Travelling costs

[Mike Brown]

…I mainly work within about a 15 mile radius or so – so this never really comes up, but, don’t I recall somewhere that both the AA and the RAC produce what they call ‘mileage guidelines for business’…then again maybe I just forgot my medication?…

more soon

mikethesign

[Steve Madley]

S’right Mike they do. And if you use their autoroute planners you just multiply the mileage rate (57ppm?) by the calculated mileage. Et viola!

[John Childs]

Perhaps I didn’t explain clearly enough.

Working out the cost of the vehicle is easy enough, either from the AA or from our own records, but the bigger expense is the lad sitting behind the steering wheel.

Collecting vehicles with drivers on £4.50 an hour is a lot different to working on-site where the driver has to be a qualified and experienced fitter earning more like £9.00 per hour.

Driving is an unskilled and non-core task for which I am happy to charge our clients one and a half times my cost for an ordinary driver whereas for a skilled fitter, to cover all the overheads, I want three times his wage. This means that there is a labour charge-out differential here of between £6.75 and £27.00 per hour.

Obviously there are differences in other parts of the country but assuming that my fitters can average 35 miles per hour covering a mixture of motorway, A road, town and city traffic, plus an allowance for finding their destination and stopping at the chip shop, that works out at 77 pence per mile labour alone.

Add that to the vehicle cost, in our case, 41 pence, and we arrive at the princely sum of £1.18 pence per mile. My problem is that I experience difficulty in convincing my clients that this is reasonable.

Perhaps I have answered my own question here, but I wondered what others charge because as I can’t reduce the fixed vehicle costs any lower rate than £1.18 must come off the labour, thereby lowering my gross profit margin and I fail to see why I should accept this, especially as there is plenty of full price work to do here without having my boys chasing round in cars all day.

[Simon Forrester]

Glad to see were not the only ones who have had the problem of quoting for travelling. Our solution was simple and you have already mentioned it, we just charge £25 per person per hour and the the vehicle cost of 65p per mile.

After all a fitter sat in a van is still costing the same as one working!!

We have used this for about the last 18months and only get the odd complaint about the price, so I think we have got it spot on for the moment 🙂

[Phill Fenton]

Travelling costs (and more importantly – the time spent travelling) are an issue with me also. Our business is currently manned by two of us (Alison and myself). There is more than enough work locally (West Lothian) to keep us fully occupied. I therefore have a policy not to travel too far to look at a job (particularly when it’s a fresh enquiry from a new client) and I have been known to refuse to quote for some jobs that involve a fair degree of travel simply to look at what was involved.

When pricing work – I will include my normal hourly rate for any time spent travelling. It’s up to the client to “take it or leave it” because I have no wish to spend hours travelling to and from work when there are plenty of jobs I can be doing locally.

We are in the Edinburgh yellow pages – because this is our “Local directory” even though we are on the outer edge of the Edinburgh yellow pages coverage. It takes me 45 minutes to drive into – and 45 minutes to drive back from Edinburgh, so you can understand my reluctance to deal with any enquiries outwith our immediate area. So why do I continue to advertise in this directory I hear you say? To be honest I’m afraid that if it wasn’t in – I wouldn’t get any local enquiries.

Sorry to digress (I know – I ramble on a bit 😕 ) – I think you should be charging your normal hourly rate for any time your sign fitters spend travelling. Let your client decide whether or not he is prepared to pay that rate. You should not need to justify it – you are running a business, not a charity. 😀

[Martin Pearson]

John, I have not had to face this problem within the sign industry as most of the work I do is fairly local so we don’t charge for traveling time as such but when I worked in the engineering industry the firm I worked for had two labour rates, one for the workshop and one for site work. Traveling time was based on 1/2 the site labour rate. Bearing in mind that the site rate was £60 an hour the company were still charging £30 an hour per engineer plus milage for traveling.

[Mike Grant]

I think we are all in the same boat here.

I charge 45p per mile and £20 per person per hour of travel time or part thereof. As I have only 2 lads working for me I cannot afford to send them out on a reduced rate as if they were back at the workshop they would (should) be generating the same amount in work. I build the travelling into the sign price and don’t advertise it by putting a seperate costing for this. (What the eye don’t see…etc.)

If I know I have to deliver say 10 signs to a customer I will break down the travelling to say £2 per sign and add that to the price (if the prices are itemised) and the customer don’t even know he is being charged!

[Martin C]

When I started full time on Signs about a year ago, I was concerned about the flow of business so took out Courier insurance on my van as cover should things go slack, pre Xmas etc.,

The going rate for Sameday delivery to the end user is £1 a mile of which the white van man, if working for a national like TNT would get 50p! Although it worked for me at the start, looking at some of your mileage rates I feel hard done by now!!! (:) (:) (:)

[John Childs]

Martin…

Don’t feel too hard done by.

As I stated above there is a big difference between muppet driver and qualified tradesman rates. You are getting the going rate when doing courier work but the thing is to make sure that you also get the going rate when doing your sign work.

Actually, your figures are quite interesting in that TNT charge out at double their cost, which is not too far away from my one and a half times for pure drivers.