Toolboxplaybook-back-btn Playbookplaybook-back-btn Chapter 6

CHAPTER 6

Billing Structure: Determine Your Pricing

Flat rate or hourly pricing? Making that decision wisely helps to ensure you’re charging rates that match the value of the service, and making sure there’s a profit from every job.

SECTION 6 OF 6

Examples of Flat-Rate Home Services

With a time and material ticket, your team must supply a detailed estimate to the customer, including all parts and supplies needed for the project. Sometimes they forget details and underbid the job or get a price wrong, which ultimately leaves your customer upset about paying a higher invoice than the original estimate.

Flat-rate pricing prevents this from happening by improving efficiency and taking the guesswork out of the equation. Because customers already know the fixed rate, they’re also less likely to micromanage techs in their home, and your techs remain focused on productivity and not the clock.

To meet your profit margin goals, calculate flat-rate hours by including all of the variables, such as parts and materials costs, local taxes, local labor costs, transportation costs, and any unique overhead expenses.

An example of a plumbing flat rate for installing a new toilet might include setting specific prices for:

  • Cost of new toilet

  • Labor (hourly rate) 

  • Hours spent on the job

  • Permit fees (if necessary)

  • Commissions

  • Per billable hour overhead costs

  • Profit as a percentage of final selling price

With all of these variables accounted for, the flat-rate price you quote for installing a new toilet might range from $500 to $700. If a customer balks at the high price, simply explain the value of installing a new plumbing fixture that’s likely to last for 15 to 20 years.

Flat-rate HVAC pricing also needs to account for many variables, such as pounds of Freon used, ductwork, circuit boards, etc. When flat-rate pricing HVAC work, try to include a price range for every possible job, from replacing a simple thermostat to installing a high-efficiency HVAC system.

Electrical flat rate pricing also requires itemizing every service your company provides to the customer. When you install a ceiling fan, do you include the price of the outlet box? If you hook up a home entertainment system, are the cost of speaker wires and mounting brackets included? Flat-rate pricing for electricians can help power your company to the next level.

Go to Chapter 7: Marketing Practices