Hi,
I can imagine that for a large company with about ten employees the estimating job gets a little tougher. Myself I am a sole proprietor so it is relatively simple to calculate what my expenses are. First I have a home office and I have only one rig.
I have advertising, telephone, fuel, office supplies, tools, etc to consider.
My expenses are relatively low. The amount of work I can do varies depending on the type of work it is. Some work depends on the logistics of the job.
I usually charge $45 per hour for labor on everything residential, ($55 for Comm)
A lot of times I will just propose a lump sum for the job. This usually works out better for me.
Sometimes I will determine how many hours and how much material and how many trips, permits etc and figure it up that way.
I used to give an itemized list of each part used and cost but I stopped doing that, I will only show the parts and no individual cost but a total material cost. This helps because the client will ultimately wonder why he paid $20 for a GFI that he could pickup himself for $13. I will show the labor hrs and rate, show the show up fee.
Sometimes I just use a standard agreement that spells out the scope and amount and payment terms. This works really well.
The labor rate is where the overhead comes in. I can get 15% on parts and sometimes a little more. Labor rates are hard to determine. I like to pay myself at least $35 per hour. That leaves only $10 per hr. to cover everything else.
If I try to up my rates I will price myself out of work.
I want my company to make a profit not just pay my wages.
A lot of outfits have several hands on a single job when I will not.
I realize there is only so much a sole proprietor can expect to earn but I want to maximize that amount.
If I cant clear $50K for wages and retirement, then have profit left in the business then a body is almost better to forget it and just show up somewhere else to get the $50K and do a lot of side work.
I know that the majority of Electrical contractors are 10 hands or less so I am not alone.
I waste a lot of time trying to pin down every locknut and how much time it takes to install it so I have almost gotten away from any specialized methods of making proposals.
When you make a proposal and never even hear back from a potential client that makes on stop and think about why the job did not come in.
On some jobs I always walk away wondering if I have left money on the table.
Calling contractors and asking what they charge is a waste of time in my book.
The big EC's will make a few million on a single project.
I appreciate all the great references I will certainly look into all of them.
Thanks for any suggestions!
-regards
Greg
[This message has been edited by mustangelectric (edited 01-29-2005).]
