Should Trades Businesses Charge Call-Out Fees?

Should Trades Businesses Charge Call-Out Fees?

Picture this scenario: you run a trades business, and the debate about whether to charge customers a call-out fee is a constant thorn in your side. It’s a predicament that countless tradespeople face, and the truth is, not many customers relish the idea of a call-out fee. So, where does that leave us? Let’s delve into this contentious topic and shed some light on the matter.

For instance, imagine you’re at the helm of a trades business that tackles a handful of small projects each day. Say your charge-out rate per hour stands at $100—an amount determined by meticulous calculations or industry standards. This rate is meant to cover various overheads, including holidays, sick leave, superannuation, and other costs for your team.

Now, here’s the crux of the issue: how much do you charge during those hours that your team isn’t directly on-site? Let’s say they’re only on-site for four hours. If you bill exclusively for those hours, what about the time they spend driving, running errands, and handling tasks not related to the project at hand?

It’s a dilemma that most small trades businesses grapple with. Those “off-site” hours are laden with various activities—washing equipment, visiting suppliers, fetching parts, and tidying up after a day’s work. The question then becomes: who foots the bill for these activities? This is precisely where the concept of call-out fees enters the picture.

When explaining the rationale behind call-out fees, you’re essentially elucidating that it encompasses more than just driving to the location. It’s about compensating for the non-project-related activities that contribute to the smooth functioning of your business.

Guidelines For Billable Work

Here’s the bigger query: How do you establish clear guidelines for what constitutes billable work and what falls under ancillary tasks? This is where the notion of billing rules comes into play. Establishing a set of rules that delineate what is attributed to the job and what pertains to other activities is crucial.

In fact, some businesses go the extra mile by compiling a comprehensive list of billing rules. These guidelines provide a structured approach for your team to discern what should be accounted for in a job’s billing and what should be attributed to tasks like workshop duties or non-productive time.

For those intrigued by how this is executed, you’re in luck. We’ve prepared a downloadable resource that outlines a sample set of billing rules. This resource not only empowers you but also serves as a training tool for your team members, ensuring transparency and consistency when it comes to charging for your services.

The call-out fee conundrum is no small matter for trades businesses. Striking the right balance between charging for on-site hours and compensating for the intricacies of running a business is a challenge that requires careful consideration. By implementing well-defined billing rules, you not only clarify expectations for your team but also establish a fair system that respects the diverse aspects of your trades business.

Find out more by grabbing a copy of my two Wealthy Tradie Books


What Do You Need To Improve In Your Business?

Call Hugh Today

Hugh Bowman is a specialist in business coaching for trade businesses and is a former engineer and technical expert. He has lived and worked in many parts of regional Victoria coaching tradie business owners.

Ph: 0409 402 474