Hi guys, new to the forum and this is a question that has probably been asked but I didn't see it posted so I'm asking again.
I've been in the service field for years, at one time working under my grandfather who is probably the smartest tech I've ever met. I've learned most everything I know from him. Thing is he was never very good at the business side and always undervalued his work. I feel that I've picked up this habit, seeing some of the money some of you guys are making and never noticing my wallet getting any fatter.
I'm wondering how you guys go about billing. How do you price service calls, parts, labor, etc., etc? I know this is going to vary from region to region and company to company but a general idea is what I'm looking for. Much appreciated.
You need to add up all of your expenses and add in your profit Margin. Monthly...For example... Rent, insurance, interest, gas, medical and all benefits, wages, tools, vehicles, stamps, paperwork, pens, toilet paper, paper towels.........it is a daunting list,.... Divide by the number of hours worked in the month and that is your overhead per hour for labor.....
Undervaluing when done by customers is a tough objection in itself but when I do it to myself it is especially painful, I am learning that a price cannot be put on quality and honesty but generally people do not respect lowest price, whether they admit it or not it is true.
It's not if your doing it right it's whether your doing the right thing that is important.
I think I know what you mean. I've had an Uncle's mindset in my head since I worked at his hardware store when I was 12-14. His philosophy was one of service to his community. Profit was not his priority although he died standing pat.
While what others charge in your area shouldn't be your pricing it can be a barometer to at least let you know what it costs others to survive in your market. It takes some years to really know what your overhead is because it's based on costs you might not be aware of yet. Costs like warranties, legal, additional equipment that need to be considered.
The goal of a business shouldn't be just survival but to grow. That's a large reason most fail.
Many new businesses undervalue out of feelings of being the new guy and not up to the standards the established companies are. That doesn't mean you can charge less and survive. Most start out as not being the greatest value in town but that's not to say you won't someday be. If you feel you have a good product and are positive for your community then you should survive. In the end both will benefit.
My Uncles influence were more positive overall even though I still scratch my head a bit about some things.
"What Fools these mortals be"....Puck
Rich. get your post count up to 30 and apply for both Pro membership, and access to the Pro Business and marketing forum. Lots of good info in those forums.