Running a trade business incurs a lot of different costs, and a key focus for a lot of business owners is to avoid losing money unnecessarily. This is why call-out fees were created, helping businesses prevent wasted time and energy when jobs don’t pan out.
But not every business charges a call-out fee, so what is it, and is it really worth it for your business to charge one?
What is a call-out fee?
A call-out fee is a fixed cost that a tradie or service business charges to attend a service call and inspect a potential job. Importantly, a call-out fee refers to attending to a call before any actual job or work is confirmed, and is charged whether the professional ends up completing a job or not. It is designed to compensate for the time taken to attend to the call, the expertise used to assess a problem, and the preparation of a quote. It is also used to compensate when attending a call outside of regular working hours.
Call-out fees are really common in trade and service industries, helping to ensure businesses aren’t losing money when their time and people are pursuing potential jobs, though they are not mandatory. The actual cost can vary between businesses and industries, as well as depending on factors relating to each individual case.
It’s also worth noting that a call-out fee differs from a charge-out fee. Your charge-out rate is the amount you charge a customer for a unit of your labour, usually an hour. This is for confirmed jobs and based on your labour, equipment and overhead costs.
The benefits of charging a call-out fee
Running a business involves a lot more than just making money, but it is a really key aspect. If you’re always doing work for free, it’s hard to keep growing your business, which is why charging a call-out fee comes with a lot of benefits.
Cost-covering
The main advantage of a call-out fee is that it places a firm value on your time and labour, covering your time and your employees and ensuring you don’t experience a financial loss for trying to get work. Call-out fees also help to cover practical costs, like the fuel used to attend calls, and the regular overhead involved with running a business.
Filtering
Call-out fees can also work as a filter on the type of work you take on, helping you to avoid wasting too much time on jobs that won’t be worthwhile. If you attend a service call but the job doesn’t end up looking too good, the call-out charge covers you. Similarly, if the client isn’t truly serious about hiring you, a call-out fee ensures you don’t lose out, and you can ignore the time wasters and focus on the clients who are genuine.
Professionalism
Using call-out fees also helps you conduct your business more professionally. It shows to clients that you are serious about your work and value your skills, while also ensuring you don’t have to inflate your service prices to cover costs, letting you remain competitive.
Opportunity
Instead of losing out on potentially lucrative jobs just because they fall outside of your regular work hours, a call-out fee shows clients in need that your expertise is always available. If you take time out from a holiday, off-day or even outside of your regular hours, you can still earn a fair return.
Disadvantages of call-out fees
As we’ve mentioned, you don’t have to charge a call-out fee if you don’t want to. In fact, a lot of tradies choose not to so they can have a competitive edge in the market. If you do charge a fee, it can be a disadvantage if you have a lot of competitors who don’t. It’s worth checking what other local businesses are doing. You can still charge a fee even if others don’t, but it will mean you need to prove your value over them to clients.
Some customers may be put off by a call-out fee too, which can mean you lose out on work. It’s always important to showcase your expertise and the value in choosing your services, and you can consider waiving the call-out fee as an incentive in the right circumstances. But you always need to be aware of the value of your time and skills.
How much should you charge for a call-out fee?
Each business’ average call-out fee comes down to individual choice, but there are a number of factors that typically influence that cost. Those factors include the distance needed to travel to a service call, the time of day (including whether it is inside of business hours, on a weekend, or a holiday), and the level of service required. You also need to consider whether any materials and equipment will be required to assess the problem.
It’s important to price call-out fees correctly, because over-pricing them will mean you miss out on a lot of opportunities, but under-pricing will eat into your profits. Some businesses offer to waive their call-out fees if customers proceed with a quote, but this is again up to each business owner.
When should you charge a call-out fee?
Some businesses will charge a service call-out fee for every call they attend, but you can reserve them for specific circumstances as well. Common situations include emergency repairs, which often occur after-hours, as well as appointments where you are only trying to assess and diagnose an issue.
Call-out fees are good for simple, one-off jobs to make them worthwhile financially. Similarly, they also work really well for complex jobs, allowing you to visit an area and develop an accurate quote for a client.
Again, you don’t have to charge a call-out fee, and many tradies will avoid them for regular customers, or potentially waive them as part of marketing promotions to win new business. Whether you do or not, it’s all about transparent communication.
How to do it right
The most important thing you can do when charging call-out fees is to be upfront and honest. Make sure all the key details — including the cost, what it covers, and any potential policies for waiving it — are clearly communicated and not hidden away. Additionally, try to be consistent: charge your fee based on the same calculations, and only waive it in the same circumstances each time. If you waive it too often, word can get around, undercutting your credibility.
Keep your trade business humming along
Adding a call-out fee might be a good choice to help your finances, but it’s not the only way to add a boost to your business. Signing up to Mira will also help you avoid wasted time and lost money, while giving you access to full-service business management software.
With in-built job scheduling, quote and invoice generation, and integrations with leading accounting platforms, Mira makes business easy as. Start a free trial today, and experience the ease for yourself.