Do you guys charge more for troubleshooting or service call. I had a service call where lights and micro wasnt working. Two hours to troubleshoot and fix a loose neutral. If I charged my normal hourly rate, it would not have been worth my time (with the drive etc.)

I charge a higher rate for the first hour, about 1.5 times. Then normal after.
I feel this is necessary to offset the cost of travel, travel time, stocking material, etc..

Our company charges our flat hourly rate 75/hour plus materials etc. We will charge a minimum of 1 hour typically (you don't want to make a person feel stupid by turning on a breaker). I have found that if you do that you should tighten "connections" or something or else they will not feel any value so try and fix something or you will never hear from them again.

The company I work for does lots of service work and we approach it like this.
A customer who wants an estimate for a repair is told that we can't do that over the phone. Either we come and fix it for T&M or we refer them to someone they might prefer. When we are called for other types of service, such as removing and reinstalling items in existing locations we try to ESTIMATE our time, but these are budget estimates only, not quotes. Customers who can identify a minor problem, like a tripped CB or GFI are talked through the problem on the phone and then we send someone if they can't solve it themselves.
We charge a 1 hour minimum from our door to the completion of the job INCLUDING THE PAPERWORK. Then we charge by the 1/2 hour. We are straightforward with people about these charges and while we have the occasional no-pay like everyone, the company has been in business for 45 years and most of our customers are repeats.

Another question about billing for service calls.My hourly rate is 140.00, i would charge 165.00 to come out for the first hour, but how do i tell them its 140.00 an hour after that without hearing a big click on the other end of the phone?Any suggestions, thanks guys in advance for takeing the time to answer a new guy in buisness question.

Commando,

May I ask how you came up with that number? And also where you are located?.

Your rates are near $100 and hour MORE than in my area. I am not questioning your intentions, I am just very curious as to why this is.

Hello speedy petey, how i figured out my hourly rate is add up everything it takes to run the buisness in a year and the ammount of hours i will probally be working that year also.I use a program from a company called markupandprofit.com.It is really good , just plug in all you items to run the company, people on t, he payroll, how much profit you want and so on, in the end it shows you what you will be making, and what you need to charge an hour to achieve that figure. I hope that made sense.By the way i was in lowes the other day and i asked the sales guy what the store gets to hang a light fixture and he said the get 185.00 to remove the old one and hang the new one the customer bought. They also get 25.00 a foot more over 7 foot.I guess the theme is you must get more for the smaller type jobs to make it worth doing. Well i hope that helped, have a good one.

You've got the right method for figuring out what your rate should be to have a healthy business, R-C. If you set your rate on what other businesses charge you run the chance of going out-of-business, as half of them will over the next few years (or living on a $25-35,000/year salary like they do).

Dave

Thanks dave, and your right everyone must know thier real cost of doing buisness,the only one you are hurting is yourself, if you are not honest about it.Dave i was going to order that flatrate system you just returned.Was it really that bad? I saw a post on here from a-line and i think it is working out well for him.I am also looking for a flatrate systm to use but i dont know which one to go with. If you have any advice on how to price things for the customer or another system let me know. Thanks again for all your replies.

LK has some beautiful price sheets which he has worked on for years. I use the Home Depot Worksite CD as explained in the post "Estimating Software" by Acetoday (last post 3-11-05 at the moment).

Dave

...and YES, I thought the flatrate system was that bad! I would have much preferred paying $2500 instead of creating my own in over 100 hours. Any system will need adjustment, but this needed an "extreme makeover".

Checkout flat rate plus at mrhvac.com. It is a good system and you can print your own books right away to get started and then spend some time making any necessary changes or additions. I used it for two years until I joined a group that supplied us with a new pricing system. We still use it from time to time for specialty pricing that I added to the book. It was a great investment.

P.S. If you go to flat rate you can base your costs at 150.00/hr and you don't have tell the customer your hourly rate, because you are not billing by the hour anymore.
Win, win!!!

I checked out Mrhvac about there flat rate but didn't have the money to invest or the interest in it yet, but they will not leave me alone. They call about every two weeks and keep sending me info. I know how to contact them if I am interested so STOP CALLING! When places keep calling me like that it drivrs me away and makes me want not to use them no matter how good they are. I've stopped answering there calls so I hope they got the clue. Maybe next year I will give them a call back.

I have had a couple of pricing systems, and there's has been the best that is sold to the public. I hemmed and hauled, to make the jump inot fla rate, but when I did, I could not believe the difference it made. The paid for itself almost immediately. Remember the old saying, "you have to spend money to make money.
I don't want to sound like a sales pitch, but check out youresi.com. It is a group for electrical service companies and they offer the comlete gambit for running an electrical service company. They have about 200 businesses involved of which I am one of them. They give us the pricing system and all kinds of tools for marketing, setting up a truck, a shop, an office, etc. They also give us access to some of the best training and software in the industry. It is not cheap, but it well worth the investment. We have alot of onr and two man shops that say the rewards of joining and the additional profits far out way the costs. We even had a company join who was almost out of business and about 100K in debt besides late with taxes. He joined as a last ditch effort at the advice of a plumber who was a member of its sister group PSI. He was out of debt in six months, paid all his taxes, and began to finally see a profit. What a testimony.

I am not going to fill this site with ESI hype, but if anyone wants to talk further you can email me at rick@bruderelectric.com and I will be happy to speak with you. Again, I am a member and not on staff, so this is not a sales pitch, just my experience.

Wow Rick, you charge $150/hr. And you can hide that in these pricing sheets.

How long has this technique worked, I am still an old T&M guy, and am looking for a way to increase my rates, but I am afraid of sticker shocking customers.

What is your material mark-up on these sheets and how does that get hid?

While you may have to spend money to make money, you don't have to spend it for Flat Rate Plus at Easy Street, Inc. (Mr. HVAC). Their roots are in HVAC, and it doesn't translate well. If you've ever seen a tin-bender wire an air conditioner, you know what I mean.

I'm going to start a new thread on creating your own sales book for a flat-rate system in the hopes that you don't go through the disappointment I did with Flat Rate Plus at Mr. HVAC.

BTW, the gentleman that runs Mr. HVAC and Easy Street, Inc. is a top quality businessman. He has wonderful ideas on the video that came with Flat Rate Plus. These same ideas are at pmmag.co , a magazine for plumbers with many articles on using a flat-rate system.

Things like...have a nice uniform, clean truck, look people in the eye, act professional, be on time, keep your promises, warranty your work, return your calls, be available, etc. Good business translates to any business.

As far as price goes, do you want to be a package of freeze-dried coffee at the supermarket, or a $2 cup at the mall. People buy both willingly. Of course a $2 cup better come with clean shoes and a smile.

Set your rates wherever they need to be for your business to be profitable. The typical fear that your customers will abandon you if you raise your rates...typically don't happen at all.

Dave

Dave good luck on that monumental task that you are about to endeavor on. My time is worth a whole lot more than spending months redisigning the wheel. Flat rate plus isn't perfect,none are, but with about 40 hours in it revisions I had a top notch database. As far as a freeze dried package, I can count on one hand the amount of guys in our area using flat rate. Most believe it won't work.

I will admit that I do not use Flat Rate plus anymore, due to the fact I am invloved in a group that uses a different type of up-front pricing system, and they gave it to us as part of our membership. But we will use it as a suplement when needed.

Now as far as hiding my labor rate. We sell a panel at a set rate. Or an outlet replacement at a set rate. This price has been achieved by determining what it costs per hour per man to operate my company. We are a service company only and not a contracting company, so my operating expenses are alot higher than most. After determining that we usually double the material and a small profit margin to that. Usually 10 - 12%. The customer now pays for the task so it doesn't matter how long it takes. Some times we make out well other times we lose out, but it averages out in the end.

Keep in mind that when you go to McDonald's for your meal your actually paying what amounts to $275.00/hr. They just don't tell you that.

Dave, one other thing about Flat Rate Plus, the software itself is very user friendly to allow you to make the book exactly the way you want it. The only real beef I had with it waws that if you use the same task in different areas of the book, you have to create a seperate task for each page. Other than that I was able to make alot changes with very little effort.

What do you mean you sell a panel at a set rate?

How much can you possibly sell a panel for?

If the customer needs a new 200 Amp panel, we have actually two set prices. One for flush mount and one for surface mount. It is always going to be the same unless the conditions are extreme. This does not cover every type of breaker such as GFI or AFI. They are extra. The rest of teh service would be priced in an itemized fashion so that we can cover most every set of conditions. These prices are in printed books so that the customer can actually see the prices.

I see, but what is the difference in price.

If a 200a upgrade is about $500 in parts and it takes a guy 6 hrs to do, I charge around $1100.

How much can you charge with your flat pricing?

Are you sitting down?

We sell a 200 amp service from 3-4k depending on the conditions. We have done 6 this week.

Keep in mind, that flat rate pricing isn't just going in and gouging our customers. We have strict systems in place that start with our CSR who answers the phone, all the wat to our 100% guarantee that we have in writing and give to our customers. My men can't even smoke or swear on the site or the work is free. Among alot of other things

Big adds in phone books mean big prices.

You and Lowry are up there.


Thanks for the info.


Dnk....

We are half the price of Lowry. However, like Lowry, we have a huge operating budget. It is not my goal to grow old working in the field making 30-40K by vreating a job for myself. My goal is to make a decent living and creat a business for myself to work on. It's been a learning effort over the last 3 years, but I am making some headway. Meanwhile, we offer the best service and gurantees that my customers money can buy. The difference between us and the others are that we actually place the customers well being before our profits.

Rick, don't sweat it.
I didn't mean to decieve you in any way, but business is business.
Mid-Atlantic told me what some of you guys were charging for things and kept telling me I should do resi-work.
I had to find out.

I play with machines alot. Mostly commercial and light industrial stuff.

I am about 10 minutes from you, see your trucks passing me on street road sometimes.

I do buildings, but often wondered about throwing my hat in the resi market after what I'd heard.

Had employees, years ago. Too much paperwork and headaches for me. Like working alone alot, have subs in my pocket when I need the help.


Welcome to the forum.

Hope we don't get to bid on the same jobs, I know what you charge now.

Dnk.....

You didn't deceive me, I knew you were a neighbor based on other posts you made. I just don't know exactly who you are. I am not concerned about quoting against you either. First of all there is enough work for all of us(that's why I am so willing to talk with and not be the typical jerk), secondly people don't use us because of pricing, they use us because of the value we offer them.

I too used to play around machines, actually I still get to do that once in a while, but I decided that with having employees this was the best place for me. If I were a lone wolf, I would have stayed in the industrial end. It's much more fun and the money is as good if not better.

God bless you

I hear some of them guys doing the "Horvanarion" (spelling) homes on Jacksonville and the Toll homes are making some prestine bucks remodeling basements.

Some of these folks are spending upwards of 100K for a basement?

Thanks interesting....
That's some serious cash there....


Dnk....

Seems to me that if you look at the top notch businesses, whether HVAC-R, Plumbing, etc, the ones that are the most successful always seem to be charging way more than the rest. I know there's a ton of variables, but it seems to hold true in many trades and industries. They are usually very proffesional and market themselves well.

I'm very interested in the transition from lone wolf to business manager. When I think about it I get overwhelmed...

Someone to answer the phone
An office and warehouse for trucks and inventory
Hiring and training good techs
A dispatcher for the trucks
Much larger advertising and marketing budget

I'm sure there's more on this list, but I'm wondering if there aren't seven little steps I can take to make sure it's working as I go, rather than a big jump.

I'm already implimenting a flat rate system which is working well for me. That was one small step I could take and I can see it working.

Dave