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Flat Rate vs Hourly Billing part 2

July 22, 2014 7 Comments Justin Baker Blog

Part two of a six part series examining common HVAC & Plumbing billing practices.

Scenario:  “I hate change and I don’t want to do it.  I have to pay to train my people, plus I will spend money I don’t have for software or books.  Add in the learning curve and it’s just more trouble than it’s worth.”

Is this your way of thinking?  With that line of thought it isn’t surprising why so many dealers lose money in their service departments.  You work hard to give great service to your customers, don’t you deserve to be fairly compensated for that work?

Let me ask you this:  Do you know your Total Annual Sales in Service, Total Gross Margin, Service Department Overhead, and Department Profit/Loss numbers?  If you take a good hard look at those numbers, you’ll likely come to the realization that you need to give yourself a raise.  If you’re a time and materials service contractor, you have a serious problem – you’re in a box.  Your customer will most likely fire you.

This is one of the many reasons why we favor Flat Rate Pricing.

Can you think of any industry besides HVAC, plumbing or electrical that uses time and material pricing?  It’s time to make the switch to Flat Rate.

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