ECN Forum Forums General Topics of the Trade Business Related Discussion t&m vs. flat rate for service?

hey guys im new to the forum. I just started a small elec buss. I was wanting any feedback on how you guys are charging cutomers. any thoughts on T&M vs. Upfront pricing would be greatly appreciated!

I am a Flat rate company Upfront pricing is listed in all my advertising. Now saying that I am my own worst enemy when quoting from a price book. i start to second guess my final price
why am I more concerned about the customers ability to pay than my own operating expenses.. I think I need one of those Charlie Greer seminars

T&M requires a great deal of trust between the customer and the contractor. It can only work after a long standing relationship has developed.

As for "flat rate," we ALL like to know ahead of time what we can expect to spend. Would you roder at a restaurant, without knowing the cost?

Now with a flat rate pricing, do you go to each customers house with a estimate, or do you give estimate over phone without seeing project? running around not getting jobs could be and issue, unless you could give price over phone. I like the idea of flat rate, but seems like you would be losing alot of time on the road as well.

Generally flat rate has a dispatch charge attached to it. It is not a good Idea to quote task prices over the phone you need to see the job.

how do you combat the contractors that are giving free estimates. With the dispatch fee you may not get to see alot of jobs available. Customers that are looking for an electrician will tend to be looking for free estimates.
Which is not hard to find! Basically it sounds like the dispatch fee is a charged estimate.

Thanks for all the input on this topic

Thanks to Aline for posting this link at another forum.
It helps to determine how to apply a dispatch fee to go look at a site.

http://contractingbusiness.com/ar/cb_imp_13003/

hey thanks, thats was very informatable.

Thanx Doug. That was great.
I have long been Leary of a flat rate. This article (as opposed to others)Has really got me thinking.

I don't think I ever had the full grasp of it before.

I have walked away after a T&M job shaking my head at all the money I didn't make.

Leland, if it is any consolation, I have walked away after some flat rate calls shaking my head at all the money I didn't make either. It doesn't always work out, but by far it does based on percentages of times it does. Trick is do not "flat rate" at only what you think it will take to do the job and make a profit at it. Figure the worst case scenerio into it and flat rate based on that. Then you start making money at flat rate cause it will even out the ones you don't figure enough time into to get it done right and to super service. One thing about that Charlie Greer article , If you drop your trip charge and then bury it back into the primary task, isn't that the same thing as "free estimate" when in fact you end up charging for that free estimate in price of the job....