How much do I charge?

[Abe]

This ones for Brian.........

Client has asked me to service around 6 or 7 heat pumps, mix between Hitachi and Panasonic, around 100 000 btu each I think

How much should I be charging ? I dont want to work out the quote on a hour rate, I would prefer to quote per unit.

Condensing Units are located against a wall, I will need a ladder toi get to them.

I know Herefishy will be aghast if I take his "Specialise" thread into account, but as Gary says, we are not jacks of all trades, but masters of many"

And I need the dough anyway

[Brian_UK]

It's difficult to be exact (as always!) but consider a simple split ac unit.

Around an hour should give you enough time to clean it, check for leaks (visual), check electrics and pressures if required. Bear in mind that unless temperatures appear odd you shouldn't have to connect your gauges. [Every connection means some loss of gas when disconnected]

Allow extra time for the aggravation of erecting, climbing and working from ladders.

Think about how many times you will adjust the remote controller for a temperature change, multiply by the built in 3 minute start delay timer and if a heat pump allow for warm ups and checking defrosts.

What sort of condensate drainage is fitted? are there additional pumps to check, tubes to change ? It all adds time.

Don't forget your travelling time and parking costs, also walking from the car park to site and back again several times when you forget 'that tool'.

Also, of course, you will have to balance your costs with the fact that it is a new customer - do you want repeat business or is it a one off?

Anyway good luck.

[Gary]

You might consider making the initial call on a 'time and material' basis, during which you will bring the units up to your exacting standards. It will then be much easier and more profitable to keep them that way.

[Dan]

I would decide whether or not I could do a decent job in a full day with one or two people, or perhaps two full days with one or two people.

I think when you have that many units, you have to think in terms of full days instead of hourly.

I would estimate that you need to charge 8 hours for a proper diagnostic and initial PM. After that, you should have a fair idea as to what you should charge.

[herefishy]

I would first base everything off of "COST", including labor. Figure your labor cost per hour including all taxes and benefits. If any products or materials are going to be provided inherantly in the service proposed, included those COSTS. Estimate how many man-hours the task will entail.

Figure out what your cost percentages are according to your P&L. Such as:

30% - COGS
35% - labor cost
20% - overhead costs
15% - NET profit.

Of course when you have a couple of guys busy all day, without windshield time (overhead), and all labor is 100% "applied" for that duration, you can decrease the desired gross from the labor accordingly, stay in budget, and offer that value to the customer.

The other consideration is the potential revenue from the PM service in recognizing the repairs that will be required or reccommended, however we do not want to put all our eggs in that basket, huh? But some consideration might be made in that regard.

[frank]

hey Fish

Can you really get away with charging 15% net profit. We are quoting on 10% and are lucky to make 5%.

[herefishy]

5%-10% on what? Just equipment pricing? On most equipment (ice makers, reach-in refrigerators) pricing, I average about 8% . Walk-in coolers 3%-5% for the larger boxes.

But service is a different critter, and that is primarily what I do. Volume is something else to consider. I'm a small service company. I don't do air conditioning either. That's a dog-eat-dog world.

I was only trying to illustrate a method of pricing, I didn't say bid it at a 15% net.

but anyway, if you know your labor cost is say $21.00 / hr., You could evaluate your pricing by saying maybe....

total labor cost = $21.00 / hr
8 hrs - 2 men = $336.00
$336.00 / .35 = $960.00 @ 35% labor cost....

now, you could figure

$960 * 30% for materials = $288.00 cost for materials
$960 * 20% to pay the bills at the shop for the day = $192.00
$960 * 15% = $144.00 net profit

actual labor charges come out to be about $31.00 per hour

do you see what I'm getting at?

You'd have to look at your owm P&L to fit the factoring to your business volume and requirements. This might be a good indicator of where you need to be. Then you go by your "gut feeling".

[frank]

Once we have costed all the materials and labour and then added for overheads we apply 10% to the total for the profit margin.

9 times out of ten the things that you didn't see coming or the things that you have to do for no return to keep the customer happy ( expecting the repeat business) all add up and reduce the net profit.

As I said, if we are lucky that usually works out @ about 5% for the year.

[herefishy]

Maybe your overheads are too high?

What percentage of bidded jobs are awarded you?

Do you get 'em all?

If you're doin' $30,000,000.00 a year who's complaining?

..But wait.... you said after the call-backs and customer satisfaction.... that is overhead or otherwise factored into your costs. Instead of trying to dead-nut it on the actual job, if you refer to your annual figures, all that stuff is included.... therefore if you follow the guideline I propose, you will already have that built in.

Does that make sense?

[dannyd]

Try 2 days @ £180/day & £ 50 ladder hire. This will cover your costs and be 'typical' costing for mint visit
Any faults found, if not readily overcome, record and submit repair qoute as per spares x 1.3 mark-up & labour on work. Should be OK to most customers

[abcdefg1675]

Originally posted by Aiyub
This ones for Brian.........

Client has asked me to service around 6 or 7 heat pumps, mix between Hitachi and Panasonic, around 100 000 btu each I think

How much should I be charging ? I dont want to work out the quote on a hour rate, I would prefer to quote per unit.

Condensing Units are located against a wall, I will need a ladder toi get to them.

I know Herefishy will be aghast if I take his "Specialise" thread into account, but as Gary says, we are not jacks of all trades, but masters of many"

And I need the dough anyway

When they ask "how much will this cost" reply "how much do ya got?"

[El Tel]

Try the Scottish Optician tactic...

"When Mr. McGregor comes in, tell him his new glasses are ready.
When he asks how much, tell him 18 pounds. If he says "OK", tell him, "for each lens". If he still says OK, say "and 25 pounds for the frames". If he still says "OK", ask him if he'd like a case to keep them safe. If he says "OK" tell him "5 pounds". If he still says "OK", say "plus tax".

[SkyWalker]

lol i like that idea el tel!

[puddleboy3]

What you trying to say about the scottish LOL