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Posted by Bob Pietrangelo on August 11, 2006, 1:21 am
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>> So, where does one get a flat rate book, and how to convince home
>> owners that's the pricing schedule they want?
Stormy, why do you have to ask these type of questions, if you are at that
point in your career that you need to think about these things please report
yourself to the BBB and ask them to protect society from you!
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> youd better make sure that your local area will support it first. if
> youre the only one charging flat rate and everyone else is T&M youll most
> likely go broke.
Why would that be the case?
I would rather know upfront what a repair is going to cost before it is
done. That is all that flat rate is.
The pricing structure in flat rate allows you to charge less or more than
T&M. I it depends on who is doing the repair.
A properly designed flat rate book that you show the customer, shows the
customer everything that is involved to do the repair, it entices them to
purchase maintenance agreements because of the discounts that are afforded
to agreement customers.
The customer is not going to be watching you and their watch too make sure
your not taking too long and increasing her bill.
Any competent company now a days is on some type of flat rate system. Going
Flat rate in a town of T&Mers would probably do very well.
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Posted by Nathan W. Collier on August 11, 2006, 10:29 am
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>> youd better make sure that your local area will support it first. if
>> youre the only one charging flat rate and everyone else is T&M youll most
>> likely go broke.
> Why would that be the case?
ive seen it myself. one of the largest shops up here went to flat-rate and
it hurt them BAD. i picked up many of their customers.
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> I would rather know upfront what a repair is going to cost before it is
> done. That is all that flat rate is.
and when you run into more trouble than you expected, then what? you charge
the customer more than you quoted him? for example, you diagnose my burnt
up 25 year old compressor and you sell me a condensor. after you install my
new condensor, you find that the fixed orifice is plugged. you now have to
recover the refrigerant and open the system.
......i give customers a rough idea of what the overall repair will cost,
but in the end i only charge them for exactly what they needed. i figure if
i cant make a living being fair, then im in the wrong business.
--
Nathan W. Collier
http://UtilityOffRoad.com
http://7SlotGrille.com
http://InlineDiesel.com
http://BighornRefrigeration.com
http://ConcealedCarryForum.com
http://1911Carry.com
http://GlockCarry.com
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Posted by Bob Pietrangelo on August 11, 2006, 6:11 pm
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>> Why would that be the case?
> ive seen it myself. one of the largest shops up here went to flat-rate
> and it hurt them BAD. i picked up many of their customers.
Did you do that by being a low ball contractor, what is your overhead per
hour?
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>> I would rather know upfront what a repair is going to cost before it is
>> done. That is all that flat rate is.
> and when you run into more trouble than you expected, then what? you
> charge the customer more than you quoted him? for example, you diagnose
> my burnt up 25 year old compressor and you sell me a condensor. after you
> install my new condensor, you find that the fixed orifice is plugged. you
> now have to recover the refrigerant and open the system.
Why would you install a condenser without a new coil?
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> ......i give customers a rough idea of what the overall repair will cost,
> but in the end i only charge them for exactly what they needed. i figure
> if i cant make a living being fair, then im in the wrong business.
What if your rough estimate is a couple of hundred less than the actual
bill?
Nathan, i am not trying to bust your stones, I am just debating the benefits
of something you do not believe in. I have been using flat rate for many,
many years without hardly any complaints. I cover my overtime and try and
make a 15% net. My four experienced guys make over 45,000/ year, and get 40
* 52 with great bennies, health, dental, vision, life, vaca, personal days,
short and long term disability. If I priced T&M my customers would chase me
away by my hourly rate, when I charge flat rate and include all of my costs
and my net profit, customer doesn't mind. My OH is $165/hour @ 60% billable
time.
When I was on my own working out of the house, I charged half as much
because my OH was about half. But I still made a great slary and a nice
net.
Customers that are just shopping by price and not quality, longevity, and
experience are not my customers, nor do I market or cater to them. I ask
customers looking for estimates if they are looking for the cheapest price,
if they say yes I let them know upfront they do not want to deal with me. I
am $1-several K over most other contractors, and survive solely on
referrals. Even my installs are flat rated.
The one big company that went out of business after flat rate and you got
alot of their customers, may not have gone out of biz because of flat rate,
but may have tried flat rate as a last resort after several other problems,
you never know.
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>
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Posted by Nathan W. Collier on August 11, 2006, 9:34 pm
> Did you do that by being a low ball contractor
absolutely not. my rates are in line with my competition.
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> Why would you install a condenser without a new coil?
in the last two years this particular customer (large developer with dozens
of commercial properties and over a hundred rental units) has spent over
$60,000 on my services, and im not going to jeopardize his account by
pushing anything that he doesnt want. he was aware that if we had to go 13
seer that it would require a new coil, but i found 15 units (10 seer 2.5
ton) at my local RSD (no 10 seer coils) which is what he wanted.
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> What if your rough estimate is a couple of hundred less than the actual
> bill?
i dont think ive ever given a low estimate. i usually quote really high,
and then the customer is especially pleased when he gets his bill. in the
event that it was going to be more than my original estimate i would discuss
it with the customer before i exceeded the amount quoted. regardless, i
always make it very clear that its just a rough estimate.
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> My OH is $165/hour @ 60% billable time.
how did you arrive at that?
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> When I was on my own working out of the house, I charged half as much
> because my OH was about half. But I still made a great slary and a nice
> net.
i currently work out of my garage that we have outgrown. at this point
we're considering either leasing or purchasing commercial space.
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> The one big company that went out of business after flat rate
sorry if i was misleading. they didnt shut their doors, but they lost at
least half (im just guessing, based on what ive heard) of their customer
base as well as many of their employees.
--
Nathan W. Collier
http://UtilityOffRoad.com
http://7SlotGrille.com
http://InlineDiesel.com
http://BighornRefrigeration.com
http://ConcealedCarryForum.com
http://1911Carry.com
http://GlockCarry.com
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Posted by Bob Pietrangelo on August 11, 2006, 10:09 pm
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>> Did you do that by being a low ball contractor
> absolutely not. my rates are in line with my competition.
Our technicians are factory trained and certified to repair everything we
service, and due to our low overhead our standard rates are well below
industry standard. We don't have incidental charges (such as mileage* or
"trip/service" charges) and we don't mark our parts up like other service
companies. We also offer many service packages for commercial and
residential customers. Call to find out more at 406.252.TECH (8324).
Nate, this is what the industry considers a low ball contracotr, these words
are from your website. And, for not doing resi work, your site surely seems
to cater toeards it. If you are doing commercial Heat and Cool PM's for a
FLAT RATE of $50 you are not going to make it much longer
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>> owners that's the pricing schedule they want?