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Pricing for Profit: Flat-Rate Pricing vs. Time + Materials
Once you have calculated the direct labor rate for profitability, it’s time to determine a pricing structure to support that rate. And pricing, business owners know, can make or break your service company.
The calculations for the true cost of doing business, and knowing your bottom line and how much an employee costs the company, lead to maximized profitability and streamlined business operations.
While most electricians, plumbers, HVAC professionals, and other types of service companies use math daily, converting to flat-rate pricing and figuring out how to calculate direct labor cost can confound the most-seasoned contractors.
But based on that calculated labor rate, you can build a flat-rate pricebook that clearly shows customers how much your labor charge figures into the final price.
And ServiceTitan’s Pricebook Pro makes it even easier.
“ServiceTitan Pricebook Pro is an incredible time saver,” Yeudy Herrera of Maximum Indoor Comfort Corp. says. “It would have taken us at least twice as long to get up and running with any other pricebook provider.”
And flat-rate pricing with Pricebook Pro can simplify the path to profit, too.