think your probably good at it" type thing.
Clear as dirt?

Have a good one,
Bob O
 
Time and Materials

I'm in the position now of having to hire out programming of the larger systems we are asked to bid on. I will not give P.O.'s for time and material any more. They haven't worked out very well for us and since we always have to give a fixed price for our proposals, it leaves us open to a larger risk.

However, to make this work, I now have much better specifications with my subcontractors and much more specific quotes to my customer. This way, everyone knows what the scope of the job is and also that moving out of this scope is going to cost more.

I also let my customer know that I am using a 3rd party to do a portion of the job. This is where a lot of trust comes into play. My customer has to trust my selection of a subcontractor and I have to trust that my subcontractor won't go around me at some time in the future and steal my customer. The best term I've heard for this is "engineering partner." To that end, my subs are also just programmers. They do not have the capabilities to build the physical systems that we build.

Eventually, if things keep moving in this direction we'll have to hire someone just for programming but for now I don't have the manpower to dedicate to large programming jobs.
 
Sample Contract

I can't figure out how to get a sample contract on here.

Cut and Paste says I need to modify a Mozilla file, what the heck?????????

I can email it to anyone who wants to try to load it, post it, or just wants a copy of it.
__________________

THIS POST WOUND UP ON A DIFFERENT THREAD SOMEHOW.

I am trying to download Firefox, maybe it will let me cut and paste here.......
 
Here is the basics that I came up with for a contract. I had one worked out, but lost it to a hard drive failure. It was edited from this one. I don't always use the different rates, as listed here. This was sort of a master, but the longer the project, the better the deal for the customer.

Whatever book I've read or business seminar that I've attended, they beat it into the ground to spend 20% of your time looking for work. This is good advice, even if you are working and booked up for some time to come!

I will try to get this uploaded as a file, but this is an antique computer. I had to reboot today, and someone had the punch cards out of order (HA HA). This one is actually better then the 233mhz w/64K that I used last summer, it is a 450mhz w/364K. I hope to jump to XP Pro and a Dual Core this spring. Maybe I'll get the laptop working someday. I just need the proper GDI.exe file or to figure out how to get the hidden font files loaded.



CenTrac Engineering - A Frontier Group Company

STANDARD CONTRACT FOR CONSULTING SERVICES
This Agreement is made this _____day of__________2004, between
___________________________________("Client"), having its principal place of business at___________________________,_______________,____,_________
and CenTrac Engineering, having its principal place of business at xxx xxxxxxxh Street, La Salle, IL 61301.
In consideration of Client retaining CenTrac Engineering to conduct for Client
_______________________________________________, it is agreed as follows:

1. Compensation and Term

Client hereby retains CenTrac Engineering who agrees to perform Consulting and Technical services as required by Client, through__________________, 2004.

CenTrac Engineering will at various times perform services at Client or CenTrac facilities, as directed by Client. CenTrac Engineering will perform the services at various times and for various durations as directed by Client.

The following fees shall apply:

$________ per hour for services performed, at the “One Day Standard Rate”.

$________ per hour for services performed at the “One Week Standard Rate”.

$________ per hour for services performed at the “Multi-Week Standard Rate”.

$________ per hour for “Exclusive Customer Rate”.

$________ per hour for services performed On-Site in the “Flex-Hour” program.

$________ per hour for services performed Off-Site in the “Flex-Hour” program.

$________Retainer, preceding start of Engineering or Technical services.

$________Per Diem for basic travel and meal expenses to primary work site.

Billing for services will be presented:___________________________________ .

Payment for services will be issued:____________________________________ .

Reasonable and necessary business and travel expenses actually incurred by CenTrac Engineering shall be reimbursed by Client upon submission of expense reports. No travel expenses shall apply for assignments within a ______ mile radius of downtown La Salle. Client shall make full payment for services upon request of invoice. If CenTrac Engineering brings a legal action to collect any sums due under this Agreement, it shall be entitled to collect, in addition to all damages, its costs of collection, including reasonable attorney's fees.

This Agreement shall commence on the date stated above, and shall remain in effect until all obligations under this Agreement have been properly completed. Either party to this Agreement may terminate this Agreement with or without cause by providing at least seven days written notice to the other party.

2. Warranties by CenTrac Engineering

CenTrac Engineering represents and warrants to Client that it will perform said services in a professional, competent and timely manner. Client will not determine or exercise control as to general procedures or formats necessary to have these services meet Client's satisfaction.

3. Insurance

CenTrac Engineering shall maintain during the term of this Agreement motor vehicle and any applicable contractors general liability insurance that is required.

4. Independent Contractor

CenTrac Engineering acknowledges that the services rendered under this Agreement shall be solely as an independent contractor and not as a joint venture. CenTrac Engineering further acknowledges that it is not considered an affiliate or subsidiary, and is not entitled to any Client employment rights or benefits.

5. Confidentiality

CenTrac Engineering recognizes and acknowledges that this Agreement creates a confidential relationship and that information concerning Client's business finances, and operation are referred to as "Confidential Information."

6. Non-Disclosure

CenTrac Engineering agrees that, except as directed by Client, it will not at any time during or after the term of this Agreement disclose Confidential Information to any person whatsoever that relate to Client.

7. Grant

CenTrac Engineering agrees that its work product produced in the performance of this Agreement shall remain the exclusive property of Client, and that it will not
sell, transfer, publish, disclose or otherwise make the work product available to third parties without Client's prior written consent.

8. Office Rules

CenTrac Engineering shall comply with all office rules and regulations, including security requirements, when on Client premises.

9. Governing Law

This Agreement shall be in accordance with the laws of the State of Illinois.

10. Entire Agreement and Notice

This Agreement contains the entire understanding of the parties and may not be amended without the specific written consent of both parties.

IN WITNESS WHEREOF,
Client and CenTrac Engineering have duly executed this Agreement as of the day and year first above written.

CenTrac ENGINEERING CLIENT ……………………………………….​
By:...................... By:......................
Name:.................... Name:....................
Title:................... Title:...................
Date:.................... Date:....................
 
Here is a filled out version...



CenTrac Engineering - A Frontier Group Company
STANDARD CONTRACT FOR CONSULTING SERVICES


This Agreement is made this 5th day of May, 2007, between
JC SMITH MFG ("Client"), having its principal place of business at: 123 Any Street Podunk Hollow, GA 00010 and CenTrac Engineering, having its principal place of business at xxx xxxxxxxh Street, La Salle, IL 61301.

In consideration of Client retaining CenTrac Engineering to conduct for Client: Contract Engineering and Programming Services, it is agreed as follows:

1. Compensation and Term

Client hereby retains CenTrac Engineering who agrees to perform Consulting and Technical services as required by Client, through: June 31, 2007.

CenTrac Engineering will at various times perform services at Client or CenTrac facilities, as directed by Client. CenTrac Engineering will perform the services at various times and for various durations as directed by Client.

The following fees shall apply:

$75.00 per hour for services performed, at the “One Day Standard Rate”.

$65.00 per hour for services performed at the “One Week Standard Rate”.

$50.00 per hour for services performed at the “Multi-Week Standard Rate”.

$70.00 per hour for “Exclusive Customer Rate”.

$45.00 per hour for services performed On-Site in the “Flex-Hour” program.

$35.00 per hour for services performed Off-Site in the “Flex-Hour” program.

$500.00 Retainer, preceding start of Engineering or Technical services.

$65.00 Per Diem for basic travel and meal expenses to primary work site.

Billing for services will be presented: each Monday morning .

Payment for services will be issued: each following Friday afternoon .

Reasonable and necessary business and travel expenses actually incurred by CenTrac Engineering shall be reimbursed by Client upon submission of expense reports. No travel expenses shall apply for assignments within a _50_ mile radius of downtown La Salle. Client shall make full payment for services upon request of invoice. If CenTrac Engineering brings a legal action to collect any sums due under this Agreement, it shall be entitled to collect, in addition to all damages, its costs of collection, including reasonable attorney's fees.

This Agreement shall commence on the date stated above, and shall remain in effect until all obligations under this Agreement have been properly completed. Either party to this Agreement may terminate this Agreement with or without cause by providing at least seven days written notice to the other party.

2. Warranties by CenTrac Engineering

CenTrac Engineering represents and warrants to Client that it will perform said services in a professional, competent and timely manner. Client will not determine or exercise control as to general procedures or formats necessary to have these services meet Client's satisfaction.

3. Insurance

CenTrac Engineering shall maintain during the term of this Agreement motor vehicle and any applicable contractors general liability insurance that is required.

4. Independent Contractor

CenTrac Engineering acknowledges that the services rendered under this Agreement shall be solely as an independent contractor and not as a joint venture. CenTrac Engineering further acknowledges that it is not considered an affiliate or subsidiary, and is not entitled to any Client employment rights or benefits.

5. Confidentiality

CenTrac Engineering recognizes and acknowledges that this Agreement creates a confidential relationship and that information concerning Client's business finances, and operation are referred to as "Confidential Information."

6. Non-Disclosure

CenTrac Engineering agrees that, except as directed by Client, it will not at any time during or after the term of this Agreement disclose Confidential Information to any person whatsoever that relate to Client.

7. Grant

CenTrac Engineering agrees that its work product produced in the performance of this Agreement shall remain the exclusive property of Client, and that it will not
sell, transfer, publish, disclose or otherwise make the work product available to third parties without Client's prior written consent.

8. Office Rules

CenTrac Engineering shall comply with all office rules and regulations, including security requirements, when on Client premises.

9. Governing Law

This Agreement shall be in accordance with the laws of the State of Illinois.

10. Entire Agreement and Notice

This Agreement contains the entire understanding of the parties and may not be amended without the specific written consent of both parties.

IN WITNESS WHEREOF,
Client and CenTrac Engineering have duly executed this Agreement as of the day and year first above written.

CenTrac ENGINEERING CLIENT: ………JC Smith MFG…….
By:...Casey K....... By:......................
Name:..Casey K... Name:....................
Title:...Grunt..........Title:...................
Date:..4/5/07.......... Date:....................
 
Insurance

Since the question of insurance always comes up with these threads, I did a "POLL" for those of you who are independant or a partnership.

I had liability insurance, and it was running me $37.00 per month for 1,000,000/2,000,000 two years ago.

Varies with area, amount of yearly income, industries served, and underwriting company.
 
Thanks Casey

Back to T&M, I (the end user), but I also may have a 'different' relationship with my contractors then the normal.


  1. I show them the job, what ever it may be (programming, wire pulling, panel building)
  2. They work up a 'bid price', this is a budgetary number only
  3. I submit the paper work, this would be (depending on the cost) an AR or just a requisition
  4. After its approved and signed off, I have the contractor come in and work off of T&M
I have not (yet) had a issue doing this, the contractors like the sense of security (of knowing they will make a profit) and I come in under budget on my project (that makes management happy)
 
Ron Beaufort said:
I fully expect to be in the minority here - but here’s my opinion on billing for “time and materials” ...



personally I don’t think it’s a good idea - even though often (usually? ... always?) it’s the only way to charge ...



discussion:



suppose that you decide to charge a standard rate of $100 an hour (just to have a number for discussion) ... suppose that you take on a certain job ... suppose that you’re experienced, talented, motivated, healthy, rested, efficient, well-equipped with all of the tools and supplies that you need, and so on down the line ...



suppose that the job takes you 40 hours to complete (just to have a number for discussion) ... so doing the math, you just grossed $4,000 ...



now suppose that you have a competitor ... the competitor takes on an IDENTICAL job ... he only charges $75 an hour (just to have a number for discussion) ... suppose that he’s not experienced, less talented, poorly motivated, unhealthy, unrested, inefficient, and poorly-equipped, and so on down the line ...



suppose that the IDENTICAL job takes your competitor 80 hours to complete (just to have a number for discussion) ... so doing the math, he just grossed $6,000 ...



you see where I’m going with this? ...



now which of those bills - yours (for $4,000) or the competitor’s (for $6,000) do you think the customer is going to be the most comfortable with paying? ... think about it ... and the winner is: the competitor’s bill - because the bean-counters who are handling the finances think that they’re getting a BARGAIN! (yes, a BARGAIN!) because they recruited someone willing to work for the reasonable rate of only $75 per hour - as opposed to your exorbitant rate of $100 per hour ...



reality check: the bean-counters aren’t really interested in the fact that the competitor took twice as long as you would have taken - because there’s really no method to positively quantify and compare the time requirements ... sad fact: to most bean-counters an hour of labor - is an hour of labor - is an hour of labor ... regardless of who performs the labor ... and regardless of how efficient - or how inefficient - the worker might be ...



and always remember this: the bean-counter has a boss to report to ... think how great the bean-counter will sound when he hands his boss the final $6,000 bill from the competitor (clearly showing the $75/hour rate) and compares it side-by-side with your quote (with its $100/hour rate - but unspecified hours) ... and then nails it down with this line: “And since it was an 80 hour job, I just saved the company $2,000” ... the fact that you’d have only taken 40 hours to do the job is never even considered ... remember: an hour of labor - is an hour of labor ...



now then ... if you’re following closely you might be thinking: wait a minute here ... my competitor made $6,000 - and I only made $4,000 ... but then again, it took Bozo TWO weeks to do the job - and it only took me ONE week ... so that means that I can still use that EXTRA week to do another job - and that way I can get ahead of the clown ...



maybe ... but maybe not ... here’s the big question: do you already have another job lined up for next week - or are you going to just sit in your office and wait for the phone to ring with another opportunity? ... or (much more likely) are you going to go out and try to market your services? ... so what percentage of time do you plan to spend marketing? ... and what percentage of time do you plan to spend working? ... kicker: and how much do you get to charge for marketing your services? ...



anyway - to sum this up ... in my personal opinion, the only guys who have a GOOD handle on charging by the hour are the automotive mechanics ... when you pull up in your car with “Problem A” they look in their handy Chilton’s book and tell you that “Problem A” is a FOUR hour job ... multiply that by the hourly rate they’re charging today - and that’s your labor bill ...



now suppose that you hang around in the waiting room and find out that it only took the mechanic ONE hour (not all four) to get the job done ... guess what you’re going to pay ... right ... the full FOUR hours ... not fair? ... well, you want him to still be there the next time your car needs fixing don't you? ...



punch line part 1: an automotive mechanic who is experienced, talented, motivated, healthy, rested, efficient, well-equipped with all of the tools and supplies that he needs, and so on down the line - can make a LOT of money charging by the hour ... and the faster and more efficient he gets at doing his job, the more money he can make ...



punch line part 2: most other by-the-hour contract workers (those of us without a Chilton’s book to guide us) often find out that the faster and more efficiently we do our jobs, the LESS money we can make ...



sad ain’t it? ...



so where do we go from here? ...



my suggestion is that you try to deal with people other than the bean-counters ... specifically, try to deal with people who understand that an hour of EFFICIENT labor is NOT the same as an hour of INEFFICIENT labor ... more specifically, with people who understand that there’s real value in getting the job done FASTER and BETTER - as opposed to just getting the job done for a lower hourly rate ...



good luck with that ... in most cases, that’s not going to be an easy undertaking ...



most important ... I’d suggest that you always try to start calculating from the standpoint of “what is this particular job worth?” ... not in hours necessarily - but in dollars/value/importance to the customer ... if the job is honestly WORTH say $10,000 (just to have a number) then try to arrange your billing to generate that amount ... again, that won’t be easy - but it’s a target to shoot for ...



finally for now (I’m out of time) I’ll leave you with this ... in another lifetime I used to run my own one-man business in restaurant equipment repair ... it was VERY successful ... (man have I got stories to tell) ... but the constant kneeling to work on ovens and fry vats demolished the cartilage in my knees ... and that’s why I got into PLCs in the first place - less kneeling involved ... anyway ... when I was first getting ready to start my own business I went to Mr. Harry Jones, a tax consultant, for help with setting up the record keeping, etc. ...



somewhere along the way, I mentioned how much all of my existing competitors were charging per hour ... and then I mentioned that I was planning to charge about $20 less per hour - in order to generate business ...



Mr. Jones gave me some sage advice which has profited me greatly over the years - and I’ll close with this:



don’t charge LESS than your competitors ... charge MORE ... people who are ONLY interested in PRICE alone don’t make good customers ... instead they make good leeches ... send them off to bleed your competitors dry ... be honest ... be good ... be fair ... but if you want to stay in business for the long-haul, then you’ve got to charge enough to make the work worth your while ... a good customer will understand that ... a leech won’t ...



I wish you the best in all of your endeavors ...

Never better said or more true.
 
geniusintraining said:
Thanks Casey

Back to T&M, I (the end user)

And right there is the difference. I am never the end user. I am either the supplier to the end user or the supplier to an OEM that has their own end user.

As I said, I cannot quote T&M to my customers. They are buying a "system" from my which they view as a complete package. If this was just for our own in house use, I think it would work out fine.

I fully expect to get higher quotes from the subs but by having clearly defined projects and terms, they get the chance to make more if they can do it in less time and I get the assurance that I'm not going to loose money if it takes longer becuase I've already had to give my customer a set price.
 

Similar Topics

Hi All, Can anyone of you please provide me with some samples of a Capability Statement as a System Integrator of Industrial Automation? We can...
Replies
21
Views
4,955
Can anyone show any worse example for this indescribably tacky marketing approach for industrial components? Control Techniques make GREAT drives...
Replies
1
Views
3,784
Contractors, how are reaching out to potential customers? What platforms are you marketing on, LinkedIn? Facebook? Personalized mass emails? Cold...
Replies
9
Views
2,230
please told me ....... i have knowledge of plc SCADA motor drive but i have no job so i switch in marketing field(marketing in...
Replies
1
Views
1,649
We have added a new feature to our latest motion control product. Our new product can do EthernetI/P I/O or implicit messaging at 1 millisecond...
Replies
9
Views
2,568
Back
Top Bottom