The trip is the product
On small tickets, drive time and dispatch often cost more than the wrench-turning. Pricing only the on-site hour is how shops stay “busy” and broke. The minimum ticket must recover all clock time the call consumes, plus truck and office cost, then leave a real margin.
Cost stack
- Field labor hours = techs × (drive minutes + on-site minutes) / 60.
- Field labor cost = field labor hours × burdened crew rate.
- Dispatch cost = (dispatch minutes / 60) × office labor rate.
- Direct cost = field labor + dispatch + vehicle/fuel + parts cost.
- Parts sell price = parts cost × (1 + markup%). Markup here is over cost; it is not the ticket’s net margin.
Minimum ticket (margin formula)
To keep a net margin of m on the whole ticket:
minimum price = direct cost ÷ (1 − m)
Not direct cost × (1 + m). That markup shortcut underprices every call (a 20% markup on cost is only a 16.7% margin).
- Trip / diagnostic charge (no parts sold) = (field labor + dispatch + vehicle) ÷ (1 − m).
- Minimum repair ticket includes parts cost in the direct-cost stack, then applies the same margin formula. Parts markup revenue is shown separately so you can see contribution, but the minimum still uses cost-based margin so you do not double-count.
Waived-fee bleed
Weekly cash left on the table ≈ waived calls × (minimum diagnostic − what you collected, often $0). “Credit the diagnostic toward the repair” is fine when they buy; the loss is the declined calls where you still paid drive and CSR time.
Sources & assumptions
- Margin vs. markup and cost-plus pricing are standard managerial-accounting definitions (e.g. Horngren, Cost Accounting; SBA small-business pricing guidance).
- Burdened shop rate = wage × (1 + burden) / utilization + overhead per billable hour — see also the companion Corbelworks job-profit break-even calculator for building that rate from payroll and overhead.
- IRS optional standard mileage rate is a published floor for vehicle cost (updated annually by the U.S. IRS); van-based trades with tools and higher insurance often exceed it — treat the mileage rate as a lower bound, not a target.
- Service-industry practice of separate trip/diagnostic fees vs. bundled minimums is widespread in residential HVAC, plumbing and electrical; the math here is cost-recovery, not a claim about any one trade association’s recommended price list.
- Defaults are illustrative placeholders. Confirm your burdened rate, workers’ comp class and real drive times. This tool is an estimator, not tax or accounting advice.