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Old 08-24-2008, 12:24 PM   #1
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Default Flat Rate Price Book - HELP!!!

In creating our own flat rate book, I am having a hard time with fine details. I've started with upfrontprice.com for the format with two prices under each item (Standard & Value Rate) because it is neat and easy to read. However, I foresee limitations.

The best book I've seen has numerous prices for each item, but is too busy. (Category Pricing: Value Overtime, Stand. Overtime, Value Reg., Stand. Reg., Add-on Value Overtime, Add-on Stand. Overtime, Add-on Value, Add-on Standard.)

This is how we are envisioning using our pricebook.

New customers pay minimum show up fee ($35.00). This covers price shoppers wasting our time and being compensated to show up. Fee covers getting a new customer set up in our system.

Existing customers - no fee. We are confident they will have us do the work.

Standard Rate - Higher price for those who are just using us because they are in over their head or their regular 'handyman' is unavailable.

Value Rate - To take care of our loyal customers.

To get the value rate -

1. Gold Club Membership - $250.00. - Customer gets value pricing, extended warranties, full home inspection (1 hr.), guaranteed emergency response, and a water heater flush.

2. Silver Club - $75.00 - Customer gets value pricing and guaranteed emergency response.

If we charge 1.5 hours for a new faucet install for an existing customer, the travel time is in the price. To do a 2nd faucet, it should be cheaper because we are already there. Do I need to create an add-on price for every item?

How does your price book work?

Also, do you ever add up all your prices and think "Whoa, that's a bloody fortune?" What I want to avoid is using flat rate and the bill come to $575.00 and mentally reprice T & M and have the price be $295.00. We are trying to raise our hourly rate by a reasonable amount ($25.00). In the above scenario, we would feel like theives if the hourly amount went up by $75.-$100.00.

HELP!
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Old 08-24-2008, 02:00 PM   #2
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My pricing structure is different, though I use flat rates, I base my rates on my own knowledge of what it takes me to perform each task.

The only comment I can offer you that I think is relevant is to take your feelings out of the equation altogether.

I learned very hard lessons (and still learning) that allowing guilt to dictate my price will put me out of business.

Lines from homeowners saying things like "I can't see why you figure it'll take more than 15 minutes" or "Can't you make an exception on the price?...it's just a couple of feet of pipe."

I learned an expression from an oldtimer that I've heard numerous times since, "If your customers aren't complaining about price, there's a good chance your too low.".
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Old 08-25-2008, 12:41 AM   #3
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Do you have primary and secondary prices? First, you figure what the cost of the first item is, with the cost of getting there included in the price. For the second price, you're already there, and should deduct the amount from the price.

I made my book with the primary prices then at the end of each section a list of the same tasks, mostly, for about $40 less. You'll still make a lot more money when you do several tasks at one job.

Today, I tweaked the book for sediment removal. We have a lot of water heater sediment to clean. I recently got about seven gallons of lime out of one through the 1" pipe-sized element opening. That can take up to two hours or so, and so I added three tasks to the secondary prices: under two gallons, 2 to 5 gallons, more than five gallons. It only had to go under secondary tasks because I'm already there to replace at least one element and draining is included in the task.

It's taken me nearly a year to get comfortable with it, and I tweak a lot. I often have to use a price similar to what I'm doing because I don't have a specific price, and that often leads to a change in the book.

I made my book in Open Office and made a separate file for each section. Then I found that Open Office often doesn't like to add anything in the middle without really screwing it up. So I sometimes have to make a replacement section and copy from the original section.

I use a binding machine with the plastic combs and it's easy to add or changes pages. Laminated sheets of card stock for the covers, regular card stock for the pages. Holds up pretty well. I sometimes have to replace the covers. I think I've only had to replace the comb once in a year. (Actually about ten months since last October.)
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Old 08-26-2008, 10:32 PM   #4
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My Bible has 3 prices for every task
1. primary price= pull up plung toilet= trip charge+ flat rate= total
2. add on = there to plung toilet= see above then put new flapper in= prmary+add on+trip
3 Special costomer price you call "club members"=5% off of all flate rate prices
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Old 08-27-2008, 07:47 AM   #5
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Thank you Will. Welcome to the forum.
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Old 08-28-2008, 12:16 AM   #6
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Crazy, one other thing. Add a misc task to your book roughly equal to a half hour of your hourly retail rate. This will allow your techs to do add-ons they know will be quick for that rate instead of one that is calculated on an average job. They should not be allowed to use it right away without approval. Once they get the hang of it, let them fire at will.

As for primary and secondary tasks, the difference should be all that deployment entails, including breaking out tools, drapes, door mats, etc., not just drive time.

As for looking at your numbers and wondering how in the heck you can charge that much, well, think about it. T&M is a best guess at the start.. a warning in the middle, and an apology at the end under most circumstances.

We hate to think that what we do is in any way unfair. But, we're professionals and we understand the risks better than our clients ever will. Why should they take the risk if its not necessary? Assume the risk, charge for it and then manage it. You have the experience to handle it and your client really isn't interested in it any more than you are to know why a push rod on your neighbor's lawn mower failed and your's did not.
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Old 08-28-2008, 03:07 AM   #7
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Quote:
Originally Posted by Double-A View Post
Crazy, one other thing. Add a misc task to your book roughly equal to a half hour of your hourly retail rate. This will allow your techs to do add-ons they know will be quick for that rate instead of one that is calculated on an average job. They should not be allowed to use it right away without approval. Once they get the hang of it, let them fire at will.

As for primary and secondary tasks, the difference should be all that deployment entails, including breaking out tools, drapes, door mats, etc., not just drive time.

As for looking at your numbers and wondering how in the heck you can charge that much, well, think about it. T&M is a best guess at the start.. a warning in the middle, and an apology at the end under most circumstances.

We hate to think that what we do is in any way unfair. But, we're professionals and we understand the risks better than our clients ever will. Why should they take the risk if its not necessary? Assume the risk, charge for it and then manage it. You have the experience to handle it and your client really isn't interested in it any more than you are to know why a push rod on your neighbor's lawn mower failed and your's did not.
Excellent points. And exactly why I have been working in flat-rate plumbing for years now.
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Old 08-31-2008, 12:55 PM   #8
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All great points, I'll throw a little tid bit in from a marketing point of view. Question-- Have you ever been at a grocery store let's say in the canned veggies isle and gotten a headache because there were too many choices of green beans? Studies have shown that people don't like too many choices. A perfect example in our trade is the ( good-better-best ) technique. KEEP IT SIMPLE
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Old 09-23-2008, 03:10 PM   #9
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Read Mark Up And Profit By Michael C. Stone. It Explaines The Flat Rate Pricing Verses T&M. You Will Make More Profit On Flat Rate. How Many Times Has Your Tech Forgot To Add All Of The Material. With Flat Rate Pricing There Is No Nogation About Cost.
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Old 12-14-2008, 02:06 PM   #10
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Quote:
Originally Posted by Plumbcrazy View Post
upfrontprice.com
Has anyone looked at these prices? are they in the legit range?
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