Upfront pricing/ Flat rate pricing. Need help getting started

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petersonra said:
I see nothing wrong with charging a fee for an estimate. We sometimes do that when a customer wants a quote and it is going to take some serious work to get it done.
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I'll refine my above answer by saying if I go over to do a "free estimate"* I have limits on what I will do for free. If I have to exceed those limits, I will inform the client that I don't have enough information to give a price and any further investigation must be paid for at my hourly rate until I do have enough information to give a price. Rarely is the potential client willing to spend any money, so the "free estimate" ends there. The limits are:
(1) I won't generally use tools to open anything up (although I do like to take the deadfront off panels for potential panel jobs).
(2) I won't crawl under a house or climb into the attic, but I will peer into these with a strong flashlight.
(3) I won't spend any more than about 30 minutes investigating.


*I always put this term in quotes because it's only free to the potential client. I have to pay for it which means it get added to overhead which means my paying clients end up paying for it.
 
Does anyone charge for an estimate with a clause stating that the price of the estimate will get credited against the price of job, if awarded?

Wondering about the pros & cons?
 
I do pretty much the same as Coppersmith. Estimates are free, unless there's a long drive, work must be done, or some engineering must be involved. I also credit most or all of that charge to the job, depending, but it's eventually covered in the total price.

For single tasks or troubleshooting, I typically charge $150 for the first hour, which includes a "dispatch" fee, and $100 per hour after that. Proposed work is based on that rate, so the customer receives a flat price. If I have a helper, working faster pays for him.
 
The only time I give an estimate is if I am adding, moving, rewiring, deleting, etc. And it's free, but it's not.

My opening price to everyone includes a certain amount of money that I can burn doing free work or free estimates or free trips.

So an estimate is free for the person who says no, but the person who says yes is paying for it by default through my opening price.

Basically, everyone who says yes helps pitch in to pay for all the time I spend with everyone who says no.

Repair work? I won't even give an estimate. They don't know what the cost is going to be until I know. And I won't know until I finish fixing it. Therefore, I won't even make the trip to go look unless they have agreed that all my time spent there is on the clock.
 
petersonra said:
If you spend the time doing the estimate, why would you do it for free?
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People expect "free estimates". It's a way of getting business. There are enough tradesmen giving "free estimates" that not doing so makes me uncompetitive. Keep in mind that eventually I will get paid for doing the "free estimate". The cost of doing them goes into overhead. This causes the price of all jobs to go up a little. So the people who actually pay me to do a job are also paying a little extra to cover the overhead of doing "free estimates". The only people paying nothing are those who never employ my services.
 
retirede said:
Does anyone charge for an estimate with a clause stating that the price of the estimate will get credited against the price of job, if awarded?
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I do this for real estate agents. I don't charge for estimates except for real estate agents. I charge them $50 in advance with the proviso that it comes off the bill if I get the job. Real estate agents are particularly dishonest. They will call to get an estimate with no intention of actually hiring me to do the work. They just want a number to show the buyer or seller to help make a sale. A lot of times they won't tell me they are an agent when they call, but if I sense they might be, I'll ask.
 
Coppersmith said:
Real estate agents are particularly dishonest. They will call to get an estimate with no intention of actually hiring me to do the work. They just want a number to show the buyer or seller to help make a sale. A lot of times they won't tell me they are an agent when they call, but if I sense they might be, I'll ask.
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They're a bunch of scoundrels.

I once heard it said of lawyers, and it could equally apply to real estate agents, that the 95% make the 5% look bad
 
James L said:
They're a bunch of scoundrels.

I once heard it said of lawyers, and it could equally apply to real estate agents, that the 95% make the 5% look bad
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Real estate agents are on commission and don't even get a draw in many cases. They almost have to be the way they are.

On top of that, clients expect that they know all there is to know about real estate from construction to repair to legal issues. The reality is that most of them are dumb as rocks about any of those things and survive solely on their sales skills. Keep in mind you can become a real estate agent most places by taking classes that total less than 100 hours. Many of these classes are given by agencies for "free" and are of dubious benefit.

I read once the 3 year survival rate for RE agents is about 5%, with about 80% failing the first year.
 
The reason I charge that fee is it takes time to do estimates and time is something you can’t get back. I never do estimates over the phone. When I go to the customer’s home I do a complete check of their electrical system. Most of the time I will find issues that are safety related and I do a little up sale at the same time. But at the end of it you spend 1 to 2 hours of your time building options for a customer you should get something to cover the bills.
 
What software are you all using so customer’s can you pay with their credit card, on-site?


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Bengel1 said:
What software are you all using so customer’s can you pay with their credit card, on-site?


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I use Square. It's very easy to use. There is no minimum fee or minimum usage. The only charge is the percentage they take from the sale. I used to use another company, but they had many monthly fees.
 
I use square as well. Square deposits the money the next business day in your account. You can use their software to write up estimates and offer different packages to your customers. If you’re dealing with a landlord they can pay with a link you send them. Plus I make all landlords save a card on file for when they are not onsite as a backup. You can save all your customers information addresses, phone numbers, emails, and you can save their birthday. I send out a hand written birthday card to them.
 
petersonra said:
I think some of this stuff you're just going to have to work out as you go. I think you're going to find first service work that it's an expensive business to get into because a lot of your time is going to be spent basically doing sales work on relatively small jobs that even if you charge what you think is a lot you won't make a whole lot of money on. If you spend a couple hours of overhead on a job that only lasts an hour or two you going to have to find a way to recover that time that you spent that you can't charge for.
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This is why I do service calls only within the city of Livonia. The drive time/gasoline will eat into my profits if I go too far away.
 
petersonra said:
I see nothing wrong with charging a fee for an estimate. We sometimes do that when a customer wants a quote and it is going to take some serious work to get it done.
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While I don't currently charge for estimates, I have always charged for this. But I don't consider it an estimate.

In electrical service work, an estimate is a quick conversation. If engineering needs to be done, specs figured out, phone calls, etc. etc then that is a consultation at minimum, many times it would be engineering. And any contractor should charge for that.

Just today I had a potential customer that needed 2 circuits for 2 new central AC units being installed. I told then that they would have to get me all of the nameplate ratings. They asked if I could call their HVAC guy to figure it out. I told them that I would have to charge a fee for this. I am not going to chase another contractor that is not iun business with me and owes me nothing, to find information and do calculations that the potential customer will then give to other contractors for a lower price.
 
petersonra said:
If you spend the time doing the estimate, why would you do it for free?
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To fool the customer.

And it works.

I have had customers who didn't like the fact that I didn't credit the consultation fee to the job if they accepted. In all those cases I explained to them that any contractor that credits that fee is simply adding it into the job price. They still didn't get it, so it just looks better crediting that amount into the job and raising the price to cover it.

There is a reason why everything still costs $**9.99. People are fooled by silly things
 
What are you all charging for installation of transfer switch and outlet for portable generators? I have a idea what I want to charge but thought I’d ask.


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Bengel1 said:
What are you all charging for installation of transfer switch and outlet for portable generators? I have a idea what I want to charge but thought I’d ask.


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I haven’t installed one of those in maybe 3/yrs, and the customer supplied it. I’m pretty sure I charged him around $500 to put it in. The panel was in an open stud closet off the garage, and I put the inlet about 10’ from the panel on the exterior of the house. It was an easy install, maybe 3/hrs.


Now I do a lot of inlets with mechanical interlocks, and as long as the inlet is right under the panel, I charge on average $700 and that includes parts .


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I've been on my own for over 1/4 century , i don't need a 3rd party, software, program.....all i need do is talk to my peers

~RJ~
 
romex jockey said:
I've been on my own for over 1/4 century , i don't need a 3rd party, software, program.....all i need do is talk to my peers

~RJ~
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You’re not wrong. A flat rate book is a good sales tool though, and it’s really helpful for techs in the field that don’t understand how to formulate a profitable quote. You could say it’s peace of mind for the owner that his techs are charging correctly.


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