As my dad found out from running a TV Repair business back in the day, no two repairs are a like. Some repairs take 15 minutes and little to no parts - others take hours and many expensive parts (like the tube on the TV). You didn't mention parts - so I'm going to assume you charge the customer separately for them.

If you are finding that the bulk of your repairs are the simpler ones, then consider the flat rate and be willing to lose money on the extreme repair cases. If it is the other case, then you will soon be out of business by only charging $150 if it takes you all day to fix this.

Consider this option - a flat rate with the caveat of a lengthy repair. So, the $150 flat rate, unless it exceeds 5 hours - then you charge something reasonable per hour, like $25. Have the customer check a box when dropping it off if that is acceptable - or a different check box if you must call and get their approval first.

Separate topic - a consumer can get a new desktop for $300. Are they really going to spend that on a $150 repair?

Good luck in your business!
Tim aka Ridlrtim

The answer depends on who you think should bear the risk of loss. If you set a flat rate, you bear the risk of having to spend many hours on a repair without being compensated for that time. If you think the customer should bear the risk, you should charge by the hour.

In the latter scenario however you need to address the customer's concern that you may not be as efficient as the competition in repairing his/her computer, or that you may not report the hours honestly. Failing to properly address such natural concerns will probably drive customers away.

In either scenario you also need to set your pricing correctly, which depends on two separate considerations. First, you need to turn a profit, or your business will fail. Second, you need to make sure your pricing brings in enough customers.

The first of these depends in turn on your labor costs (or the amount of money you need to make per hour on average if you're both the business owner and the repair person). The cost of parts needed should also be considered unless these are charged separately.

The latter consideration is more complicated. You need to not only provide better value than your competition but also to make the repair a more attractive option that replacement with a new computer. There will be many computers that are simply not worth repairing. An older computer that can be replaced with a faster machine for $300 or $400 should not be repaired at a cost that's close to half that amount, since there will likely be more repairs down the road as other components fail. You should provide value for your customers by steering them away from such a repair. This will give you a reputation for providing honest and good service, which will bring in more business down the line. Though it is best to be able to beat your competitors' prices, it is almost as good to have comparable pricing but better service.

As a customer, I would like to know the approximate $ amount of the repair job to decide whether I would want the computer to be repaired.

“$50/hr (Could Take 3 hours)” will mean: $50 to unknown amount, most likely $150, whether successful or not.
“$150” will mean: $150 if successful, $0 if not successful.

Which is better also depends a lot on the final outcome.

For “$50/hr (Could Take 3 hours)”, I(customer) will be unhappy if:
1. try much longer than 3 hours, thus overrun $150 a lot.
2. try but unsuccessful, and charged $.

For “$150”, I(customer) will be unhappy if:
seems easy job (for e.g. take only short amount of time to solve or no part changed) and charged $150, feel cheated.

An alternative pricing method will be:
fixed cost (parts replaced etc.) + variable cost (hourly pay)
If you go to customer’s place to do the repair job, transport fee should be included into fixed cost.

I think an hourly rate sounds fairer. People know that some things are complex and take time and other things can be done more quickly.

Regardless of your pricing and how you want to charge, what you have to remember is that you're a business, therefore, do a little research around your area to see what the competition is charging and always do better than them. You want to have your price do the work of drawing customers for you. We're all consumers, even if you own a business. So a balance of profit for you and deal for them is needed to draw customers in. Then when you have a strong client base, you can shift to a different charging system. The hourly charge is the standard, and most profit for you. Use the consumer pricing method of "99" so instead of $40 its 39.99 per hour, it's psychologically less. Hope this helps and good luck with the competition research.

If I'm taking a computer into a repair shop, I have a few questions in my head before i'd decided to pay for the repair.

1) would the money be better spent on a new computer? If its going to cost $150 to fix my elderly laptop might want to save the money and put it towards the cost of a new one...

2) Is what you're proposing as a fix reasonable. Knowing that $80 of the cost is involved in replacing the graphic card with a particular one (that i can know the price of) reasures me as a customer. I know where the money is being spent.

3) A cost for labour is fine... If you are doing data recovery... or something that requires a level of technical skill. However I would be horrified if that hourly charge was being spent on time where you were running checkdisk or a virus scan. I don't think that you'd do this.. but the biggest computer chain in the uk certainly
did

In all I'd want a quote for a flat fee... with a break down between parts and labour. If when you're doing the work it looks like its going to cost more, I'd expect to be told before you do the work so I can decided if i want you to do it.

If the real price is a bit over the quote, I'll be ok with that... but if the price comes in below it you'll get my business next time

As a customer I'd prefer to hear a fixed price, with an explanation of why the price is at the level it is. e.g. "I can do that for $200 all in. It'll probably take three hours work and I'll have to get about $50 worth of parts."

The reason I prefer a fixed price is that unlike you, I don't know how good you are at estimating the amount of work. And with something like this, an extra hour needed (if it is $50) could swing it between getting a repair, or going for a new PC.

The only reason I need to know the breakdown at all is to see if I'm being ripped off. If the amount of work seems implausible, maybe I'll ask around to see what others quote.

As long as you are good at estimating, you can probably charge a small premium for providing the certainty of a fixed price.

If you are going for an hourly rate, you might do well to provide the certainty of an upper bound. "It's $50 an hour, and I guarantee it will take no more than three hours."

Btw, you might find some useful resources on the Pricing Strategy page.