How did you set your prices?

[shutterstuff]

I started this reply in another thread and decided it needs it's own, so here it is.

When I started 2 years ago, I used the attached as a guide to set my prices. I forgot where I found this, but I think it was Locksmith Ledger. I have since found it to be lacking in some areas and wonder what the survey looked like that this data was compiled from. I also shopped my competitors and even went to all of the hardware stores and had them cut a key for me to see how they did and what their prices were.



On my price sheet, I combined some, raised a couple and lowered most. Service call and Labor are both $60. One of my competitors charges 50% more for commercial labor. I don't feel right about that.

[billdeserthills]

I grew up doing this work, with my Dad. He set all the prices as it was his business and I have not moved them up as far as I could.
I think too many people want too much, including myself, sometimes, so I try to keep my prices a bit lower than others in my area do.

The thing to me is, I don't need a huge amount to live on, and I think greed is the #1 worst thing, it seems to lead to so many other bad things
After thinking on this for years, I stopped charging extra on most after-hour calls, although for a long time prices could easily double late at night/early morning

[kwoswalt99-]

I saw that guide once too in an old 2006 LL magazine. Here's the source: http://www.locksmithledger.com/article/10881122/locksmith-services-pricing-2013

I have since found it to be lacking in some areas and wonder what the survey looked like that this data was compiled from.

You can take the survey yourself: http://www.locksmithledger.com/article/12002045/average-locksmithing-charges

[shutterstuff]

I grew up doing this work, with my Dad. He set all the prices as it was his business and I have not moved them up as far as I could.
I think too many people want too much, including myself, sometimes, so I try to keep my prices a bit lower than others in my area do.

The thing to me is, I don't need a huge amount to live on, and I think greed is the #1 worst thing, it seems to lead to so many other bad things
After thinking on this for years, I stopped charging extra on most after-hour calls, although for a long time prices could easily double late at night/early morning

Since I started from scratch with the help of a retired CML, he refused to help me set prices. So I had to do my own research. It was actually good experience.

I too have trouble with extra late night or weekend rates. My time is my time. The only time I charged a weekend rate was when someone really wanted their house re-keyed on a Sunday afternoon (non emergency). It was a nice day and I wanted to spend it with family. So I made up a charge on the fly and he agreed. Turns out he thinks someone stole a set of keys on Saturday. He even tipped me!

[shutterstuff]

I saw that guide once too in an old 2006 LL magazine. Here's the source: http://www.locksmithledger.com/article/10881122/locksmith-services-pricing-2013

I have since found it to be lacking in some areas and wonder what the survey looked like that this data was compiled from.

You can take the survey yourself: http://www.locksmithledger.com/article/12002045/average-locksmithing-charges

Thanks for the link to the survey! That was the original article I found. The new survey is dated last year, I wonder if it is still good? But it at least has the info I was curious about.

[cledry]

I think you should charge extra for night or weekend service. It is your choice but if I call a plumber or electrician out at night I am getting charged extra. We charge the same $60 trip charge and $60 per hour. It goes to $90 for each after hours until 11PM, after that it is $120 each. In the daytime a 2 hour emergency response time is also usually an extra charge as is mileage past 25 miles.

I charge a little more in the shop for flat steel, bit keys than that list because I know Home Depot and hardware stores don't deal with them. We are much less on sidewinder keys though at only $35 because hardware stores do them for $30.

Our biggest earners are NSPs, and house brands. Lowest earners are padlocks.

[Sinifar]

IN my hot hand, is my National Locksmith Flat Rate Manual. GET one.

Now work out your expenses, as per the first part of the manual, then use the given multipliers and work out your prices. Expenses include, but not all of these, and this is only a partial list - Advertising, Bad Debt, Depreciation, Dues & Subscriptions, Educational, Income tax, all other business taxes, Insurance, Motor vehicle expense, office expense, rent, supplies, telephone, utilities, payroll, and replacement of tools and other assets.

You need to take into account all this - Hours open, and add in hours you are wiling to work after hours. - How long are you available weekly, times 4 - times 12.

Next, number of weeks per year you are available. You do take a vacation, don't you? - 50? 52?

Multiple this together, and you get productive hours available.

Actual number of productive hours available - which is the hours you really have for a year time - take the last number and multiply by .75. This covers lunch, commuting, and bathroom breaks where you are not available.

Next factor in your total overhead, see above, less cost of good sold. This ends up being your fixed overhead which includes utilities and salaries and everything else, besides COGS in your budget.

Next factor in your employees. multiplying that into your hours available - ie -- 2 employees = more billable time.

Next - Expenses divided by productive shop hours.

This should yield some kind of close to what you are going to need to keep the door open and the lights on.

Never let anyone else set your prices or you will be behind the 8 ball all the time wondering why you can't keep the lights on and the bills keep on piling up.

Finally, set your prices by the factors in the flat rate manual by multiplying the factors listed by the number you got above.

Now you have your prices.

I also use the Locksmith Ledger's Business Guidance and Flat Rate manual from June 1990. This maybe hard for a newbie to come by but if try the Ledger, they may be able to provide you with one - or point you to someplace you can get a look at one.

Just our way.

IN any event, get the National Locksmith Flat Rate manual, from any good supply source. I have had mine for over 25 years, and it still works today.

Sinifar

[shutterstuff]

Fantastic information Sinifar! I just ordered that book.

[CapeCodLocksmith]

More of a rhetorical question. The market dictates prices, not the locksmiths.

Prices vary drastically. Companies in Washington DC charge an arm and a leg for lockouts, whereas in rural Indiana you can pay the price of a dinner.

Nothing wrong with charging extra for late night lockouts. If I'm up at 2 AM unlocking a door, it will affect my working in the morning.

[shutterstuff]

More of a rhetorical question. The market dictates prices, not the locksmiths.

Prices vary drastically. Companies in Washington DC charge an arm and a leg for lockouts, whereas in rural Indiana you can pay the price of a dinner.

Nothing wrong with charging extra for late night lockouts. If I'm up at 2 AM unlocking a door, it will affect my working in the morning.

I charge a median price for lockouts and tourists are often surprised at how "cheap" I am. Using the above book and the Locksmith Ledger national Average price list is how I came to charge what I do. Actually, I purchased the book after I made my price list and decided I was going to keep the prices I set.

My question for you "long timers" is should I charge a different rate for commercial hourly vs residential? Right now I am the same.

[Tyler J. Thomas]

A good number of people, myself included, think that you should have a set price for each specific task you do. Tom Demont, former ALOA president, teaches this his business classes and even has/had a charge for lubricating a cylinder - no I'm not kidding. The popular saying is that if you charge hourly for everything then you should just go work for someone else.

But yes, have a residential and commercial price list. Company I worked for charged a dollar more per rekey for commercial clients, for example. It's one thing to pull up to a house and rekey it. The homeowner is nearly always going to be there and have the key waiting. With commercial, you've got to find a place to park, sometimes check in with security or at least meet your contact, you've got to walk a larger property - sometimes making multiple trips to and from the truck, with multiple parties (such as engineers, chief engineers, and tenants) you might have to wait a bit longer to make sure everyone is on the same page for keying requests, etc.

Basically, commercial clients can be a much bigger pain in the butt and really cut into your time on an otherwise simple task.

One of the best things you can do is to start averaging out the time you spend on completing tasks. It really helps to break down each task as specific as possible: new installation of a cylindrical leverset, retrofit installation of a cylindrical leverset, new installation of panic hardware, etc. If you find that the retrofit installation of a cylindrical leverset takes 30 minutes on average, from pulling up to rolling out, set your price accordingly. Sometimes you beat the time, sometimes you won't, but the long term average will take care of you.

Same thing for safe and automotive work if you do that.

The goal is to have it all figured out so that you rarely have to use your hourly charge. It also benefits you to break down your charges and tasks on the invoice rather than "1.5 Hours Labor @ $50/hr - $75". Commercial jobs don't end when you leave. You may get a call a week or month later from accounts payable wanting to know what you did on the 3rd of last month - it helps to have your pricing clearly labeled and outlined, trust me.

As for overtime, time and a half is pretty standard. Say you have a 10 cylinder emergency rekey. Service charge $75.00, each cylinder is $15.00 during normal business hours.

Regular time:

(1) Service Charge @ $75.00
(10) Residential Cylinder Rekeyed @ $15.00 ea. = $150.00

Total: $225.00

Overtime:

(1) OT Service Charge @ $112.50
(10) OT Residential Cylinder Rekeyed @ $22.50 ea = $225.00

Total: $337.50

[ltdbjd]

[GWiens2001]

ROFLMAO!!!

Gordon

[mseifert]

I have to say I agree with Tyler Thomas here.. I'm not a locksmith but I do work in a customer service based industry .. And I think people want to know what they are getting for there $150.00 charge. So breaking down the bill may take longer but I think somebody would be more willing to pay it ..

Also, We have areas where we have a set fee but also have a fee schedule for every little thing we do.. Some thing like pick and drop a safe can be lump sum priced, but a more lengthy task (i.e. keying a building) should be broken down... Even lubing a lock takes time and materials.. Plus the added benefit is if you track the ACTUAL cost of tasks versus the PROJECTED.. you can adjust prices.. You may find out that a rekey you have been charging 100.00 is only really costly you $75, and you can offer a better price to your customers..

this is just my 0.02, I'm not a locksmith, but service based business management is somewhat standard...

[CapeCodLocksmith]

More of a rhetorical question. The market dictates prices, not the locksmiths.

Prices vary drastically. Companies in Washington DC charge an arm and a leg for lockouts, whereas in rural Indiana you can pay the price of a dinner.

Nothing wrong with charging extra for late night lockouts. If I'm up at 2 AM unlocking a door, it will affect my working in the morning.

I charge a median price for lockouts and tourists are often surprised at how "cheap" I am. Using the above book and the Locksmith Ledger national Average price list is how I came to charge what I do. Actually, I purchased the book after I made my price list and decided I was going to keep the prices I set.

My question for you "long timers" is should I charge a different rate for commercial hourly vs residential? Right now I am the same.

Commercial vs residential, is hard, we usually will charge according to the model of the lock. Some residential locks can be a real pain, a lot harder to work on than some commercial. Some commercial lever locks are even worse, so it all depends on what you're working on.

Example: A customer has a patio door lock that requires extensive taking apart to rekey, versus a simple mortise rekey for a commercial customer.