flat rate price example

[rombo]

Starting up my own company and in the past any side jobs i have done a flat qouted per job depending on who it was, location, time of day.

But i would like to see some of your examples of pricing. Not asking for your entire book just an idea. Thanks

[OkieBill]

Tack on an extra hundred bucks no matter what the job to what a normal person would charge and you have flat rate:D

Just kidding.....

I went online and believe it or not I found a few people selling their employers flat rate books on Ebay ( with examples)... It may help

I have never been a flat rate guy but times may change someday so I like to stay informed I'm curious to see where this thread will go.

[rombo]

I am human so i will give breaks for multiple repairs at one time but i have always worked at T&M companies. I could make a flat rate list quick but am curios to see the diffrent prices depending on location, number of employees, ect...

[gear junkie]

rombo check your private messages upper right corner

[aero1]

good question, the way we did it was sat down{many times } with our accountant to figure out what our direct cost were vs indirect cost, overhead, market value, cost of materials ect, now weve been around a long time but this was still not easy because with out true cost you cannot know your worth, weve seen and checked out all the flat rate stuff on line and what applies to one company or market will surely not apply to you. this is a fine line between profitability and pirating so tread carefully and good luck.

[Aaron91]

Another flat rate thread? WTF.

[westcoastplumber]

rombo check your private messages upper right corner


no talking behind our backs....it can be said in public.....can't it??

you are best to take your overhead and work on your own numbers and goals.

[Drain Medic]

Tack on an extra hundred bucks no matter what the job to what a normal person would charge and you have flat rate:D

Just kidding.....

I went online and believe it or not I found a few people selling their employers flat rate books on Ebay ( with examples)... It may help

I have never been a flat rate guy but times may change someday so I like to stay informed I'm curious to see where this thread will go.


Or you can go T&M and milk it for 4hrs that would normally take 1hr ;)

[rombo]

Well i won't have much overhead as of right. i own a 3/4 pick up that will get my started. not as easy as working out of a van.

have most tools so i don't need to make 2k a day

[aero1]

but you also have to look at your house payment food clothes, and anything else you need to make a living that will come from what you pay yourself, at this point all is considered overhead ie your cost to live and provide for your family is cost. when self employed all must be considered.

[rombo]

i am lucky i am still young and live with my parents so my cost of living is low but i need to save money for a house in the next 2-3 years

[aero1]

right on so that is a projected cost, dont sell yourself short your about to take a big step, good luck.

[rombo]

plus i have a few buddies with well established companies that have offered some sub-work

[MPMGinAL]

check out UpFrontPrice.com. There are some sample books there that you can actually download, print, and use. Yes, you can make your own flat rate book, but it would take a countless number of hours to account for everything in a flate rate guide. As for the guys that bash flat-rate. All of the prices are 100% your own. If you can't sell at the rate change it. I know i can't get 1500 for a wh swap out, so i changed it. The owner of the above mentioned company is randal hilton he is a pretty cool and knowledgable guy to talk to about the subject.

My problem with T&M is that as you grow there is a chance that two techs could charge two nieghbors different prices for the same job. How do you explain that.

As you as a tech grow and get better you in turn get faster. You might attend schools and become more familiar with things, thus making you faster. Based on T&M the more versed your are at your job, the better your tools are, etc. the less your worth, because you should be faster.

Plumber Rick for example, apparently has every tool that has hit the market. To me he is working smarter with more technologically advanced stuff. He should be able to make repairs faster with his plethera of propresses, but does that mean that he is not worth as much as the guy that still insists on age old soldering techniques? At the end of the day both repairs have done the same thing why not get paid the same. Rick shouldn't get shafted even though he has been drinking cocktails since you finished cleaning your fittings and waiting on that three story house to drain so you could fix the leak.

The only reason that i make reference to soldering versus pressing is taht most all of the people that bash flat rate are the by god im not using that pex stuff or pressing is crap, or to heck with csst i only run sch 40. No offense meant to the old timers, but things evolve.

[All Clear Sewer]

Or you can go T&M and milk it for 4hrs that would normally take 1hr ;)

Now why do people think that your milking if your T/M ?

I`m T/M and I bet I can do most jobs in 1/2 the time any F/R book gives ya.

I was a factory plumber for a trailer house factory years ago and I could totally plumb 5 Double wide homes including fixtures a day. I was like 18 back then, Dont know that I could do it now, but I bet I could come close.

[PLUMBER RICK]

Now why do people think that your milking if your T/M ?

I`m T/M and I bet I can do most jobs in 1/2 the time any F/R book gives ya.

I was a factory plumber for a trailer house factory years ago and I could totally plumb 5 Double wide homes including fixtures a day. I was like 18 back then, Dont know that I could do it now, but I bet I could come close.


that's what i'm talking about;)

not sure about the double wides:eek:

but i was a production plumber for 15 years, so to me it's a 123 thing. not an all day thing. plus i have too many places to be in a day to milk anything.

rick.

[Drain Medic]

Now why do people think that your milking if your T/M ?

I`m T/M and I bet I can do most jobs in 1/2 the time any F/R book gives ya.

I was a factory plumber for a trailer house factory years ago and I could totally plumb 5 Double wide homes including fixtures a day. I was like 18 back then, Dont know that I could do it now, but I bet I could come close.


Why do people think your scabbing, or ripping people off doing Flat Rate??

You just dont go to a store and buy a flat rate book :rolleyes:

[Drain Medic]

check out UpFrontPrice.com. There are some sample books there that you can actually download, print, and use. Yes, you can make your own flat rate book, but it would take a countless number of hours to account for everything in a flate rate guide. As for the guys that bash flat-rate. All of the prices are 100% your own. If you can't sell at the rate change it. I know i can't get 1500 for a wh swap out, so i changed it. The owner of the above mentioned company is randal hilton he is a pretty cool and knowledgable guy to talk to about the subject.

My problem with T&M is that as you grow there is a chance that two techs could charge two nieghbors different prices for the same job. How do you explain that.

As you as a tech grow and get better you in turn get faster. You might attend schools and become more familiar with things, thus making you faster. Based on T&M the more versed your are at your job, the better your tools are, etc. the less your worth, because you should be faster.

Plumber Rick for example, apparently has every tool that has hit the market. To me he is working smarter with more technologically advanced stuff. He should be able to make repairs faster with his plethera of propresses, but does that mean that he is not worth as much as the guy that still insists on age old soldering techniques? At the end of the day both repairs have done the same thing why not get paid the same. Rick shouldn't get shafted even though he has been drinking cocktails since you finished cleaning your fittings and waiting on that three story house to drain so you could fix the leak.

The only reason that i make reference to soldering versus pressing is taht most all of the people that bash flat rate are the by god im not using that pex stuff or pressing is crap, or to heck with csst i only run sch 40. No offense meant to the old timers, but things evolve.


Well said. My theory behind the flat rate is , its protects me, and more importantly my customers. I wont have to worry about charging customers different prices. They all get the same prices. No matter what. If it takes you the same amount of time to snake Mr Smiths line from outside, and Mrs Jones line from outside, both same problems, but charge Mr Smith more cause you were having a bad day...That doesnt fly with me. I have NEVER had a price complaint on a flat rate job EVER!!! T&M they are hawking you. When they hear its going be X amount of dollars to clear the line wether its 15 mins or 2 hrs they are all for it, but if i tell you Well its going to be 65 an hour, could take 2 or 3 hrs. Now they are panicing.

[Masterplumb]

Well i won't have much overhead as of right. i own a 3/4 pick up that will get my started. not as easy as working out of a van.

have most tools so i don't need to make 2k a day


What about insurance (general liability & auto), license fees, gasoline, stock, etc?

[rombo]

i have all of those factored in as they are an on going cost. i was more talking about initial cost and i will be using home as a shop for now

[All Clear Sewer]

Why do people think your scabbing, or ripping people off doing Flat Rate??

You just dont go to a store and buy a flat rate book :rolleyes:

Because I can R&R a W/C in less then .5 and that`s from the trailer to the house and back to the trailer with the old one. Whats the F/R for that job?

[ToUtahNow]

Well said. My theory behind the flat rate is , its protects me, and more importantly my customers. I wont have to worry about charging customers different prices. They all get the same prices. No matter what. If it takes you the same amount of time to snake Mr Smiths line from outside, and Mrs Jones line from outside, both same problems, but charge Mr Smith more cause you were having a bad day...That doesnt fly with me. I have NEVER had a price complaint on a flat rate job EVER!!! T&M they are hawking you. When they hear its going be X amount of dollars to clear the line wether its 15 mins or 2 hrs they are all for it, but if i tell you Well its going to be 65 an hour, could take 2 or 3 hrs. Now they are panicing.

I have nothing against an honest flat-rater (which I believe you are) but this statement makes no sense. Under T&M it would not matter what type of day you were having as an hour is an hour regardless of how you are feeling. In addition, most mainlines take less than an hour so if a flat-rater is figuring 2-3 hours for a mainline the customer may be getting a fixed price but it is 2-3 times the cost of what it would be at T&M.

Mark

[ChrisConnor]

Upfrontprice.com

Affordable flat rate books without all the pressure.

Tell Randall I said hi!

[Service Guy]

I have nothing against an honest flat-rater (which I believe you are) but this statement makes no sense. Under T&M it would not matter what type of day you were having as an hour is an hour regardless of how you are feeling. In addition, most mainlines take less than an hour so if a flat-rater is figuring 2-3 hours for a mainline the customer may be getting a fixed price but it is 2-3 times the cost of what it would be at T&M.

Mark

Actually my upfrontprice book figures less than an hour for a basic mainline. Its actually too cheap imo, I had to adjust it higher to cover the costs of machine wear & tear.

[PLUMBER RICK]

truthfully, it's pretty easy to estimate/ flat rate a sewer cleaning job.

especially when it's a repeat customer.

i already know how much time i will need 95% of the time. that's why i can sch. the work day the way i do.

it's the plumbing unknown that will screw up your sch.

rick.

[mtnman1100]

I will be charging flat rates and discount for multiple lines of service

[Drain Medic]

Because I can R&R a W/C in less then .5 and that`s from the trailer to the house and back to the trailer with the old one. Whats the F/R for that job?


And thats great. Now, are you just replacing the toilet?? or are you R/R the toilet and snaking the line, video inspecting the line??


Hey Flat rate isnt for everyone. I prefer it, it works for me. I never have a price complaint, everyone gets the same pricing, its easy for invoicing, its easy for computer work. The less effort i have to do with paperwork and computerwork, the better for me. Some people need to stay T&M due to one man shows, or that is what all the companies in there areas are doing, others are just to afraid to get with the times. Im sure in 5-10yrs from now when just about every service company out there is flat rate, and the T&Mers are trying to do the jobs, they will get kicked off jobs. Unfortunetly this is what the trades are turning to. Its getting so bad out there, that people dont want to pay hourly....they want to know the price either over the phone of what its going to cost, or they want the total price upfront before you start, then if your to much they will send you home to find someone else. Maybe where your at T&M is the way to go, it doesnt fly in Philly. Of course you will find your local Craigslist plumber who will clear any drain for 20 bucks :D

[Drain Medic]

I have nothing against an honest flat-rater (which I believe you are) but this statement makes no sense. Under T&M it would not matter what type of day you were having as an hour is an hour regardless of how you are feeling. In addition, most mainlines take less than an hour so if a flat-rater is figuring 2-3 hours for a mainline the customer may be getting a fixed price but it is 2-3 times the cost of what it would be at T&M.

Mark


Sure it does. If your having a slow day, and you need to make certain quotas, which some companies do, they will charge different prices. Im not saying the honest T&Mer is going to do that, but i know for a fact that there are companies out there who would go to a senior citizens house and because they didnt make their 1000 bucks for the day will charge 150 an hour instead of their regular 95 an hour. It happens everywhere.

I personally like going to a house that your fly by nighter craiglsist drain cleaner goes to, charges the customer 500 bucks for being there for 8hrs, couldnt get the drain open, i get there, jet the line from the outside cleanout, video inspect the line and charge 600 for my 1 1/2 hrs. Gotta love it. Then they will say, wow, 600 bucks, you were only here for 1 1/2 hrs. And my beautifull responce to that, YEP and i got your drain clean and running free, here is your warranty...Its ashame the other guy didnt know when to quit, but he is T&M so he just keeps stabbing away at it with a cable to run that bill up.

[youngsplumbing]

I know this is an old topic but I'm newer to the board so I'm gonna jump in here...I haven't researched all the threads to see if this has come up yet so for give me if I am being redundant.

Our shop uses a mixture of T&M and flat rate. For example we have a set price for cleaning a main drain up to 100', and we have a set rate for water heaters (this is based on 1' of pipe replacement at each connection - h/c, gas, vent). These rates are based on what the market dictates...we have to stay competitive...of course there are always guys out there quoting jobs at ridiculously low prices then pounding customers with extras after the work begins.

Anyway, my question is to the flat rate guys...how do you bill for unforseen circumstances. We all probably have encountered a water heater boxed in by either finished walls or gas/water supply lines in which case you have to lift the heater in and out (usually requiring an extra man) or undergo so major repiping...of course this could not have been known when you quoted the price over the phone. Would this extra labor then be charged on an hourly basis or what. Not trying to stir the pot here...just curious cause I'm new here.

[Drain Medic]

I know this is an old topic but I'm newer to the board so I'm gonna jump in here...I haven't researched all the threads to see if this has come up yet so for give me if I am being redundant.

Our shop uses a mixture of T&M and flat rate. For example we have a set price for cleaning a main drain up to 100', and we have a set rate for water heaters (this is based on 1' of pipe replacement at each connection - h/c, gas, vent). These rates are based on what the market dictates...we have to stay competitive...of course there are always guys out there quoting jobs at ridiculously low prices then pounding customers with extras after the work begins.

Anyway, my question is to the flat rate guys...how do you bill for unforseen circumstances. We all probably have encountered a water heater boxed in by either finished walls or gas/water supply lines in which case you have to lift the heater in and out (usually requiring an extra man) or undergo so major repiping...of course this could not have been known when you quoted the price over the phone. Would this extra labor then be charged on an hourly basis or what. Not trying to stir the pot here...just curious cause I'm new here.


I dont speak for everyone, but i do have access fees. If its going to take me awhile, i will convert to hourly, but only on jobs that will take all day, or have many drains to do. I wont task every single drain, then it would be to expensive.

For example. If i had to cut an access on the wall to go to a drum trap for a tub, there would be an access fee to cut the wall and a task to clean the tub line.

[rombo]

x2 on the extras?

[Drain Medic]

what do you mean?

[rombo]

sorry i mean i would also like to know how these extra's are dealt with:)

[Drain Medic]

There would be a discount rate on the 2nd task or the access fee

[rombo]

do you ever have anyone say i thought it was the same price no matter what????

[MPMGinAL]

Everyone keeps going back to the same thing. Sometimes un-forseens happen. You just have to suck them up and get the job done. You are not going to loose money if it takes an additional coupling or two or an extra 15 min. What DrainMedic is trying to say is you go in look at the job. FE: 40 Gal Lowboy in C/S. You have a FR price to change out hater, lets say 740.00, a price for intermediate access 110.00, needs ball valve and TXT 85 and 175 respectively. Mrs. Ma'am your water heater changeout will cost 1110.00. Thats it. No more. No Less. Now, do you have to charge for access, extra fittings, etc. NO! Completely up to you, but its there if needed.

[All Clear Sewer]

F/R would be good and a money maker if every plumber in your town used it. From what I have seen, only the Big plumbing Co`s use it around here and get away with the extra pricing that the small guy cant. I can do a W/H for an easy 600.00 if there is no repiping and be done in .5 now the big plumbing Co`s get 1000.00 to I`ve heard as much as 1500.00. The people around just cant swing that kind of money. Most of the big plumbing CO`s have lay-off and the little plumbers keep pretty busy. I saw 3 vans that have been parked for about the last 3 months from one of the Big Plumbing CO`s...hummm We call them the A Team as they are the biggest plumbing CO around here. They got rid of the union and are still having trouble.

[PLUMBER RICK]

a couple weeks back i was doing a job 2 doors from one of the very first flat rate companies.

i was on the roof of the building and was able to look right into the yard of the company.

at 10:30 am. they had 27 trucks parked in their lot. not sure how many were out on the road, but there was not room for many more trucks to fit.

this is a company that has radio ads, multiple phone book pages.

it takes time for the word to spread.

even 5 years ago i saw the owner at the supply house with a list of material he was trying to sell back to the supply houses.

i'm just waiting for a fire sale:rolleyes:

rick.

[MPMGinAL]

I know what you are saying. I'm just me and one other now. I see the big companies having trouble as well. What i have done is realized that doing one water heater for 800-1000 makes me about 3 times as much money as one at say 600. I do something that most plumbers can't fathime though, 5 year parts, labor, workmanship warranty. Yes it sounds ridiculous, but honestly, what is the chance that the Rheem Pro you just put in is going to fail? This is something that most won't compete with. Espeially the Homecenters who are driving the prices down. They can not offer that warranty. This keeps my price from being compared apples to apples. Personally, i was charging more than 600 years ago.

Total Cost 600

Less WH (40GNG) 345

6 man hours 150
(6 man hours figuring you, a helper. Taking call picking up heater, driving to home, and installing 3 hours each you 30 per and helper 20/)

Misc Mat 30

Gross Profit 75.00

That's not good. to figure your net profit you would subtract your in-direct expenses (Fuel, mapp, solder, flux, hand towels, pipe dope, etc.) then you still have to subtract overhead ratio.

You might be better off giving Mrs. HO a 50 dollar bill and telling her to call someone else. All you made was your pay. Your business lost money! If the numbers are wrong please show me where.

[Service Guy]

I know what you are saying. I'm just me and one other now. I see the big companies having trouble as well. What i have done is realized that doing one water heater for 800-1000 makes me about 3 times as much money as one at say 600. I do something that most plumbers can't fathime though, 5 year parts, labor, workmanship warranty. Yes it sounds ridiculous, but honestly, what is the chance that the Rheem Pro you just put in is going to fail? This is something that most won't compete with. Espeially the Homecenters who are driving the prices down. They can not offer that warranty. This keeps my price from being compared apples to apples. Personally, i was charging more than 600 years ago.

Total Cost 600

Less WH (40GNG) 345

6 man hours 150
(6 man hours figuring you, a helper. Taking call picking up heater, driving to home, and installing 3 hours each you 30 per and helper 20/)

Misc Mat 30

Gross Profit 75.00

That's not good. to figure your net profit you would subtract your in-direct expenses (Fuel, mapp, solder, flux, hand towels, pipe dope, etc.) then you still have to subtract overhead ratio.

You might be better off giving Mrs. HO a 50 dollar bill and telling her to call someone else. All you made was your pay. Your business lost money! If the numbers are wrong please show me where.


I agree, your math looks good to me, I charge over $800 for a 40 gallon gas complete.

[All Clear Sewer]

the last W/H I did cost me around 350.00
Parts to do the install were 20.00
Time from shop to get the heater
and do the install was right about
an hour That's like $230 an hour for me and my 10.00 an hour helper.

We don't warranty the install when a W/H fails only the heater.
You shouldn't have to eat your labor unless you didn't install it right.

I let em pick what W/H they want and give them the warranty card when I`m done.

[ToUtahNow]

I know what you are saying. I'm just me and one other now. I see the big companies having trouble as well. What i have done is realized that doing one water heater for 800-1000 makes me about 3 times as much money as one at say 600. I do something that most plumbers can't fathime though, 5 year parts, labor, workmanship warranty. Yes it sounds ridiculous, but honestly, what is the chance that the Rheem Pro you just put in is going to fail? This is something that most won't compete with. Espeially the Homecenters who are driving the prices down. They can not offer that warranty. This keeps my price from being compared apples to apples. Personally, i was charging more than 600 years ago.

Total Cost 600

Less WH (40GNG) 345

6 man hours 150
(6 man hours figuring you, a helper. Taking call picking up heater, driving to home, and installing 3 hours each you 30 per and helper 20/)

Misc Mat 30

Gross Profit 75.00

That's not good. to figure your net profit you would subtract your in-direct expenses (Fuel, mapp, solder, flux, hand towels, pipe dope, etc.) then you still have to subtract overhead ratio.

You might be better off giving Mrs. HO a 50 dollar bill and telling her to call someone else. All you made was your pay. Your business lost money! If the numbers are wrong please show me where.

Just as an observation it seems like your customer is paying for your guys to sit at a supply house due to poor planning on your part. Our trucks always had a 40 and 50 gallon gas water heater on the truck and the 30s were in the shop. The supply house doesn't charge anything for delivery so we would keep enough stock in the shop to restock the trucks each morning.

Even leaving your installed price the same, as a business owner you would put the time and money your wasting on your guys sitting at the supply house and turn it into your profit.

Mark

[Drain Medic]

do you ever have anyone say i thought it was the same price no matter what????


Not at all. I will look at the job, diagnose it, give them the price upfront of what it will cost. If i spend more the 20mins looking at the job, then they get charged a diagnosis fee of 45 bucks. I cover all my grounds 1st. If they agree to the price, i write it on the invoice, then have them sign. Thats the price. If after im done and they say, can you look at this...I will look at it and give them a discounted price to do whatever additional work they may have. Never had a price complaint being flat rate.

[DuckButter]

i am lucky i am still young and live with my parents so my cost of living is low but i need to save money for a house in the next 2-3 years

My first impulse was anger.
Thats not your doing, it's because I have been played by budget hunting customers who will almost always go straight to the lowest bid...usually the newer guy who has little overhead.

Over a month ago I had a fella with a foreign accent asking me a plethora of questions regarding the type water heater I install & how much it would cost to install the one he wanted.
I spent 20 minutes on the phone with him explaining why he couldn't use a less expensive draft type heater to replace a powervent, and went over warranties, specs and efficiency ratings.
After I got off the phone I spent another 1/2 hour shopping around for the name he wanted, finally called him back 45 minutes later with a price and he said he'd call right back.

Next day I call him back to ask what was going on....he delightfully tells me another plumber is doing the heater I'd priced for $15 less than my bid, he'd waited an extra day without hot water to save $15, on my time.

I know who did the install, young fella just started up a few months back.

Situations like this have given me pause to consider quoting rediculously low prices, then explaining to the customer once I'm there that new piping isn't included, new vacuum breaker, new valve, expansion tank...etc.

But I won't...here's why:

There are shady practices on both sides of the fence, people that seek cheapo deals almost like predators, and vise versa...plumbers that scam more money after the fact...regardless of T&M or F/R.

They deserve eachother, as I see it.

It took a very short time on my own to realize something...you choose who your customer base will be for the long-run...the guy you offered to install the water heater for $100 less than half a dozen other quotes will be calling you in 6 months, maybe a year to play the same game all over again with his boiler/leak/clogged drain...over time you're spending more time waiting for these people to check your price over the other half dozen guys they have bidding against you until someone finally gives them the price they want.
I have had these types even schedule the work, all to tell me they went with someone else as I call them on the way there the next day.
The guy that does the heater at that price is left with no choice but to cut corners.

In short..DON'T sell yourself short...certain people will ALWAYS complain about prices, whether you charge $600 or $1100.
Don't just settle to make "a little more" than you made working for a shop..the shop you worked for had overhead, and now you do too, insurance, health, tools, vehicle, gas, storage/shop, marketing/advertizing ...and be absolutely sure you make a decent profit, a cash reserve is NOT a luxury.
When the engine goes, you'll realize that, when the threading machine dies, when your snap cutter dies, right angle, rotary hammer, sawzall, or when work dies to a crawl and you have no money to spend to advertize....list goes on and on.

I know a guy in a different trade that was told the IRS allows you to have a loss for the first three years and this has become his rationale for cutting prices to get customers and influence the way he runs his business...I like the guy but it doesn't look like he'll make it.
I hope I'm wrong.

[ToUtahNow]

My first impulse was anger.
Thats not your doing, it's because I have been played by budget hunting customers who will almost always go straight to the lowest bid...usually the newer guy who has little overhead.

Over a month ago I had a fella with a foreign accent asking me a plethora of questions regarding the type water heater I install & how much it would cost to install the one he wanted.
I spent 20 minutes on the phone with him explaining why he couldn't use a less expensive draft type heater to replace a powervent, and went over warranties, specs and efficiency ratings.
After I got off the phone I spent another 1/2 hour shopping around for the name he wanted, finally called him back 45 minutes later with a price and he said he'd call right back.

Next day I call him back to ask what was going on....he delightfully tells me another plumber is doing the heater I'd priced for $15 less than my bid, he'd waited an extra day without hot water to save $15, on my time.

I know who did the install, young fella just started up a few months back.

Situations like this have given me pause to consider quoting rediculously low prices, then explaining to the customer once I'm there that new piping isn't included, new vacuum breaker, new valve, expansion tank...etc.

But I won't...here's why:

There are shady practices on both sides of the fence, people that seek cheapo deals almost like predators, and vise versa...plumbers that scam more money after the fact...regardless of T&M or F/R.

They deserve eachother, as I see it.

It took a very short time on my own to realize something...you choose who your customer base will be for the long-run...the guy you offered to install the water heater for $100 less than half a dozen other quotes will be calling you in 6 months, maybe a year to play the same game all over again with his boiler/leak/clogged drain...over time you're spending more time waiting for these people to check your price over the other half dozen guys they have bidding against you until someone finally gives them the price they want.
I have had these types even schedule the work, all to tell me they went with someone else as I call them on the way there the next day.
The guy that does the heater at that price is left with no choice but to cut corners.

In short..DON'T sell yourself short...certain people will ALWAYS complain about prices, whether you charge $600 or $1100.
Don't just settle to make "a little more" than you made working for a shop..the shop you worked for had overhead, and now you do too, insurance, health, tools, vehicle, gas, storage/shop, marketing/advertizing ...and be absolutely sure you make a decent profit, a cash reserve is NOT a luxury.
When the engine goes, you'll realize that, when the threading machine dies, when your snap cutter dies, right angle, rotary hammer, sawzall, or when work dies to a crawl and you have no money to spend to advertize....list goes on and on.

I know a guy in a different trade that was told the IRS allows you to have a loss for the first three years and this has become his rationale for cutting prices to get customers and influence the way he runs his business...I like the guy but it doesn't look like he'll make it.
I hope I'm wrong.

Read my signature line! You generally lose money when you cut your price just to get a job.

Mark

[DuckButter]

Read my signature line! You generally lose money when you cut your price just to get a job.

Mark
I'd be using yer line if you hadn't had it first...words to LIVE by.
You lose money on many levels and often it's too late by the time you figure it out.

[Masterplumb]

My first impulse was anger.
Thats not your doing, it's because I have been played by budget hunting customers who will almost always go straight to the lowest bid...usually the newer guy who has little overhead.

Over a month ago I had a fella with a foreign accent asking me a plethora of questions regarding the type water heater I install & how much it would cost to install the one he wanted.
I spent 20 minutes on the phone with him explaining why he couldn't use a less expensive draft type heater to replace a powervent, and went over warranties, specs and efficiency ratings.
After I got off the phone I spent another 1/2 hour shopping around for the name he wanted, finally called him back 45 minutes later with a price and he said he'd call right back.

Next day I call him back to ask what was going on....he delightfully tells me another plumber is doing the heater I'd priced for $15 less than my bid, he'd waited an extra day without hot water to save $15, on my time.

I know who did the install, young fella just started up a few months back.

Situations like this have given me pause to consider quoting rediculously low prices, then explaining to the customer once I'm there that new piping isn't included, new vacuum breaker, new valve, expansion tank...etc.

But I won't...here's why:

There are shady practices on both sides of the fence, people that seek cheapo deals almost like predators, and vise versa...plumbers that scam more money after the fact...regardless of T&M or F/R.

They deserve eachother, as I see it.

It took a very short time on my own to realize something...you choose who your customer base will be for the long-run...the guy you offered to install the water heater for $100 less than half a dozen other quotes will be calling you in 6 months, maybe a year to play the same game all over again with his boiler/leak/clogged drain...over time you're spending more time waiting for these people to check your price over the other half dozen guys they have bidding against you until someone finally gives them the price they want.
I have had these types even schedule the work, all to tell me they went with someone else as I call them on the way there the next day.
The guy that does the heater at that price is left with no choice but to cut corners.

In short..DON'T sell yourself short...certain people will ALWAYS complain about prices, whether you charge $600 or $1100.
Don't just settle to make "a little more" than you made working for a shop..the shop you worked for had overhead, and now you do too, insurance, health, tools, vehicle, gas, storage/shop, marketing/advertizing ...and be absolutely sure you make a decent profit, a cash reserve is NOT a luxury.
When the engine goes, you'll realize that, when the threading machine dies, when your snap cutter dies, right angle, rotary hammer, sawzall, or when work dies to a crawl and you have no money to spend to advertize....list goes on and on.

I know a guy in a different trade that was told the IRS allows you to have a loss for the first three years and this has become his rationale for cutting prices to get customers and influence the way he runs his business...I like the guy but it doesn't look like he'll make it.
I hope I'm wrong.

I agree with everything you said with one exception. Why give a price over the phone for a job you can not see?

[Service Guy]

It took a very short time on my own to realize something...you choose who your customer base will be for the long-run...the guy you offered to install the water heater for $100 less than half a dozen other quotes will be calling you in 6 months, maybe a year to play the same game all over again with his boiler/leak/clogged drain...over time you're spending more time waiting for these people to check your price over the other half dozen guys they have bidding against you until someone finally gives them the price they want.
[

AMEN! I have the exact same experience, I have walked away from quite a few customers this first year simply because they were looking for the low-baller in town....and thats not me. I don't deserve that type of business, and they don't deserve top-quality service. They just want cheap, and thats available out there. I just tell them to call someone else.
On the other hand, I have built a decent list of clients who are repeat customers and have given me repeat referrals.

No matter what your company does, it has to have a NICHE. NO COMPANY CAN BE ALL THINGS TO ALL PEOPLE! There's no way I could compete with a quality contruction plumbing company when it comes to construction speed, efficiency and price. And they don't have a chance competing with my repair knowledge, speed and 24 hour, courteous customer service.

I am slowly establishing my reputation as a reliable 24 hour service/repair specialist. That way poeple can distinguish the difference between Bob's Plumbing or whatever who does new contruction at $60/hour and me who comes to their house 24 hours/day with a truck loaded with parts/tools and tons of experience fixing all kinds of problems, wearing shoe covers, using drop clothes, giving upfront prices and guarantees etc.

The point is no matter how you run your company or how you charge, you have to pick a niche of customers and build your company around THEIR needs. While ignoring people outside that niche. (for me that means hanging up on builders and people looking for low bids, that don't care about quick, quality service and focusing all my attention on my existing customers and people who call me needing reliable service NOW!)
:plumbdog:

[MPMGinAL]

Just as an observation it seems like your customer is paying for your guys to sit at a supply house due to poor planning on your part. Our trucks always had a 40 and 50 gallon gas water heater on the truck and the 30s were in the shop. The supply house doesn't charge anything for delivery so we would keep enough stock in the shop to restock the trucks each morning.

Even leaving your installed price the same, as a business owner you would put the time and money your wasting on your guys sitting at the supply house and turn it into your profit.

Mark

Maybe so, however, that is your/my choice as business owners. We should get paid the same for the job as the guy that runs service in his ford ranger that would have to spend the time to go get it, if not more. How much time would you block off of one of your guys schedule for a water heater install? I don't feel that three hours is excessive.

30 min travel time
1 hour for install (I know its possible to do it faster, but i don't want my guys getting in a hurry and tripping over themselves and screwing something up. For all realistic purposes I think an hour is justified.)
15 min to collect, load truck, go over operation or lighting instruction with HO, and check water pressure.

Might as well call that 2 hours billable to that job. Now should we consider the time that is not billable i.e. your guy in the shop that orders and stocks your shop. Time spent every morning re-stocking. You have to re-coupe that somewhere.

Bottom line. even if you cut the previously stated labor in half. Instead of 150 its 75.00. That would increase GROSS profit to 150.00. Is that really much better?

Break it down for me. Show me that 600. is adequate. Seems like charity work to me.

[MPMGinAL]

the last W/H I did cost me around 350.00
Parts to do the install were 20.00
Time from shop to get the heater
and do the install was right about
an hour That's like $230 an hour for me and my 10.00 an hour helper.

We don't warranty the install when a W/H fails only the heater.
You shouldn't have to eat your labor unless you didn't install it right.

I let em pick what W/H they want and give them the warranty card when I`m done.

You are exactly right. Install the heater correctly and you should not have any trouble for years to come. So trust that and market it as a labor warranty to you customer. They will appreciate the peace of mind knowing they have spent all they will have to on a water heater for a while.

What would you say that your NET profit was on that job? This goes back to what so many people say "Do you know what it costs per man hour for your business to operate?"

I don't want you to take me the wrong way, i'm just trying to make a point. Did you consider mark-up on the heater or materials? What about that 10/hr helper. What is his actual labor burden? I know that the labor burden on my 12.50 an hour helper will almost hit twenty bucks.

What ill's me about water heaters is that a couple of years ago i could change out a condensing unit, Just a condenser, Lets say 3 tons Cost of unit 350.00 (cheap brand), in about 3 hours total. Includes travel, wiring, soldering, vacuum all that. I was charging 1750.00, and was still in the lower end of the spectrum with other bids. Plumbers could never get that for a water heater, and the labor is almost the same, materials the same. Why?

[Tyman]

I had a post all typed up and deleted it.

To answer your question directly,

140.00 to snake a drain with a machine in two hours or less. Any more than two hours and it goes to hourly.

We are not a flat rate company but I guess you could say we use flat rate for some things.

[ToUtahNow]

Maybe so, however, that is your/my choice as business owners. We should get paid the same for the job as the guy that runs service in his ford ranger that would have to spend the time to go get it, if not more. How much time would you block off of one of your guys schedule for a water heater install? I don't feel that three hours is excessive.

30 min travel time
1 hour for install (I know its possible to do it faster, but i don't want my guys getting in a hurry and tripping over themselves and screwing something up. For all realistic purposes I think an hour is justified.)
15 min to collect, load truck, go over operation or lighting instruction with HO, and check water pressure.

Might as well call that 2 hours billable to that job. Now should we consider the time that is not billable i.e. your guy in the shop that orders and stocks your shop. Time spent every morning re-stocking. You have to re-coupe that somewhere.

Bottom line. even if you cut the previously stated labor in half. Instead of 150 its 75.00. That would increase GROSS profit to 150.00. Is that really much better?

Break it down for me. Show me that 600. is adequate. Seems like charity work to me.

I'm not telling you what you should be charging I am simply telling you you are wasting money which you should be keeping as profit. When you and your helper are driving around buying parts you are spending time which you could be using to do other calls.

On a standard change-out I use to budget 2-hours for a 1-man truck and 1.5-hour for a 2-man truck. As far as $75.00 profit over $150.00 profit, it may not seem like much but it doubles your profit. At the end of the year if you make (profit) twice as much money just because you let the supply house deliver materials I would say your doing okay. Now consider at the same time because you have cut your time in half you can schedule twice as much work which in turn doubles your profit again.

Please don't consider my comment as being disrespectful to you as the are not meant to be. I am only trying to offer you some constructive criticism. That is what this forum is about and after 27-years as a contractor I have learned a few tricks which helped me keep more of the money which I've earned.

Mark

[gear junkie]

What ill's me about water heaters is that a couple of years ago i could change out a condensing unit, Just a condenser, Lets say 3 tons Cost of unit 350.00 (cheap brand), in about 3 hours total. Includes travel, wiring, soldering, vacuum all that. I was charging 1750.00, and was still in the lower end of the spectrum with other bids. Plumbers could never get that for a water heater, and the labor is almost the same, materials the same. Why?
AC
Condenser-450.
Evaporator-450
misc installation stuff 200
manifold-300
vacuum pump-400(don't forget about the oil)
recovery machine-700
micron gauge-300
Nitrogen setup-200
oxy acetylene-450
tubing cutter-20
reamer 5
sil phoss-60

Grand total-3535 and I think I'm missing some stuff
also; only those holding an EPA card can handle refrigerant

Water Heater
W/H-250
Misc installation stuff-200
mapp bottle with torch head-50
tubing cutters-20
reamer-5
solder and flux-20
wire brush and sandpaper-10
copper pipe and fitting-50

Grand total-605. No plumber only card required

[plumberscrack]

Excellent point Benny :bravo:

[gear junkie]

I'm starting to switch to flat rate as customers prefer it. They know that the job will cost XXX. I did lose money on a drain job on Sunday but that's the first time that's happened. In every and any profession out there, those who can do the job fastest with quality get paid the most. I can't think of one example where this doesn't hold true.

T&M doesn't support this. It's an honest pricing system no doubt, but why should a 5 year plumber get paid more for 30 year plumber doing the same job?

Flat rate allows for protection for the homeowner because they aren't paying more to compensate for the plumber's shortcoming. FR protects the plumber(usually) because it pays the plumber who is the most experienced the same if he got the job done in 30 min or 2 hours.

[gear junkie]

On a standard change-out I use to budget 2-hours for a 1-man truck and 1.5-hour for a 2-man truck.
Interesting, why didn't you allot 1 hour for 2 man truck(2 guys should work twice as fast).

[DuckButter]

I agree with everything you said with one exception. Why give a price over the phone for a job you can not see?
Scouts honor, somehow I knew you were going to say that...I think you'd commented about it on another thread.
I'll admit, I like what you had to say...BUT...one thing I see is a way to filter out price shoppers, dump 'em before I get into bidding wars.
I imagine the same folks that never call back are the same folks that refuse to pay a flat service or trip fee anyway, in fact I'm just about positive.
The guy that went for the $15 cheaper w/h is better off not having my biz card...he'd have hung up if I told him I'd be right over and theres an upfront fee to show.
Once in awhile I get lured into answering 20 questions, but usually it's cut & dried, here's the price, have a good night.

I am seriously considering your technique...charge a service fee regardless and then give an estimate on site...BUT it seems like the same people that won't pay a fee are also the ones who seek cheap deals like predators from any fool that will abide.

It boils down to one simple question for you...Do you often get a homeowner that refuses the price, but pays the service fee?

[ToUtahNow]

Interesting, why didn't you allot 1 hour for 2 man truck(2 guys should work twice as fast).

Fifteen minutes travel time on both guys.

Mark

[rombo]

I don't plan to sell myself short because i know the first time someone gets a deal they always want it. In initial start up i will be providing any and every plumbing service untill the customer base builds.

I actually hope i can continue will a little of every type of work. I have been very well trained in the 3 big ones ( service, construction, drain work ) and really like the variety.

[MPMGinAL]

AC
Condenser-450.
Evaporator-450
misc installation stuff 200
manifold-300
vacuum pump-400(don't forget about the oil)
recovery machine-700
micron gauge-300
Nitrogen setup-200
oxy acetylene-450
tubing cutter-20
reamer 5
sil phoss-60

Grand total-3535 and I think I'm missing some stuff
also; only those holding an EPA card can handle refrigerant

Water Heater
W/H-250
Misc installation stuff-200
mapp bottle with torch head-50
tubing cutters-20
reamer-5
solder and flux-20
wire brush and sandpaper-10
copper pipe and fitting-50

Grand total-605. No plumber only card required


Thats like saying that the plumber that uses a pump to drain the water heater, or a press to pipe up new one should charge more?? I agree that it is a little more technical, but not much. Remember we are refering to changing a 10 SEER condenser only. My point is we hae gripped back and forth about what to charge for wh's for two days. The industry has let its guard down and allowed so much competition in to the market with homecenters, diy's, moonlighters, etc. Instead of a EPA card why not have a gas card that is req'd to buy gas appliances. If someone buys a gas appliance that they foul up installing they could do serious property damage or death, foul up with some refrigerant and you burn alittle hole in atmosphere? I just wish that the were stronger restrictions on these things that would pahse out some competition. Then we could make the money we deserve. I think its obsurd that you can feasibly make the same amount of money R.R a water closet as installing a new water heater. What good sense does that make?????????????????????????????????????????????? ???????

[Masterplumb]

Scouts honor, somehow I knew you were going to say that...I think you'd commented about it on another thread.
I'll admit, I like what you had to say...BUT...one thing I see is a way to filter out price shoppers, dump 'em before I get into bidding wars.
I imagine the same folks that never call back are the same folks that refuse to pay a flat service or trip fee anyway, in fact I'm just about positive.
The guy that went for the $15 cheaper w/h is better off not having my biz card...he'd have hung up if I told him I'd be right over and theres an upfront fee to show.
Once in awhile I get lured into answering 20 questions, but usually it's cut & dried, here's the price, have a good night.

I am seriously considering your technique...charge a service fee regardless and then give an estimate on site...BUT it seems like the same people that won't pay a fee are also the ones who seek cheap deals like predators from any fool that will abide.

It boils down to one simple question for you...Do you often get a homeowner that refuses the price, but pays the service fee?

Hey Duck, It is maybe once or twice a year that a "customer" doesnt accept the proposed work and just pays the service call charge. Then there is one who refuses to pay even the service call charge.

I am not the lowest price in town nor am I the highest (although I am closer to the higher cost then the lower).

If someone refuses to even pay the service call charge, I dont argue with them, I'll try and reason but its not worth the headache. I think most people are good by nature and will keep to their word.

I understand it could be tough to get someone to agree to the service call charge, but even if you make it $xx it still lets you know you will not be wasting your time, energy and gas for some prie shopper who wasnt giving you the job anyway.

I guess my original point was that you know the homeowner isnt going to be 100% honest with you about whats entailed with the job and without seeing it, you could never give an accurate price.

Good luck, and if you need help implementing it let me know if I could help.

[gear junkie]

Thats like saying that the plumber that uses a pump to drain the water heater, or a press to pipe up new one should charge more?? I agree that it is a little more technical, but not much. Remember we are refering to changing a 10 SEER condenser only. My point is we hae gripped back and forth about what to charge for wh's for two days. The industry has let its guard down and allowed so much competition in to the market with homecenters, diy's, moonlighters, etc. Instead of a EPA card why not have a gas card that is req'd to buy gas appliances. If someone buys a gas appliance that they foul up installing they could do serious property damage or death, foul up with some refrigerant and you burn alittle hole in atmosphere? I just wish that the were stronger restrictions on these things that would pahse out some competition. Then we could make the money we deserve. I think its obsurd that you can feasibly make the same amount of money R.R a water closet as installing a new water heater. What good sense does that make?????????????????????????????????????????????? ???????
The type of equipment I listed is REQUIRED not optional to do a proper install. You don't need a pump or propress to install a WH. We're past 10 seer and only 13 seer and above can be installed now. The process, tools and techniques used to install a 10 seer is exactly the same as installing a 13 seer. Being a great hvac tech is extremely hard to do, I only consider myself good with much to learn and this is after doing it for 11 years and going to trade school. Plumbing is much easier than doing hvac correctly.

That being said; I agree with you 100% on tighter restrictions with what is being sold to the general public. HVAC supply houses won't even talk to you unless you're a contractor, they'll ask you to leave. A HVAC forum I go on requires proof of employment and doesn't allow diy'ers or handyman, pros only. But go to Home Depot and you can buy any plumbing part you could want at a price comparable or cheaper than fergusons. But plumbers in this area get paid more per hour than hvac guys, I don't understand this one bit. I can also say that the hvac industry as a whole has moved to flat rate. This is coming from Trane. The hvac field also has continuing certification like NATE which is nationally recognized. The plumbing industry would do well to follow the lead set by it's comfort specialist brother.

[DuckButter]

Hey Duck, It is maybe once or twice a year that a "customer" doesnt accept the proposed work and just pays the service call charge. Then there is one who refuses to pay even the service call charge.

I am not the lowest price in town nor am I the highest (although I am closer to the higher cost then the lower).

If someone refuses to even pay the service call charge, I dont argue with them, I'll try and reason but its not worth the headache. I think most people are good by nature and will keep to their word.

I understand it could be tough to get someone to agree to the service call charge, but even if you make it $xx it still lets you know you will not be wasting your time, energy and gas for some prie shopper who wasnt giving you the job anyway.

I guess my original point was that you know the homeowner isnt going to be 100% honest with you about whats entailed with the job and without seeing it, you could never give an accurate price.

Good luck, and if you need help implementing it let me know if I could help.

On that note, I omitted that I disclose to the customer if there are any complications with existing plumbing it's extra.
I think your way & mine are about the same result, weeding out bargain hunters, those scraping the bottom for the cheapies.
I DO charge a diagnostic fee when there's a leak or problem that can't be prejudged over the phone...not one problem with that to date.

One VERY recent lesson that hits a nerve, informing customers there IS a charge for scheduling...had a jack-ss "forget" to tell me he needed his gas appliance purchased off graigslist converted from propane along with installation.
His argument was "but this should take you less than five minutes" as he handed me three seperate orifaces he'd bought at a hardware store and said "you should know which one goes where...right?".
I asked him if he was kidding, packed my tools and walked telling him I refused to do it without ordering the correct parts from the MFG.
Call him back next day with parts & price, he says "sorry thats too much".

My bad for not getting a check before I left.

[gear junkie]

You can always give the money back but getting it after you left is next to impossible.

[rombo]

for the guys that quote over the phone. How do you work a leak in the ceiling?????

[Drain Medic]

for the guys that quote over the phone. How do you work a leak in the ceiling?????



Some things cannot be quoted over the phone. Most of my drain jobs i can quote, but something like that which i did tonight, leak from a shower, good thing i didnt quote it over the phone cause there is no access to the lines behind the tub.

I simply tell them i have to look at the job to quote it, i wont even ballpark those type of jobs, to risky. I will even give it as a free estimate.