# Flat rate



## justin (May 14, 2010)

I am fiddling with the thought of going from hourly to flat rate . I'm sure that there are threads that cover this . I am still gonna start this thread anyways. 

I am wanting to so as to stop a surprise for customer at end. I love to be hourly . It works out for me. I don't think it would get me more work, because because usually a person that is calling for service and not price shopping is my main client. If they are a price shopper then whether I am hourly or flat rate I will be too high. 

How would flat rate help me or hurt me. ? Or is hourly good? I've never been anything but hourly to residential. My commercial jobs are always flat . This is just for residential. All input would be nice.


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## Titan Plumbing (Oct 8, 2009)

Aren't you flat rate for the most part anyways? I mean when a customer calls and asks how much and you quote them a price then it becomes a "flat rate".

I find that even though I'm basically "hourly", I'm really "flat rate". However, I find that sometimes I am less expensive than true flat rate companies.

ETA: When I quote I always add the caveat that once I see it, it could change.


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## OldSchool (Jan 30, 2010)

The only problem I have with flat rate for residential is that you got to go to the customers house and sell it to them

On the other hand TM the service is sold before I get there


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## vinpadalino (Aug 27, 2010)

I usually get residential repairs done in a hour or less.. If I changed by the hour I would loss.. 

Or would have to slow down..


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## OldSchool (Jan 30, 2010)

vinpadalino said:


> I usually get residential repairs done in a hour or less.. If I changed by the hour I would loss..
> 
> Or would have to slow down..


Why ?

Just charge a minimum call out like 1.5 or 2 hr charge


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## plbgbiz (Aug 27, 2010)

IF (big if) a company is honestly charging the actual billable hour rate that satisfies the business' established budget, then it does not matter one bit the method by which you charge that rate.

If you change from T&M to FR your hourly rate should still be the same and the amount of time it takes for you to complete a given task won't change either.

The only material difference is that FR offers a level of consistency to your pricing rather than it varying a few dollars up and down depending on whether or not you are having a bad day.


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## OldSchool (Jan 30, 2010)

Frankly I don't sell plumbing or HVAC

I sell time...... Every minute of every working hour somebody is going to be paying for it.... Even if we are sitting at the shop


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## justin (May 14, 2010)

plbgbiz said:


> IF (big if) a company is honestly charging the actual billable hour rate that satisfies the business' established budget, then it does not matter one bit the method by which you charge that rate.
> 
> If you change from T&M to FR your hourly rate should still be the same and the amount of time it takes for you to complete a given task won't change either.
> 
> The only material difference is that FR offers a level of consistency to your pricing rather than it varying a few dollars up and down depending on whether or not you are having a bad day.


Last paragraph . Consistency!! That may be the whole problem of hourly verse flat rate . I think that is why I am even considering it.


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## justin (May 14, 2010)

vinpadalino said:


> I usually get residential repairs done in a hour or less.. If I changed by the hour I would loss..
> 
> Or would have to slow down..


That's crazy! I have a lot of hour calls , but most turn into more than that. Maybe I have just targeted more than stopups and faucet leaks. And on stopups or faucets I usually try to sell a better system with a camera insp. or a new faucet . Idk!


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## pilot light (Apr 21, 2012)

Be careful my friend! Make sure the flat rate is more than the hourly rate then. the guy who said he completes mosy resi calls in under an hour is right usually. USUALLY! Tread lightly !


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## revenge (Jun 30, 2011)

usually when you give a flat rate it makes it harder to itemize (i know i spelled that wrong). If you charge 130 for the first hour than the part you can justify what you charge. mainly on water heaters but we have a flat rate on our heaters its 705 elec. in garage usually in and out within an hour hour and a half and when they ask us for it to be itemized we usually get the stink eye how can you explain a 350 water heater and 355on labor


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## Qball415 (Nov 20, 2010)

revenge said:


> usually when you give a flat rate it makes it harder to itemize (i know i spelled that wrong).


Brother you have misspelled 90% of everything you've typed, but we love you for it.


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## rjbphd (Feb 5, 2010)

Qball415 said:


> Brother you have misspelled 90% of everything you've typed, but we love you for it.


We'll I'm a mispaller,too...


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## SimplePlumber (Feb 1, 2012)

justin said:


> I am fiddling with the thought of going from hourly to flat rate . I'm sure that there are threads that cover this . I am still gonna start this thread anyways.
> 
> I am wanting to so as to stop a surprise for customer at end. I love to be hourly . It works out for me. I don't think it would get me more work, because because usually a person that is calling for service and not price shopping is my main client. If they are a price shopper then whether I am hourly or flat rate I will be too high.
> 
> How would flat rate help me or hurt me. ? Or is hourly good? I've never been anything but hourly to residential. My commercial jobs are always flat . This is just for residential. All input would be nice.


It sounds as though you are doing just fine with the way things are right now.

If you goal is to prevent a price surprise for your customer, focus on ways to communicate with them better than to change your pricing structure.

Why change a good thing?

IMO, residential service calls need more communication finesse, since a lot of homeowners are not as literate in plumbing. Builders and business owners are a lot more aware of plumbing terminology and prices than the average homeowner.

One of the ways I improved financial communications with my customers was to emphasize the distinction between diagnosing a given problem and solving it.

The initial call usually went like...

-Me: Good morning, DTP
-Cust: Hi, my tub is backing up when I flush the toilet, do you guys do that type of work?
-Me: Yes sir we do, who recommended us to you?
-Cust: Oh, noone, I found you online
-Me: Nice, was it easy for you to find us?
-Cust: Yes, I just used Google and you came up 
-Me: Great, well we charge $95 for the first 15 minutes and $30 per 1/4 hour thereafter to figure out what the problem is (i.e. diagnosis) and fix it.
-Cust: Ok, how long do you think it will take?
-Me: If it is what I think it is we can likely get it solved for you in about 1-1.5 hours...though we can get a clearer idea of what is wrong when we come out. We typically can diagnose clogs within the first 15 minutes of arriving to give you a clear idea of what it will take to actually solve your problem.
-Cust: Sounds fine, when can you get here?
-Me: The earliest we can get to you is 2pm today, will that work?
-Cust: Sure
-Me: (get customer info) Oh, by the way, what website did you see us on?
-Cust: I believe it was Citysearch, I read the reviews and they were pretty positive.
-Me: Well that's good...Thank you, see you at 2, be well.

I charged the $95 for the first 15 minutes because I felt that it was a fair price for the little calls (flappers, flushometer diaphrams, toilet auger, jammed disposer, etc) that could be handled within the 15 minute window. Customers seemed to react positively to the fee and conceded that while it was a high price for 15 minutes, it was a fair price and they took note that I didn't waste their time or ruin my credibility by stretching it out into the next 15 minutes.

I opted not to do the one hour minimum since I will always be there for 15 minutes, but not always one hour. This way, if got done in 15 minutes, the customer didn't resent the fact that they still have to pay for 45 minutes of unused time...and noone likes to pay for something they didn't receive...even if it was "policy"

Also, I didn't want to feel like I should mow their lawn to justify my unused time.


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