Flat Rate vs Hourly Pricing

Flat rate is typically more profitable for experienced providers who can complete work efficiently. Hourly protects you when job scope is unpredictable.

Most customers prefer flat rate because it provides cost certainty. However, hourly rates feel fairer for exploratory or diagnostic work.

Charge flat rate when the scope is well-defined, you can accurately estimate time, and you want to reward efficiency. Flat-rate businesses earn 20-40% more per hour of actual work because they benefit from getting faster at their craft.

Hourly pricing caps your earnings at hours worked. A plumber charging $95/hour for a 2-hour job earns $190. The same plumber charging a $275 flat rate for the job earns more and the customer has cost certainty. Flat rate also eliminates time-tracking admin.

Scope creep is the biggest risk -- if a job takes longer than estimated, you absorb the loss. Mitigate with clear scope definitions, change order processes, and building a 15-20% buffer into estimates. New businesses should start hourly until they understand job durations.

Five key factors: job predictability (predictable scope = flat rate, exploratory work = hourly), your experience level (experienced trades = flat rate, new trades = hourly until they understand job durations), customer preference (homeowners overwhelmingly prefer flat rate certainty), competitive landscape (match how local competitors quote), and whether your speed is a competitive advantage you should capture.

Flat rate pricing increases revenue by 15 to 25% for experienced tradespeople because faster workers capture more profit per job according to ServiceTitan data. Hourly pricing is safer for new businesses that do not yet know their job durations. Homeowners prefer flat rate pricing by a 3 to 1 margin because it eliminates bill shock and makes comparison shopping easier.

Consider expenses, desired income, and billable hours...

Profit margin is the percentage of revenue that is profit...

Moving a home in the US costs $15,000-$40,000 in realtor commissions, closing costs, title insurance, and moving expenses alone.

70-75% annually is average.

A trustworthy contractor should provide a written itemized quote, proof of general liability insurance (minimum $1-2 million), a valid state contractor license, a written contract with scope and timeline, and references or a portfolio of completed work.