service maintainence contracts

[FEISTY]

Hope all out there are having a great day !! My question is this... I am a 1 man company with a helper set of hands as needed. I have been pressed by corporate managers to quote service contracts for maint./service calls. I have never offered these since , being a 1 person operation, you never know what work situation will arise and contracts give the customer " instant ownership " of your time. Without back-up that you can redirect from a minor call, you just can't walk off someone else instantly. Any comments or suggestions on this point. I am leaning toward avoiding these situations even if it means giving up a few customers. Don't want everyone to suffer because of a few. Thanks for any advise !

[Daddy Cool]

If you are going to start, a big delaps report is essential, don't get left with someone elses trash. be clear about the times for response so you don't get into a 2hr repsonse time for something stupid that can wait, and be clear about 'response' time, and it's meaning, does it mean you will be on site within a given time, or does it mean it will be running! price accordingly and have someone you can 'sub' to especially if you ever want to take a holiday!

[dan wong]

Hope all out there are having a great day !! My question is this... I am a 1 man company with a helper set of hands as needed. I have been pressed by corporate managers to quote service contracts for maint./service calls. I have never offered these since , being a 1 person operation, you never know what work situation will arise and contracts give the customer " instant ownership " of your time. Without back-up that you can redirect from a minor call, you just can't walk off someone else instantly. Any comments or suggestions on this point. I am leaning toward avoiding these situations even if it means giving up a few customers. Don't want everyone to suffer because of a few. Thanks for any advise !

Stop worrying, Go for it. work great for me. I line up two of my former employee for back up. Work great.

[billv]

FEISTY

I suggest you quote for a support & maintenance contract i.e to be on call and available to attend a service call within an agreed timeframe(eg 4 hours?) and to do routine maintenance work at fixed intervals (6 monthly?)

You could have a standard rate of charges for any service calls and charge them for any work you do plus parts.

If you don't have the staff to back you up during busy periods or during holidays etc you could perhaps get another friend (also contractor in the same business) to cover for you?

cheers

[billv]

be clear about the times for response so you don't get into a 2hr repsonse time for something stupid that can wait, and be clear about 'response' time, and it's meaning, does it mean you will be on site within a given time, or does it mean it will be running! !

Good point, response in my books means picking up the phone and talking to the customer to determine the urgency of the situation and to assist over the phone where possible.

However, some customers would like you to be there within an agreed time so make sure the response clause is well understood by both parties.

cheers

[LRAC]

I am leaning towards avoiding these situations even if it means giving up a few customers.

Good for you FEISTY if you are happy in the way you trade at the moment then stick with your current methods.
Service contracts become awkward for one man bands as you mention holidays, sick days etc. Your paperwork load could increase dramatically as well. If your making a reasonable living on your own and it is enjoyable with no out of hours call outs then i would advise you to stay as you are.

Work should be enjoyable and not a bind on your personal life.

[tonyhavcr]

Good for you FEISTY if you are happy in the way you trade at the moment then stick with your current methods.
Service contracts become awkward for one man bands as you mention holidays, sick days etc. Your paperwork load could increase dramatically as well. If your making a reasonable living on your own and it is enjoyable with no out of hours call outs then i would advise you to stay as you are.

Work should be enjoyable and not a bind on your personal life.

Not so when done right you have more free time if you set them every 4mo and do the the pmi right then you do not get called out I only get called out 5 times a yr if that some yr there is none.
Service contracts should be set up so parts and the repair are extra all they pay for is the pmi pules filters and belts so when you check it you go threw every thing and they pay you to fix it how do you know you are doing your job your are home @ 4 every day w/no call backs or call out's

[billv]

Tony

I agree, you might not be inconvenienced by many callouts and the agreement could guarantee you a set income.

Once you have a few maintenance contracts you will certainly be able to employ more staff and grow your business.

cheers

[Greengrocer]

Tony

I agree, you might not be inconvenienced by many callouts and the agreement could guarantee you a set income.

Once you have a few maintenance contracts you will certainly be able to employ more staff and grow your business.

cheers

Not sure how things are done elsewhere in the world but in UK most of our maintenance contracts are paid for in advance. So your 2,3 or 4 visits per year are in the bank before you go. Any additional call outs or parts are extra according to a schedule of rates which you provide as part of the written contract. Try not to agree to any response times. We only "suggest" next day or 24hr response - which cannot be gauranteed in the summer anyway. If client wants anything better then they will have to pay for a guy to be on call 24/7 x 365days. Ask if they would like to fund the cost of an engineer to sit on his backside waiting for their kit to break down!! Also what happens if the "on call" engineer is already out on another breakdown when they ring? Chances are you wouldn't be able to get to them within 6-8hrs at best. Critical process sites should have spare capacity installed to cater for breakdowns - as such they should not need 2hr on site response times.
It can be done and be lucrutive but you will need some help from subbies or directly employed engineers if you want to grow that side of the business.

Example. We have grown our maintence business over 5 years to approx 60 contracts which are run by a lady in the office and sub-contractors. We took on our first directly employed engineer in 2008 & his feet haven't touched the ground since!! If things don't go tits up in 2009 then we will be looking for a 2nd engineer pretty soon. Also, don't under estimate the amount of paaperwork needed. Loads of small value (but high margin) invoices, e-mails, calls to suppliers for parts etc etc etc. Very time consumming. Our office lady started part timee but went full time within 3 months of starting!!

[tonyhavcr]

Our maintenance contracts are paid for in advance too. My stuff I work on is old 10 to 30 yr and if you do your pim well things do not break the only time I go out is for a costumer who will not do a pmi with us.
We have the pmi set up threw the yr this way if something pops up we can get there in 2 to 4 hr even in summer.