flat rate and service agreements

[NICKLAS ANDERSSON]

I am curious about how the flat rate system works, I have been told many things but by no body who actually uses it. One of my biggest concerns is if you give a price on a drain cleaning job and it turns out that you have to dig up the line because of roots, are you still committed to the orignal price for unstopping the sewer? Please explain in some detail. How do service agreements work for residential and commercial accounts? How could they be priced that the customer can afford and I can make money? Thanks!!!!!!!1

[SylvanLMPParticipant]

Flat Rape pricing is not a cure all for pricing as the system sellers would have you believe.
It is based on AVERAGE and we both know there is no avergage for how long it takes to unblock a sewer.

Here is an article I wrote in 1999 about this topic.

If you want feel free to E mail me and we can discuss the way flat rate pricing is under the microscope in some places.

Upfront Pricing For Repair Work by Sylvan Tieger : PlumbViews >> MasterPlumbers.com – The Largest Plumbing Resource on the I
http://plumbviews.masterplumbers.com/plumbviews/1999/tandm.html

[jimbo in TexasParticipant]

I really appreciate your your reponce. I hated to waist anyone’s time, but I must admit I did not know forsure if what flat rate was. It did turn out that I had the right idea, but I didn’t realize some of the points which you brought out. Thanks a million!!!!!

[SylvanLMPParticipant]

et yo

quote:

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Originally posted by jimbo in Texas:
I really appreciate your your reponce. I hated to waist anyone’s time, but I must admit I did not know forsure if what flat rate was. It did turn out that I had the right idea, but I didn’t realize some of the points which you brought out. Thanks a million!!!!!

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No problem BUT if you want you can contact me and ILL tell you about the KING of flat rate pricing in “plumbing” amoung his other fine qualities besides pricing.

For drain cleaning ILL explain how I price it and guaranteed you will make a darn good living.

[jimbo in TexasParticipant]

I would appreciate any help you can give me on pricing service work and drain cleaning.
my email adress
[email protected]

Thanks!!!!!!1

[SylvanLMPParticipant]

quote:

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Originally posted by jimbo in Texas:
I really appreciate your your reponce. I hated to waist anyone’s time, but I must admit I did not know forsure if what flat rate was. It did turn out that I had the right idea, but I didn’t realize some of the points which you brought out. Thanks a million!!!!!

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Jim your more then welcome to join my list of professionals in the field. JUST E mail me.

[Edited by SylvanLMP on 07 September 2001]

[TheLocalPlumberParticipant]

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,
Bill
The Local Plumber
Tustin, California http://www.TheLocalPlumber.com

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

[GuestParticipant]

Your example of automobile “blue book” pricing reminded me of my former pastor’s experience. He had a VW and needed some engine work done. There were three tasks and to do any one of them required that the engine be removed from the car. When the “technician” gave him the estimate, he saw that all three jobs were at the full blue book price. When he inquired about it, they told them that that is what the book says and does not allow for multiple jobs at one time. He then told them to schedule his car for Wednesday, Thursday, and Friday, since if they were going to charge for pulling the engine three times they were going to do it. They told him to leave and not come back. Does your flat rate schedule have an adjustment for situations such as this? And why can’t you give a price over the phone if you have a flat rate for repairing a drain, for example? Are you counting on the fact that the service person being on the job already will intimidate the customer and accept the price? I also do not quote over the phone, but I do price the job depending on what is needed.

[TheLocalPlumberParticipant]

Oh 4th year you have so much still to learn, Why are you pickin on me.
Yes our books do reflect for multiple tasks and NO we do not quote over the phone because a majority of the time the customer mis- diagnosis the problem.
Good Luck to you,
Bill
The Local Plumber
Tustin, California http://www.TheLocalPlumber.com

[SylvanLMPParticipant]

Hi Bill, as you know from my numerous postings I do give contract prices and T&M pricing and YES I. Quote my hourly rate over the phone.

There are way to many stumblebums who never in their lives had a successful business or operated a successful business now “experts in pricing”

I figure if someone calls to ask how much as main sewer is going to cost to be cleaned I have no problem quoting $125 minimum.

This gets rid of the price shoppers and lets folks know It is not going to cost one cent less.

There are many “normal” jobs that I can and do quote over the phone for example 50 gallon 10 year water heater installed (replacement) $970

75 gallon $1,200.

I do not have to waste my time or theirs driving to someone’s home to give a diagnostic look for a fee.

After all as a plumber I have installed at least one hot water heater in my career so I know how long it should take and have a darn good idea how much materials I will need.

As I said a 1,000 times I WILL NOT give a “contract price” on any job I know will be under $1,500 (I just raised it from $1,000)

It just not pay for me to send out a van with a mechanic to look at a job.

On jobs that do require a written estimate I charge for the time it takes for material take off and labor work up… NON Refundable fee.

This helps me get away from the folks who want to play “lets make a deal” rather then looking for quality 1st.

I normally change the specifications also when I see plastic drainage and adjust my prices accordingly if need be, as most of the time I can charge the same price for cast Iron as for plastic.

Being a professional I do not need the materials to make money, that is why I do charge enough for my labor rate LIKE A doctor or Lawyer or drain ligitimate drain cleaner. No materials required to make a decent living.

The flat rate unemployables who are now writing “how to price” why not ask them to show you ONE BUSINESS they actually owned, JUST ONE.

I am not talking about real professionals like Maio But the new wanna be contenders who lost money on every business venture if any they dabbled in.

Look at the educational back ground of these folks giving advice show me the MBA or extensive accounting background.

My God Bill would you really want to go to a doctor who either learned strictly by killing his former patients or a guy who has only on the job training but nothing in the way of WHY it is done but they THINK how it should be done?

Any plumbing/heating/roofing etc. contractor can figure out their OWN flat Rape system if they wanted to.

All you do is keep track of how long it takes you to do a certain task ADD 50% or more time to it to cover the unknown and then add 75% to your material cost and try your best to HIDE THIS RAPE of the victims your gouging.

Why should I flat rape a victim like the following

I go to install a kitchen deck faucet and the white metal nuts are frozen and it takes me time to loosen them plus the kitchen cabinet is small so working conditions are tight and it rakes two hours to do this job.

Next job I get in and get out in less then 20 minutes WHY should the easy job be punished for the bad one?

T&M the victims pay their own misfortune not AVERAGED IN.

The better jobs are rewarded with paying just the ONE hour service call plus parts actually needed

Once you educate folks that even if the job takes 30 SECONDS they are paying the service call rate ONE HR MIN.

How do you hide your hourly rate on a toilet stoppage that takes 3 minutes?

I don’t even try as I quoted over the phone as follows.

“Toilet stoppage $125 UNLESS the toilet has to be taken up NOW your looking at more time and materials” Done deal either they say come over or you hear the phone go click

Why send a truck out to see “STUFF” in a toilet to give a diagnostic fee?

I know what a blocked toilet looks like, ALL MY EMPLOYEES know what it looks like I am sure the home owner now knows what it looks like WHY diagnose it?

Why do I have to make some stumblebum low life unemployable Male Or female rich by buying their book WHEN I can figure out myself how much to charge for this stoppage?

Why do I have to S.C.A.M* these folks with a “service contract” to unstop a toilet WHAT am I going to do have a van parked outside their home waiting for the kids to fill the toilet up with paper and stuff

S.C.A.M Sewer Cleaning And Maintenance (contracts)

Personally years ago I used a fantastic pricing book called MEANS that gave every description possible.
As a stationery Engineer I had to have an idea what the contractors would charge.

The means was right on the money EVERY SINGLE TIME.

But these books were written by professionals not stumblebums who cant make it in “business’ so they sell their snake oil to unsuspecting contractor who have no faith in them selves LIKE the Franchise contractors who give a hefty KICK BACK to the home office guys who have no clue which end of a tool to use.

Before you buy a pricing/business book ASK what ON GOING successful business these bums selling these “basic” books own.

Bet you would think twice before throwing your money to feed these peddlers fecal reading.

Have a great one and thank you again for the very kind words. Sylvan

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SylvanLMP

[CLOGCLEANERParticipant]

Jimbo…if you follow the advice of these flat-rapist on this board,with my “volume” drain company being in Texas also..you will not survive in my area at those outlandish prices. To unstop a sewer-line we charge $59.95 to unstop from clean-out, we charge an additional $20.00 to unstop from the roof or of we pull a commode.If it is a 2″sink-line we charge $49.95 to unstop it. We offer a “free” video inspection with a sewer-line stoppage…and if roots or off-set joints are the problem..we offer to do a spot-repair on the line with those prices ranging from $1,200-$2,000 depending on the job. WE also offer clean-out installations from $300-$600 depending on the job. At these prices, my workers and I are livin g the good life and I have to occasionally get a new ringer for my phone as it continues to “ring” off the hook!!!!!

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ClogCleaner

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