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  • #31
    Re: Tee and em

    Originally posted by stolen View Post
    you tell your customers this?
    Yes I do, and I have absolutely no problem saying it to them. Let me explain why!

    When I got out of college in 1982 I became a district manager for one of the largest Chemical companies in the world, Chemed. My salary, bonuses etc, was based on the performance of the seven guys that worked under me in sales. When our customers did not pay there bills it effected our bottom line, my bonus etc... My divisional Vice President, who had taken me under his wing, had a simple explanation that today is the internal phrase of our company.

    "something of nothing is ....... Nothing....." (think about it for a while and it will make sense)

    My two years there was a huge learning curve in customer owed debt. When I left that company after two years I became the National Sales & Marketing Director for an industrial water treatment business. In that company a huge chunk of my annual income was based on actual profit. Customers that were slow on paying there bills, or did not pay, effected not only my bottom dollar, but those of my sales staff.

    After two years of working at this company I finally sat down with the owner and taught him what "Something of Nothing is nothing, meant." From that point forward the company went from making $350,000 in annual sales to over $10 Million when I left. Every single year for eleven years the company showed a profit, all based on the simple philosophy of "something of nothing, is nothing."


    I am in the business to make money. Period! Not to break even, not to give away the farm, but to actually make money, for not only myself & family, but for the people in my organization.

    Oh, and so you don't think everything is Rosy, in the last two and half years we have watched virtually 50% of our commercial / industrial customers leave California for other states. I would rather turn away business that I know will cause headaches down the road. When customers start questioning price, I tell them to hire the other guy. That's a customer I don't need, period.

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    • #32
      Re: Tee and em

      Originally posted by NHMaster3015 View Post
      When you go to McDonalds, what do you get for your money? We can argue all day over the taste but rememer that both McDonalds and Wal-Mart provide a product that meets the average customers expectations and they do so consistantly. Neither are particularly low priced.
      The Mickey D's in socal are priced at around $6.90-$8.95 for all there combo meals. They have become so non-competitive with there price increases that we are actually calling in orders to nicer take outs and getting ten times the meal for the same price as Mickey D's. Pretty funny when were on a job sight and we call in an order to Corner Bakery, SubWays, In-and-out, etc... and send a guy over to get the food. You should see the faces from all the other trades when our guy shows up with the food. "Like a pack of salivating wolves."

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      • #33
        Re: Tee and em

        fair is a place where they put ribbons on pigs! (my kids love me saying it). we do both T&M and FR

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        • #34
          Re: Tee and em

          I have said this a thousand times before but it bears repeating. Anybody setting their prices based on the competition and not their bottom line needs to start attending business seminars. I understand that many of you are very good plumbers but plumbing is only a small part of your business.
          sigpic

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          • #35
            Re: Tee and em

            What I don't get about Flat Rate is it is based off T&M. Why do Flat Rate? Why not just keep it simple and do T&M and if some one wants a flat price on say a Water Closet install then shoot them a price based on your hourly rate. I do it all the time. I prefer T&M, but if someone wants a final price on a job I can give it too them on the spot.

            Of course I have the advantage to doing that since I'm the Boss, a company with alot of techs would not have that luxury.
            Will Rogers Plumbing
            Moore, Oklahoma
            (
            405) 323-2852

            "Your Solution for Any Sewer and Drain Cleaning Needs"

            "We Unclog Drains That Others Can't"



            www.willrogersplumbing.com
            http://willrogersplumbing.com/?page_id=8

            "Oklahoma's Favorite Plumbers!"

            Comment


            • #36
              Re: Tee and em

              The part of the discussion that I think is missing is "what does the customer want". Obviously, he wants the lowest price you'll give him, but he also wants (and is willing to pay for) good work done quickly.
              When I pay for services, I usually want a flat rate so that I know exactly what the end result is, and how much it costs. This protects me from "well, we didn't know how bad it really was", or from having somebody sit around idle for awhile. Sometimes, it is a quick, easy job and everything goes perfectly. In those cases I would have paid less with T&M, but it doesn't matter. I am willing to pay the slightly higher price in these instances to avoid the risks associated with the hourly prices that get out of hand when something didn't go smoothly.

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              • #37
                Re: Tee and em

                Originally posted by bmitch00 View Post
                The part of the discussion that I think is missing is "what does the customer want". Obviously, he wants the lowest price you'll give him, but he also wants (and is willing to pay for) good work done quickly.
                When I pay for services, I usually want a flat rate so that I know exactly what the end result is, and how much it costs. This protects me from "well, we didn't know how bad it really was", or from having somebody sit around idle for awhile. Sometimes, it is a quick, easy job and everything goes perfectly. In those cases I would have paid less with T&M, but it doesn't matter. I am willing to pay the slightly higher price in these instances to avoid the risks associated with the hourly prices that get out of hand when something didn't go smoothly.

                When I hire someone I also want to know the price up front. I'll never again hire someone who is T&M, I've been ripped off before. If I need an electrician or a landscaper I want to know the price up front. I hired a landscape company a couple years ago to install some window wells and haul in rock around my home. Half the time he was sitting around smoking his cigarettes, I got charged for all the time he was here, bullchit I say! I also don't always go for the cheaper one either. We have a few different electricians around here and I always hire the man I know that does the best job, is always on time, and is reliable. He's not the cheapest but he's the best.

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                • #38
                  Re: Tee and em

                  I have a mechanic that I use alot. He charges T&M. I've been to the yahoos that charge flat rates and I would never to to a flat rater again. I'd much rather go to the T&M guy who tells me exactly what he did and bills me for 300 bucks than to take it to the flat rater who uses BS jargon and charges 600 bucks and you don't even know what he did.
                  Will Rogers Plumbing
                  Moore, Oklahoma
                  (
                  405) 323-2852

                  "Your Solution for Any Sewer and Drain Cleaning Needs"

                  "We Unclog Drains That Others Can't"



                  www.willrogersplumbing.com
                  http://willrogersplumbing.com/?page_id=8

                  "Oklahoma's Favorite Plumbers!"

                  Comment


                  • #39
                    Re: Tee and em

                    Yea, I like T&M mechanics. Hmmmmm work a little, have a coffee, answer the phone, morning dump, chat with your buddies, all on the clock
                    sigpic

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                    • #40
                      Re: Tee and em

                      I guess it helps if you know the guy and he's honest. We could go round and round in circles and the bottom line is if your honest, it doesn't matter how you charge. Notice I said honest, not cheap. I'm T&M and I'm far from cheap.
                      Will Rogers Plumbing
                      Moore, Oklahoma
                      (
                      405) 323-2852

                      "Your Solution for Any Sewer and Drain Cleaning Needs"

                      "We Unclog Drains That Others Can't"



                      www.willrogersplumbing.com
                      http://willrogersplumbing.com/?page_id=8

                      "Oklahoma's Favorite Plumbers!"

                      Comment


                      • #41
                        Re: Tee and em

                        Originally posted by NHMaster3015 View Post
                        Yea, I like T&M mechanics. Hmmmmm work a little, have a coffee, answer the phone, morning dump, chat with your buddies, all on the clock

                        Even the t&m mechanics are actually charging a flat rate but they just don't tell you that. A job might take them 30 minutes but they'll say it took two hours and tell you that you got a great deal! LOL It could have been the burrito he ate last night!

                        Comment


                        • #42
                          Re: Tee and em

                          Originally posted by TheMaster
                          You say when you pay for services you USUALLY want a flat rate. What services would you prefer T&M or what circumstances would you want T&M? How do you protect yourself when you do pay for services by T&M?
                          I work with an artist every once in a while. He is T&M, and has a reputation for being quick and reliable. Also, I have hired friends/family to do jobs and paid T&M. This situation is mainly because the friend needs the job. Otherwise, I prefer not to do business with friends and family, and prefer flat rate.

                          Originally posted by TheMaster
                          What do you consider the risks of T&M and are their any risks associated with flatrate?
                          The risk of T&M is the potentially unlimited price inflation. I am not there to babysit. Also, I am not proficient at his job, so I can't tell necessary work from filler work even if I was there. I prefer to pay in a way that does not motivate someone to make things worse.
                          Of course, there are risks with flat rate, too. It motivates someone to get in and out quickly. I always maintain that the job is not "finished" until the one paying for the work has the opportunity to inspect.
                          I think of flat rate as a hedge against T&M. I knowingly pay more than the price for the average T&M job, so that in the event that things don't go as planned, I am covered.

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                          • #43
                            Re: Tee and em

                            Originally posted by ironranger View Post
                            Even the t&m mechanics are actually charging a flat rate but they just don't tell you that. A job might take them 30 minutes but they'll say it took two hours and tell you that you got a great deal!
                            I went to a mechanic that charged T&M. He would look in a book and say " the job should take ## hours, so that would be about $$". I'd say, great, let's agree on that price. He never agreed, saying he would bill based on the acutal time, that the book is just a guide. It was funny, though. He never seemed to get the job done faster than the book's time. It was either the same time or longer. I eventually learned my lesson and stopped giving him my business.

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                            • #44
                              Re: Tee and em

                              Actually TM if the company is operating with honesty and integrity it really makes little difference to the customer as to the final bill. Notice the "honesty and integrity" because either method is open to misuse. The best thing that Flat rate has done for my company is to make billing easier (13 employees) and drastically cut down on the number of questioning and irate phone calls from customers. Besides that I estimate that I lost close to 30% of my customer base in the first year which turned out to be a God send because those 30% were primarily the dead beats and slow payers that kept my recievables at unreasonable levels. We do nothing for customers without credit. When a new customer calls the first thing we do is get the credit card number. I have found that most customers really like having a set bill and because I need to make X amount of money to cover expenses and make a profit, the actual cost to the customer, regardless of method or task is going to be the same. Here's another thing that's helpfull. We need to charge $ 142.00 an hour to break even. When you tell a customer that your rate is $142.00 an hour they generally will hang up. (or if you are only ther 40 minutes they argue the difference) When you tell them the job will run $142.00 they say "how soon can you come"
                              sigpic

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                              • #45
                                Re: Tee and em

                                Well, sometimes you loose a little but generally the numbers will run in your favor. The main reason I think most small shops don't do flat rate is because of the work involved in pricing your services, and believe me, even with canned programs there is still a whole lot of work involved and it needs to be constantly updated. There are lots of companies that provide working templates but as good as they are they still need tweaking. I don't belive either method is effective if you don't know your company and it's employees.
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