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HVAC Flat Rate Pricing vs. Time and Materials

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Starting out in the HVAC business and deciding the best way to charge your customers?  Well there are actually a lot of options to choose from.  The most used options are between hvac flat rate pricing and the other, time and materials pricing methods.

To give you a good idea, you first need to understand the concepts of both options.  Hvac flat rate pricing simply means a fixed means that no matter what service, be it repairs, cleaning; maintenance that needs to be done the pricing remains the same.   

On the other hand, time and materials simply means charging by hour. Usually includes labor costs, part, materials, percentage mark up and other possible charges deemed necessary. 

But still the question of which pricing method to use remains unanswered.  Here are some differences in using hvac flat rate pricing as compared to using time and material pricing. 

• Hvac flat rate pricing are fixed unlike time and material pricing.  If it’s fixed, you can immediately set expectations with customers.  This gives the customer an idea on the amount and gets to compare with other prices.  Much importantly they can identify upfront if it fits their budget.  The pricing is pretty much upfront even before the work is done. 

Time and material pricing on the other hand cannot be upfront with its prices.  If that’s the case chances of building trust and confidence with a customer would be slim. 

• Hvac flat rate pricing is pretty much straight forward.  What you see is what you get. 

Unlike time and material pricing, it can get confusing from a customers point of view.  At the same time, the technician if not an expert may miscalculate charges and could end up having a difficult time and perhaps frustrate a customer. 

• As an employer, having a hvac flat rate pricing guarantees that the charges will be consistent across the board.  You won’t have to worry of possible over charging being done by employees. 

Time and material pricing on the other hand is prone to that concept.

• Flat rate pricing becomes easier to manage from an accounting point of view, since the prices are fixed.

It may work otherwise for time and material pricing.  Since the charges will be different.

• In flat rate pricing is fair the rates are based on fair market prices.  They do this in order to be able to be competitive with other businesses within the industry. 

Again, this may not be the same case for time and material pricing.

People today are more conscious and concerned about prices.  They want one that is available and upfront.  They really don’t have time to identify hidden costs.  If you really want to make it big in the HVAC industry, then be straight forward and set the expectations at the very start of doing business with you customers. 

So go ahead and take the time to do your study on the charging methods.  Feel free to refer to the comparison list above between choosing HVAC flat rate pricing or time and material pricing methods.  

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