I think you will always have a percentage of customers that either won't pay or wan't a reduced price. I track this as bad debt on my P&L statement and figure it in as overhead so it gets included in my price structure. I quess its just another business expense like insurance, phone, gas,etc. You have to pass the expense on to your customers. All you can do is try to reduce your bad debt costs as much as possible. Thats why I like to give them the price upfront and get a signature before I begin any work. The ones that don't pay get a note not to do business with them on my computer when I look up their name. If a customer insists on a breakdown I can show that I only charge them what the material cost me, but this will increase the labor rate so they will complain about that. Your higher labor rate might be easier to explain though. If another contractor charges half the labor rate that you charge, you can explain to the customer that he isn't saving anything if it takes him twice as long to do the job. You can justify your higher labor rate by providing service superior to the other guys. Your labor rate is higher because you only employ the best electricians and to do that you have to pay them more and keep them well trained and motivated to do the job correctly. The customer may be able to find the exact same part that you installed cheaper somewhere else, but he isn't going to find the exact same electrician cheaper anywhere because he works for you. Not all parts are created equal and not all electricians equal. You have to pay more for the best.
[This message has been edited by A-Line (edited 11-24-2004).]
[This message has been edited by A-Line (edited 11-24-2004).]
