SECTION 3 OF 6
What Does Flat Rate Mean?
Flat-rate pricing means your company charges the customer a set price for a specific job, regardless of how many hours it takes to complete the project. A single, fixed price includes the direct costs for parts and labor, and the indirect costs of overhead expenses.
When explaining this flat-rate meaning to customers, instruct your techs to describe it as the direct cost your company charges for providing a service, plus a small added markup based on a certain percentage or a set amount to cover company costs.
For instance, a flat-rate plumbing fee of $250 to fix a leaky faucet might include the parts needed for repair, estimated time on the job, and a small percentage fee for overhead expenses, such as fuel, truck maintenance, insurance, etc.
In comparison, hourly pricing or a time and material contract means your company charges the customer for parts and materials, plus a set hourly rate for the amount of time spent on the job.