No one wants to feel like they are getting ripped off which is one reason why I’m writing this article. On small jobs where there is no floorboards to lift up or pipes to bury in walls there is no room to manoeuvre on price. However when on a big job a customer asks if I can do the job any cheaper than the estimate provided I always say the following:- ‘the amount on the invoice may be less than the estimate as there are some unknown factors in the job, because we don’t know what we’ll find when we lift up the floorboards etc which may mean we’ll use less materials however the labour cost will be the same and the we won’t charge more than the estimated amount.’
Pavlou Plumbers offer their best price every time. I believe those tradesman who agree on a lower price than what they have written down are basically saying ‘I thought you were stupid so I tried to rip you off, but you’re not so I can reduce the price’.
Cash
On small jobs the VAT is not as noticeable however beware of paying for big jobs for ‘CASH’ in an attempt to save money. I know VAT is a bit of a con however, for those of you who don’t know a company must be VAT registered if their annual turnover is above a certain amount. It’s the law. The only way you can avoid paying VAT is to find a smaller company who is not VAT registered. There are plenty out there. Otherwise if you choose a busier VAT registered company to do your work but pay them cash then don’t expect your new boiler to be registered with Gas Safe or the warranty to be registered with the boiler manufacturer, or the the commissioning checklist of the boiler to be completed as the fitter will want no record or proof of the job ever taking place. In fact you would be lucky if the fitter ever returns even to rectify an issue the fitter had caused.
Pricing
For any business pricing has got to be one of the most important fundamental parts to get right. Price too high and you won’t get the work, price too low and the business won’t last long. At Pavlou Plumbers a lot of time is spent pricing work which is made easier with the use of spreadsheets. However finding prices for all the required parts, working out how long the job will take, entering the customer’s details into the accounting software, filling out the estimate sheet and emailing it to the customer is a process which needs to be done. Each estimate usually takes between 20 minutes and 2 hours to complete depending on the size of the job. Last month I sent 49 estimates which, if you do the maths is a lot of my time. As I provide free estimates it is vital that I provide the best estimate I can otherwise I am wasting my time which no one wants to do.
In order to provide some customers with an insight of how I work out my labour rates are calculated I have to take the following expenses into account:- Wages, Bank charges because business banking is not free, van insurance, public liability insurance, tool insurance, mobile phone insurance, the excess on those insurances which I must have available, income protection insurance, mobile phone, diesel cost, the cost of replacing tools because they don’t last forever or they get robbed or lost which does happen, personal protective equipment, clothing, the cost of keeping up with training, membership to various organisations such as Gas Safe, Water Safe, accountants fees, vehicle maintenance, software subscriptions, marketing, online storage space, stationery and business savings to pay for any mistakes. Mistakes happen which we always learn from, by putting money aside we are better equipped to deal with mistakes properly. I believe the quickest way to learn from your mistakes is to pay for them.
All the above is vital for Pavlou Plumbers to continue to provide the best service possible for our customers today and tomorrow.