Comparison of Lump Sum vs. Time & Material Profitability

today um we'll go over some numbers later too um so when I put my lump Su quote together for this project I estimated it at six labor hours at $65 an hour and 30 minutes travel time here and 30 minutes travel time back so we had 7 hours total in on this job plus a little bit for materials not much for glue um 7 hours time $65 and hour which is the labor rate that I charge comes up to $455 so that's what their proposal was this job was completed yesterday in 1 hour and one tube of glue so actual expense that I have in this job is around $12 $15 for labor plus $3 for a tube of glue so the proposal is $455 and the actual expense we'll call $15 so we netted $440 on this job that's how a lumpsum quote can bring you more money now if I did this strictly on an hourly basis at $65 an hour you would think oh that's a that's a huge rate you guys are getting and yeah that's but that's for this Market that's average okay it could be 55 or 45 wherever you're at but this job then I would have charged them $65 plus I would have upped probably the you know the glue by you know maybe charge them $5 cost me $3.97 so I would have made $70 on this job my profits would have been $55 cuz I had $15 in actual expense on the project so if I did this job on an hourly basis I would have made $55 but I quoted it on a lumpsum basis and this is an actual completed project uh instead I was able able to make uh 440 some dollars that's a big difference do you see the possibilities the opportunities that exist when you know all the factors that's a huge thing go for the lump suum when you can calculate all of the variables and then what you do is you calculate them on a worst case scenario so you're covered because you got to understand you're also taking the risk when you do a lumps sum quote If this job job here would have taken me 10 hours I couldn't have changed my numbers at that point if this job would have taken me 12 or 15 hours I could not have changed my proposal you just can't you can't do that because you you get a reputation built very fast if you change your numbers after the fact but going into it I did a worst case scenario and we we were able to come in underneath that time frame that's where your profits are going to lie so it's more risk for you don't get get me wrong guys and gals it's way riskier for you to bid these jobs on a lumpsum basis than an hourly basis hourly is safe but hourly isn't going to make you the big money that you're looking for hourly is going to…