Ask Mister Sparky

Need some help improving your electrical service business? Just ask Mister Sparky (AKA Patrick Kennedy). As the owner of Mister Sparky, Inc. in Atlanta and the president of Electricians' Success International in St. Louis, he knows a thing or two about the industry.

Have you ever turned down a job after seeing the condition of a home's wiring? Is it a liability issue?

This is a pretty rare occurrence, but in my years in the industry, I have run into it from time to time. In these situations, we'll go in and see in the open areas of the home where a handyman or even the homeowner tried to make repairs or changes and left the wires exposed or worse. Yet in a lot of these cases, we've only been called out there to simply repair one outlet.

When faced with this situation, we'll obviously inform the client of the problem and present them with their options for bringing their home up to Code. However, if they were simply expecting a small outlet repair, they may refuse to go ahead with all of the work and demand that we just fix the outlet.

In those instances, we'll agree to fix the outlet, but not until the customer signs a release on our invoice that says they've been informed of what their home needs to be brought up to Code and they've chosen not to have that work done. We explain that our insurance company won't allow us to take the liability of not doing all the necessary work.

At this point, one of two things will happen. They'll either refuse to sign that statement — in which case we'll walk away from the job — or they'll see how serious we are about the work their home needs and decide to go ahead with it all rather than take on the liability themselves. So, in some instances, refusing to do the work may help you close the sale because the homeowner will understand just how serious the problems are.

I'm thinking about starting to charge a travel fee. How should I set the price?

First off, I applaud you because it sounds as though you're already committed to charging this fee. Usually business owners will start by asking if they should offer one at all because they're worried about losing customers.

Charging a travel fee is a smart business move because it allows you to recoup some of the costs of getting your electrician to your client's home. Also, it allows you to weed out some of the price shoppers and those clients who are looking for the cheapest price.

We've always charged a travel fee, but several years ago we decided to raise it. At first, our customer service representatives weren't confident about charging the higher fee, and their call-booking percentage dropped. However, at the same time, my electricians' ability to close their sales dramatically increased. Now, as our CSRs have become more comfortable, their booking percentage has returned to the level it was at before.

The overall outcome was that we booked the same amount of calls, but we closed more of them and we were able to collect a higher travel fee at the same time. So I wouldn't hesitate to incorporate a travel fee into your pricing.

What should your fee be? I'll admit that my answer is a very unscientific one, but here it is: “whatever you want to charge.” Now with that being said, there are some things you may want to take into account. Your fee shouldn't be prohibitive. If everyone else in your market is charging $29 and you set yours at $150, you'll most likely lose quite a few clients. Your fee should help offset at least some of the cost of getting your electrician to the door. That would include things like your hourly wage, the cost of gas, vehicle upkeep, and a whole range of other costs. However, you should also look at your travel fee from a marketing standpoint. Will your clients pay it? How will you present it to them? Can you build upfront value in it?

Ultimately, how you set the price is up to you, but the bottom line is that no matter what you decide to charge, taking that step will set you apart and help you run a profitable service business.

Send your business-related questions to askmistersparky@primediabusiness.com