Flat-rate pricebook price: 3 parts to build in

• Write a clear scope for each job before you price it.
• Time typical jobs from real records, not best-case days.
• Build the unbilled hours into your labor rate, and write the rate down.
• Count each overhead dollar once, in one place.
• Log every price change with its date and reason.

When a tech stands in a customer's kitchen and reads a price off a menu, that number has to cover the time the job takes, the overhead the business carries, and the profit the business needs. If any piece is missing, the company either loses money on every job of that type or quietly makes up the difference by cutting corners somewhere else.

But the tool only works if each price was built on purpose.

Owners and dispatchers can use the same breakdown to check existing prices and to train new hires. Nothing here replaces your own costs.

A flat-rate price is a promise. The customer agrees to pay a set amount for a defined job, and the company agrees to deliver that job no matter how long it takes. That makes the price a bet on the average. Some jobs will run long and some will run short, and across the book the average should work out to cover the costs and leave a profit.

FieldPulse lets techs select jobs with labor, overhead, and markup already included, then transfer the pricing and line items into an estimate, invoice, or variant proposal. Once a price goes into the book, the tech does not see the pieces. They see one number. So the pieces have to be right before they are combined.

That means each flat-rate job needs a clear definition. "Replace a water heater" is too vague. Does it include removing the old unit, the drain pan, the flue check, the permit, and the haul-away? A price built on a vague job name will be argued about on every call. Write the scope first, then price it. For how scope details reach dispatch, see Field Service Work Order Checklist for Dispatch Handoffs.

Keep add-ons separate from the base job too. FieldPulse notes that you can "offer add-on lists for upsells", and that is the right place for work that only sometimes happens. If the base price includes things that appear on only a few calls, you will overprice the simple visits and underprice the complicated ones. Keep the base scope tight, and put the extras in add-ons the tech can select when the situation calls for them.

Labor is the part most shops think they understand, and it is the part most often wrong. The obvious mistake is to use the hourly wage of the tech and call that the labor cost. A proper labor component includes the time the job actually takes, the time spent getting to the site and back, and the cost of paying the tech for time that is not billed.

Start with job time. Pull real records from past invoices and dispatch logs for each job type. Look at the typical time, not the best time and not the worst. If you do not have usable records, have your strongest techs walk through the job and time it, then add time for the slower techs who will also take it. Do not build the book on the fastest time you have ever seen. A flat-rate book priced on the best day of your best tech will lose money on the ordinary days.

Next, account for the time between jobs. Drive time, parts runs, loading and unloading the truck, paperwork, and callbacks all consume paid hours without producing billable work. If a tech bills four hours of work in an eight-hour shift, the labor cost of each billed hour is effectively double what the wage suggests. You need to decide how much unbilled time to build into each billed hour, write that decision down, and apply it the same way across the book. For how paid time becomes pay, see Calculate technician overtime with 8 payroll fields.

Then decide how labor enters the price. Some shops price labor per hour of tech time. Others build a labor line for each job from a target hourly figure. Whichever method you choose, write the rate down, date it, and use the same rate across the book. When wages change, the book should change with them.

Watch the skill mix as well. A job done by a senior tech and the same job done by an apprentice have different labor costs and often different results. If the book sends every call to whoever is free, the labor cost on paper will not match the labor cost on the truck. You have two honest options. Price the job for the skill level it requires, or make the skill requirement part of the job definition so dispatch assigns it correctly.

Overhead is everything the business spends that is not direct labor or materials on one job. Rent, insurance, software, phone plans, truck payments, fuel for the fleet, office staff, training, licensing, shop tools, and the owner's own time all fall here. It is easy to forget when you are pricing a single job, and it is often the reason a job that looks profitable on the truck loses money at the end of the year.

Think about overhead in terms of fixed costs. OpenStax explains that contribution margin is "assumed to first cover fixed costs first and then realized as profit." The idea applies directly to a service business. Every job has to contribute enough margin to pay its share of the fixed costs, and only what remains is profit. If the book leaves overhead out, each job contributes less than it appears to, and the fixed costs have to be covered from somewhere else or they go unpaid.

Start with a total. Add up your annual overhead, including the small costs. Then decide how to spread that total across your jobs. The simplest method is to divide overhead by the billable hours your team expects to deliver in a year. Another method divides overhead by the number of jobs, though that treats a short tune-up and a long install as equal, which is rarely right. Choose the method that matches how your costs actually behave, then state it so the whole team understands the number. For one system's job cost settings, see Job costing setup for field service: 5 key settings.

Be careful about double counting. If your labor rate already includes an overhead allowance, adding that same allowance separately counts it twice. Applying markup to a total that includes overhead is a separate pricing decision. Keep one simple rule: each dollar of overhead enters the cost calculation once, in one place. If you find the same category appearing in two columns, remove one of them and note the change.

Markup is the amount added to cost to set the selling price. Labor and overhead tell you what a job costs to deliver. Markup determines the amount above that cost; contribution margin measures price minus variable costs.

OpenStax uses a simple example to show how this works. Hicks Manufacturing sells its Blue Jay Model for $100 with variable costs of $20 each. The difference between price and variable cost is the contribution margin: $80 is available to cover fixed costs and contribute to profit.

The same example has a contribution margin ratio of 80%, leaving approximately $0.80 of each sales dollar for fixed expenses and profit. A ratio like this is useful in a service business because it lets you compare jobs of different sizes. A large job with a thin ratio can bring in more dollars and less profit than a small job with a healthy ratio. Dollars alone do not tell you which jobs are worth the truck roll.

Remember that the Blue Jay figures come from a manufacturing example, not a repair rate. Use the method, not the numbers. Your variable costs will be different: parts, consumables, fuel for the trip, and the portion of labor that rises with the size of the job. Your markup has to be set against those costs, not against an industry average you have never checked against your own records.

There are two common ways to set markup, and some shops combine them. A percentage markup applies a fixed percentage increase to cost. It adds more dollars to expensive materials and fewer to inexpensive ones, which can overprice costly parts and underprice cheap ones relative to their handling effort. Some shops use a percentage for parts and a set amount for the service call itself. The right mix depends on your costs and your customers.

Whichever method you pick, make the markup visible. Track it by category. If the markup on water heater installs is a different ratio than on drain cleaning, that should be a deliberate decision you can explain. An unexplained variation is usually a leftover from an old price nobody revisited.

Once you have labor, overhead, and markup, add them in a fixed order. Start with direct costs: labor time at your chosen rate, plus parts and consumables. Add the overhead share for the job. Then apply markup to that total, either as a percentage or as a set amount, depending on your method. The result is the flat-rate price.

Keep the working sheet simple. Use one row for each job, with columns for scope, labor hours, labor cost, materials, overhead share, markup, and final price. When someone asks why a price is what it is, you should be able to answer in under a minute without opening three different files.

Then test the result against the goal of the book. FieldPulse notes that you can display jobs "as a plain list or in a Good / Better / Best format that gives the customer a choice." A Good / Better / Best layout only works if each tier was built from the same three parts. A cheap tier with no real labor behind it, or a premium tier with inflated markup stacked on unchanged labor, will show up quickly in close rates and in callbacks.

Check the numbers against the job, not only against the spreadsheet. Run a set of recent calls through the new prices, and look at them honestly. Ask whether a tech working at a normal pace would make the job pay for the time spent. Ask whether a customer would see the price as fair for the work described on the line. If either answer is no, look at which part is off before changing the final number.

This example uses made-up figures. A flat-rate job is priced at 100 dollars. Its direct costs, labor time at the book rate plus parts, come to 20 dollars, so 80 dollars is left to cover overhead and profit. If the job's overhead share is 55 dollars, most of the 80 is spoken for and the rest is profit. Then run the same check as above: would a normal-pace tech make this job pay for its time?

A pricebook is not a one-time project. Costs move, customers change, and techs find faster or slower ways to do the work. A review schedule keeps the book useful. Pick a regular time, perhaps each season or each year, and check the three parts in the same order each time.

Look at labor first. Compare recorded job times against the times in the book. If a job consistently runs long, either the scope was wrong or the time estimate was. Fix whichever is wrong and document the change. If your wage rate has moved, update the labor component across the book at once so every job reflects the same rate.

Next, check overhead. Pull the year's actual costs and compare them with the total you used. If the total has grown and the book has not, the gap is coming out of profit. Decide whether to spread the increase across all jobs or to change the prices of specific jobs that carry the largest share of the new cost. Either choice is valid. Leaving the gap unaddressed is not.

Then look at markup. Compare the margin on each category against the target you set. Pay attention to jobs that are frequently discounted or negotiated on site. Also look at jobs that are almost never sold. A price that nobody accepts may be too high for the market, or the scope may not match what customers actually want.

Keep a change log. Each time a price changes, record the date, the reason, and which part changed. When the team asks why a number moved, you will have an answer. When you revisit the book next year, you will know what was tried, what worked, and what was reversed.

A common mistake is hiding the logic from the people who use the book. Techs who understand why a price is what it is will quote it more confidently, explain it better, and be more willing to suggest add-ons when they fit.

Today, pick your three best-selling jobs, write each scope on one line, and pull the last five invoices for each to check the typical time. That is enough to start the book.

Do all jobs need the same three parts?

Yes, build every flat-rate price from labor, overhead, and markup so the whole book follows one method.

Should add-ons go in the base price?

No, keep the base scope tight and put occasional extras in add-on lists the tech can select.

How often should the book be reviewed?

Review it on a regular schedule, such as each season or each year, and log every change.