Quick! Your sink has sprung a leak! Your toilet is backing up–who do you call? No, not the Ghostbusters (on this occasion). But a plumber. And if you’re that plumber, how do you know how much to charge for plumbing work? Whether you’ve been doing the job for 30 minutes or 30 years, the market is always changing so it’s important to price strategically with profitability in mind.
The Average Costs of Typical Plumbing Jobs
What is the average cost of a typical plumbing job and how much should you charge? There are multiple ways to skin a cat in this scenario. Some businesses will charge a flat rate for their services and some will charge upon the hour. There may even be a period of trial and error where you try both ways to work out which is more profitable.
Costs, of course, vary when deciding how much to charge for plumbing work. This depends on location of the job, the materials required and the time of day. For example, weekends and after hours are likely to be billed higher. On average, plumbing jobs are usually around $40-$80 per hour but, with a lot of variables, it’s hard to measure an exact average. For the more common jobs such as installing or repairing a tap, you’re looking at around $130. Looking at replacing a toilet or installing a radiator is around $260-$280.
Can You Charge More on Weekends and Holidays?
The short answer is yes. If you’re providing a service outside of standard working hours or on a national holiday, you can charge an additional fee. A lot of plumbing services will add a call-out fee for this kind of work as it can be an inconvenience to the plumber. Once again, there are a lot of variables that will affect the outcome of what you wish to charge for weekend work and national holidays. But, it’s certainly worth taking into account and very common for these rates to be double standard rates.
Types of Rates
Let’s take a look at the different types of rates you need to consider when deciding how much to charge for plumbing work. It’ll either be based upon an hourly rate, a flat rate, or job type.
Per hour
You want to ensure you’re making a profit on all the work you’re carrying out. So figuring out the best way to charge for work by the hour is essential. An hourly rate tends to be the popular choice within the plumbing world. No matter how small the job is, the majority of plumbers will charge their hourly rate as standard to cover their overhead. In order to calculate your hourly rate, divide the amount of money you’d like to earn each week by the number of billable hours. The figure you’re aiming for should also take into account other business costs, such as materials, overhead and any other outgoings. For example, if you want to earn $600 a week and you had 28 hours of billable labor, your rate would be $21.43 per hour. It never hurts to check out what local businesses rates are in your area as well so you can try to price competitively.
Flat rate
This rate is one set price based on the end result and the work that is carried out. You’ll still need to take into account the time it takes to finish the work as well as material costs and overhead. However, this type of rate puts productivity as the main focus over time taken to complete on an hourly rate. From a customer’s perspective, it’s a lot more appealing to have one set price because it shows exactly what they need to budget for. From a business perspective, you can collect payment faster, meaning revenue is coming into the business a lot faster as well. However, it’s important when charging a flat rate that you not only consider what is fair to your customers but also what will be profitable for your business. One disadvantage of a flat rate is that there can sometimes be unforeseen circumstances which were not accounted for. Or perhaps what initially thought to be a fairly small job, turns out to be a lot more complex.
Job type
This pricing model is a hybrid mix of the two pricing strategies above. You can have an hourly rate or a flat rate based on a job type. This kind of pricing is perfect if you’re regularly doing the same types of jobs. For example, a blocked sink or toilet would come under one job type. And installing a new water heater or toilet would be categorized as another. You want to group job types together that are of a similar nature and cost in order to price accurately.
How Much to Charge for Plumbing: What to Consider
There are so many variables when it comes to putting together a pricing strategy for your plumbing work or business. You’ve got to consider complexity of the job, material cost, profit margin and a whole lot more. Let’s take a look at each of these and discuss how they affect job costing.
Complexity of the job
Any type of manual labor is flexible in terms of the time that it takes to complete it. If you’ve got a job that is going to take up to a week or even a few days, you’ll want to consider these time implications when planning how much to charge for plumbing. The time taken to complete will weigh in with the complexity of the job, for example, a predictable type of work could be a clogged drain or a leaky tap. They won’t take up a lot of your resources and you can hopefully be in and out within a couple of hours. On the other hand, fitting a new toilet is a more complex and time consuming process so will naturally cost more. In addition to this, while you’re on larger jobs you’re bringing in revenue at a slower rate. Depending on the size of the team or business, the complexity will affect the amount of jobs accepted and start dates for the work.
Material cost
When putting together a list of materials needed for a job, the costs will quickly add up. It’s common within the industry to let the customer know which materials are required and why. You can then charge for these costs. As the material costs will differ depending on the complexity and type of job, it’s almost impossible to include them within the hourly or flat rate charge. If there are any unforeseen challenges requiring additional materials, make sure you check with the customer before ordering anything. Being open and upfront will solidify the relationship and build trust with the customer.
Profit margin
Figuring out profit margin is something you want to do fairly early on. This will determine how much money you make after all other business costs are accounted for. Costs such as overhead (electricity, heating, phone bills etc.), employee wages and materials. The average profit margin for plumbing jobs is between 20%-25%, so keep this in mind when calculating rates. For example, purchasing washers costs you $0.50 per washer from a supplier, your customers will pay $1.00. Your profit margin would be 50% because you’re making a $0.50 profit. Remember this rule and you’re on the right track to staying in the green.
Vehicle expenses
I’d say it’s pretty unheard of to find a plumbing business without any vehicles. You may have your own vehicle or perhaps you’re in charge of a team that has multiple vehicles between them. Whatever the setup, this type of expense needs to be accounted for. Things such as Department of Transportation (DOT) fees, services, petrol and any repairs that must be made along the way all add up. Depending on the location of a job, petrol can be incredibly costly. Ensuring this type of expense is factored into your pricing is paramount to maintaining profitability.
Labor Cost
We’ve already touched on the fact that each job comes with its own set of unique challenges that’ll vary depending on the type of work. Labor costs reflect the amount of time it will take to complete the job. By following this equation you can work out your labor costs:
(# of labor hours) X (hourly rate) = (total labor costs)
So if we use the hourly rate we calculated earlier as our benchmark, approximately $22 and are on a job that will take about three hours of labor time. That’ll give you a labor cost of $66 (3 x 22 = £66).
Expertise level
Based on your own experience and knowledge, or the team you’re managing, you can create different pricing brackets. For example, a trainee plumber is likely to earn less than another who’s been in the industry for a many number of years. There will also be jobs that plumbers with less experience won’t be tackling due to their knowledge level. For larger work, such as installing a water heater or removing large amounts of waste, it’s going to take more time and include more complexity. Therefore, it makes sense to price these jobs not only by complexity but also based upon the experience level of the technician completing the job.
Location
The location of jobs will play a pivotal role in your expenses. If you have one job that takes an hour to travel to then it’s important to factor this into the pricing for the customer. Especially during periods when the economy is experiencing an increase in fuel costs, as well as cutting more time out of your day spent on one job. Furthermore, the location of your business can also affect earnings. For example, in cities plumbers tend to inflate their prices by about 20% compared to smaller towns. This is due to a higher demand for work in larger cities, and there is a smaller popluation in suburbs. A similar trend can be seen across major cities throughout the world. So in that sense, geographical location can be highly advantageous to you as a business.
Fixing existing repairs
In the business world you want to provide an exceptional service and make sure the work carried out is done to the highest standard. This encourages repeat business and builds trust. That being said, the same can’t be said for all trade businesses. While not the majority, a small handful will have a focus on getting the work done quickly rather than efficiently. This may cause problems later down the line. For example, a plumber has gone to fix a burst pipe but in their rush to do so didn’t fasten the replacement parts securely. This results in a flooded kitchen and one very disgruntled customer one month later. The likelihood of calling the same plumbing service when another issue arises is very low, so that customer will call around to find another local business. This is where you have the opportunity to fix an existing repair. emphasize with the customer's situation and be apologetic towards the fact that the first fix didn’t go as planned. Then explain how you view the problem, how you’ll fix it and reassure the customer there’s a guarantee in place with the work you’re carrying out. Also let them know that since you didn’t do the initial fix, there will be a charge for the repair.
Additional repairs
Remember those long car journeys where you’re happily following the satellite navigation system? And then all of a sudden there was a diversion or roadwork forcing you to change route? This can be the case with plumbing work. You'll go to do a repair and the initial job won’t be quite as simple as you first thought. Additional repairs come up every now and again that you can’t foresee, be upfront with the customer and advise them it’s going to require additional work. Therefore, the costs will have to change and explain the reasoning behind it.
Summary
There are lots of different variables when deciding how much to charge for plumbing work. Whether you’re a lone ranger or you have a larger team, make sure you take all of the above into account. There’s no harm in adapting the pricing structure as you go either, especially if you’re a new business there’s a lot of trial and error involved.
Author
Toby Mortaro
Toby is a keen gamer and loves relaxing with a book, watching some anime or going for a run. He started writing video game reviews and articles as a hobby and soon realized it was something he had to pursue. Toby’s Simpro journey began in support building internal relationships as well as those with our customers. After a couple of years and fancying a creative challenge, he jumped ship to the marketing team.
