How do I understand Incentive Types?
Use incentive types to budget your jobs. Simply choose the option that best fits your specific labor budget structure.
Contents
- Item (Fixed price per Item)
- Percentage (Percentage of total Job)
- Square Feet (Price per Square Foot)
- Linear Feet (Price per Linear Foot)
- Budgeted Hours (Rate per Labor Hour bid)
Item (Fixed price per Item)
- Definition: Adds a fixed dollar amount per item, unit, or fixture installed on the Job to the Job's Budget.
- Example: $350 per push pier installed or $75 per de-humidifier.
- Example: A 5 Star Google Review can add $25 to the Budget.
Percentage (Percentage of total Job)
- Definition: Sets aside a specific percentage of the total contract price for the labor budget. Multiple percentages per classification can be added to a single job.
- Example: Budgeting 12% of a $17,000 project ($2,040) toward labor.
- Example: Job total (Contract Price): $10,000, $5,000 @ 12% + $5,000 @ 10% = $1,100 towards Labor Budget
Square Feet (Price per Square Foot)
- Definition: Calculates the labor budget based on the total surface area covered in square feet.
- Example: $2.50 per square foot for crawl space vapor barrier encapsulation or polyurethane foam concrete lifting.
Linear Feet (Price per Linear Foot)
- Definition: Calculates the labor budget based on the total line distance of the work area in feet.
- Example: $35 per linear foot for foundation wall epoxy crack injection and exterior waterproofing.
Budgeted Hours (Rate per Labor Hour bid)
- Definition: Applies a fixed dollar rate to every estimated labor hour quoted in the job bid.
- Example (Man Hours) : Budgeting $40 per man hour for crawl space encapsulation. If a 3-person team works 10 hours on site, that equals 30 total man hours (3 workers × 10 hours). Total labor budget = $1,200 (30 man hours × $40).
- Example (Crew Hours) : Budgeting $220 per crew hour for a concrete pouring and finishing crew. The crew spends 6 hours on site pouring a basement slab. Total labor budget = $1,320 (6 crew hours × $220).
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