ECN Forum Forums General Topics of the Trade General Discussion Area Making Money

Hi LK

For your info i did not miss,payroll costs.
also if a seviceman wants to be paid for 8hrs he has to show 8 hrs of billable time, if not you are running a charity.The only time i want to see time on his time sheet that is not accounted for on an invoice, had better be put towards a bid project.I rarily will pay a man just for the sake of paying him,their are times that this will happen but in no way should it affect you bottom line.

GETELECTRIC,
It is difficult for a small business to schedule service stops, It comes down to scheduled time, which may result in a work day ending at 3:00 instead of 4:30, this hour and a half is not billed, or the Call ended at 11:00 and the next job is at 1:00 so the $75 an hour covers the time not billed, and is not money in my pocket, or that excess you showed with your figures.

Now the way you figured, can work, and does work, when you are able to assign a man to 40 billed hours. Contractors that have men, doing maint, and installations in office buildings are very sucessful with this, however they charge a lower rate for the study work.
And no, I will not send my men home early without pay.

[This message has been edited by LK (edited 08-27-2004).]

Electricmanscott,

Everyone knows you're marking stuff up, it is no secret. Keeping the amount a secret creates mis-trust. So if the customer knows how much a circuit breaker cost, as they can easily find out, and reverse engineer an invoice, as people do. They look at it and say, "Hey, I just paid $50 for a $30 item! Wonder what else they're #%^king me on? Was that light fixture really $500?" If they know right off the bat, that you are marking up, and how much, you'll find yourself doing a lot less negotiating/bickering at the end. Not to mention if the customer trusts you, he'll be a lot more likely to call you back. This for T&M invoices, bid prices are different ball game. Tell them you'll charge an hour to break it down for them.

And, you can not tell people NOT to do side work. But they should understand that their day job suffers because of it. If the local going rate is $75-80, and they're out there on the week-end charging $35 cash as your compitition. (No license, permit, insurance, taxes or 'comp.) They have no right to whine when they ask for a raise and don't get it, or bussiness is slow and they get laid off! The underground economy accounts for big losses to the market. If we were not competing with our employees, we could charge more, and pay them more! Right now, I'm an employee, but been on both sides as an employer too. (Still do some side BUSSINESS on the up and up, at market rate.) Had to close because as a start up, I was competing with that underground, and go back to work for someone else.

Everybody should go to- www.nosecrets.com click on "pricing for profit" in the left hand menu. When you get to that page, click on the "Labor rate calculator" button in the center of the page. Once there you can change the numbers written in blue to fit your own personal situation. You all might be suprised by the numbers and what you need to be charging to make the profit you want. I sure was!




[This message has been edited by Pat@Amber (edited 08-27-2004).]

Everyone knows you're marking stuff up, it is no secret. Keeping the amount a secret creates mis-trust. So if the customer knows how much a circuit breaker cost, as they can easily find out, and reverse engineer an invoice, as people do. They look at it and say, "Hey, I just paid $50 for a $30 item! Wonder what else they're #%^king me on?

This is one subject that makes me mad enough to kill!

ITS NONE OF THE DAMN CUSTOMER'S BUSINESS HOW MUCH YOU PAID FOR AN ITEM. Period. End of story.

I couldn't care less if some cheap SOB goes to Home Depot and can get something for less. If they have that attitude they can install it too! I'm not even going to go into WHY you HAVE to mark up material and how you should arrive at the prices you charge.

The customer is supposed to trust me because I tell them what my markup is? Don't give me that crap! Hell, why not just show them your tax return so that they can decide whether or not they are paying you too much.

If you have to prostitute yourself to these people to get work you really need to look at how you present and promote yourself and your business. When was the last time you asked someone how much money they make? Apparently you command little respect or these people wouldn't have this attitude in the first place.

The last time a customer questioned why he was charged $20 for an item he found on line for $10 I removed the charge from his invoice as a courtesy and informed him that I was no longer interested in his business. THAT'S how you treat those kind of people.

This guy lived in a 2.5 million dollar house. I didn't ask him how he made his money, he damn well isn't going to tell me how to make mine!

-Hal

[This message has been edited by hbiss (edited 08-27-2004).]

When the issue of prices comes up, I tell the customer that we charge more because we warrantee the items. If it fails within one year, we will come back and replace the item, free of charge. Let them try to get that from Home Depot.

hbiss,
If it makes you mad enough to kill, come on down.... (A good thinning needs to happen...) 'Cause we could deal with a few less 'round here. I'm sure you don't compete with illegal immigrants on slave wages, or low ball artists from tinckerville. So come to SF and see if your numbers work here?!? Without being in court for hours at a time. (justifing it to Judge Judy down at lein court..... Trying to command respect....)

"The last time a customer questioned why he was charged $20 for an item he found on line for $10 I removed the charge from his invoice as a courtesy and informed him that I was no longer interested in his business."

What if that was every customer? Welcome to my world!!!!

We just tell them up front, if they don't like it.... They do have to do it thenmselves.

Hal,
Please go into why we have to mark up material and how we should arrive at our prices. It would be a big help to all of us.

Anybody try the labor rate calculator?

Pat

Pat, I'll attempt an limited explaination of why we have to markup, but hopefully someone will expand on it.

When I got started and was working by myself I used to never markup my materials. I had about $2000 in inventory on the truck alone. Some items sitting there for years before they got used. If I had that money invested in the stock market I could count on 8% per year. If you don't markup, you lose that at the least. Second, it takes time to purchase materials, stock them, inventory them, etc. Nobody pays you for that time. What if a part is bad or your helper fries a $50 1000watt dimmer while installing it. Is the customer going to pay your time while you drive to the supply house and either exchange it or have to purchase another out of your own pocket? I doubt it.

We actually buy many items so much cheaper than home centers sell them for, that our mark up makes our price only slightly higher, so we don't get many complaints.

Hot topic- Materials are marked up for all the reasons already listed- we all purchase quantities at advantageous times(low prices on emt, wire) for obvious reasons and hold stock, just like the retailers. The retailers also aren't sitting handily in the parking lot, like our vans; the retailers also won't return to repair under warranty,labor included. I will not compete with retailers or even supply houses, if it becomes an issue with a customer, we tell them either that we won't install materials we don't provide(except lamps), or we will not warranty their materials AT ALL.(they pay for all labor, travel, diagnostics) This shows them the value of our policy. I think the "how can I make a living at this" question gets easier as you develop faithful customers and more word-of-mouth referrals. Our experience is that when you come well recommended, the customer will respect your judgement.(Every satisfied customer will refer 4 people, every dissatisfied customer will refer 10) It took about 10 yrs to realize that I didn't always "win" when I competed for EVERY job that came by. But, to get back to markup, everyone knows that the retail market will sell items at below cost(loss leaders) to get you in the lines. Also using one large orange place as example, many manufacturers are building special low price/quality product lines specifically for this retailer. A large device manufacturer(starts with 'L') makes a particularly cr@ddy line of dimmers to compete pricewise. It took a while to identify these products as we came across them-item number was same with a letter added, but the performance was less than supply house identical line. And which would you use in your home- Homeline or QO?