What do you charge as a minimum rate for a service call?

If I'm on a series of calls and my schedule is full for the day, I really don't use a minimum, but an hour is the least that I will charge.

If, on the other hand, I'm done for the day or it's the weekend, and I get an "emergency call", It's a 2 hour minimum, even if it's just flipping a breaker and takes me the drive + 5 minutes. I don't think it's asking too much, as the vast majority of the people who have these "emergencies" would never even consider going into work after hours or on the weekends, and I haven't had an argument yet.

Any thoughts or different policies out there?

I sure wouldn't want to use on a day that you are not busy!

In order to be consistant and fair with each customer, you should charge a fee to everyone, everytime. You wouldn't want two neighbors to discuss why one of them was charged a minimum fee and the other wasn't. One of those persons is going to be very mad.

I suggest charging a fee to everyone, but do not attach a time limit to it. Call it a travel fee, show up fee, service fee or anything else, but not a "1 hr minumum charge". When you charge everyone the same fee, it will make you more consistant (and thus easier to prepare invoices), and make you more money. An extral $100 a day in "travel charges" really makes a difference in your bottom line.

If it is any help, let me tell you what I found while working some jobs the past month, One customer needed a gas appliance hooked up they called the gas company, when he srrived while we were there, he came in with tool box, took him about 6 minutes to attach gas line, another 5 to write up invoice, she paid $159 plus tax, no hourly rates just a flat amount.
Another job we were on an appliance repair showed up, they were there for an oven repair, the man came in looked at the oven 4 or 5 minutes at best, told the lady she needed a new oven, and presented a bill for $139 plus tax, his total time there was about 15 minutes.
Another job we were installing a line for a sump pump, when an AC repairman came to the house, he took about 5 minutes looking outside, came inside opened the air chamber and replaced a filter, the owner touted how good he was, only $279, well for 20 minutes of work that was not bad.
This friday, we were replacing smokes, and installing an outdoor light, when a plumber arrived, to replace a toilet seal, he was there for almost an hour, $290

The way it lookes to me, everyone seems to be moving away from hourly charges.

Electrical Contractors in my area charge different rates, one guy just up the road charges $90 just to ring the door bell, then charges $120 an hour, the big yellow guys charge from $139 to 159 just to ring the bell, then they quote a flat price for the job. The new guys on the block make call for either nothing or a very small amount, but we don't worry about them, they are usually back working for someone in a few years, then a new crop comes along until they go bust.
You really have to find your own costs. and establish a price, just don't forget, service calls cost more then scheduled work, plenty of existing posts to explain the difference.

Then the electrician shows up, diagnoses the problem, gives a free estimate and leaves with nothing.

The guys charging T&M are working out of their garages.
Those with a flat rate system own a shop.
If you like your garage, stay with T&M.

We struggled with T&M for years. People don't like you telling them you charge $100 bucks and hour and they make $20. They have no clue of the costs of business and don't care to hear about it from you. I tell them it costs so much to do so much. New customers don't see a difference in quality, just the bottom line costs. They assume all work is done the same.

You need clean, uniformed, courteous, SALES people who can pull out a price on work while they're on site. This provides consistancy. I lost a good customer by charging different show up fees, just because I couldn't remember what I charged them on previous trips. They actually kept the receipts and compared them. Caught in the act (of ignorance).

That's a good way to put it into perspective PE'. Thanks for the insight.

there is a huge misconception that if you are flat rate you have to be expensive. You can be the cheapest guy in town and be flat rate.

PE, REW and satcom all made the points.

here is one last one. most contractors that go to flat rate purchase some type of pricing system. as part of that system, to create their flat rate pricing, they have to perform a break even calculation. This determines the cost of doing business.

Once you perform a break even calc, you would be a fool to charge less than it costs you to operate.

most guys who charge T&M, have never performed a break even calc. they just charge the "going rate" and live according to what they can make.

edit to add- this is figuring a small resi/lt commercial service company. Larger commercial companies that do installs will often make money on the install and lose money on service just to keep the customer happy for the next install project.

All good advice. Doing business can be like a game. It doesn't matter how you play it as long as you can do well with it. Once you know your breakeven you can...

1). Do Free Estimates and boost the rate of the first task.
2). Have a Service Charge to cover travel, setup & cleanup, and keep the first task normal.
3). Have a Minimum Charge that covers travel, setup & cleanup, with normal task rates.
4). Whatever else will work for you.

The main idea is to recover your overhead and earn profit. The method you choose to do that may depend on your territory or your business style or your comfort level.

Dave

Like LK was saying earlier... I used to work up on Long Island as a Journeyman. We would charge $90 min to show up at the front door. This lady call us for a problem with some light fixtures. An old three-way switch was half-way between positions. We just flipped the switch and back in business. Ninety dollars.

now the key is to spend another 30 mins, turn it into a $200 call and leave a happier customer.

think about how that lady felt spending $90 for you to flip a light switch.

Now, spend another 30 mins, replace the switch, change out a bad GFCI, etc. charge her $200 and leave her happy. Because now she got something for her money.

I never spend only five minutes at a customer's home. Especially if it's a new customer and it's the first time I've been there.

I always do a courtesy evaluation of their entire electrical system as part of the service call fee. I pull panel covers and check and tighten connections. I check for and test GFCI's, look for broken receptacles, missing covers, check for smoke detectors and CO detectors.

I went out on a call a while back where the customer lost power to some outlets. When I got there she said she had lost power to some other outlets in her home previously and the electrician she called found a loose wire in the electrical panel and tightened it. She said she would never use him again because he charged her $135 just to tighten one wire.

I pulled the panel cover and found three more loose neutrals on the neutral buss that the previous electrician had missed. I went through and made sure all connections were tight. The panel had been upgraded recently but was not wired correctly and didn't meet code. Grounds and neutrals were landed on the same buss even though this was a sub panel without a main breaker. There were 20amp breakers feeding 14awg wire.

I did a courtesy inspection of her entire home and wrote up a list of my findings and prices for the repairs. I wrote up $2,500 worth of repairs charged her the same $135 and she commented how happy she was with what I had done.

Out of the $2,500 she had me do $2,000 worth of repairs. Below are some of the things I did.

Installed 12 GFCI receptalces.
Replaced breakers.
Installed ground bar.
Corrected polarity of some receptacles.
Grounded some receptacles.
Replaced existing smoke detector with combination CO/Smoke Detector.

The other electrician before me came out and quickly found the problem, tightened one connection, collected $135 and left. He could have gotten another $2,000.

Don't assume the customer isn't interested in buying anything else while you're there. Show them how much money they'll save by having you do the work while you're already there.

On another call I went on I reset a GFCI breaker in the panel. Did a courtesy inspection and sold $950 worth of repairs.

GFCI receptacles in the kithchen.
Whole house surge protecion for power, phone and cable.
Other minor repairs.

There's usually a lot of things that are unsafe and in need of repair. Alway check the garbage disposal especially on older homes. These are often a mess and very unsafe from a do it yourself job. There's a gold mine under there.

Always carry smoke and carbon monoxide detectors with you. You can't sell what you don't have.

When replacing a switch try to upgrade them to a dimmer if they don't already have one.

Going out on a service call and only collecting $90 is going to break you.

"Don't assume the customer isn't interested in buying anything else while you're there. Show them how much money they'll save by having you do the work while you're already there."

"On another call I went on I reset a GFCI breaker in the panel. Did a courtesy inspection and sold $950 worth of repairs."


That is the way we have been operating since day one, Not everyone will be intrested in doing the additional work, but they will remember you checked.
This is why you need to charge a decent service call fee, to allow for your investigating time, electrical is a system, not a room that needs painting.

By the way this guy said he didn't have the money at the moment for $950 worth of work. But then said; Well since you accept credit cards I guess I'll just put it on my credit card.

Accepting credit cards is a great way to increase sales. Accepting credit cards doesn't cost you money. It makes you money.

I almost didn't offer him the whole house surge protection because I didn't think he'd be interested in it. He didn't seem like the type that would be interested in anything else. I decided to got ahead and add it to the list anyway and he bought every thing on the list. You just don't know what people will buy unless you offer it to them.

I regret not putting more on the list. He probably would have bought more.

I heard Ford make more money from there financing than selling cars.

I don't provide financing. I just accept credit cards.

I had a woman the other day, when I told her I don't provide financing, ask me if she could give me monthly payments and when she had given me enough to pay for the job I would come out and do the job.

She said she had a hard time saving money so she would give me $100 per month to save for her until she had enough saved to have the job done.

This was a $3,000 job. She was going to give me money each month for almost three years without me doing any work?

I've had people pay me in advanced but never like this.

I had a deal with Wells Fargo, they did the loan (took the risk) and I got paid in full.
Just being able to offer that made many sales that would have otherwise been lost.

"Zapped" Your time on site is irrelevent regarding what you charge. You have tools to buy, gas, truck repairs, insurance, blah, blah & blah to pay for to stay in business.

We charge a service call fee of $85 which includes up to one hour. That hour includes travel to the job. However if all we do is reset a breaker or such have only 15 minutes invested I charge a $55 "Limited" service call. There is more to everything than meets the eye, ie office people keying in your mans invoice data etc.

If you feel you are ripping people off charging them $85 for twenty minutes driving and twenty minutes work you need to get a job and give up contracting.

You are providing a service to people and could save someones life or burn their house down depending on your workmanship. Your work demands more than a landscaper or roofer and you need to charge accordingly! Just don't rape people just because you can.