Is there a room in professional PAT testing for a business model other than 'per unit'?
I ask because I've been giving this some thought. I've just finished the 2377-22 course. Not with the intention of actually doing any PAT testing professionally, rather mainly for the purpose of my own 'in-house' testing for a handcraft luminaires business I intend to launch soon. Originally I was dead against the idea of offering testing to others, mainly because I think of it as rather dull and I also couldn't find any serious competition locally. You may find this counter-intuitive, but I sometimes take lack of competition to be an ominous sign for a new business idea, as to my way of thinking it may indicate a lack of demand for the product or service. If lots of people are doing the same thing, I often take that as a good sign, the only challenge being then to find a differentiator.
Anyway, I live in a tourist area and my tutor on the 2377-22 course has suggested I look into hotels, B&Bs and what not, and I've had a re-think about it. It could be done as a spin-off from my lamp business, using my machine tester, and would be a way of acquiring a bit of electrical experience on my path to (I hope) qualifying as an electrician; and, it affords me some experience of interacting with clients, maybe with a view to building up a client list of my own. Plus, you never know, I may make a bit of money out of it, if I can find a niche.
My understanding of the conventional business model for PAT testing is that you price per item tested and you have a minimum fee that you charge irrespective. Thus, typically 'Anywhereshire PAT Testers' might charge £1.50 per item tested with a minimum fee of, let's say, £50.00.
I've also noticed that one or two testing firms have a 'site fee', similar to the minimum fee, which applies at the lower end of the fee scale, and covers the provider's costs for site attendance in addition to item fees.
The per test fee tends to be scaled progressively according to number of items tested, with a 'POA' for testing over a certain limit depending on the provider's capacity - typically 'POA' might kick in at 10,000 items.
I realise that, in reality, many providers - especially the larger ones - have driven down pricing considerably, in some cases significantly below £1.00 per unit. I can only assume this is a risk sharing strategy on the part of client and provider (a sort of cost-driven Faustian bargain), in which the provider relies on value-added and spin-offs to achieve greater margins while the client is narrowly concerned with the trade-off of risk and is, in effect, paying to outsource compliance regardless of whether the provider is good, bad or indifferent. They simply don't care if the equipment is actually inspected properly or machine-tested or even looked at all.
Whatever the morals of all of this, it is commercially understandable, and the purpose of this thread is NOT to criticise it or get into a debate over the rights or wrongs of it. I merely seek to understand it because this pricing model, as I have outlined, seems to be ubiquitous to the industry. I have seen variations on the theme, but all providers seem to stick to this core model, albeit that some are more ethical than others. I have hunted high and low and cannot find anybody who departs from it - which is interesting in and of itself.
I am now going to outline a slightly different approach and invite constructive feedback:
(i). My interest would be in providing thorough, proper, ethical, competent in-service testing. I would take the emphasis off simple machine testing and instead emphasise advice/guidance about sound and pragmatic inspection and re-testing regimes for different types of devices, with the aim of both safety and long-term cost reduction.
(ii). I would charge a day rate or fixed overall job rate, rather than a per item rate. So instead of £1.00 per item or whatever, my price would be per job or visit - let's say for argument's sake, £75.00 per visit or £75.00 for the whole job.
(iii). I would visit clients with business premises over two days - the first day would be scoping, preparation and paperwork, and based on this I would provide the client with a quotation. If the quote is agreed, the second day would be the actual inspection and testing, and I would then e-mail the client the final report and invoice. For landlords, I would try to combine these steps into one single day so as to minimise disruption to tenants.
(iv). I would market my service to small, owner-managed businesses such as shops, B&Bs/guest houses, small hotels, professional firms, small officers, perhaps the smaller independent care homes, and letting agents/managing agents, HMO landlords, etc.
(v). I would set clear parameters to my service, based on my competence and capacity. I would make clear that I am not an electrician and cannot undertake general electrical work. I would seek to assist clients only with ordinary consumables that can be tested adequately using a basic device such as a Martindale HPAT600 or similar. I would not undertake Fixed Appliance Testing or testing of commercial/industrial scale equipment, especially those with switching parts. There are other exclusions, which I won't exhaust here.
(vi). I would stick to my local area - this helps me to control overheads and allows me to provide proper support to clients and makes testing/re-testing cycles more viable.
(vii). I would add value by offering free simple repairs (within clearly-defined parameters), free replacement electrical accessories such as bulbs and fuses (up to a given maximum) and discounted accessories over the maximum. I would also provide a government-licensed waste disposal service at no cost to the client in regard to items that 'Fail' and cannot be viably repaired.
Any thoughts, comments or advice? I ought to just make clear that I'm familiar with the basics of starting a business (insurance, etc.) and I've done a lot of my own research, but I have never run or offered electrical services to the public, even at a basic level such as PAT testing. It's just an idea at this stage.
I'm particularly interested in whether anybody here has tried (ii) above. If so, what was the response to that method of pricing? How was it put across to the client? If you abandoned this method, why was that?always gone
I'm also interested in knowing whether it is worthwhile joining one of the schemes for PAT testers like NAPIT?
www.tester.co.uk
