Holiday Billing....

[gonzo1510]

I have my first potential customer that wants to sit down and negotiate service

it's for a bus company that wants 24 hour unarmed service.

I know what price range I want to stay in but as far as holidays do you bill at double or time and a half ?

I have not ruled out not billing him extra for holiday service as an incentive for him to go with my company ( I would pay the guards holiday pay myself for this contract only)

keep in mind this is my first potential customer and he knows this...

[globalinstincts]

While I don't own a security company, I do own a retail shop and a mortgage service company.

If it were me, I would give it to him at straight time. It's not going to cost you dramatically more annually, and it is a nice perk to offer to secure the contract.

Good luck at hooking your first big one!

[HotelSecurity]

What does the law or union contract say you have to pay your staff, double time or time & a half?

[gonzo1510]

What does the law or union contract say you have to pay your staff, double time or time & a half?

There is no union here in the Los Angeles County region.

As far as state law, I believe (although I might be wrong) it only calls for overtime pay after 8 hours.

[globalinstincts]

There is no union here in the Los Angeles County region.

As far as state law, I believe (although I might be wrong) it only calls for overtime pay after 8 hours.

California employers are not required to pay their workers holiday pay when they close for business on holidays OR if an employee works on a holiday (unless it is the employer’s policy to pay extra rates such as time-and-a-half).

If the employee has worked in excess of a 40 hour work week, Employer must pay time-and-a-half. Employees who work over 8 hours per day are not due overtime pay unless they exceed the 40hr work week.

I.E.; 4 x 10hr days/week= a regular 40hr (no overtime)

[davis002]

I know what price range I want to stay in but as far as holidays do you bill at double or time and a half ?

I would bill 1.5 of the bill rate for holidays.

[Curtis Baillie]

I have my first potential customer that wants to sit down and negotiate service

it's for a bus company that wants 24 hour unarmed service.

I know what price range I want to stay in but as far as holidays do you bill at double or time and a half ?

I have not ruled out not billing him extra for holiday service as an incentive for him to go with my company ( I would pay the guards holiday pay myself for this contract only)

keep in mind this is my first potential customer and he knows this...

At times I don't charge a client for some part of my services, such as mileage. I still reflect the charge on the statement, but then deduct it showing a savings to the client.

There have been times when I bid a consulting project at a not to exceed price. If the project exceeds the quoted price I still show the actual hours worked but the billing reflects the actual quoted price.

Any time you can reflect a savings to a client, or customer; they will appreciate it. It just makes good business sense.

[N. A. Corbier]

Factor in if you can pay the employees holiday pay from "your own pocket," and if so, absorb the loss (of which it is) for not billing the client. Also note that you will be paying the employees holiday pay, it makes the client understand that you're not short-sticking the employees.

[Bill Warnock]

I have my first potential customer that wants to sit down and negotiate service

it's for a bus company that wants 24 hour unarmed service.

I know what price range I want to stay in but as far as holidays do you bill at double or time and a half ?

I have not ruled out not billing him extra for holiday service as an incentive for him to go with my company ( I would pay the guards holiday pay myself for this contract only)

keep in mind this is my first potential customer and he knows this...

gonzo1510, what are you going to use for your manpower survey calculations? I might suggest you use the 4.8 calculation per post or patrol.
1 man 24 hours x 365 days = 8,8,760 hours
1 man 08 hours x 052 weeks = 2,080 hours
1 man 24 hours x 007 days = 00168 hours
1 man 08 hours x 007 days = 00056 hours
1 man 08 hours x 0005 days = 0040 hours
You can define how many manpower spaces you need to cover 1/2 hour increments.
That accounts for sick, lame, lazy and holiday schedule needs.
Enjoy the day,
Bill

[Dam Guard]

I truly learn something new from this forum nearly every time I log into it. Nice job with the advice and statistics gentelmen.

[HotelSecurity]

California employers are not required to pay their workers holiday pay when they close for business on holidays OR if an employee works on a holiday (unless it is the employer’s policy to pay extra rates such as time-and-a-half).

If the employee has worked in excess of a 40 hour work week, Employer must pay time-and-a-half. Employees who work over 8 hours per day are not due overtime pay unless they exceed the 40hr work week.

I.E.; 4 x 10hr days/week= a regular 40hr (no overtime)

You employers have it good. In Quebec an employee has to be compensated for a holiday EVEN if he does not work that day!

Our law requires that an employee receive 20% of his previous 4 weeks pay for a holiday. Therefore if you work 40 hours a week x 4 weeks = 160 hours divided by 20% = 8 hours. So if you work that day it's 8 hours + the 8 hours for the holiday. If you stay home it's 8 hours! If you are a part-timer it is the 20% of the previous 4 weeks + the number of hours you work that day.

Our law also requires time-and-a-half after 40 hours. There are a few exceptions. One is for In-House Security where it does not have to be paid until after 60 hours but even though I've shown this article to the Controller of my hotels he still insists that he has to pay overtime after 40 hours. With business being very bad at this time of the year I have to advoid overtime at all costs!

[globalinstincts]

You employers have it good.

That's the upside to Business Owner's in California, You get to stick it to your Employees!

The downside is California is sticking it to You (City Taxes, County Taxes, State Taxes....)

[HotelSecurity]

That's the upside to Business Owner's in California, You get to stick it to your Employees!

The downside is California is sticking it to You (City Taxes, County Taxes, State Taxes....)

Quebec is the tax capital of North America!

[SecTrainer]

Hoo boy! If I'm this guy, I just sit back and say nothing, because you're committing the cardinal sin of negotiations - you're negotiating with yourself! Why should I negotiate with you when you're already playing both sides of the game, and doing a better job for me than you are for yourself!? I have a real strong gut feeling that if this guy just keeps quiet and stays noncommittal for a couple of weeks you'll gradually give up much more than he would have tried to get himself.

What impresses people is not a panty-waist at the bargaining table, looking for something to "give away", but a hard-headed business man who knows what his product is worth and charges what it's worth. You might as well find out right now whether you're the kind of guy who can get customers to pay what you're worth or not.

The price game is a mug's game and a LOSER'S game. There are companies out there that can - and will - offer this guy a contract AT A LOSS if necessary, and can afford to do so long enough for you to pack up your little lemonade stand and go home. There has to be SOME REASON for this guy to do business with YOU instead of them...and price ain't gonna be that reason. Better service, better trained officers, local control and management...those have to be the kinds of reasons to do business with you.

So....figure out what you're going to have to pay for regular time, on holidays and for overtime, etc., figure out what your markup has to be and tell him what it will cost. Period.

Think about this: Say you have to pay 1.5x for holidays. Your contract calls for 10 FTEs x 3 shifts (the 4.8 figure doesn't come into play here) for one holiday at a base pay rate of 10.00/hr...so if you're "paying the difference", you're short $5.00. Whoops! No you're not, because you have payroll expenses in addition to the base rate. For the sake of argument, say you're short $6.00/hr. One holiday costs you: 10 x 24 X 6 = $1440.00....and how many holidays are there? (There are 15 federal holidays, about 8 "common" holidays...three of which fall within 5 weeks or so!)

So...you wind up giving away $10,000 or more per year. How many man-hours at your profit margin do you have to sell to "get back" that $10,000 (and the truth is, you never get it back). So, who are you? Donald Trump? If I'm your competitor I hope you do get the contract.

Does that mean you don't negotiate? Of course not! You offer him a lesser level of service if he wants to pay less...NOT a lower hourly base rate. Get this through your head...your base rate is WHAT YOU MUST GET IF YOU WANT TO STAY IN BUSINESS AND MAKE A REASONABLE PROFIT. It is NONNEGOTIABLE. It is your baseline...your guarantee that the business you get won't be putting you OUT of business!

Say your contract at the proper rate comes in at $120,000. He wants to pay $80,000 (you asked him what he felt he wanted to pay, and then sat there SILENTLY until he told you - because once you ask the question, the first one to talk loses). Okay...tell him you'll be happy to work out a contract at $80,000. How? Well, fewer man-hours, in all likelihood, or perhaps more unarmed and fewer armed officers. Are there times of the day or days of the week where the staffing can be reduced? Fine. However, one way or another it is going to be a lower level of service at $80,000 than he would get at $120,000 - about two-thirds lower, in fact.

And...while you're at it, work out a contract at $100,000 to split the difference. Again, the difference is the level of service. Now he has choices A, B and C at $80, 100 and 120,000...and three different levels of service to go with them. Put them in front of him, and explain the differences. Starting with the $100,000 version, tell him what he gets. Then, point out how "just $X per month" more at $120,000 would give him a much greater value. Then, and only LAST, compare $120,000 level to the much lower level of service at $80,000. This is very important. You want to juxtapose B and C in his mind as a small increment in price, and then juxtapose the great difference in service between C and A. If he doesn't choose C, he'll choose B...I almost guarantee he won't choose A. I'm guessing he picks B - $100,000.

Think about that time that you were thinking about putting marble counters in your kitchen. The guy quoted you, say, $10,000. When you said, "No, I can't spend more than $7,500", the guy (unless he was a total weinie) didn't say "Oh, very well. $7500 it is. Thank you very much sir. I love to do business at a loss, sir. Do you have any friends for whom I could do business at a loss, sir?"

No...perhaps he suggested a marble look-alike, or marble tile instead of slab marble. Perhaps he suggested a lower grade of marble. Perhaps he suggested one of the marble "counter overlay" products. Maybe he just walked away from the deal altogether and let you think about it. If he was any kind of a business man, the bid for marble counters was the bid, and if you wanted to pay less you would have to buy something less for your money.

That's how business works. You get what you're worth, or you go out of business. Get it? Customers can't walk into Safeway and offer ten cents a pound for sirloin can they?

Resist the temptation to have a "going out of business" sale every time you sit down to do business. Take pride in what you do and let customers know that they're going to get what they pay for in the form of astonishingly high levels of service. That's the definition of "value".

Once you already have a customer, you might decide to cut a little pricing slack here and there ON A PARTICULAR BILL as a gesture of goodwill or appreciation for customer loyalty, or perhaps even as a self-imposed penalty if your service should happen to fall short of your own expectations in some minor way. However, you do NOT ever do this when you're negotiating the contract itself. The best service businesses are those that say "Our rate is $x/hr", and never dream of negotiating that rate. They know what they're worth, they know what they have to make per hour, and that's what they charge. Try telling a $150/hr lawyer that you want to pay $75/hr, and he'll either kick you out the door or turn you over to a junior partner.

In this life, you get what you pay for. Why do you imagine that it should be any different for your customers, or that they really honestly expect anything else? Will they take advantage of a sucker when they see you coming? Of course they will...but that's your fault, not theirs.

I really do apologize for what might seem like a rant, but this kind of "do it cheaper" thinking has very nearly killed our industry. It has guaranteed that officers are underpaid, underequipped, poorly trained and poorly supervised. It has devalued our services in the eyes of the public and in the eyes of our own clients. These, in turn, are the reasons that our profession is looked down upon. It is bad business and it is bad for our business. So yes, I get a little ballistic every time I see the "do it cheaper", "give something away", etc. philosophy rearing its ugly head. It's time to reeducate clients that security is a fundamental obligation of all businesses, that a secure workplace contributes to their bottom line, and that it takes trained, dedicated people to do this work, and they must be paid properly. Our field also has become more and more technology-linked and technology-dependent, and technology costs money, too. Enough already with looking to see what we can give away!

[Mr. Security]

.....
Think about that time that you were thinking about putting marble counters in your kitchen. The guy quoted you, say, $10,000. When you said, "No, I can't spend more than $7,500", the guy (unless he was a total weinie) didn't say "Oh, very well. $7500 it is. Thank you very much sir. I love to do business at a loss, sir. Do you have any friends for whom I could do business at a loss, sir?" ....

Thank you, SecTrainer, for the good reminder. I am in the process of negotiating a new contract myself and the client wants a "package deal" instead of the hourly rate that I prefer to charge. I usually steer away from that type of pricing because my work always takes longer than I think. I'll be sure to add in plenty of margin, take it or leave it.