First of all...I'm not the Dave that some are commenting about.
In regards to pricing, the central issue IMHO is about trust more than price. Does the client trust that you will be professional and provide a quality installation at a FAIR price?
This is rarely an issue on repeat jobs, but is a major issue on first jobs. It is confusing to first time clients when they're trying to find a good contractor and aren't sure how to compare them. This is where you get questions like "What is your hourly rate?".
When someone isn't trustworthy T&M or Flat Rate can be abused. IMO T&M is stress-free for the contractor (if it takes longer, you still make your rate). IMO Flat Rate is stress-free for the client (if it takes longer, the price remains the same).
On the issue of price, there is no guarantee which system will save money for the client or be more profitable for the contractor.
I've done both & prefer Flat Rate. I prefered T&M when my estimating skills were weak. My #1 & #2 skills now are high-quality installations & estimating. I'm able to very accurately estimate the variables of an installation.
A contractor fears working for nothing & if you underestimate, you're working for nothing on part of the job. That's a good reason to use T&M, but to repeat myself, I don't use it because I think it adds stress to new clients & I don't have significant problems with estimating.
I should add that almost all of my work is residential service.
Dave
