# General Business Category > Business Finance Forum >  service fee

## murdock

i got a call from a friend yesterday complaining that he had to pay R285 for a call out fee....which got me thinking about rate which i get charged by my accountant R700 per hour...doctors R300 - 2000 per hour...car service mechanic R500 per hour to replace my engine oil etc.

here is the thing...the next time a person complains about my rate i charge i will take it as a serious insult...and you want to know why...because i get a call to lets say fix a machine...

i get in my vehicle make sure i have all the equipment to carry out the tests required.
drive to the factory wherever it may be...risk my life on the road...worrying about getting hijacked and have to sometimes sit in traffic jams which waste my time because i dont get paid while sitting in traffic.
i trace the fault in the shortest possible time.
then if spares are required i get back into my vehicle...back on the road again...travel to the wholesaler or sometimes there suppliers to collect the part...return to the factory and replace the part...test the machine then leave...if it breaks with a month they expect me to go back and repair free of charge...maybe i should try what the doctors do...give me a call in a weeks time and i will charge you another call out just to make sure i fixed it correctly  :Headbutt: ...what i should charge for such a call out:

call out fee...a minimum of R450.00
travelling R4.50 per km including to go and collect the spares.
a minimum of 25 % mark on the spares i have to buy.
plus my hourly rate R450.00 
total bill expcluding spares around R1100 for the call out excluding vat...which would take around "2.5-3 hrs" from the time i get the call till the time i hand in the invoice...i would say you getting a bargain at only this much....if i started charging for telephone calls like lawyers do you would need to add another R120 onto the bill...

it normally wouldnt cost this much but i just wanted to give you an idea what it should be.

think about it you go to a doctor...they charge between R400 and R600 per visit for less than 15 minutes...you have to drive to them waste half and hour sometimes and hour waiting for them...they then make you go collect your own medicine which has a bout a 500% mark up and then tell you to go back 2 weeks later just in case they didnt diagnose the correct problem...now we arent talking specialist who charge R1500-R2000 per 10-15 minutes...and people say to me but they went to university for 5-7 years.

well i have also been at apprentice school for 3 years...2 years of technical college a further 1 year night school...training seminars and have the most important qualification 27 years of experience...everyone for their own skill...i am not saying i am smarter than anyone else...just dont insult me when i ask for a R250 call out fee...it is actually pathetic the rates electrical companies  charge for the service...the minimum rate for a qualified electrician shouldnt be less than the amount i mentioned above...electricians are regarded as high risk by the insurance companies so if you took that into account i think an even higher fee wouldnt be unjustified.

and a meesage to all those electrical companies only charging R450 for a coc and R250 per hour...you making it difficult for everyone to make a living wage.

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Dave A (16-Mar-10)

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## daveob

Thank You for laying this out in such a logical manner.

I couldn't agree with you more.

Now could you please forward the contact details for your employee ( the one that does the actual physical work ) so I can get him to quote on moonlighting the job for me.

 :Headbutt: 

Just kidding. A good article.

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## murdock

i am the one who does the actual work so i do get people asking me to do sideline jobs for them not knowing that i own my company  :Big Grin:

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## daveob

Are those rates better ?

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## murdock

there seems to be a misunderstanding about COCs...

When asked to do a COC...there is a proceedure ie...first an "inspection report" must be done...which i charge for regards if i there are any repairs to be done or not..people seem to think that when you do the inspection report it means you automatically get a COC..."wrong"

A COC is only issued once the inspection report is done and there are no faults and the installation is reasonably safe.

if there are repairs required then the COC can only be issued once the repairs have been carried out and a reinspection is done to detemine that the installation is "reasonably" safe.

if nobody arrives at the property to do an inspection report and a COC issued...chances are there was never an inspection report done and hopefully you are not the purchaser.

just remeber the "idea" behind the COC is to ceate a safe enviroment for you and your family...be it a shopping centre...house...or factory.

one of the biggest problem in KZN is the stove disconnection which is not part of the COC and becomes a huge problem because most times the owner or his mate disconnects it and leaves the wires hanging out the pipe...there was a case where a couple moved into the house with their children and the 2 year decided to check out the kitchen...found the open wires hanging out the pipe and was electricuted to death...the guilty person is not the inspector who carried out the COC it is the previous owner for not having it disconnected by a qualified person ...i am sure you wouldnt want this to happen even to your worst enemy...so make sure you get the stove disconnected by a qualified person who will remove the red and black wire from the isolator and pull them out completely to be absolutely safe or just disconnect and isolate the wires at least...leaving only the green earth wire behind.

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daveob (16-Mar-10)

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## daveob

What is the actual purpose of the COC ?

Does it mean that the accessible parts are safe for a normal person to be around  ( normal = member of the family ), or does it verify that all wiring in the house ( including visible points, ceilings, geyser, etc ) are all wired correctly ? If so, should the inspector for the COC open all light switches and plug points for inspection ?

Had an electrician change a dimmer switch recently, and he felt that the COC should not have been issued because the printing on the breakers was not clearly visible. A quote followed for the replacement of the breakers on the DB.

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## murdock

you need to check with the circuit breaker manufacturer and find out if the code on the side of the breaker indicates the size...then engrave the breaker so that it is clearly labeled...if not and you cannot see the size of the breaker ie 10 amp or 20 amp etc then it would need to be replaced....the reason for that would be because there is no telling if the size wire used for that cicuit was correctly selected.

the idea behind the COC is to make sure the electrical installtion...ie wiring...circuit breakers type and size...etc...etc...is suitable for the application and is reasonably safe.

the best thing to do is take a picture post it on the website and forward it to the elctrical inspector who signed the COC.

i believe we all required better quality training and we as inspectors should have to attend seminars on a regular basis to obtain credits to retain our status as masters or installtion electricians...the unfortunate thing in this country is we cant even get the dept of labour out to check illegal installations because they dont have the manpower...it would just become like the drivers license...firearm license etc a money making racket which will take years and more suitably skilled people to achieve this goal...which we just dont have...there is only a handful of suitable qualified people left and they are not young anymore...in fact most of them are past retirement age already...and all of them are not bee compliant...so that just blows everything out the window.

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## Dave A

A truly great first post, Murdock  :Thumbup: 

And this little interchange was also pretty special:



> i am the one who does the actual work so i do get people asking me to do sideline jobs for them not knowing that i own my company





> Are those rates better ?


 :Rofl:

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## desA

Where does the escalation train end?

Charging based on what the rest of the supposed peer group charges will inevitably lead to bubbles & incredible distortions. Charging based on a fair, honest profit, could possibly lead to a very different paradigm.

I had a clear example of market distortions in comparing the price of a certain component in SA & SE Asia. The SA price was 2.4 to 2.8 times that of the identical component in SE Asia. 

I believe that the SA economy may very well be a bubble, pegging itself to the excessive greed of the import cartels & numerous greedy professionals. No wonder there is a huge divide between the 'haves' & 'have-nots'. When will this end?

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## murdock

my problem with the prices also has to do with the quality of work...university degree and all...the fella who was suppose to make sure i stayed asleep during an operation must have read the medice instruction manual incorrectly because they had my whole elbow out the skin when i woke up on the operating table...man you dont want to experience this...i have never been in so much pain during or after an operation...this could also be the reason they have never been able to repair my elbow...because i climbed off the operating table during the operation and pulled trying to get away from this what it hought was just a nightmare...i was told they could not fix it because of the accident...but as i am typing this thread i am starting to wonder if they didnt do more damage during the op  :EEK!:  i could never prove it...thats why there should be cameras in the theatre during the operation...so that it can be played back and if there was foul play i could sue them for the lose of use of my elbow.

just had another instance recently where a piece of cloth was left in a persons eye during an operation...the person had to go back and have another operation to remove it...it was dicovered because the eye would not heal.

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## Dave A

> Where does the escalation train end?
> 
> Charging based on what the rest of the supposed peer group charges will inevitably lead to bubbles & incredible distortions. Charging based on a fair, honest profit, could possibly lead to a very different paradigm.


I'm a strong supporter that people should charge the rates they want without being a slave to what others are charging around them. However, very few people have really thought their pricing strategy through and matched it with their medium and long term goals - if they even have medium and long term goals.

Charging at rates that simply puts bread on the table at the end of the day and nothing more isn't exactly advancing your future prospects much.

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desA (17-Mar-10)

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## desA

How would/could price-control legislation affect charge-out rates?

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## wynn

> I had a clear example of market distortions in comparing the price of a certain component in SA & SE Asia. The SA price was 2.4 to 2.8 times that of the identical component in SE Asia.


One of the reasons for higher prices in SA is tax.
EG. most models of SA vehicles also available overseas are half the price.

Perhaps your components are also under that catergory.

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## desA

^ Could be, wynn.

Question is though, why tax something to the hilt that is not even manufactured in SA?

I am beginning to see why SA is on a hiding-to-nothing in the international marketplace. At this rate, no-one in their right mind, will manufacture stuff in SA. It will be manufactured off-shore & the easiest way found to bring in the parts/sub-assemblies for local consumption.

The ones who are getting reamed are the customers - with the net result being declining job numbers as the 'old industries' go out of business. All a bit daft, in my view.

The same perceptions seem to have invaded the 'fair value' thought processes. In the end, the local market becomes an incredibly-distorted bubble, which just has to burst at some point. People need jobs - jobs are created by industries either supplying local demand, or for export. The tax mechanism puts effective brakes on most new export-based developments, I'll wager. To encourage local industry to develop in the medium-to long-term, the taxes need to be lowered, not raised.

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## murdock

dave you starting to sound like my bank manager who told me  i wouldnt last 5 years because i had no goals or bussiness plan...just got out there and did it  :Big Grin:  

it took me 10 years in bussines to come up with my company logo...so i am a slow starter...my next to goal is to come up with a bussiness plan and sit and decide where i want to be in the next 5 years....i just hope it doesnt take me 5 years to do it  :Big Grin:

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## Dave A

> How would/could price-control legislation affect charge-out rates?


It is my experience that any form of price control at any stage through the value add chain reduces productivity and effectiveness, with all the knock-on consequences of that. It also increases customer price sensitivity because there is too much focus on displayed price in the industry and not enough focus on value for money and value propositions.



> my next to goal is to come up with a bussiness plan and sit and decide where i want to be in the next 5 years....


There's a long weekend ahead - set a goal to have something on paper by Monday night  :Wink: 

It doesn't have to be fancy or complicated - just some thoughts commited to paper.

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desA (18-Mar-10)

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## murdock

> Are those rates better ?


they are bcause i only charge time and a half instead of double time...but then i make it up on the speed that i work...because i would sit and chat to the customer while his wife brings coffee bicuits etc  :Big Grin:  and him thinking he is getting a good deal dosent even realise how he is getting screwed with a smile.

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## SilverNodashi

This is a tough subject, especially for start-up's and slammer companies (generally one-man-band type companies) We make a clear point of our costs, upfront before doing any work for a client. And most of the times we even require a 50% deposit, depending on the nature of the work to be done. 

But, to accommodate smaller clients I have decided that the first hour's labor is included in the callout fee, within a 10KM radius from our office. This brings in less money, per job, but more clients so it does pay off  :Smile:

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desA (18-Mar-10)

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## desA

^ That is smart. Give a little more, get a lot more.

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