Reply To: flat rate and service agreements

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Jimbo, Are you really that satisfied with Sylvans answer to your question? Is it that easy to get you to continue doing business as usual even though you are searching for a better way?
Now dont get me wrong, Sylvan is a highly respected master plumber who clearly knows the business of service plumbing, he has gained not only my respect but the respect of many who follow his posts.
There is however a different opinion he shares with me and others on this business of how one bills for the work that is performed.
Let me ask you this Jimbo, when you bring your truck into the mechanic for a new battery and while it is over there they find that it is not the battery but the alternator, what do they do? Right they contact you to tell you what has changed since they gave you an original proposal. Well Jimbo that is how a flat rate Plumbing Contractor handles it as well.
1.) Do not give any pricing over the phone.
(unless your crystal ball is working properly that day)
2.) Attain a flat rate price book with all your tasks in it.( so you do not pull numbers out of the air)
3.) When the job changes or you find additional work, stop and inform the customer of the additional charges.
You see Jimbo, making money in this business is an art. Someone with Sylvans reputation and many years of the same customers can look at the person straight in the eyes and tell them he chargesxx.xx an hour and they say either OK or see ya.
For the guy just starting out or for that matter anyone who truley KNOWS what it costs to run a Plumbing Contractors business each and every dollar must be incorporated in the hourly charge.
Now this number today is clearlyxx.xx when you add the monies paid to the journeyman plumber for his wage, plus overhead( which includes all expenses you incurred to open your doors this number alone if you dont miss anything will be in the $40. to $50. range. So you see without adding for profit ( which is why I am in this business, for without a profit I could make more money working for someone who understands what it takes to open the doors) a succesfull Plumbing Contractor is in the $75.-80.00 range, WITHOUT PROFIT. I add a minimum of 25% for our service orientated business.
If you dont understand this concept, STOP what you are doing and understand it. Otherwise you will follow all those other guys that didnt make the change to flat rate and are NOWHERE to be found today.
Good Luck,
The Local Plumber
Tustin, California

» This message has been edited by TheLocalPlumber on 24 November 2001

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