Got a call from a small office building owner in Youngstown — maybe $800/month electric bill with Ohio Edison. He wants an audit but my gut says the potential recovery is too small to justify my time on a contingency basis. What's the lowest monthly utility spend you'll take on? Is there a rule of thumb for when to say no?
What's your minimum engagement size — is any account too small to audit?
I won't take anything under $2,000/month on straight contingency. Below that the potential recovery just doesn't justify the hours. But for smaller accounts I offer a flat fee audit — usually $500-750 for a single-account review. Client pays upfront and I deliver a written report of findings. If there's a recovery opportunity they can pursue it themselves or hire me on contingency for the claim portion. That way I get paid for my time regardless and smaller clients still get value.
My threshold is $1,500/month but I'll go lower if it's a multi-account client or a referral source I want to keep happy. One small account that leads to a portfolio of 20 locations is worth doing at a loss. I also look at the billing complexity — an $800/month account on a simple commercial rate probably has less error potential than an $800 account with demand charges, power factor penalties, and riders. The more complex the billing the more likely I'll find something.
Both Sarah and Art make valid points. There's no universal minimum but you need to value your time. A quick way to screen: if the account has demand charges and has been on the same rate for more than 3 years without review, it's worth a look regardless of size. If it's a simple flat-rate commercial account under $1,000/month, a flat fee review is more appropriate than contingency. The flat fee approach also works well as a door-opener for new client relationships.
Ended up offering the Youngstown client a $500 flat fee review. Found a sales tax exemption he qualified for that was worth about $85/month. Not huge but the client was thrilled and referred me to two larger accounts. Sarah was right — sometimes the small ones lead to bigger things.