Billing, rates

Mark Wolff

Thanks for the info. We do a lot of bush work also, Kobuk, Shungak, Emmonak, Hooper Bay,etc. etc. etc. We charge full rate for travel time, but didn't know our rates were so low comparatively. I appreciate the update.

Paul Mitchell

Just a little survey among friends

Wanted to know how everyone basically charges. We currently charge mostly hourly time and material. A little flat rate on specific stuff. Been reading alot about flat rate....not sure what I think. Considering a Diagnostic fee to cover first half hour and then a per 15min charge after that....Not sure though. Just curious.
Paul

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Mad Dog

Almost 98% flat rate

if its going to take time to diagnose, t & M too. Mad Dog

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Mark Wolff

Rates

Bid/estimate/flat rate on some jobs t&m on others. Just depends. Always there is a 1 hr minimum charge. $70.00/hr (thinking of raising it, the auto shops charge $75).

jim lockard

Kinda like -U-

Paul ---call it what you wish diagnostic fee/door /showup.
Any way you cut it 1st half hour on site within a 15 mile radius. longer distances/up in the hills/dirt and gravel back roads/night time adventures/NO back roads after dark.
All are worthy of additional cost just to get there. Like to be able to quote a price at that time. Involved troubleshoots or other scary stuff I just play it safe and stay T&M. Cut and dry installs I perfer to give a price.
J.Lockard

Kevin_12

flat rate

I work in Indianapolis. We are 98% flat rate. We charge as follows as far as diagnotic charge
Residential $74 /Night calls $93 /Service agreement cust $63
Also there is a $5 surcharge on top of this
It don't matter how long it takes to diagnos problem
Most problems can be diagnosed in 15-45 minuts
Commercial is
Under 5 ton $100 Night calls $121 and Service agreement cust is $85
Over 5 ton is $121/156/99 respectivly
we charge 96.00 hr. if it is T and M
We give a 15% disc on service agreement customers
A Honeywell T8400 stat during the day non agreement is $171 plus diagnotic and surcharge.
I'll let you know any price on something if you ask.
I was t and m for years and always thought flat rate was a rip off but now I love it.
Why should the customer be charged a different amount when it takes junior techs longer to make repair vs. a tech that is faster? with flate rate theoredically the customer would pay the same amount no longer how long it took

Jack, CVMS

Rates

Hey Mark,
From what I've heard you're under Anchorage by quite a bit. We're at 75 here and thinking seriously of going up to 90 before long.
We do a lot of work well out of town, so we charge 50% for travel time, but no mileage. All of our work is T & M, as every job is so different that we couldn't come up with flat rates if we wanted to.

Paul Mitchell

Thanks for the input guys



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Toearly

Paul

We are Flat Rate.
Closer to 200.00 then a 100.00

David

Mark Eatherton1

THE most important thing to know...

is your direct and indirect costs of doing business. Until you know those numbers, any other number you come up with is just a guess. And guessing doesn't do you much good.

I'd suggest a trip to my good friend Ellen Rohrs web site at http://www.barebonesbiz.com/

There you will find two real easy to read books, along with a device she calls a Numbers Cruncher. Once you read the books, you'll WANT to use the cruncher to see where you are compared to where you SHOULD be. What ever method you decide to go with, you MUST understand your cost of doing business before you can determine a sales price for your goods and services.

That said, I prefer the "Up Front" pricing method. It takes the guess work out for the consumer. I know I wouldn't want someone to start a job without knowing how far into my lifes savings they were going to be digging a hole...

ME

Paul Mitchell

I was refering to service

Installations are always a flat price.

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Geo_2

I'm with Mark on the "up front pricing", T&M or flat rate.

Dale

ASN

Saw a nice article in Appliance Service News on this a month or two ago, service only company, tech paid $20 per hour and make average 8 calls per day, with good benefits charge $143 an hour to make a profit and cover all costs, things like truck replacement and training, as one of the other posts said the key is to track all costs. I am always surprised to see costs lists, even the yellow pages add was divided into service hours available.

Mad Dog

Let's not go there Geo...........................

we don't need to restart the war on flat rate versus T & M. There are ethical an unethical practioners in both genres. Mad Dog

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Mark Eatherton1

And that...

is where most contractors choke on the flat rate principal. Having to charge more than $100.00 per hour to make a buck.

But the sad thing is, it don't matter wether you're a flat rater or a T&Mer, it IS what it IS. ANd if you're not covering it some how, it's costing YOU money to stay in business.

Been there, done that, don't want ot do it no more... (lose money that is..)

ME

Dave DeFord

A HO's perspective..

As a HO I think that I would prefer a flat rate for a couple of reasons. First of all I know how much the bill is going to be before you walk in the door. Second it is then in your best interest to get the job done a quickly as possible. The only possible down side is see if you or your guys would get in a hurry and I think that would be covered by professionalism and warranty.

jackchips_2

Where's good old

Frank Blau when we need him?

Anyone seen him bending a rod?

Ken C.

Dave,

Today I went to a customer's house to install a shutoff valve for a dishwasher. My company is flat rate, and I showed the customer the price ($144). He was flabbergasted. ("THAT MUCH to replace THAT VALVE!!?? How long will it take you, all of 20 minutes??) I thought he was going to kick me out, but he said he had to have it done so he could use his new dishwasher. In all honesty, I could have been in and out of that job in 10 minutes, but I offered to run the dishwasher through a cycle to check for leaks, even though someone else had run the water and drain lines to the appliance, to make him feel a little more like he got his money's worth. My point is, not everyone is prepared for prices that a flat rate company ususally charges. How would you react if I proposed a price of $144 for a simple (for me) 15-minute job? Would you still like flat rate? I know these prices are necessary to cover our company's expenses plus a modest profit, but most homeowners don't understand.

Ken C.

Mark,
I've seen this "we're not worthy" syndrome firsthand. I used to work for a T & M service company (plumbing mostly) that sent two employees on most jobs. If the bill was more than $300 or so, the other guys would practically beg me to go collect payment from the customer, who didn't know upfront what the price of the job would be. They were clearly afraid of what the customer's reaction to the price would be. I didn't care, I wasn't afraid to collect on a job, no matter how high the price. Sure, it wasn't always pleasant, but I wasn't afraid to get paid for the work we did. If they really put up a fuss, I could always refer them to my boss. Some people in the plumbing field have a low concept of self-worth and are hesitant to charge accordinly. Just my opinion.
Ken

Mark Eatherton1

Thats a fact Ken...

and the easiest way to overcome it is to have the person answering the phone (call taker, service scheduler, appointment maker, whatever) set up the final payment, i.e. "And, so Mrs Smith, how will you be paying our technician for todays services, check, cash of credit card?" The consumer then knows that they are expected to "Pay upon completion".

The bigggest problem with going flat rate is getting the employees to go along. If they don't feel it's fair, then get another one who does. You're not doing yourself or the company any favors by maintaining employees who are not a part of the long term plan/goal of profitability.

Regardless of how good you perceive them to be, if they don't get completley behind the plan, it's time to find their replacement. When properly addressed, the majority of people will go along with the plan, but there are the few, the staid, the stoick, those people who don't believe that you could/should charge more than $100.00 per hour to have plumbing/heating work done. They need to wake up.

How much do you figure Grease Monkey is charging per hour to conveniently change your oil? Trust me, it's well over the $100.00 per hour rate, and they are not exposed to NEARLY the hazards we expose our employees/customers to.

Let's see, we work with water, fire, electricity, products of combustion that can KILL you (or your customer) and on and on. I think we're deserving of well over $100.00 per hour for our services. I'm sure there are some CPA,'s attorneys and doctors who would dispute that fact, but it's just that, FACT.

I'm sure I'll catch heat over this one:-)

Bring it on.

ME

hr

Ken

you need to make sure the customer understands the travel time involved, also. Takes an hour to get from one end of Springfield to the other at certain times of the day. Those costs need to be spread out among the calls.

I'd be glad to do $65.00 service calls IF the homeowner brought the problem to my shop

Just think, no truck, fuel, insurance, windshield time costs, etc. Divide the cost of owning and maintaining a service truck by your billiable hours. Gets to be a big number.

I think this is the part many customers don't understand when the get a price for a percieved 20 minute repair. Unless they live next to your shop.

Oh, but then you would have the Chuck Shaw problem, where neighbors don't expect to pay the going rate

hot rod

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John@Reliable_5

So true!

I have told customers ,if you can bring your boiler to my shop I'm sure the price will be less! most will understand then.

Wethead7

Rates

We are not flat rate. Basic Res service is $125.00 to appear at the door.If You do not let the serviceperson in at that time. An additional $125.00 for the next visit. Both must be paid before we start any work. Comer. work is higher. We are currently considering raising the rates.

When I took over the service department The boss said I would run them out of bussiness. I raised the rates from fourty dollars to ninty, within a month we more work than we could complete. We had all the service personel working 60 to 80 hours a week.

Mike

Paul Mitchell

Where are you guys

located and what do you do? Thanks for the response

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Ken C.

Excellent points, Mark. I wholeheartedly agree that the hazards of our profession, coupled with the importance of providing basics like heat, running water and sanitary drainage, make our services well worth $100+ an hour. You know it and I know it (and hopefully, more of our brothers in the trades will come to believe it too), but I think an even tougher hurdle than convincing employees is convincing customers that our services are fairly priced. Part of the problem is that there is always someone willing to work cheaper, whether it's Joe handyman working out of a station wagon, or a skilled plumbing/heating man who lacks enough business savy to realize he's working his butt off for peanuts. Tradespeople should not backstab each other. My boss told me it goes up his **** when someone from another company tells a customer, "I would've done that a lot cheaper," thereby making the customer believe anyone who dares charge enough to cover expenses plus make a reasonable profit is a crook.
Ken

Wethead7

Location

Slightly northwest of Kansas City, Plumbing, Hydronic heating(both steam & water)including raidant,Biotech(medical equipment,gasses, high purity water & steam,medical air,vacum, and others)scoard air, A/C & refrigeration systems, Electricai.

Note the medical rates are higher than the standard rates$250.00. Our basic rate is $125.00 for most others