Up-front-pricing vs Tine and material?

Discussion in 'Bidding, Estimating and Pricing' started by WetspotFL, Aug 3, 2018.

  1. WetspotFL

    WetspotFL LawnSite Member
    Messages: 31

    Looking for feedback on companies that currently use, or have used, up-front-pricing (flat rate)? We currently use time and material for service work, but are seriously considering the transistor to a fixed rate pricing for our irrigation service work. Any experienced feedback would be greatly appreciated!
     
  2. BrendonTW

    BrendonTW LawnSite Senior Member
    Male, from Oklahoma City
    Messages: 976

    We have a service call charge and then time and material, but it’s a little different that typical time and material.

    For basic repairs such as head replacements, etc. we have the labor charge set. Kind of like an auto repair shop. They know how long it usually takes to replace brakes so they give you a quote and then hopefully the mechanic gets it done in that amount of time or less.

    It still comes out looking like time and materials. The only thing is that the time is billed according to what the average head should take. Same for valve replacements, nozzle change outs, etc. So far haven’t had any customers gripe about us spending less time than we billed for but our estimates have been pretty good too though.

    With more complicated things we charge the time actually taken plus materials.
     
    WetspotFL and hort101 like this.
  3. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Messages: 13,861

    So with irrigation
    Simple repairs are fixed flat rate typically repairs under $75.00

    Example : head repair/replacement $25.00
    Nozzzle adjustment/replacement $15.00
    Minimum service call $50.00.
    Stuff like that

    Anything over $75 is time and material.

    So a tech can see 15-20 houses a day replacing 20 heads adjusting 20 nozzles or adjusting the clock or whatever 10 times and gross $1300.00

    Or he could spend 6 hours at a location doing a major repair at $72/hr for $432.00 using $100.00 in parts (marked up 20%) for $652.00 and gross $800 or less the whole day.

    That’s a rough example but that’s the general idea,
    If he’s running around doing a bunch of minimums you make more money and have happier customers... nobody wants a $600 bill
    But if they get $25.00 bill and everything works fine you can get loads of billables through multiplication with very little investment in a single truck/van and one employee.

    Typically the triage tech will do all the minimums and keep going, he finds something major he can’t solve for under $75 he flags it, rights it up, informs management who then gets the authorization to repair and sends a two man “construction crew” to dig it up and make repairs.
     
    hort101 likes this.
  4. TCSGuy

    TCSGuy LawnSite Member
    Messages: 63

    We do irrigation and landscape lighting. 95% of our repairs are time and material. If the bill is going to be bigger than $500.00 then we give them a low and a high estimate. With a guarantee that it won’t go above the high estimate (unless we find something we didn’t count on).
     
  5. Mumblingboutmowers

    Mumblingboutmowers LawnSite Senior Member
    Messages: 375

    That would most likely get you in trouble. Customers expect a business to know all things that could be encountered and have that included in the high estimate.
     
  6. TCSGuy

    TCSGuy LawnSite Member
    Messages: 63

    In some cases that may be true. However, in irrigation, I can’t see what’s under the ground without digging it up. There are many instances where there are issues and the customer wants a “round about” cost. As with anything that is underground, there is NO certainty. We have been doing it this way for years and never had any major issues.

    If there is something that comes up, we always inform the customer before we move forward.
     
    knox gsl likes this.

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