Re: Help with pricing needed

A quote:

"The service charge is something that is often questioned by people calling a locksmith for the first time. Basically, a service charge is a charge that is designed to help cover the cost of being in business. While locksmithing may seem like a "low-overhead" business, let me tell you, for a business to be run professionally, there are a lot of "costs" involved that most people aren't aware of."

Seems to me the best way to explain the service call or trip charge is the hourly rate times the average amount of time it takes to travel to the job site. This also simplifies the way you set the amount you charge when your shop rate goes up.

Not really. If the job is twenty minutes away, the S/C is $45.

If the job is five minutes away, the service charge is $45.

If you try, in any way, to compare it with hourly rates, you'll always get people who will say, "Why so much? We're right around the corner from you."

Besides, the S/C really has nothing to do with travel time (to some extent). If it did, I'd refer to it as a "Trip Charge". Service Charge is meant to cover business expenses not actually incurred by that particular job alone.

BTW - If the job is more than twenty minutes away, THEN I charge hourly (at $60 per) for travel time beyond twenty minutes. For example: if the job is forty minutes away, the S/C would be $65.

Bobby

Let me preface this by saying charge what ever you want, but I will point out that I used the word "average". On good days you will travel from job to job and never warm up your engine. On bad days your first job will be at one extreme of your $45 service call range and the following job will be on the other extreme of that area. If things go according to plan you should bill out 8 hours per day at your shop rate, if not it is probably time to look at your pricing.

Nope. Most of my work is within ten minutes of me (Southeast Baltimore City and suburbs) and I seldom work a full 8 our day. If I based my S/C on hourly rates (on average) I'd lose money.

The fish & chip / hamburger shop owner, 500 yards down the road from me was locked out last month. After I handed him the bill, he stated that because I was only 'just up the road' he should only have to pay about 1/2 price for the S/Call. I said O.K. But it works both ways. Because 'I'm just up the road', I should only have to pay 1/2 price for all my fish & chips / hamburgers etc. He soon realised where I was coming from !!

My point exactly! That's why I say the S/C has nothing to do with hourly rates.

bobby

Bobby,

Average is a nice little word you seem to have overlooked.

If a job is 20 minutes away from your shop, this means you would need to drive for 40 minutes to get there and back. It has been a while since I have driven in Baltimore, but rush hour traffic would probably add more to that calculation, and then there is no doubt the times when you have a call to a third or forth floor walk up and have to make several trips to get stuff out of your truck parked around the corner.

You also seem to have some strange pricing. You get 20 bucks to drill open a lock, but only $5 more to install a dead bolt from scratch?

Let's consider this for a moment. You said you would travel to a location

40 minutes south of your shop for your first call and then your second call was 40 minutes north of your shop.

Assuming you had no traffic snags, you just spent 160 minutes in your truck and only charged for 130 minutes meaning you are in the hole for 30 minutes.

Sounds to me like you need to add a couple of quickies near the shop to

*average* out your time expended vs. that billed.

Savvy?

Again... (Local) S/C is to cover business expenses and AFAIC, has nothing to do with hourly rate.

I charge a slightly higher than the "average" prices charged by locksmiths in the area on most stuff.

$25 plus S/C is a little higher than the average "going rate" to install a deadbolt around here. I can usually do one in about twenty minutes - fifteen if I'm doing several and I'm on a roll.

The reason I charge $ 20 to drill open a lock, even though it usually takes less than five minutes is because it's a skill that (unlike installing a deadbolt) takes knowledge that most carpenters and handymen don't have. So I increase the charge accordingly. It also needs to cover the five to tem minutes I wasted trying to pick it in the first place.

A job 40 minutes away is not what I consider local and would charge more. I used to charge for the extra time (past twenty minutes) both ways, but I'd lose most of them because the service charge ($85 for what you are describing) would price me out of the job. There are lots of other locksmiths between me and some one forty minutes away. Now I just charge the extra time one way ($65 for what you're describing) and if the job isn't big enough to make up for it or for a very good customer, I simply turn it down.

Most of my work is relatively close. So yeah, it all works out in the end.

Bobby