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Joe Marconi

How Does $5,700 Labor Per Hour Sound?

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The other day, the alarm panel at the shop displayed a message that said, “Low Battery”. I called my alarm company and got the owner on the phone. He said that means the battery in the panel needs to be replaced and he would be over in a few hours.

 

A few hours later, the alarm company owner arrived with the battery in his hand, walked over to panel, opened it, pulled off two spade terminals, removed the old battery, put the new battery in place and push on the two terminals. All of this took about one minute, which included saying hello to me and complaining about the Knicks losing to the Pacers.

 

Then he handed me the bill:

Labor: $95.00

Battery: $45.00

Total: $140.00 plus tax

 

I did the math and the labor works out to $5700 per hour. What do we get to install a car battery? I know, I know, it’s a ridiculous analogy. But hold on for a second, is it really? Installing a car battery is a lot more difficult than a little alarm battery with push on terminals. Isn’t it?

 

We have the battery hold down to deal with, corroded terminals, corrosion on the tray to clean, a memory saver to hook up to the OBDII connector. And on some cars, like BMWs, we have to register the battery in the computer to insure it will charge properly. And, we have to sell the battery after we spend time testing the battery and the charging system. And what’s the average labor charge for installing a car battery? 25 bucks? 35 bucks? Some charge no labor, just happy to sell the battery and make the part markup.

 

I am having a little fun with this, but the truth is the alarm company owner did the math and knows what he needs to charge to remain profitable. He knows what every service call costs him in time, gas, insurance, workers comp, payroll costs, and other overhead expenses. If this is what he truly needs to remain profitable, then so be it.

 

I only wish we can be as brave at times to charge what WE need to remain profitable.

 

 

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