[aptpupil]

This question is especially for service guys.
What do you do when you raise rates? For new customers it's easy - just tell them what your rate is. For recurring customers, though, do you have a talk with them, email them, send an announcement with an invoice, just raise it without mentioning it...? I'm talking about a 10% increase, not huge, but nothing to sneeze at either.

 

[kevjob]

I dont do service calls but I would imagine that every year you would have to raise them a little to account for higher costs that I see every year from Kohler, Delta etc....

I get letters from my suppliers stating that effective this date we are will be adding 10% etc....

How about a spring reminder letter with ac tune ups or whatever and add that as of such and such date prices will go up 10%? Use it as a way to stay in front of them

 

[huggytree]

10% is a huge increase

the yearly union raise is in June, so every June I raise my hourly rate and I raise them for materials as it rises monthly

most of my work is bid, so the hourly rate doesn't even come up...and if it does oh well..things go up

ive never lost a customer because I raised my prices 4-5%....10% id worry about though....no one gets a 10% raise...not even union plumbers

 

[mikeswoods]

That's a tough one--but if you were under charging and need a higher amount to stay afloat--so be it---

Perhaps a note to your regulars with your new hourly rate?

If you loose a few that were costing money to service--is it really a loss?

I've jumped my prices a lot in the last year---lost a few--but not many--and the business is busier than ever--with larger and more profitable jobs.

 

[Leo G]

10% is a huge increase

the yearly union raise is in June, so every June I raise my hourly rate and I raise them for materials as it rises monthly

most of my work is bid, so the hourly rate doesn't even come up...and if it does oh well..things go up

ive never lost a customer because I raised my prices 4-5%....10% id worry about though....no one gets a 10% raise...not even union plumbers

Mirka Abrasives just had a 20% increase. My finishing materials go up 3-5% every other month.

10% is nothing these days.

If they keep devaluing the dollar 20-30% increases will need to happen just to keep up with the inflation. Even though they keep telling us it's only 1.2%

 

[hdavis]

Assuming T&M, tell the customer before each job what the rate is every time, you don't even have to point out you raised your rate. As long as it isn't out of line, I don't see a problem.

 

[huggytree]

copper went up 200% in a few months at the start of the recession....what happened? everyone dumped copper and went to pex (I did)

rough materials sometimes go up 7-15% a year (pvc went up 7% last year)

fixtures go up 1-3% a year

wages------stagnant or going down....

I went up a lot last year, but not 10%

5%...no one will even notice...they will expect it....but unless your underpriced now I think 10% for labor increase is extreme

10% for material increases...typical.......10% of labor increases---not normal



as a business owner you can charge whatever you want.....im not cheap and neither are my customers.......if you have cheap customers id expect you to lose some over the 10% increase...............or with the extra 10% you may be able to add some better service and get some better new customers......I always increase my prices every year...never lost 1 customer due to the increase

 

[mikeswoods]

Huggytree---I agree,,10% is a big jump---but if a fellow needs 10% more to make the business fly---that is simply a fact.

I'm guessing that this member has prices that are out dated---a lot of contractors were afraid to raise prices for the last few years----

If he is selling dollar bills for ninety cents--a think a 10% increase is really needed---in order to stay in business.

 

[Spencer]

10% is a huge increase

the yearly union raise is in June, so every June I raise my hourly rate and I raise them for materials as it rises monthly

most of my work is bid, so the hourly rate doesn't even come up...and if it does oh well..things go up

ive never lost a customer because I raised my prices 4-5%....10% id worry about though....no one gets a 10% raise...not even union plumbers

When I started talking to my boss about quitting my job and working for myself full time I found out that all of the sudden my employer had much more money he could afford to pay me per hour. Of course it was "the best I can do" before I said i was moving on.

Long story short, last Friday he made his final offer which was a 46% raise in my hourly rate. I said I was honored but politely declined. I'm tired of being screwed around by employers who talk out both sides of their mouth.

 

[mikeswoods]

Spencer--the same works when you are bidding jobs---

You need to price the job correctly --present it and wait----If your numbers are right--and the proposal well written and easy to understand---wait---

More than once , I have said," I know what it will cost me to do the job correctly. If you have someone who will do the same work for less,why do you keep calling me?"

Seriously--don't say that to anyone you hope to do business with---that is a kiss off-----I'm old and just don't care that much---

You have to make a living wage----

 

[aptpupil]

Thanks guys for all the food for thought. The fact is that I'm just way too busy. So I can keep working way more than I want for the same amount, or raise prices to the point where I'm only getting enough jobs to fill my week and get paid more in the process.

For handyman stuff telling people that I'm booked 4 weeks out just seems ridiculous. If I were a renovator or builder then a backlog that far out would be standard, or even low, but for me it seems like too much and it leaves very little room for the more high urgency things that come up.

That said, it sounds like 10% is too much of a shock so I'll just go up 5% for my best regulars and all the new customers may have to pay a little more.

 

[mikeswoods]

Glad to hear you are busy---I sure wish I could find a dependable handy man in this area----I turn down a ton of good handy man jobs ,but I can't find someone that I can send the people to.

 

[CITY DECKS INC]

Thanks guys for all the food for thought. The fact is that I'm just way too busy. So I can keep working way more than I want for the same amount, or raise prices to the point where I'm only getting enough jobs to fill my week and get paid more in the process.

For handyman stuff telling people that I'm booked 4 weeks out just seems ridiculous. If I were a renovator or builder then a backlog that far out would be standard, or even low, but for me it seems like too much and it leaves very little room for the more high urgency things that come up.

That said, it sounds like 10% is too much of a shock so I'll just go up 5% for my best regulars and all the new customers may have to pay a little more.

No its not. Service work is just in out stuff. We do small service work all the time and I can squeeze you inbetween are normally scheduled permit jobs. Ill charge for a full day even its for two hrs and book2-3in one day. The only way grow in profit is to raise your rates especially when your backloged. When you service the repeats just say our insurances spiked up and our new rates are x.

 

[Inner10]

This question is especially for service guys.
What do you do when you raise rates? For new customers it's easy - just tell them what your rate is. For recurring customers, though, do you have a talk with them, email them, send an announcement with an invoice, just raise it without mentioning it...? I'm talking about a 10% increase, not huge, but nothing to sneeze at either.

10% is screw-all, price of cigarettes just went up. For a massive material jump like when WD got flooded and Seagate doubled their prices I tell people in advance, when I increase my labour rate or service call fee buy a few bucks I don't bother.

 

[Stephen H]

I guess I just don't see what the difficulty is.

If A customer calls us for work on a situation that is more of a service call type thing than a carefully proposed project- I just say " We would be happy to handle that for you-we charge $XYZ for the service call to come to your home and we charge $ ABC /man hour for the work performed.

More typically for that type of thing we charge the service call amount--and X amount /slate or x amount/roof tile with a 10 slate minimum.

Maybe it's just me- but in my opinion if raising your service call price by 10% is a no go for your customer base- it's time to improve your customer base.
stephen

 

[66 Shelby]

I raised my hourly labor rate 10% on Jan 1st for new customers. I am giving repeat clients the old rate, and I explain to them that their next job will be at the new rate. No complaints so far (that I know of).

 

[huggytree]

Thanks guys for all the food for thought. The fact is that I'm just way too busy. So I can keep working way more than I want for the same amount, or raise prices to the point where I'm only getting enough jobs to fill my week and get paid more in the process.

For handyman stuff telling people that I'm booked 4 weeks out just seems ridiculous. If I were a renovator or builder then a backlog that far out would be standard, or even low, but for me it seems like too much and it leaves very little room for the more high urgency things that come up.

That said, it sounds like 10% is too much of a shock so I'll just go up 5% for my best regulars and all the new customers may have to pay a little more.

now we hear more to the story....if your booked up 4 weeks out then id raise my rated 10%+......obviously your under pricing things

im booked 7 days out.......if I get more than that I work weekends or long hours...no one will keep me as a sub. if I cant show up in a week...

who cares if you lose 1/2 your customers.....if your making good $$ already id consider hiring to bring that wait time down to 2 weeks or less

 

[huggytree]

Huggytree---I agree,,10% is a big jump---but if a fellow needs 10% more to make the business fly---that is simply a fact.

I'm guessing that this member has prices that are out dated---a lot of contractors were afraid to raise prices for the last few years----

If he is selling dollar bills for ninety cents--a think a 10% increase is really needed---in order to stay in business.

you are correct.....more info is needed...maybe he's 20% under priced

my union sometimes takes 2 years+ to get a contract....I keep giving myself yearly raises anyways because I don't want to have a huge jump when they finally pass the contract.....id rather have a steady 4-5% increase each year so I don't have to raise prices 10% all at once

I am confident I would lose customers if I went 10%, but im already at the high end of the spectrum