List price or T+M

[jimmyglen]

Ike,

I know a lot of guys who do resi service @ $70/hr/man and make a nice profit every year. The fact is, they would make a nicer profit if they didn't do that service work, all it does is cost them money. But since they don't break it out, they really never know. /QUOTE]



this is the case with a lot of contractors

some guys make a ton of dough and never really look the numbers over, they just keep working hard and banking the cash

 

[khixxx]

Man to bad we couldn't set this thread up on a you tube debate. What about charts like Ross Perot has? anyone have any?

I guess I am a # 2 guy so take it as you will. I would do a list price or a flat rate for your upgrades, unless you get into some thing very very crazy might just be best to raise your rates, but you might lose the work altogether. Maybe focus on your niche and work with this guy till things get rolling?

I have learned lots from Emhaler. His and others on this forum have said good and bad advice to everyone. I guess I have been pretty good at picking up the best advice and running with it. I use to only invest $2k a year. YTD I am at $40k. I am more interested in passive income.

If you want to change the Electrical Contracting industry just regulate it more. Talk to you state about passing laws were only legit ECs can purchase electrical equipment.

 

[iwire]

Talk to you state about passing laws were only legit ECs can purchase electrical equipment.

I hope that never happens.

Are you telling us that you don't do home DIY projects?

This country was built by DIYs and that should always be an option.

Here in MA only plumbers can legally install plumbing, it is against the law for HOs to do their own plumbing work.

Yet it is still legal to buy plumbing supplies and I do so at a professional plumbing supply house. I can't say they are happy to serve me but they do and the quality is better then the big box stores.

 

[aline]

My A/C condensing coils were frosting up. I cleaned the coils and made sure I had a clean filter in for proper air flow but they were still frosting up so I called an A/C company to come out to check the freon charge.

I was expecting to pay at least $200 to $300 for this service.
They checked the A/C system, charged the system, tested temperatures and checked for leaks. The total bill was $106.50. $69 in labor and $37.50 for the freon.

Although I was happy that it was so cheap at the same time I was also dissapointed that they did this for so little money. I want over a hundred dollars for labor alone for any service call. Pricing like this doesn't help any of us. I was also a little bummed that he didn't try to upsell anything to me. He should have been trying to increase that ticket. I can't see where he made any money so why even bother doing it. Does he think I'm going to remember him years later if I decide to buy a new unit and purchase it from him? I probably won't remember who came out.

He didn't bother to leave a sticker on the unit or a business card either. I would have plastered my sticker over the sticker of the guys that installed the unit in the first place.

Electricians aren't the only ones not charging enough.
Even some HVAC companies don't know what they should be charging.
$69 labor for a service call?

Would I've been happy if he had charge me $200 to $300 for this service?
Yes. It was what I was expecting.

Would I've use the guy again?
Yes.

I should have given him a copy of one of my Frank Blau articles.

 

[iwire]

I had two plumbers to my home on a Sunday for an emergency. (My Two year old flushed the TP paper holder :grin: )

They said $300 on the phone, once they got there it went quick and they dropped the charge to $125.

Of course I was happy but I wondered how much these guys where getting? $125 for two guys on a Sunday emergency call? They where at my house about an hour. :-? :-?

Had they charged me the $300 I would not have been upset, I was expecting that.

Will I recommend them to friends? I can't, I don't remember who they are, I found them in the yellow pages.

 

[aline]

I did a saturday emergency call by myself.
The homeowner said he lost power to a bedroom, bathroom and hallway.

I told him a minimum $250 service call fee would be charged and he said ok.

The problem was a tripped GFCI. He said the kids were in the bathroom when it happened and he thinks one of them probably pushed the test button. The homeowner had replaced the receptacle with a GFCI receptacle and when he did he connected everything downstream to the load side of the GFCI.

I reset the GFCI and rewired it so that the other loads were on the line side.
Did I lower my price? No way.

The funny thing is I had done a service upgrade on this home about a year prior to this. At that time I offered to install a GFCI in this bathroom while doing the service upgrade at a very reasonable cost. The homeowner declined and said he would do it himself.

 

[growler]

Electricians aren't the only ones not charging enough.
Even some HVAC companies don't know what they should be charging.
$69 labor for a service call?

I have friends that do HVAC and it's a little different than electrical work.
When we do a service call it's normally all the money we are going to get out of that customer unless something else goes wrong in the near future. We can hope for a service upgrade but most homes wired 20 years ago with a 200 amp. service are still in good shape.

HVAC units really need to be serviced as much as twice a year ( spring,A/C, fall-heating). This is good because it keep them circulating through the neighborhood. What they are really looking for are the old units that need to be changed out. This is where they make the real money.

Their service calls can be seen more as paid sales calls. They just want to keep their name in front of you waiting to sell a new unit ( plus all the duct work you are probably going to need ). This works well for them.

You may see an electrical service that's 50 years old and still working fine but HVAC doesn't last that long. They can be sure of a new system a least every 20 years on average. If we got to do that many service changes we would be in hog heaven.

We electricians just don't have to many items with a $1500-$2000 mark-up right off before labor cost.

 

[aline]

I have friends that do HVAC and it's a little different than electrical work.
When we do a service call it's normally all the money we are going to get out of that customer unless something else goes wrong in the near future. We can hope for a service upgrade but most homes wired 20 years ago with a 200 amp. service are still in good shape.

HVAC units really need to be serviced as much as twice a year ( spring,A/C, fall-heating). This is good because it keep them circulating through the neighborhood. What they are really looking for are the old units that need to be changed out. This is where they make the real money.

Their service calls can be seen more as paid sales calls. They just want to keep their name in front of you waiting to sell a new unit ( plus all the duct work you are probably going to need ). This works well for them.

You may see an electrical service that's 50 years old and still working fine but HVAC doesn't last that long. They can be sure of a new system a least every 20 years on average. If we got to do that many service changes we would be in hog heaven.

We electricians just don't have to many items with a $1500-$2000 mark-up right off before labor cost.

Why couldn't he have done this and still charged me $200 to $300?
Why do we think we have to charge a ridiculous low price just to keep our name in front of the customer in hopes of getting future work?
What's wrong with mailing a company newsletter or post card to the homeowner once in awhile to keep your name in front of them? Maybe quarterly, semi-annual or at least once a year. These can be mailed out during slow times to generate more work.

My A/C system is 12 years old. He didn't try to upsell me on anything. He didn't try to sell me a service agreement to service my A/C unit in the future or even try to set up an appointment to have it serviced again next year. He didn't even mention having it serviced at all. All he left behind was the invoice. No business card, no sticker on the furnace, no fridge magnet, no brochure on the importance of having it serviced each year, nothing at all.

If he's counting on $69 service calls to generate more work for himself he needs to do a better job of marketing and be sure I'll see his name everytime I change a filter. Instead I see the sticker from the guys who originally installed the unit.

When I mentioned they should make it easier to get to the condensing coils for cleaning since you're supposed to clean these every year he told me they don't need to be cleaned that often. He didn't seem too interested in coming out and servicing it each year. He seemed to just want to get in and out as quickly as possible so he could move on to the next one.

 

[macmikeman]

This is great! I posted it on E-Bay an hour ago for the low low price of $40.95 and sold 32 copies in one hour. The payments were all sent to my Nigerian bank account. My new plan is to retire at age 56 with tens of millions in the bank also.........

 

[emahler]

You'll be receiving a C&D letter shortly. Or just pad the price 30% for me

 

[480sparky]

This is great! I posted it on E-Bay an hour ago for the low low price of $40.95 and sold 32 copies in one hour. The payments were all sent to my Nigerian bank account. My new plan is to retire at age 56 with tens of millions in the bank also.........

When do I get my 15%?

 

[peter d]

I still laugh at that "EC for Dummies" creation every time I see it. The "cadpoint to English" thing really puts it over the top. Definitely one of your best efforts Ken.

 

[growler]

My A/C system is 12 years old. He didn't try to upsell me on anything. He didn't try to sell me a service agreement to service my A/C unit in the future or even try to set up an appointment to have it serviced again next year. He didn't even mention having it serviced at all. All he left behind was the invoice. No business card, no sticker on the furnace, no fridge magnet, no brochure on the importance of having it serviced each year, nothing at all.

Maybe he's just an idiot I here there is a lot of that going around. Just kidding he probably hasn't had the proper training. He really should have tried to set you up with a service agreement.

New construction is not going any better for HVAC than for electrical so he may have come from that side of the business. Those guys don't know much.

 

[tonyou812]

I recently got hooked up with a central air company .And I am trying to figure out the best way to charge them. They are mostly updating old systems so the jobs are small for me an example is yesterday I went to a job and brought stuff up to code add a switch and receipt in attic,add a WP gfi outside also I added a 240 v circuit and switch for new blower old was 110 .We were in and out in 2.5 hours I feel like I work fast there for T&M I am working myself out of money.Opinions pls

T & M is good sometimes but youll never get rich on it. Dont forget to include the time to get to the job. other wise you loosing money before you even start working.

 

[nafis]

what do you guys think on this then......

what do you guys think on this then......

what do you guys think on this then......

http://www.thecircuitdetective.com

 

[mivey]

what do you guys think on this then......

http://www.thecircuitdetective.com

I haven't read the material but I think it is a neat idea as long as the information is good.

I do wonder about the DIY that will get in over their head but they would probably do that even without this guy's information. You just can't protect people from themselves.

 

[frizbeedog]

And bob, when multiple sources can be cited, it ceases being opinion.

When multiple sources can be cited, it just means that you found the right people who agree with your way of thinking.

...ever wonder why people never cite things (opinions) contrary to their way of thinking?

...to much vested in their belief system to do so.

Many will find, and be able to cite opinons that are contrary to yours. Does it then become fact?

It just means that there are more people with the same opinon, contrary to yours. It doesn't magically become fact.

...define fact!

Wait, I got it, opinoin is fact. :roll:

 

[mivey]

When multiple sources can be cited, it just means that you found the right people who agree with your way of thinking.

...ever wonder why people never cite things (opinions) contrary to their way of thinking?

...to much vested in their belief system to do so.

Many will find, and be able to cite opinons that are contrary to yours. Does it then become fact?

It just means that there are more people with the same opinon, contrary to yours. It doesn't magically become fact.

...define fact!

Wait, I got it, opinoin is fact. :roll:

Now that's a fact.

And, the majority is not always right. There's another fact for you.

 

[LarryFine]

Hmm. A new signature: Not always right, but never in doubt.

 

[emahler]

Frisbee and mivey. The differnce between fact and opinion is simple.

Frank Blau set forth a challenge years ago. He challenged anyone to show him a profitable P&L for a company who runs resi service T&M. After all these years he still hasn't been sent one. And the money offered is pretty decent.

Once you tip the scales to over 51% in any direction, that becomes the rule.

Right now, for resi/lt commercial service company (companies that focus on that market, not.dabble in it) There most definitely is a better way to do it.

Now you can sit there and argue against the known. That's fine. But at the end of the day , for companies with employees, who focus on resi/lt comm service and repair, its well established that a flat rate system is more profitable and usually provides the employees with higher pay, better benefits and and overall better life.

You want to argue for the alternative, have at it. You want to cite exceptions to the rule as proof, that's your right.

In the meantime go to websters and look up the difference between fact and opinion. You might learn something.