Flat Rate Pricing Book

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About Flat Rate ​

Flat Rate pricing is sometimes referred to as Upfront Pricing where the customer is given a repair price before the work begins. It is usually arrived at as a calculation of part cost, part market and a time component in which a trained HVAC or Plumber can complete the work. The hourly rate the company charges the client is usually derived from an overhead amount which typically runs from $150 to $220 per hour depending on the company’s competition and overhead. Unlike Time and Material billing in which the technician charges for the time they spend on the job flat rate uses a fixed time, part cost and part markup to calculate the repair cost.

Flat Rate Cons

There are of course cons when using flat rate pricing. If material cost rise dramatically the company can lose money on parts. If the repair takes the technician considerably longer to complete or the diagnosis is incorrect the company could be doing the work for less money. Many contractors also believe that flat rate is unfair and often charges their clients more. Although this can happen with some flat rate books many are quite reasonable. For example, a dual run capacitor installed should cost about $200 to $250 in most flat rate books.

Flat Rate Pros

Happier Customers. Most clients prefer to know the price of a repair upfront. This relieves their fears about cost and allows them a better purchasing experience. They are at ease knowing the price and will not hassle your technicians to do the work faster.  Another benefit is your best technician now no longer brings in the least billable revenue just because they are more experienced and can do the job faster. The work all costs the same regardless of who is preforming it. This allows for a better revenue structure for the company which makes growth and planning for the future more consistent and profitable.

As the owner you will need to decide what works best. Whether it is Time and Material or Flat Rate both have advantages and disadvantages and either one if put in place correctly can be profitable and successful.