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#38906 06/05/04 06:53 PM
Joined: Feb 2004
Posts: 33
D
Member
Thanks guys, I really appreciate it. I think I started low hoping to get the jobs and a good reputation. I like the idea of how much I need to make per day, it puts it in perspective. Nobody cuts us any slack and yes, thinking back, all that schooling and remember the apprentice days? Well I am going to look at a book on estimating which may help also. I have a freind who is a general and he calculates what he thinks it should be and then doubles it. Thanks again you guys were great help.


One of the better ones-
Electricians do it without shorts.
#38907 06/05/04 07:11 PM
Joined: Dec 2001
Posts: 444
S
Member
I dunno... the oil companies don't seem to find it too difficult to raising the price of gas. The government has no problem raising taxes in our area. The local mechanics garage doesn't mind billing me an exorbitant charge per hour to repair my vehicle, and think, I have to bring it to him! When we do calls, we have to spend (waste?) our time driving to the call and performing the service, whether a big job or small. Business is business.

#38908 06/05/04 10:21 PM
Joined: Dec 2003
Posts: 524
Member
... I'm in the same boat,... (tho' I'm too stupid to buy a paddle).. I still give customers a break,now and then,..(more now than then)..but I manage to break even.It's not easy,by no means..I've developed a decent client base,built on referrals,and word of mouth..Still I yield to the sob stories,the heartbreaking saga's of the elderly people,and pressures of charging a decent buck..Sometimes I make out,sometimes I lose..They must see me coming...maybe one day I'll grow a spine and tell everyone where to go,..but that'll be after I'm retired,..I guess..Delectric,you're far from being alone in this quagmire..Trust me.. Follow your gut instinct and charge accordingly..thats all I try to do.. My rant is complete..Good Luck,man... [Linked Image] [Linked Image]
Russ



[This message has been edited by Attic Rat (edited 06-05-2004).]


.."if it ain't fixed,don't break it...call a Licensed Electrician"
#38909 06/06/04 06:42 AM
Joined: Dec 2001
Posts: 300
M
Member
Operating costs for a one man operation. Note, these are "real" costs:
1. A good family medical program - $700 per month minimum.
2. Vehicle, gas, ins., payments, depreciation, tires, tune up, repairs, etc. - $670
3. Office supplies including stamps - $30
4. Acct and attorney, if and when needed - $50
5. Magzines and books $40
6. Business taxes - $100
7. Telephone - $50
8. Cellular phone - $100
9. Travel & entertainment - $50
10. Seminars and Trade Shows - $125
11. Uniforms - even just jeans and shirts - $45
12. Small tools - $15
13. Software and upgrades - $30
14. Marketing & Advertising - $200
15. Office Equipment depreciation - $75
16. Liability Insurance - $300
17. Workers Comp OR Disability insurance - $125
18. Bad Debt - $100
19. Guarantee work $100
20. Future Capital Expenditures - $100
21. Owners draw ($1000 weekly) - $4333.00
22. Bookkeeping - ($150 per week) $650
With no provisions for retirement, no vacation pay, no sick time, no other perks and benefits a real job gets you, it comes to about $7950 per month. Anything less and you're kidding yourself. Divide that by about an average of 32 "production" hours per week at 46 weeks for a total of 1472 man hours per year, or about 122 man hours per month. Divide that $7950 by the 122 hours and you get $65 per hour - COST of doing business. Add the profit you want.

The overhead cost items listed above are far from being excessive, but are realistic as to the true cost of operating, it you wnat to treat yourself as a legimate business owner. I do't see how anyone can operate without charging anything less than a minimum of $70 per hour. Notice, I've not included the many hours spent on sales calls, estimating, typing contracts, etc. Nor do I include a reward just for being in this very difficult business and the inherent many and varied liabilities assumed.

It doesn't matter if the profit is taxed directly to you as a sole prop. You're also taxed at twice the rate of everyone with just a job. As a minimum, you are writing a quarterly check to the IRS for 1/3 of your income

Being a nice guy, it feels better to do your customers a favor on price. But the result is always poor quality work,hurrying to get done to get to the next job to get the next check, substituting the best materials for less expensive ones, and nothing left over in the bank to honor warranty work if you get a call back. The customer suffers. Charging prices that let you do the job right and be in business the next time they need you is good for you and the customer.

Quality is remembered (or lack of it) long after price is forgotten. If you want referral businesses, provide the absolute best qualiy in product AND SERVICE. And charge accordingly.

#38910 06/06/04 06:52 AM
Joined: Jan 2002
Posts: 1,457
E
Member
Well there it is guys. Not alot more to say. You either want to make money or you don't. If you do you have to charge accordingly. It is that simple.

#38911 06/06/04 01:12 PM
Joined: May 2003
Posts: 1,158
Member
I have to say Thanks very much. I have been stuggling with my over head costs for far too long.This really has put it in perspective.

#38912 06/22/04 10:38 PM
Joined: Nov 2001
Posts: 328
B
Member
To resurrect a thread I'll add some 'costs' that maintenanceguy didn't mention but alluded to:
- the firsthand cost on your mental and physical condition when there's too much month left at the end of the money,
- the secondary cost on you when your adoring and supportive spouse accepts the predicament as a shared burden to be overcome when there's not much, if any, paycheck after your monthly obligations are met,
- the 7-day a week schedule you keep just to ensure your business runs as smoothly as possible and you're not behind schedule when you arrive (earlier than anyone else) on Monday morning,
- the dental appointments you or your family schedule every 5 to 10 years with the dental school because they're free or really, really inexpensive,
- the haircuts you allow your significant other to give even though they aren't the best and you say "thanks" and put on your hat,
- the six-pack of beer or soda you feel guilty over because it's truly almost a luxury...
- and so on...

My dad owned his own business (non-electric) and for years, as did my brother-in-law and I know it takes a lot to make them successful - but charging appropriately is a good place to start.

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