It's American, but interesting.

[Voltimax]

Hi guy's

I notice there's always a lot of threads here asking how to price jobs. The other day by accident I came across this

Electrical Flat Rate

Now this seems to be big in the land of the free at the mo and I guess it's much the same as our point pricing. Reading through that long section there got me thinking that a few points they make regarding the system are valid ones.

Thoughts?

 

[DurhamSparky]

seems bit pricey at $199 like!!!

maybe compile a similar thing in the arms!! north and south divide obviously!! lol

 

[UNG]

Isn't it just a schedule of rates with a different name

The idea behind the price itself, is that if you did the job lets say, 10 times at 10 different customers, you would take all 10 totals / divide them by 10 to get your average installation price.


So technically, some of your customers would be paying less than they should be and others would be paying more, but as long as they all paid an average Flat Rate, you would always be making a profit on the job.

Surely you only make a profit if you get all 10 jobs or the easy profitable jobs as you can't make a profit on job that costs more than the average price your charging or am I missing something?

 

[Voltimax]

Yes that's exactly what it is, a schedule of rates, but the rates are decided by you. What they're trying to say is that if you fix the price, it's possible to charge more than you'd get by doing time and materials. The reason is, for some reason people prefer to pay a set fee and it's easy to see why. If you tell a customer you will charge X amount to do a job, then someone comes in for an estimate for less, they'll most likely pick you. Their mentality is that they know there will be no extra cost involved if they pick you. You set a price and unless they have extras that's all they'll pay. If they choose the estimate, they may end up paying more, because it is just that, an estimate.
Companies like British Gas etc having been pricing like this for years. The trick is to allow enough in your price so that when you get an easy installation you're making alot, then when you get the odd difficult one it will all balance out.

Like I said, it seems to be the in thing in the states at the moment. I just found it interesting.

How does one join the electricians arms, or is it a select group?

 

[DurhamSparky]

sparky pub = DAN

 

[BluSparx]

I have been using fixed rate since going alone I work out roughly how long the job will take me add an extra 1hr to be safe and then add cost of materials + my profit margin on materials.

I also do a FREE visit (takes me 15-30mins) to explain the job to customer and what else may be required - if the wiring looks old I will spend slightly longer and do an IR check on the exisitng circuits to show any potential issues and again explain to the customer if anything else needs checking/upgrading.

Customers do like this more due to knowing how much the job will cost them - never been out of pocket yet and not lost a job to a competitor yet as most people in my area are still using the T&M Method.

This method helps during the current climate as customers are much more likely to use you if you have given a fixed rate.

 

[Voltimax]

I think most of us do free visits i.e. free estimate, but I like the idea of charging for the visit and then knocking it off the quotation if it's accepted . It annoys me when I go to some premises and spend along time there and then don't get the job.
Who ever thought up the term 'free estimate' needs his rear end kicking, if he's still alive of course

 

[DurhamSparky]

problem is there are plenty of people out here to give free estimates so you will just not get the chance to quote in that case...!!

 

[BluSparx]

I think most of us do free visits i.e. free estimate, but I like the idea of charging for the visit and then knocking it off the quotation if it's accepted . It annoys me when I go to some premises and spend along time there and then don't get the job.
Who ever thought up the term 'free estimate' needs his rear end kicking, if he's still alive of course

You could always do it the other way and add a little to the quotation - i add an additional hour into my final quotation as part of the labour, Whilst this won't always give me the money for my time at every "quotation" visit it will however pay my diesel / insurance each month - if you think on average 5-6 jobs per week with the additional hour = business running costs paid

 

[Voltimax]

Already do that Blu Like you say though you don't always get it, never mind eh?

 

[BluSparx]

Your right you don't always get the job however the way I look at it is if a customer doesn't like my prices and they go elsewhere for "cheapness" I am safe in the knowledge I would have been installing Safely and to the current regs not cutting corners and providing full EIC and notification to LABC.

 

[Voltimax]

problem is there are plenty of people out here to give free estimates so you will just not get the chance to quote in that case...!!

Not necessarily.
If you make it clear that they will get it back if they don't accept then they have noting to lose. Not really any different to asking for a deposit up front.
The trouble is electricians (and other trades) are their own worst enemies.

 

[kung]

Hi guy's

I notice there's always a lot of threads here asking how to price jobs. The other day by accident I came across this

Electrical Flat Rate
Now this seems to be big in the land of the free at the mo and I guess it's much the same as our point pricing. Reading through that long section there got me thinking that a few points they make regarding the system are valid ones.

Thoughts?

Onece on that page goto home page and check out line man doug's job in the video ! i thought my job was bad !

 

[lloyd1980]

people dont realise how much bloody work goes into an estimate
free estimates suck my --- , especially when you dont get the job!!!

 

[kung]

I know exactly what you mean buddy ! time/fuel etc ! not long ago went to this pregnant teachers house whos husband was a chef and they wanted an estimate to discon some dodgy dangerous lights from bathroom and install downlights and get a storage heater working ! the fused switch was knackerd for heater so i said £10 and £80 for lights inc supplied holes cut and fitted etc etc and got a reply saying they were going on holiday and when they get back they prob wont have it done ! sounded like he was going to do the job ! Told them about part p as special location but you could tell he didnt give a dammmm mabe thought i was going to supply and fit £46 worth of lights for a fiver ! makes you sick when all it seems some people do is call you out for a quote and when they know what to do they shrug you off ! not much point charging for a quote with people like that as you prob wont get the money anyhow !