Plumbing service agreement

This prices a plumbing service agreement from the contractor's side. It takes the inspection visits you promise a year and what each costs you, the discount you give members on repairs and the repair spend you expect them to have, and the margin you intend to keep, and returns the annual and monthly plan price, the contract value over the term and the gross profit on it. The plan is a product with a cost; this is that cost, priced.

The visit is the cost, the discount is the risk

Each promised visit costs a technician's time, the drive and a few consumables, and that is the certain cost. The repair discount is the uncertain one: a member who has a lot of repairs uses a lot of discount. The page treats the discount on the expected repair spend as a cost of the plan, because it is, and a plan priced without it is a plan that loses money on its best customers.

Margin on a plan is not margin on a repair

The plan is paid in advance and the visits are scheduled into slow weeks, which is why it can carry a lower margin than emergency work and still be the best business in the book. Put the margin you actually intend to keep in the field. The page divides the cost by one minus that margin, so the price delivers it.

Sell the term, book the visits

A twelve-month term with one visit is the common shape; two visits suits properties with a lot of fixtures or a tankless heater that needs descaling. Whatever you sell, put the visits on the schedule at signing, because an agreement whose visits never happen is a refund and a lost customer.