How much do you charge for a service call

[busman]

$90 to show up and covers the first 30 minutes. Add'l $30 trip charge if outside 15 miles.

Primarily residential service electrician and my truck has all the right stuff for that line of work.

Mark

 

[emahler]

$90 to show up and covers the first 30 minutes. Add'l $30 trip charge if outside 15 miles.

Primarily residential service electrician and my truck has all the right stuff for that line of work.

Mark

mark,

serious questions...

1) do you charge for travel? or is that in your $90? and just an additional $30 for over 15 miles?
2) how do you explain the additional $30 to a customer? how many just hang up and call someone closer to them?
3) if you are set up and your truck is stocked for it, why not go to a flat rate system?
4) how many billable hours do you average in a day? 4? 5? 6? 7?
5) what do you bill after the 1st 1/2 hour?

by Northern VA, i'm going to assume the Fairfax/Prince William area...there are a bunch of flat rate service companies...the customers are accustomed to them...
thanks

 

[satcom]

On the flat rate issue, about 5 years ago, the flat rate guys showed up in my area, and I did not consider it as much of a threat, after all how could a bunch of companies charging a higher prices, take away any business from us established guys, about that time, one of the guys on here, said they will eat your lunch, well how can that happen, when everyone elses prices are low, well it's 5 years later, and most of the low price guys are gone, and the flat rate gang is going strong even in this market we have today, I see their trucks out and about every day, and many of their customers are the same ones the low priced guys, thought they had because of price. We can discuss the pricing issues until the cows come home, but the proof is in the results, the low priced crowd is just not getting the work, and there are a lot of reasons why the customers went with the flat rate guys, so why not find out why they go to them and try to adapt.

 

[bradleyelectric]

find out why they go to them and try to adapt.

because there is only so much work and to many electricians trying to get that work so the only alternative that will work will be to drop your price. Haven't you been listening

 

[Greg Swartz]

We charge...

We charge...

Good discourse here.

We charge $65 / hour. Minimum 1 hour.
We are not the lowest, and we are not the highest.
Several well established ECs in the area charge around this price as well.

Do I think this is high enough? No way!

That is why we are in the process of producing a flat rate system.
We use it for our contractors, but have not finished it enough for our HO service calls.

There are 2 ECs in our area that are part of the big franchise flat rate system. On average they are charging $150 / hour.
Unfortunately, both of them are not doing well. They both have large color ads in every phone book, vehicle wraps, radio ads, etc...

We have pricing for about 1/3 of the items we work with.
I think flat rate is the way to go because it sets up a price, that you give to your customer... the price is what it is... materials, labor, profit... all included. When you present that price to your customer... in writing, it makes a big impression. When some people see it in writing, they think it is stone clad... and can't be changed.

You all need to get with James, because he is developing the most extensive flat rate pricing system I have seen.

We used to bid everything... and I used to break every item out. People liked the way I did things. They liked to see how much things cost (or how much they were being charged, anyway)... but I spent waaayyyy too long on doing that, and we got underbid by the 'lectrician doing side work.

("Here you go, Mr.'Lectrician, here is what the last guy gave us...")
("$100!!! Ma'am, that's way too much! I can do it for $99!")
("You're my hero!")

So, I changed my mindset, I raised my prices, stopped breaking things out, gave an overall better first impression, and got into many more doors.

As several have mentioned on this forum, the people that don't want your prices, are probably not the customers you want. In fact, if you DO lower your prices to get them, you will probably find out that they are your worst customer... and they will want it for lower still.

Another item that helps in the sale is that we are in the process of giving a written guarantee. That gives people the warm and fuzzy.

Oh, and another thing... I don't run a 1 man shop. I have employees. So, getting them onboard is key... and getting billable hours is key!

Let the discourse continue!
Greg

 

[satcom]

because there is only so much work and to many electricians trying to get that work so the only alternative that will work will be to drop your price. Haven't you been listening

We have over 250 EC's in my county, all trying to get work, and still the flat rate guys, get the lions share of work, what we did to adapt was raised our prices, so we could afford to operate a more efficent business, and in turn it rewarded us with a slow and study growth,

 

[electricguy]

Charging enough to cover damages

Charging enough to cover damages

I am dealing with a customer were we installed a satellite system. My installer ran a screw though a coax feeding a satellite receiver in the top floor of a house.
We installed a whole new system for the basement tenant.


I got a call that a receiver wasnt working in the upstairs floor. I went and looked and found the damaged cable i made a repair and the upstairs people were not home.

I get a call 2 days later saying my repair didnt solve the issue. I went back and checked a few items. the people with the issue wanted there own guy to come in and I left about an hour after showing up.

Then I get a call they found the problem the bill will be 75.00 i said fine I need a copy of the Invoice.

Just got another call saying the receiver is fried and will cost another 225.00.
unfortunately we do not get a lot of money installing a sat system from the dish company . They do not care if we dont have damages money available from what they pay us it has to come out of my pocket.
This winter I put my foot though a ceiling from a low head room attic the damage cost 360.00 the customer went 1/2 with me they understood.

With the ceiling Damage I had that covered somewhat in my quote I still made money but not as much.
My insurance deductible is 1000.00 per occurrence so i just have to pay this stuff from my profits.

I am basically trying to point out that this is only one instance that i have to be aware of and have a portion of these costs estimated into my break-even.

 

[MarkyMarkNC]

You all need to get with James, because he is developing the most extensive flat rate pricing system I have seen.

Greg

Who is "James?" Someone on the forum?

 

[A1cbr]

I charge $65 and some people or ok with it and some are not.

 

[satcom]

I charge $65 and some people or ok with it and some are not.

I don't think it really matters what the amount is, but if your able to cover your expenses and also have some profit on each call,

Service call work usually costs more then scheduled work, our service trucks cost more to insure because of the nature of service calls, more stops per day, also repairs on the service truck are usually more, and they need to carry more inventory which costs a few bucks. and your non productive hours add up, and someone has to pay for them.

 

[Rewire]

I don't think it really matters what the amount is, but if your able to cover your expenses and also have some profit on each call,

Service call work usually costs more then scheduled work, our service trucks cost more to insure because of the nature of service calls, more stops per day, also repairs on the service truck are usually more, and they need to carry more inventory which costs a few bucks. and your non productive hours add up, and someone has to pay for them.

Why would they cost more to insure over a regular truck?

 

[emahler]

Why would they cost more to insure over a regular truck?

I don't think it really matters what the amount is, but if your able to cover your expenses and also have some profit on each call,

Service call work usually costs more then scheduled work,our service trucks cost more to insure because of the nature of service calls, more stops per day, also repairs on the service truck are usually more, and they need to carry more inventory which costs a few bucks. and your non productive hours add up, and someone has to pay for them.

more mileage, more risk...might just be a NJ thing...

 

[satcom]

Why would they cost more to insure over a regular truck?

If the truck just goes to the job and back to the shop when the insurance is cheap, as soon as you start doing service calls they up the rates, I was talking to the pizza guy, he gave up the delivery truck and hired a bunch of kids to deliver with their cars, the insurance companey wanted $8K A year My neighbor HVAC guy pays $3K a year for each of the 3 vans he has, he said he has a good deal for a service truck.

 

[satcom]

more mileage, more risk...might just be a NJ thing...

I think it may be a Jersey deal

 

[Rewire]

I think it may be a Jersey deal

Must be a jersey things I have one policy that covers all our vehicles and drivers,the only time it changes is when I add or delete a driver. The trucks are assigned to a driver and they are used for all jobs.

 

[emahler]

Must be a jersey things I have one policy that covers all our vehicles and drivers,the only time it changes is when I add or delete a driver. The trucks are assigned to a driver and they are used for all jobs.

not in New Germany, i mean Jersey....

 

[nhfire77]

We charge $100 for the first hour. That includes travel (mileage varies). Then $65.00/hour. We do commercial Low Voltage/data/comm. We do flat rate for new installs, system upgrades and testing. Repairs and system additions/alterations are T&M.

Why is T&M frond upon by some of you?


Net profit average 22% between three different business units under one main company. Anyone else care to share their Ratios?

 

[emahler]

We charge $100 for the first hour. That includes travel (mileage varies). Then $65.00/hour. We do commercial Low Voltage/data/comm. We do flat rate for new installs, system upgrades and testing. Repairs and system additions/alterations are T&M.

Why is T&M frond upon by some of you?


Net profit average 22% between three different business units under one main company. Anyone else care to share their Ratios?

I wish we were at 22%...we are at 10-12% NET...have you ever broken out your profit for T&M vs. flat rate?

The issue with T&M is billable hours...if I'm paying a guy $50/hr total package, and I'm only billing $65/hr...then, if I bill 8 hrs a day, I make a whopping $120 Gross off his labor...if I only bill 6 hrs a day, but pay 8, I make a whole $20 gross off his labor...

how do I make money like this? so, we don't do a lot of T&M, and when we do it, we bill travel and minimums in order to earn enough to make money...

 

[nhfire77]

I only see details on one of three business units so I now wonder the overall NET T&M vs. flat rate. Good Question!!!!!

We are in the northeast, it seems better profitability here, but cost of living is higher, I guess. Yea for T&M jobs where its a multi-day job and with traffic its one hour travel to site jobs; we are billing the drive to the job, its included in our rough estimate to the customer.

We need more local/regional contractors, and less national/international ones. I am a free market guy, but, the big companies are hurting us. We have to cut our own throats to stay in business, but, they do not lower their price structure its status quo for them.

 

[Rewire]

I wish we were at 22%...we are at 10-12% NET...have you ever broken out your profit for T&M vs. flat rate?

The issue with T&M is billable hours...if I'm paying a guy $50/hr total package, and I'm only billing $65/hr...then, if I bill 8 hrs a day, I make a whopping $120 Gross off his labor...if I only bill 6 hrs a day, but pay 8, I make a whole $20 gross off his labor...

how do I make money like this? so, we don't do a lot of T&M, and when we do it, we bill travel and minimums in order to earn enough to make money...

why would you be paying $50.00 and only billing $65.00? Your doing one of two things wrong you are paying to much or charging to little.