Maintenance Jobs, Billing The Customer, Profit On Small Invoices - Electrical - Contractor Talk

Maintenance Jobs, Billing The Customer, Profit On Small Invoices

 
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Old 06-09-2014, 10:36 AM   #1
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Maintenance Jobs, Billing The Customer, Profit On Small Invoices


I'm starting to help my father in law with his small electrical business. I'm a project manager for an earthwork and site work contractor, so I am familiar with the industry. My question is regarding the smaller maintenance calls he makes (less than 2K). He does ok on his larger jobs (2-15K), is able to mark up and make some money. But when I look at what he charges for these smaller simpler jobs, there's no money in the jobs. Not sure if he is charging enough or invoicing them correctly.

Any advice regarding maintenance calls? Is there a standard minimum charge? Any advice on how to bill customers? Sometimes he sends out an electrician for a few hours and bills a few hundred bucks (materials plus $65 an hour). Once you factor gas, wages, etc...we aren't covering overhead and definitely not making any profit.
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Old 06-09-2014, 03:05 PM   #2
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Re: Maintenance Jobs, Billing The Customer, Profit On Small Invoices


I charge a service call fee to get to the site. Try and always price and get approval for the job prior to beginning the work, that way you are not disclosing an hourly rate, just a total cost. For trouble shooting, I charge a diagnostic fee - which covers up to 1/2 hour trouble shooting - then hourly after that. Once the problem is found - a price to repair.

You are correct in your thinking that you cannot do 1 -4 hour jobs profitability for $65.00 an hour.

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Old 06-09-2014, 04:14 PM   #3
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Re: Maintenance Jobs, Billing The Customer, Profit On Small Invoices


One or two hundred dollar service call fee to get to the site would probably help I imagine. Any customers have a problem with that service call fee? His clients are so used to cheap work, its going to be hard to change that.
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Old 06-10-2014, 10:01 PM   #4
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Re: Maintenance Jobs, Billing The Customer, Profit On Small Invoices


$75-$100 service call plus a minimum 1hr charge is the norm around here.
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Old 06-11-2014, 07:51 AM   #5
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Re: Maintenance Jobs, Billing The Customer, Profit On Small Invoices


Ditto here, $175 gets you a knock on the door.
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Old 06-11-2014, 02:05 PM   #6
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Re: Maintenance Jobs, Billing The Customer, Profit On Small Invoices


I think you will find that you will have a hard time making a profit charging $65 an hour across the board. I have come up with a system that works for me on small service work. First hour: $***(billed for an hour if 15mins or an hour), additional hours or half hours: $**.

I will make a slight concession to minimum first hour on jobs next door to each other, but if I have roll up hoses and move down the street it's back to first hour minimum. You have to be firm on your minimum, because as you can tell by looking at the numbers. Travel time, set-up, break-down time can really eat in to productivity/profits.

None of my work is billed by the hour to customers. But, when I bid a job I break it down to hours for me. I have my minimum first hour in my head and add $10, $20, $30, or more for travel time.
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Old 06-11-2014, 09:47 PM   #7
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Re: Maintenance Jobs, Billing The Customer, Profit On Small Invoices


Quote:
Originally Posted by thezoo View Post
Ditto here, $175 gets you a knock on the door.
Are average home owners ok paying that? Now if you are still in business they must be. Thinking just as a home owner if you told me it was $175 just for you to come out I'd move on. I think about this mostly with my AC guy. $29 service call, but gets $400 in time and materials, for what took him 45 min and $50 relay from Granger. I feel better paying for "work" then "fees". Rather pay more for skilled labor then fees and taxes. Same reason I get pissed off every time I look at my phone or cable bill.

Of course my company charges $300 just for me to visit you. So the above is clearly from the view of a home owner.

My concrete guy is the total opposite. Stops by, we have a beer and talk about the project, give him a stack of cash and I have a new side walk in a week. No fees, no mileage surchages, just good work.
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Old 06-12-2014, 04:28 AM   #8
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Re: Maintenance Jobs, Billing The Customer, Profit On Small Invoices


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Originally Posted by Mikekow80 View Post
Are average home owners ok paying that? Now if you are still in business they must be. Thinking just as a home owner if you told me it was $175 just for you to come out I'd move on. I think about this mostly with my AC guy. $29 service call, but gets $400 in time and materials, for what took him 45 min and $50 relay from Granger. I feel better paying for "work" then "fees". Rather pay more for skilled labor then fees and taxes. Same reason I get pissed off every time I look at my phone or cable bill.

Of course my company charges $300 just for me to visit you. So the above is clearly from the view of a home owner.

My concrete guy is the total opposite. Stops by, we have a beer and talk about the project, give him a stack of cash and I have a new side walk in a week. No fees, no mileage surchages, just good work.
On your relay/contactor.

I'd charge you 145 bucks to come out and tell you what is wrong, and then another 157 bucks to replace the contactor(includes contactor in price). So 302 for the total bill.

By getting more upfront, don't need to charge as much for the repair. Plus I don't need to condemn parts that aren't bad to make a profit.

A few customers say the 145 is high. But they still pay me to come out.
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Old 06-14-2014, 08:38 PM   #9
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Re: Maintenance Jobs, Billing The Customer, Profit On Small Invoices


Around here its all over the place for service calls (residential), some guys are 45 bucks 8-5pm then 65 after 5pm. Others are way up there around 80 between 8-5pm, 100-150 after 5pm. My rate is usually (this is residential mind you) 75 for me to knock at the door and diagnose/first hour. If I need materials to fix, the charges go up for materials and an hour minimum charge. However, if its something small, take tonight for instance - No power in the living room outlets, tripped breaker in the panel and it wouldnt reset. Turns out a ground contacted the hot side of the main outlet feeding the rest of the living room outlets and tripped. simple fix, less than 10 minutes. I was out of my house for a grand total of 35 minutes and that included drive time. So I charged my $75 and called it a night.

Even the big commercial guys around here are all over the board with service call prices, hell a couple are even lower priced than residential calls!

As for profit and overhead I work for me, no employees (unless I need casual labor for a day or two here and there) and no store front.
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Old 06-15-2014, 02:43 PM   #10
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Re: Maintenance Jobs, Billing The Customer, Profit On Small Invoices


I tend to straight time my service charges even though I don't always make much profit on them. They almost always lead to bigger jobs or referrals. My regular glass service calls have a flat rate that I can usually give over the phone.

My money is in remodels not service calls, however, the service calls like I said are better than advertising and they also help cashflow between and during the larger jobs.

Don't look at the small service calls as the money making part of the business, they are more the customer service end of things.

My latest gig came about as I was going to look at a few drywall patches and some minor exterior sheeting repair. This led to three full bathroom guts and probably a years worth of work on two houses.

The guy who showed up before me didn't want to get dirty and most likely it wasn't worth it to him to do the small stuff as he said he would sub all the crawling out. Turned out there was very little crawling.
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Old 06-15-2014, 06:59 PM   #11
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Re: Maintenance Jobs, Billing The Customer, Profit On Small Invoices


I had a moving company come out to a bath remodel I was doing to take a 350lb vanity/attached marble top up 2 flights of steps. They charged $40 trip charge $40hr per guy (2 guys) and a 2hr minimum for both. Had it up there in 20min. And I was happy to pay it. Cheaper than me pulling a guy from another job and my back still works.
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Old 07-04-2014, 09:10 AM   #12
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Re: Maintenance Jobs, Billing The Customer, Profit On Small Invoices


The way I do my maintenance jobs for my regular customers is this:

I usually tell them to make a list for me so when I come out, they get more bang for their buck.

I charge a flat rate and that covers travel time and 2 hours of me working on their "list". Then anything that exceeds 2 hours I charge in 15 minute increments, then add in material + markup.

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