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yet another long-winded flatrate debate

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  • #16
    Re: yet another long-winded flatrate debate

    I agree that both systems used honestly have their strengths and faults.

    Mark: I'm not sure you would even need the billable hours for a week...

    I would ask to see examples of the flat raters pricing guides it would be easy to work backward from them ( Lets not forget the padding, we would also need the participants Trip Charges / fuel surcharges / Equipment use charge list and materials price lists )

    But in reality if your market can stand it and you continue to build a strong customer base charge away...
    Last edited by OkieBill; 01-01-2009, 09:04 PM.

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    • #17
      2009 prediction

      I'm callin' it here and now!




      This thread is going to stretch a few miles, drag some members back here that haven't been here in quite some time to voice their opinion * I know they lurk here, I sees them * and possibly shut down with Josh having to make an appearance.



      I'm worse than the cameraman on "Deal or no Deal" zooming in on those beautiful ladies chests. I'm guilty!
      Northern Kentucky Plumbers Twitter Feed | Plumbing Videos

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      • #18
        Re: yet another long-winded flatrate debate

        Originally posted by DUNBAR View Post
        I'm assuming you mean that they put in quite a bit of hours in regards to the task at hand, instead of the other way around?


        I've done this many times on drain cleaning years ago, but now I always give them a flat rate price that covers "up to the first hour" and then goes hourly at a low rate of $50-60 dollars an hour.

        2 hours on a kitchen sink clog....$185 max. I should be nailing that drain in less than 20 minutes IMHO.
        I'm really not saying either way, I am only trying to figure out what the end results are.

        Mark
        "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

        I never lost a cent on the jobs I didn't get!

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        • #19
          Re: yet another long-winded flatrate debate

          Originally posted by OkieBill View Post
          I agree that both systems used honestly have their strengths and faults.

          Mark: I'm not sure you would even need the billable hours for a week...

          I would ask to see examples of the flat raters pricing guides it would be easy to work backward from them ( Lets not forget the padding, we would also need the participants Trip Charges / fuel surcharges / Equipment use charge list and materials price lists )

          But in reality if your market can stand it and you continue to build a strong customer base charge away...
          My understanding of flat rate ( after 20-years of watching it) is they have an hourly rate based on their costs and then a book with man hours per task. Without the billable hours we can't compare them with the actual hours.

          Mark
          "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

          I never lost a cent on the jobs I didn't get!

          Comment


          • #20
            Re: yet another long-winded flatrate debate

            DING DING DING " Leeeeeeeeeeeeeeets get ready to rumbleeeeeeeeee!!"

            J/K though a good discussion is always fun


            I think it really boils down to the fact that we are all in the business to make $ and support or families or our various good and or bad habits...

            IMO flatrate has a smoke and mirrors quality to it.... If I break a task down into it's basic components and charge for each it is easier to push the totals up higher and justify it by my system....

            Okie

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            • #21
              Re: yet another long-winded flatrate debate

              Man O Man,,,,,, You guys just love doing this...... Have at it, gentlemen.....
              Great Link for a Construction Owner/Tradesmen, and just say Garager sent you....

              http://www.contractorspub.com

              A good climbing rope will last you 3 to 5 years, a bad climbing rope will last you a life time !!!

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              • #22
                Re: yet another long-winded flatrate debate

                I have been under the impression that flat rate had a task list broken down by price with time constraints placed on each task...

                Example:

                Flat rate to clear the 1.5" kitchen sink clog.

                Snake 1.5" line $100 (1 hour max after first hour each 1/2 hour after is 75$)

                Okie

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                • #23
                  Re: yet another long-winded flatrate debate

                  I have thought about going T&M many times. But there is ONE main point that will forever keep me from it. If I do two jobs in one hour using flatrate, I get paid for those two jobs. If I do only one job in an hour, I get paid for only one job. That seems extremely fair to me.
                  With T&M, I get paid for one hour no matter how much I accomplish in that hour, if I get nothing done, still an hours pay, if I am super-plumber and get a ton of work, still an hours pay. Totally unfair. T&M doesn't take SPEED into consideration in any way at all. I believe flatrate is FAR MORE FAIR. True, sometimes flatrate backfires on me, and a job will take so long, that I end up losing money and I would make out better using T&M. But in the end I believe it is far more fair for me to be paid for the amount of work I do, and not for how long it takes me. I beleive that so strongly that I will never charge by the "clock."
                  Also, if you give a customer a flat-rate contract, it isn't fair to charge them for extra time if it takes longer...that defeats the whole concept of fair flat pricing.
                  The bottomline is this: jobs should be CONTRACTED at a fixed rate. No matter how you come up with it, the exact job terms and exact price terms should be agreed upon by both parties in contract before work starts. This is the law, no matter if you contract using T&M or flat price.
                  Water Heater Reviews & Water Heater Information

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                  • #24
                    Re: yet another long-winded flatrate debate

                    Originally posted by ToUtahNow View Post

                    If those who are flat rate would like to participate in a little experiment they could keep track of their actual hours worked in one week versus their actual hours billed and share it with us.

                    Mark
                    Mark, I designed my flatrate price book myself. I based it on a national pricing system which I bought, but I dramatically changed it and tweaked it to fit my unique company and market. Unlike most big flatrate shops, I tend to figure hours a little too low. But then again, maybe that is why I have so much repeat business.

                    Honestly Mark, that is a very good idea, and I will make a journal and try to commit to it for a whole solid week. The numbers will be very revealing if I am charging accurately or not. I have a feeling that some jobs go over, some go under, I may even do this long term and that way I can adjust my pricing accordingly...some prices up, some prices down.
                    Water Heater Reviews & Water Heater Information

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                    • #25
                      Re: yet another long-winded flatrate debate

                      Why don't we just cut and paste all the posts from the previous t&m vs flatrate thread? Then we could either go to bed early or argue about something more fun like maybe....SECTIONALS VS DRUMS!
                      "Man will do many things to get himself loved, he will do all things to get himself envied." Mark Twain

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                      • #26
                        Re: yet another long-winded flatrate debate

                        Originally posted by SlimTim View Post
                        Why don't we just cut and paste all the posts from the previous t&m vs flatrate thread? Then we could either go to bed early or argue about something more fun like maybe....SECTIONALS VS DRUMS!
                        Nobody can argue against this simple fact:
                        T&M doesn't take SPEED into consideration in any way at all.
                        Water Heater Reviews & Water Heater Information

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                        • #27
                          Re: yet another long-winded flatrate debate

                          Fair is in the eye of the CUSTOMER...not the tech. I have unclogged a toilet in 5 minutes, a jam in a disposal in 2 minutes, and flushed a water heater in 10 minutes. Should I charge a flatrate price for all of them in one call???

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                          • #28
                            Re: yet another long-winded flatrate debate

                            Originally posted by NorthernIllinoisPlumber View Post
                            Fair is in the eye of the CUSTOMER...not the tech. I have unclogged a toilet in 5 minutes, a jam in a disposal in 2 minutes, and flushed a water heater in 10 minutes. Should I charge a flatrate price for all of them in one call???
                            That is your choice. If something takes me two minutes, and I am there doing other work, I often tell the customer it is "on the house."
                            Water Heater Reviews & Water Heater Information

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                            • #29
                              Re: yet another long-winded flatrate debate

                              Originally posted by ToUtahNow View Post
                              I'm not sure I know any T&M shops who don't have a shop bid price for those items. The difference is when a flat rate company is charging for each individual item like it was installed in a vacuum the price becomes ridiculously inflated. Flat rate companies who know their costs are capable of giving an honest price to a client.

                              If those who are flat rate would like to participate in a little experiment they could keep track of their actual hours worked in one week versus their actual hours billed and share it with us.

                              Mark
                              We do not focus on billable hours by the tech but rather gross profit as the result of all operations that were required to complete the repair. Those costs include direct labor, office research/technical support, pick-up & delivery, shipping costs, material cost & handling costs (for warranty return).

                              I can tell you that most service projects come-in at 50-70% gross profit if I have set-up flat rate properly and the tech uses the flat rate system as it has been designed.
                              spodelee

                              Until lions have their own storytellers, stories of the hunt shall always glorify the hunter

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                              • #30
                                Re: yet another long-winded flatrate debate

                                Originally posted by spodelee
                                Since I have been putting together plumbing flat rate pricing for months now, I welcome your thoughts. So here you go, see the attached - have at it:

                                Primary Repair - is the column that is used for the first or primary repair when the customer does not have a service contract.

                                Primary W/ Basic - is the column that is used for the first or primary repair when the customer HAS a service contract.

                                Second Repair - is the second repair or task that is needed
                                Third repair - the third repair or task that is required
                                Fourth & Fifth Repair - and so forth

                                Almost forgot, the last four digits in each task part number indicates the minutes that should be required to perfrom the task by a journeyman plumber who is on task and doing his job very well. Keep in mind that the minute allotment assumes the technician is already on site and ready to go to work.



                                In addition to labor and materials, the costs associated with research, ordering, shipping and travel are included in each part number.


                                Very Impressive Work and a good looking list...

                                I'm curious do you set this list in front of the customer then offer to sell them a service contract?

                                I guess my areas rates are just alot lower than California

                                I rebuilt a toilet flange on slab on Monday... Pull toilet, a little light demo hammer work, place new flange, mix and place a little hydro cement. reset toilet. In and out in 2.5 hours $200 with parts (flange, wax ring, cement, toilet bolts, shims...

                                Make sure I'm pricing this right...

                                Busted flange on slab & leaky flapper=
                                - Remove toilet for repair and reset second repair? or would this be first repair since you have to do it first to get to the slab? lets call it first repair @$253.47

                                - Repair leaky flapper (third repair) $68.22

                                - Repair flange on slab (second repair) $732.54

                                Total= $1054.23

                                $400 bucks an hour! Thats what I'm talking about:-)
                                Last edited by OkieBill; 01-01-2009, 11:18 PM.

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