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additional cost to him for travel, readying and cleaning up the work area with regards to the washing machine valve. That’s included in his $150 vent cleaning price. But this


FIGURE 2 Figure 2 shows the extra time involved to install the new


washing machine valve during that visit. Based on a minimum labor/overhead cost of $150 per hour for a qualified service technician with a truck, his range of cost for labor and overhead to him for the washing machine valve installation without material would be a minimum of $150, an average of $287.50 and a maximum of $412.50. (Remember, the


“gimmick” addition to the vent cleaning job still has costs attached to it. Assuming that all materials are on his truck, the cost of material will be somewhere between $50 and $100.


92


maximum could be higher, dependent upon circumstances. Adding material to the labor/overhead cost, the


minimum range of cost to him for the washing machine valve at that visit would be $200 to $250. His average cost range would be $337.50 to $387.50. His maximum (dependent upon circumstances which could make the cost higher) cost range would be $462.50 to $512.50. If we use the minimum cost possibilities


of $175.50 for the dryer vent service and $200 for the washing machine valve, he minimally spent $375.50 to bring in $300. That’s a loss of $75.50 for his super duper gimmick price. Webster defines gimmick as “any clever scheme.” No matter how you slice and dice it, this contractor’s


“gimmick” price is not clever. It is extremely foolish! There are many ways to fool yourself.


An old adage states, “Fool me once, shame on you. Fool me twice, shame on me.” When you are the person who fools yourself, you have no one to blame but yourself. My advice to you is not to fool yourself


like this contractor is doing. Before quoting selling prices, 1) identify and calculate your true cost of operation, 2) calculate doable time allowances that will give you the opportunity to deliver excellence and value to your clientele and 3) never consciously sell your services below your cost. It’s downright foolish! If you need my assistance, coaching skills,


etc, I’m as close as your phone. Call me at 845/639-5050. I can help keep you from doing that which is foolish. As always, I wish you good health and much wealth. l


Richard P . DiT oma is a contracting


business consultant and active PHC contractor with over 40 years of experience in the PHC industry


. He can be e Circle 61 on reader reply form on page 111


reached at 845/639-5050, via email at richardditoma @verizon.net, by FAX at 845/639-6791 or mail to R&G Profit-Ability Inc., P ..O Box 282, West Nyack, NY 10994.


phc december 2011 www.phcnews.com


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