Welcome back to this series of articles that I hope will serve as guidelines to make you more money. I'm not talking about greed; I'm talking about making your fair share of the wealth that abounds in this great nation of ours so you can raise your families with the necessities, comforts, and perks that are available to only those smart enough to change.
I also said my articles would make Flat Rate easy to learn, and last time, using a garbage disposer installation, I showed how easy setting up one Flat Rate price could be, how much stress it removed from the business transaction, plus how much more ethical than Time & Material it was. This time let's look at training — both for yourself and for any employee(s) you may have.
Under the old T&M method, let's review what happens when the job's completed: Clean up, go to your truck, write down time, write down materials, look up cost of materials, add it all up, then go back to the customer and shock 'em with a price they weren't expecting! Then maybe argue a little, agree to a lesser price, and finally walk away with what you would hope was a decent hourly wage. Sound familiar?
Now, let's take the same scenario, only reverse it and see what happens: 1) Diagnose job; 2) return to truck; 3) estimate time & materials needed (including the time to write the estimate/invoice); and 4) return to residence and present the price before work begins. It's an honest price so the client agrees. At this point if you don't see the reduced stress, ease of negotiation, and comfortableness the client now has because she knows what the price will be, then you should think about going to work for someone else.
I'm anticipating your questions: What if the job takes longer or what if I didn't figure for all the materials? To which I'll answer: Are you a plumbing professional or a handyman? By the way, if this job were the disposer we figured in my last article, you already knew the price ... instantly! No offense, but if this got any easier I could teach it to grade school children.
So, let's review and let me give my first recommendation for Flat Rate “software” ... uh, called books. Uh oh, here comes the pitch. Yeah, well, I get nothing out of it, and it's super-cheap, so buck-up, Bucko.
Review: Each time you estimate a job, add it to the list of 10 most common tasks I asked you to write down last time. Your Flat Rate guide is now developing and for each of these jobs you have an “instant” price for the next client.
The time savings are obvious. Yeah, developing Flat Rate this way may be slow, but slow is just dandy and this allows you to learn as you go! You don't have to buy-in to the big "all-at-once" approach, although I can recommend a few flat-rate manuals at this point if anyone's interested.
Recommendation: Subscribe to Trade Service's (http://www.tradeservice.com/) Quarterly Plumbing or HVAC Pricing Manual. It's complete with a flat rate section, illustrations, and over 11,000 of the most commonly used plumbing and mechanical items. The price for a quarterly subscription (each book) is $240 yearly, or, if you simply want to try one out, you can buy 'em for $55 each. It don't come any cheaper than this and it's also a great teaching tool.
That's it for now. I honestly hope some of you are beginning to take these first small steps to turn your outfits into thriving concerns. Next time we'll look at your emerging company as a culture of learning and service. Later, step-by-step, we'll look at easy ways to understand systems, break-even points, profits, and more. Meanwhile you can begin — just begin — to watch your families smile a little more because you have more time to spend with them, more time to enjoy what you want, and the money to do it with.
Ed O’Connell is a master plumber and the founder emeritus of O'Connell Plumbing Inc. He is now a business, health and wellness coach, and a Service Round Table Consultant in Fairfax, Calif. He can be reached at [email protected]