New business

[stevekerr]

I'm Steve's wife and he has worked for other contractors for the last several years and with commercial construction down, has been laid off one time too many. In all honesty, he is a little older and not so fast as some of the younger ones on the jobsites. He has decided to do residential service work. Checked other local businesses in the area and it seems that most charge a service charge or a fixed rate for the
first hour anywhere from $68 to $75 .. some charge a trip charge on top. He has been charging $50 an hour with no service charge. I've been "encouraging" him to charge more .. any suggestions or ideas would be appreciated. Thanks. We are in the Dallas area and are lucky enough to have a cousin as a CPA and she is helping me with the financial part.

[bphgravity]

In my experiences, charging too low can be just as bad as charging too high. Some consumers will consider it a sign of lack of quality, lack of ability, or some sort of scam. Instead of providing a lower rate to encourage work, try other gimmicks like free estimates, first-time service discount, or a senior discount. In any case, I would definitely not be more than a few dollars each way from the majority of your competition. Good Luck!

[t-bird]

The established companies in your area are charging their service rates because they have learned what it cost to do the service call and make a profit. Most of the electricians that I know (myself included) charged too little when they started. If you are as good as your compitition, charge what they charge.

[definitive]

Ive found the best way to charge for service work is by the 15 minute increment. For example, $75 for the first 15 minutes and $22 for each additional 15 minutes. In my experience so far, Im not sure why, but most people dont like to see a trip fee. So Ive built it into the first 15 minutes.

[jro]

I have seen this way of charging for service work : Example $ 71 for first 1/2 hr this breaks down to $52 for electrician $19 for truck and setup fee, forgive me but I dont recall what the setup fee is for, then $52 for each additional hr broken down into 15 min, increments time stats at customers door. It may seem like alot but some body has to pay for your electrician to drive out to the job, and the time starts at you door is a good incintive. Remember to also include helper rates if it aplies Ex. $23 per hr, broken down the same way just don't double the truck and setup fee.

[stevekerr]

Thank you for your answers. This has really helped.