# Flat rate



## dee (Sep 26, 2007)

am i missing something, what is mr sparky?


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## Song Dog (Feb 3, 2006)

Its the most recent addition to Clockwork Home Services. Electrical franchise. www.mrsparky.com I think that is the correct address.
Clockwork Home Services owns Benjamin Franklin Plumbing-One Hour Heating and A/C- Mr. Sparky Electrical
There is a One Hour and Ben Franklin in Indianapolis. 

In Christ,

Song Dog


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## Plumber (Apr 19, 2007)

*Mr. Sparkey*

There is one of their truck on Thompson Rd near Beech Grove. If I'm reading this right they are linked to Ben Franklin? Huh never knew! 

Dee
I never heard of SPHC or do the letters stand for something??

I know you never heard of me either, But only been in buisness for less than a year for myself and I'm now only a one man shop.


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## All Clear Sewer (Nov 8, 2006)

We have a One Hour and Ben Franklin at the same building along with 2 other names. The guy that owns all of em keeps screwing the people of our town over so he keeps changing the names but keeps the same phone numbers....lol. They got me on my heating and air so now I have to take em to court :furious:
I never knew that the One Hour and Ben Franklin were one of the same franchise. I wonder if the other names they use are not tied in some how?

WOW.... I just found out that 72 degrees (one of their other names) is also a franchise, not sure if it`s tied in with One Hour and Ben Franklin?


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## Putty Truck (Oct 6, 2007)

Flat rate rules. I hate T&M with a passion. I will not--absolutely not--work for T&M.

My first flat rate experience was with Mike Diamond before he had a price book. I did 25k a month in sales and that was back in the late '80s or so in L.A.

Now that I have my own gig, I can sure appreciate Mike's training and his vision of a functional repair company.


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## PARA1 (Jul 18, 2007)

*arty:One price for everything* First hour= $68.29 then a 29.9% increase per hour with a 12 hour minimum on weekdays-- double that on weekends or after 3p.m. If you want to watch or ask me how much longer add $79.99:w00t:


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## KillerToiletSpider (May 27, 2007)

PARA1 said:


> *arty:One price for everything* First hour= $68.29 then a 29.9% increase per hour with a 12 hour minimum on weekdays-- double that on weekends or after 3p.m. If you want to watch or ask me how much longer add $79.99:w00t:


So, based on this I could open a shop next to yours and do T&M based at $85.00 an hour, charge time and a half for any after hours work, and be consistently lower in price than you are, and tell the end user that flat rate shops are basically screwing them.


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## Driftwood (Feb 15, 2004)

Anyone is lower than Ben. F. Not many repeats when You screw folks!


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## mahlere (Aug 6, 2006)

Driftwood said:


> Anyone is lower than Ben. F. Not many repeats when You screw folks!


not always about price drift...not always about price...i know, i know..."i've been doing this for 45 years...." yada, yada, yada....

you can charge $10/hr and screw someone just as easily as I can charge $200/hr and give them a bargain...


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## smellslike$tome (Jan 22, 2006)

KillerToiletSpi said:


> So, based on this I could open a shop next to yours and do T&M based at $85.00 an hour, charge time and a half for any after hours work, and be consistently lower in price than you are, and tell the end user that flat rate shops are basically screwing them.


Based on this you could work a 40 hour week, assuming you could bill for 8 hrs a day, which you can't, and work 52 weeks out of the year without ever taking a day off because the kid next door infected your whole family with some virus and your sick as a dog and you can never take a day off because it's the 4th of July or any other holiday, and forget about taking a vacation and your truck can never get damaged in an accident or just break down because it has to keep working too. If you could do all this then you could produce $176,800 in revenue for the year. Oh yeah but I forgot about all of your overhead costs, you know stuff like insurance: gen liability, auto, health, workers comp, and vehicle costs like fuel, oil, tires, tag, maintenance, etc., and administrative costs like office supplies, printer ink, computer gear, replacement printers, phone bills, etc. The list goes on and when you finish taking care of all these costs, from whatever is left you can probably figure on handing over somewhere between 30% - 40% to various governments. So at this point you are well under 100k for the year and will probably end up somewhere around 75k (this is simply what a good service tech will make which means your company made 0% profit for the year) for all your risk and all your trouble. One good thing though is that you probably will not have to spend a dime on advertising since you will have referals out the wazoo as soon as word gets out that you are so ridiculously cheap. You would be better off working for someone else as a service tech. You could make the same 75k at a good flat rate shop and not have any of the trials or problems of being a business owner. Sounds like the only one getting screwed is you.

Oh yeah, I am curious, if you have anyone or will have anyone working for you as a service tech what will you pay them? The above scenario does not allow for any other employees but yourself. So if you do try to hire it will have to be the bottom of the barrel dregs of the plumbing world.


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## PARA1 (Jul 18, 2007)

*KILLER your killing yourself.*

KILLER----You have got to get out of this paycheck mentality.:no:


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## mahlere (Aug 6, 2006)

PARA1 said:


> KILLER----You have got to get out of this paycheck mentality.:no:


no he doesn't...he's not the owner...he helps run the shop, but he collects a paycheck...


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## mahlere (Aug 6, 2006)

KillerToiletSpi said:


> So, based on this I could open a shop next to yours and do T&M based at $85.00 an hour, charge time and a half for any after hours work, and be consistently lower in price than you are, and tell the end user that flat rate shops are basically screwing them.


you could, until you send out a guy who takes 4 hrs to do a job that should be 1 and then you have now charged more than a flat rate company...

here's the deal...T&M the customer takes the risk and reaps the rewards, you collect a paycheck...

flat rate the contractor takes the risks and reaps the rewards, and collects a profit...


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## Song Dog (Feb 3, 2006)

I wonder why we have alot of return clients. I would guess more than 1/2 of our customer base or more.
We get happy letters and svc report cards back with postive comments and remarks.

Though you have an opinion, I do respect that. 

But back to thread, it comes down to value, svc, product and real guarantees.
How do auto service dealers price your repair out, pretty much the same deal. The customer knows ahead of time, the $, before you start with options. They love the option to choose for whats best for them.
It also makes it alot simpler. Diagnosis the situation, show the repair or replacement cost w/options, and they get to choose.

In Christ,

Song Dog


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## Song Dog (Feb 3, 2006)

All Clear, the only franchises Clockwork has is One Hour, Ben, and Mr.Sparky. I have never heard of 72 degrees before. Got me on that.

In Christ,

Song Dog


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## Putty Truck (Oct 6, 2007)

Hardy anyone charges T&M.

Looking through last month's bills, the vet, dentist, doctor, mechanic, lawyer, painter, carpet cleaner, wife, kids, and the cat all charged me flat rate. Nobody told me how long it took or how much each piece cost.

Only a few in the trades charge hourly and judging by this thread and the world-at-large, they are the odd man out.


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## PARA1 (Jul 18, 2007)

*Charlie Don't Surf!*

_*SOMEDAY THIS WARS GONNA END:no:*_


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## KillerToiletSpider (May 27, 2007)

mahlere said:


> no he doesn't...he's not the owner...he helps run the shop, but he collects a paycheck...


He's right.

My questions were out of curiosity, and to see if there was anything I could apply to the 5% of the time that we do T&M work, as 95% of our work is by contract. Our T&M work consists of a GC calling us at 10:30 in the morning because his guys were demoing a condo and broke a live water line, and we need someone there now, I don't see how I could apply a flat rate to that, as the GC is going to pay whatever the bill is anyway.

Thank you all for helping me understand the philosophy behind it.


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## mahlere (Aug 6, 2006)

killer, 

take the example you gave (10:30am, GC, big problem) and substitute Homeowner for GC...

that is the prime candidate for flat rate...

Mrs. Jones, we'll get someone there immediately.

Tech on site - "Mrs. Jones, the problem is ABC...we can go ahead and fix that for you right now. It will only cost $X"

no worrying about hourly rates, clocks, etc...get to work and get it done...


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## Plumber (Apr 19, 2007)

*flat rate*

I think I might need to look into that closer. I'm kind of doing a flat rate I think? I go to customers house look at the problem go out to the truck look through my material cost book and figure out how long I think it will take and go back into the house present my price. some jobs I make a killing on an some I just break even. ( I guess I like to practice sometimes):w00t: But I usually don't get service calls most of my work is through GC or builders. And of course friends and family bring in a some work too. 

In the next few months I'm changing my direction of my plumbing company anyways . kind of a story I 'll like to keep to myself do to competion in my area but it should keep me busy for the next 18 years if I can get it to kick off.


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## dee (Sep 26, 2007)

what is mr. sparky???????????? dee


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## dee (Sep 26, 2007)

plumber, answer to your question. sphc is an abbreviation of my company name. i have never been involved in a forum before, and was uncertain of whether i should share that. i love this forum. i am of course, in indiana, not too far from indy. i joined this forum after going to google searching a forum. you know, we never get too old to learn & things change everyday, & us small businesses have to stay educated as much as possible to stay in the game. the co. i am in the plumbing, heating & cooling business, and i am here to learn & share info & be of any help to someone else as i can be. i dont claim to know it all. in business, there is so much that changes each & every day. i am impressed with some of the posts from various people. i wish you well in your new business. you said you mainly work with generals,
i assume that means you do new homes? is that correct???? nice to meet you dee


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## Putty Truck (Oct 6, 2007)

Plumber said:


> ....
> In the next few months I'm changing my direction of my plumbing company anyways . kind of a story I 'll like to keep to myself do to competion in my area but it should keep me busy for the next 18 years if I can get it to kick off.


Let me guess...you are going into service, repair, and rooter, right?


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## Herk (Aug 1, 2007)

I recently decided to move to flat rate. It will either break me or make me. I have a lot of thoughts about it that I can share, as to why I made the decision.

I'm a one-man shop in a small town. Other plumbers charges range from very low to low. The area going rate is indeed the going-broke rate. I've been in business for over 30 years and really don't have much to show for it.

In the years since I first discovered flat rate, I've observed companies in my area either avoiding this town completely or going out of business after about five years with a franchise. I've read of other plumbers saying they tried flat rate and it bankrupted them. 

But this area is growing a lot, and many of the new arrivals to the area expect a price before the work is done. They're distrustful of plumbers who simply say they work by the hour and mark up parts.

What really changed my mind was when talking to a plumber from a nearby town who told me he made $60 k last year working for a flat rate company. That company has a reputation of being expensive, but they seem to get work. 

I certainly don't make that kind of money and I don't really expect that I will here, but I can certainly make more than I do.

I wasn't doing too badly until Home Depot moved into the area. Maybe I'm not assertive enough - other plumbers tell me they add markups to material whether the homeowner supplies it or the contractor supplies it. But I've not had much luck getting a markup for faucets, toilets, and so on, and it appears to have been about half my income.

Flat rate cures this with a price for installing owner-supplied parts.

Since I began giving prices up front, I have made some mistakes, and still have made a bit more per job than t & m. It takes practice, I'm sure, to know how to effectively bid jobs, and to gain confidence in the book. 

The customers seem to like it, though it might be too early to tell. I've only had one job where it didn't work - a customer I worked for years ago called me to repair some faucets and I knew from the tenor of the call that flat rate wasn't going to go over well - he wanted to know over the phone what my lowest rate was because he thought that the faucets just needed some washers or something to fix them. 

When I gave him a price of repairing two faucets and replacing a flapper, he just said, "I can't afford that," and it was no surprise to me. I had actually given a price for Moen cartridge replacement rather than kitchen faucet rebuild, and thrown in the toilet repair for free, but it came to a lot more than he was expecting. 

Here's a guy on oxygen, and he and his wife are probably well into their eighties, and it really wouldn't matter if I was working time and material or flat rate - they couldn't have afforded either. 

It's sad, but it's a simple matter that if you don't charge your cost of doing business you won't stay in business. One of the other longtime plumbers in this area has always had a lower rate than me, and is making more money selling vitamins than they are plumbing, and keep talking of quitting the business. 

I'd like to be making enough money that when I run across senior citizens, I could afford to do the work pro bono if they are needy. You can't help people if you can't help yourself. 

Some months ago, I read that only 1 in 5 Idahoan workers makes a living wage. Most don't hire plumbers - they either do it themselves or hire a handyman, and there seems to now be a state registration for handymen that allows them to advertise plumbing work with their lawn work and porch repairs and get away with it. 

I think flat rate is the best way to go. Had I done the work by the hour without quoting a flat rate price up front, chances are I wouldn't have been able to get paid at all anyway.


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## Putty Truck (Oct 6, 2007)

Herk said:


> I recently decided to move to flat rate. It will either break me or make me. I have a lot of thoughts about it that I can share, as to why I made the decision.
> 
> I'm a one-man shop in a small town. Other plumbers charges range from very low to low. The area going rate is indeed the going-broke rate. I've been in business for over 30 years and really don't have much to show for it.
> 
> ...


You are ready for flat rate. I was "contract" price for years before I bit the bullet and bought the book....now it's on cd and changable. Earlier in this thread there is a link to "upfront" pricing (Mike Diamond), butyou can search the web for many others. The prices are totally adjustable to fit your town.

I live in a similar small town....that's my choice, though. I've been around the world and Los Angeles, too, but I'm back in a small town making small town earnings. The city boys have a bigger gross, but a way higher cost and they do put up with stuff that I'm not willing to live with.

Customers come and go and nobody is happy right now anyway. If you gave your work away, they would probably sue you for damages. 

The older baby boomers are becoming a problem. People are living longer through the grace of medicare and they are staying in their homes instead of moving to a condo or retirement village. My house is surrounded by 70 year olds and up and their houses are slowly falling apart. It is not good. They have got to make way for the kids and all the great changes each generation brings to neighborhoods. Is it my responsibility to do their plumbing for free? No. If they can't afford to support a house, it is time to move.


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## Song Dog (Feb 3, 2006)

Herk are you in or around the Boise area?

In Christ,

Song Dog


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## Herk (Aug 1, 2007)

Song Dog said:


> Herk are you in or around the Boise area?


No - I'm on the other side of the state. I'd do a lot better in the Boise area. But I'm not one to move.


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## Song Dog (Feb 3, 2006)

I talked to a guy from the Rexburg area that uses Nextsar quite awhile back. I have been to Boise once and instantly fell in love with the State (Mountains). I was there on a predator hunt (coyotes).
I came real close to moving to Idaho once.

In Christ,

Song Dog


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## Plumber (Apr 19, 2007)

*Mr Sparkey!*

DEE

Mr Sparkey is a electric company like Ben Franklin and One Hour heating and air.

I work for 2 custom home builders, 2 remodeling company's, 1 slum lord, 1 real estate agent,and 1 guy who flips houses. Of course who ever else calls in between with little jobs.

Putty Truck

As of 10/20/07 I'm tring to change my direction of work. This will be the first job I will do in my new direction and hopefully it will take off. Since I will have 4 other neighbors watching me and they need the same type of work done at their houses too. 

Michael


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## dee (Sep 26, 2007)

*mr. sparky*

plumber, thanks for the info. how are you getting along working for contractors? are you also doing service and repair? I am not being nosey, just interested. we had given up all service in 1980 & devoted all of our efforts into new construction. but 11 years ago i made the decision to draw back the service & retro fit business. ultimately a decsion had to be made to which direction to go. we began phasing down out of new construction & finally was able to give up all new construction work. we found it became impossible, to be able to take service work due the generals expecting you to be there at a moments notice. we were at their beckoning call. i would rather work from a customer base in the 1,000's than have to rely on 10 to 15 generals. please, i hope the generals here, take no offense, but it is impossible to keep the general public happy & on schedule & do new new construction hvac, if you are a small company. dee


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## Grumpyplumber (May 6, 2007)

*Herk, you're in an unfortunate situation.*
*Sounds like a big time supply/demand problem, the number of plumbers vs local population means stiff competition.*
*As for pricing, I first want to be up front that you have enormous time over me, but I've had trouble in the past quoting a firm price with confidence.*
*I have a family to feed, I just think of them when someone starts trying to negotiate my price.*
*I just make a point of making sure I sound confident when I give a flat rate.*
*If they say it's too much, then so be it, let someone else work cheap.*
*I have had times when I'd taken a job on short money and the cell phone rings for an emergency service call that I couldn't get to, my competition got a bonus.*
*I don't know how tough it is in your area, I do live in a much heavier population here, so it might be an "easier said than done" thing coming from me.*


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## Herk (Aug 1, 2007)

Grumpyplumber said:


> Sounds like a big time supply/demand problem, the number of plumbers vs local population means stiff competition.


It's an odd situation. I live in a small town between two larger towns, and when the first Home Depot moved into one of them, it took about three months for my calls to drop drastically. People here are subject to low incomes, and yet there's a mix of nice new houses along with Hispanic trailer parks. Plumbers from other outlying towns moved here when Homey squeezed them where they were. But most of them are new house plumbers, and only do service work on the side. Most of the plumbers in the area have never crunched the numbers to see what they should be charging. They plumb a house for 2/3 of the day and then pick up a service call and don't realize that they're tossing away the money they made in the first part of the day.

I used to do that, until we had a crunch of overbuilt housing and I was doing service almost full-time anyway. About 9 years ago, I decided to dump new housing because I had too much trouble getting paid as per contract. They'd promise payment as soon as I finished an underground or a top-out, but it would take about two months to actually collect it.

My theory was that I could have more control in service - be able to charge what I needed - until I crunched the numbers and realized that I was never going to be running a successful business as long as others were charging $65 / hour.

I recently raised the rates as a stopgap measure before switching to flat rate, and that helped a little, but I really don't think it would have made enough difference. People here do a lot of their own plumbing, and there are remodeling people who like to do all the plumbing, too. They'll call me in to cut a piece of cast iron or something. My biggest loss with Homey was selling the material. I was depending too much on the markup. And I didn't like arguing with people over whether I could mark up stuff they bought. The reason they bought it in the first place was so they could save money on the plumber. 

But with flat rate, it doesn't matter - I can install parts and make the same amount of money as I would if I supplied it, but I don't have to guarantee their material. To me, that may be the most lifesaving part of flat rate. And I know from reading Uncle Frank years ago that the price shouldn't depend on material markup. There is no material markup when you're replacing faucet washers.



> *I just make a point of making sure I sound confident when I give a flat rate.*
> *If they say it's too much, then so be it, let someone else work cheap.*


I think confidence is a key factor. If you stammer, they'll try to get you to give them a better deal. 

I've read everything I could find online about flat rate, and one of the more interesting sites I came upon was seattleplumber.com 

He has a page where he denigrates flat rate, saying that it's just a way to make greedy plumbers rich, in essence. Yet he gives basic pricing for disposers, water heaters, and shows how much he charges for hauling the old one away, how much more if it's in a basement or difficult area - he's actually using flat rate!

All the while complaining that his hourly rate isn't quite enough to make ends meet. Here's his flat rate page. I find plenty to disagree with in what he says, because flat rate can be at an astronomical level, but it doesn't have to be. I think the people around here could easily recognize a used car salesman in a plumber suit, and I don't think they'd last. 



> I don't know how tough it is in your area, I do live in a much heavier population here, so it might be an "easier said than done" thing coming from me.


The toughest thing is that there's not a lot of money. And the other plumbers are still acting like it's 1940. It's not because of the competition as much as it's because they just don't realize they have to charge more or go under. What encourages me the most is the influx of out-of-staters who are used to paying more.


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## Putty Truck (Oct 6, 2007)

Herk said:


> ...
> I've read everything I could find online about flat rate, and one of the more interesting sites I came upon was seattleplumber.com
> 
> He has a page where he denigrates flat rate, saying that it's just a way to make greedy plumbers rich, in essence. Yet he gives basic pricing for disposers, water heaters, and shows how much he charges for hauling the old one away, how much more if it's in a basement or difficult area - he's actually using flat rate!
> ...


I've seen the site and they are the most expensive in town and they are hourly: http://www.seattleplumber.com/PIarticle.html


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## Grumpyplumber (May 6, 2007)

*Herk, I've seen that site numerous times.*
*Interesting approach, you just know home owners are using that as a guide to get his competitors to go lower.*


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## PARA1 (Jul 18, 2007)

Sounds like he's the CONMAN. He probably bitches all day about plumbers who have found a way to succeed while he's sipping his $6.25 non fat double dipped dark roasted triple latte at that popular coffee shop in Seattle.--Speaking of marketing (thats what we were talking about was'nt it) is a cup of coffee worth $6.25 ? --Boy! STARB**KS really be ripping people a new one. I guess they just don't know the going rate for a cup of joe.:w00t:


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## smellslike$tome (Jan 22, 2006)

PARA1 said:


> Sounds like he's the CONMAN. He probably bitches all day about plumbers who have found a way to succeed while he's sipping his $6.25 non fat double dipped dark roasted triple latte at that popular coffee shop in Seattle.--Speaking of marketing (thats what we were talking about was'nt it) is a cup of coffee worth $6.25 ? --Boy! STARB**KS really be ripping people a new one. I guess they just don't know the going rate for a cup of joe.:w00t:



Yeah and I wonder how many millions of gallons they sold last year to all those poor pitiful customers who don't seem to know that they are paying way more than the "going rate". Hmmm, wonder what keeps 'em coming back?


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