Im in Texas and have a hard time getting $80 per hour for service calls. A women called me today and wanted a 4 prong cord placed on her clothes dryer. When I told her it would be $95 to cover the 1 hour minimum, it wouldnt take longer than an hour, and that the price included material she said that was WAY to high and she was surprised I was in business. I probably get 4 calls a week like this one so that has me thinking maybe Im chargeing too much, but I dont see how anyone can justify a service trip for less than $80 per hour. Do you guys thank thats too high?
There has been a good deal of discussion lately about "trip charges;" that is, charging, say, $35 just to come out. This approach has its' benefits- not the least of which is that you get the credit card info in advance; no-show customers do happen! Once you're out there, maybe it is a simple five-minute job- or, maybe, it's not. You won't know until you're there. And, con't forget, the customer is an unknown at this point. Mean, greedy, young jerks sometimes grow into sweet, innocent-looking, old jerks!
You might suggest she call Sears- she'll find out they have a pay-in-advance policy as well. "If Sears does it, it must be OK."
Your time is money, and gas is too expensive to waste.
I also have had great feedback, after the job is done, when I knock a few dollars off the bill (on my own- if they start the 'hustle,' the price starts climbing!)
Your hourly rate should have nothing to do with how much work you have or what the customer thinks. Your hourly rate should be based on your cost of doing business plus your profit. Profit should be anywhere form 10- 20%. So you need to determine your operating expense, insurances, gas, phone, electric, secretary, etc. and compute what you need to make a profit. $80/ hour seems very reasonable and may not be enough.
Well the fact that "companies" advertise in our main news paper that they will work for $40 per hour, "dont tell my boss I do side jobs", and "we give free estimates" hasnt helped my business at all. I use to give free estimates until I realized I was only getting about 1 out of 20 of these jobs. I would go to the customers home or business in a clean company uniform, clean shaven, was as polite as I could be, and gave them a very fair price only to hear "well let me talk it over with my husband or wife" or "I will have to think about it". Well, thanks for letting me vent a little.
Some of these people would think free was too expensive so you have to take what they say with a grain of salt.
Sometimes you can turn these calls into more work and make the customer happy also. When they call and ask for a small item that doesn't meet the minimum say something like this: "We have a $95 minimum charge and this would surely cover your repair, but if you can think of a few other small items we can probably do them also for the same price or not much more"
Also, try to stay away from mentioning hourly rates. A guy making $15-$20 per hour or even more can't fathom pay a lowly electrician $80 or more per hour. He doesn't understand your overhead and cost of doing business, he thinks you're trying to make $80/for yourself(which I'm not opposed to).
LK, The calls I mentioned actually came from business cards that I placed at a Lowes store. I know Lowes charges something like $100 to install a ceiling fan. I use to run an add in a penny paper and you are 100% correct when you said all you get is low end business. Well, thanks for all the advice and have a great week everyone.
Rick Bruder. You say that it should not depend at all on how busy you are? If you're busy and your services are in demand you can charge more. Economics 101, laws of supply and demand. It happens in all industries despite your formulas of x percent profit or what have you. Business is business.