Are You Charging Enough? Average Heating Business Prices
As seen in Issue 174 (September 2023) of Registered Gas Engineer.
In the trades world, pricing is everything. If you’ve got a busy schedule but are struggling to make ends meet, your prices are almost certainly too low – and it’s an easy trap to fall into. A couple quotes lost due to “high prices” or customers trying to haggle you down can be all it takes to get the idea you’re charging too much.
You’ve got to make a living, though, and businesses that don’t charge enough have to rush around from job to job—resulting in poor service quality and unhappy customers.
Now, we get it – pricing isn’t perhaps the most thrilling of subjects. But it’s important to get right because it affects the amount of profit you make, the number of customers, and the overall success of your business. In this article, we’ll cover questions like:
What should you be charging?
As a software provider for 6000+ businesses, we’re in a unique position to see the average pricing trends for different areas. Completely anonymously, we’ve broken down the average price of common gas engineering jobs across the UK.
To get a better idea of how prices have changed over the years, we’ve shown the average pricing figures from June 2023 and five years ago.
| Region | Median Labour Cost | Median Gas Safety Cost | Median Call Out Cost | |||
| June 2018 | June 2023 | June 2018 | June 2023 | June 2018 | June 2023 | |
| Yorkshire and the Humber | £38.00 | £56.00 | £56.00 | £63.00 | £55.00 | £76.00 |
| West Midlands | £43.00 | £53.00 | £47.00 | £54.00 | £61.00 | £72.00 |
| South West | £35.00 | £40.00 | £57.00 | £73.00 | £58.00 | £71.00 |
| South East | £50.00 | £60.00 | £69.00 | £74.00 | £75.00 | £70.00 |
| London | £75.00 | £64.00 | £65.00 | £66.00 | £76.00 | £81.00 |
| North West | £41.00 | £52.00 | £51.00 | £58.00 | £56.00 | £76.00 |
| North East | £32.00 | £47.00 | £53.00 | £57.00 | £60.00 | £90.00 |
| East England | £52.00 | £60.00 | £52.00 | £69.00 | £62.00 | £85.00 |
| East Midlands | £33.00 | £43.00 | £59.00 | £59.00 | £62.00 | £68.00 |
| Scotland | £34.00 | £49.00 | £49.00 | £50.00 | £63.00 | £64.00 |
The June 2023 figures show a recent average of where your competitors price themselves in your region. If you charge less than the average but are constantly filling up your calendar, you should look at increasing your prices.
By striking a balance, your revenue will either maintain its level with fewer hours or increase with the same number of hours – a win-win scenario.
Why should you avoid underpricing?
Setting low prices can look appealing and you’ll probably attract more customers because of it. But there are a few major downsides to it:
- Lower prices mean less profit per job.
- Raising prices later while keeping your customers can be incredibly tough.
- The type of customer after a cheap job are often not those who remain loyal and return for repeat business.
- Low prices and busy schedules are a one-way ticket to getting stressed and burnt out.
- It’s often a race to the bottom with pricing.
- Slim margins mean that it only takes one or two jobs that go off track to wipe out your entire month’s profit.
What are your personal and business goals?
Ultimately, every business owner needs to think about what their short and long-term goals are. It’s best to break these up by personal goals and business goals.
Business goals should always be formulated to help you reach your personal goals, and pricing is at the very core.
- For example, you may wish to have the freedom and flexibility to travel the world and work remotely for part of the year. For this, you would need the business to grow and expand such that you can step away from the tools and manage a team instead.
- You may also want to have more free time and work fewer hours. For this, you would want to look at ways of increasing profit margins.
Pricing affects these goals because it can change the way your business works. Do you want:
- To maintain a small-scale operation?
- Drive growth and hire more employees?
- Position yourself as a high-quality service provider?
- Run a highly competitive and economical business?
It’s up to you where you want to position your company in the market, but the one common thread is that pricing too low makes any of these difficult to achieve.
What do the most successful businesses do?
We’ve noticed two distinct characteristics that separate successful businesses from the rest:
1. – The majority of those earning an above-average revenue perhead are charging more than the median for individual tasks. Meanwhile, those charging well below the median earn far less.
The fact that the companies that charge slightly more can still fill their calendars suggests that a significant portion of gas engineers under-price their services.
2. – Running an organised company that does the basics well helps to provide real value to customers and sets you up to charge a premium.
How can you start getting paid faster?
Gas Engineer Software is all-in-one job management software made specifically for heating and plumbing companies. Charging a bit more of a premium is far easier when you’re able to provide a better service to your customers and, more often than not, it’s the little things that make a big difference.
Professional and paperless quotes, invoices, and certs, showing up on time, having all their details on hand, and easy QR code payments – these are all made easy with Gas Engineer Software.
Try it out for free with a free trial. No card details required until you decide it’s for you.
Next steps:
If you’ve been thinking about implementing software into your workflow to save time, here’s what you can do next:
- Visit our resources centre where you'll find more articles like this one and our free gas rate calculator.
- Start a free trial to see exactly how our software works for your business.
- Watch our video demo to get an idea of how our software works. You can also book a 1-on-1 session with our customer success team for a more personalised experience.
- Know an engineer who's still using paper? Help them and us out by sending our software their way!
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