BUSINESS AND TRAINING
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Flat rate billers contend that customers like it.“ It helps them control their costs,” says Simpson. Prices can’ t balloon,“ especially if you’ ve got an experienced plumber who can spot the potential stumbling blocks before the job starts.” If the job runs longer than expected,“ customers won’ t be watching the clock because they know their own costs won’ t rise.”
Strategically deploying your personnel can boost profits.“ If the book gives a plumber four hours to complete a job, but a more experienced plumber can get it done in half the time, it essentially packages a higher hourly rate into the flat price,” Simpson continues. Of course, he points out, that means you want to be sure your employees are well trained.
While Vice of Fayette Drain and Sewer leans towards time-based pricing, his service crews are different.“ We have flat rates for drain clogs, residential water leaks, and septic cleaning,” he notes.
Of course, flat rate service jobs can turn into larger hourly projects.“ My service guys bring in a lot of bigger jobs for my other crews,” Vice points out.“ A simple sewer line cleaning could turn into a complete replacement. At that point, for the most part, we quote the replacement as a time-based job.”
Rationales Simpson acknowledges that a flat rate job finished quickly can translate into a steep hourly rate and trigger customer complaints. But he contends that this is rare.“ On the other hand, if you bill by the hour and the job takes longer than expected, your chances of receiving complaints increase quickly.”
I had a flat rate system that worked for all situations,” he admits.“ It would make my life easier, but figuring that system out and implementing it, I think would be a miracle within itself.”
Regardless of how you feel about pricing structure, study it closely. Then, whichever direction you go, you’ ll go there with more confidence in your choice. PA
Only you can decide what’ s best for your business.
Sanders points out that contractors like plumbers, drain cleaners, HVAC repair services, and others are there to fix a problem— bringing a“ head, not simply a set of hands” to the job. Besides the simple labour and parts put into the job, the flat rate bill should appropriately reflect the expertise and the investment in continued training.
For Vice, the question of flat versus hourly really leads to deeper considerations.
“ I spend a lot of time doing quotes and looking at jobs,” he says.“ I have learnt that you don’ t get every job you quote, so you don’ t need to cut yourself short just to be cheapest.” He also wants to avoid race-to-the-bottom competitive bidding.
“ As a service company, I do not like to bid jobs, because if you are just looking for the cheapest price, that is not going to be me,” he says. He prefers to sell reliability and local presence.“ I look at potential problems in the future, because I will be the one who services it years to come.”
Your best option Vice has clearly poured time and energy into figuring out what system works best, which is why he’ s opted for a hybrid.“ I wish
March 2017 Volume 23 I Number 1