ECN Forum Forums General Topics of the Trade Business Related Discussion Something from nothing... How to build a bussiness?

Heh...

First, one could begin by correctly spelling "business"... Geesh...


Best I could do in emulating an invoice...

They really look much neater than this:


Materials Used
Quantity Catalogue # Description Cost Each Price Each Amount
15 3-M1700-TEMFLEX Tape Vinyl Electrical Black 0.0115 $0.01 $0.15
3 BLKADR2 Split Bolt #2 AL-Cu 2.3800 $2.38 $7.14
6 BLKECS2 Cable Strap #2 SEU 0.2960 $0.30 $1.80
1 BLKSEC2 Entrance Cap Weather Head #2 SEU 11.8770 $11.88 $11.88
1 BLKWT4 Connector 1-1/4" SEU Weather-Tite 4.7360 $4.74 $4.74
1 BURPENA-1/2 Penentrox Oxygen Inhibitor 0.9936 $0.99 $0.99
4 FASTENER Lag Bolts 1/4" x 1-1/2" 0.2500 $0.25 $1.00
2 NEEC-1251-R Connector 1-1/4" SEU 1.1050 $1.11 $2.22
9 SCRHHD10X1-1/2 Screw Hex #10 x 1-1/2" 0.0418 $0.04 $0.36
2 S-CWA164 Reducing Washer 2" to 1-14" 0.9350 $0.94 $1.88
1 SQD-QOM100VH Circuit Breaker Main 100A 120/240V 79.990 $79.99 $79.99
20 WALSEU2/3AL #2-3 SEU Service Entrance Cable 1.053 $1.05 $21.00
Subtotal $133.15
Sales Tax 6% $7.99
Total Materials $141.14
Labor
Time In Time Out Hours Date Rate Total
18:30 19:30 1.00 3/6/05 $25.00 $25.00
11:40 12:15 0.58 3/7/05 $25.00 $14.58
13:35 15:05 1.50 3/7/05 $25.00 $37.50
9:30 12:00 2.50 3/8/05 $25.00 $62.50
Total Labor 5.58 Man-hours $139.58

Total Amount Due $280.72

Overhead and Breakdown:
2 bounced checks ($60.00) Total Bounced Checks
3 Trips to BGE @ 75 min ($22.50) Total fuel costs
& $7.50 fuel 3.75 hours not billed
9.33 Total Time
$57.08 Money Left for Labor
$6.12 Average hourly wage



[This message has been edited by sparky66wv (edited 03-13-2005).]

Sorry about that - had a fire call.

Well, I'm not in the $100k/yr club for my sparkshop, but here's a few pointer/questions/comments about your sheet...

Why billing for less than a full hour unless doing "favor " for the proverbial "little old lady" or a repeat customer? I mean, if you're at 61 minutes, it's one thing. If you're at 78 minutes...

Why not charging for trips to supplier (assuming that's what BGE is)? I charge for trip to supplier & back (part of overhead, if that's the right "category" for it), but not for repeat trips (if I screw up and miscount something - if it's a customer extra then it's billed).

Where's your materials markup? Once again, unless doing a favor on a severe break for the "little old lady" on the corner, my mats get bumped.

Do your have a "Miscellaneous parts, hardware, and accessories" category? Mine flexes between $25 and $100 depending on the size and complexity of the job, and includes small supplies used in less than 1/2 of a sales or stocking container (box/bag)or a loose number (usually 10 or so) like screws, wire nuts, conduit connectors, couplings and straps and the like. It also loosely includes 10-14 AWG runs of CU wire less than 25' - more than that, I'll buy a reel and bill.

Consider a little more beneficial pricing:

3 BLKADR2 Split Bolt #2 AL-Cu 3@$5 = $15
1 BLKSEC2 Entrance Cap Weather Head #2 SEU $20
1 SQD-QOM100VH Circuit Breaker Main 100A 120/240V $100
WALSEU2/3AL #2-3 SEU Service Entrance Cable 20' @ $2/' = $40

Total "hard" (line item) supplies = $175

Misc. Supplies
6 BLKECS2 Cable Strap #2 SEU
2 S-CWA164 Reducing Washer 2" to 1-14"
1 BLKWT4 Connector 1-1/4" SEU Weather-Tite
1 BURPENA-1/2 Penentrox Oxygen Inhibitor
2 NEEC-1251-R Connector 1-1/4" SEU 1.1050
9 SCRHHD10X1-1/2 Screw Hex #10 x 1-1/2"
4 FASTENER Lag Bolts 1/4" x 1-1/2" 0.2500

Total Misc. Supplies = $50

New Supplies total (with a very modest markup) = $225.00

Labor:
3/6/05 - 1hr @ $25.00 $25.00
3/7/05 - 1hr @ $25.00 $25.00
Trip to supplier 2 hr@25 $50.00
3/7/05 - 2hr @ $25.00 $50.00
3/8/05 - 3hr @ $25.00 $75.00
Total Labor 7 Man-hours $225.00

Additonal Charges - Returned checks - $60.00

New total $510.00

My cold call rate is $80/hr - I'm a lot more likely to bill by the 1/2 hr for that rate. I usually bill at least $40/hr - that's for direct referrals and repeat customers. The only time I drop below that is for very good friends, and other contractors at the FD - then it's the going rate - $10/hr and pizza

I charged $25/hr doing electrical as a "handyman". Being licensed and insured is worth more.

I think you're shorting yourself - both in terms of hourly rate and materials. Of course, I don't know your competition and area, but give it some thought.

[This message has been edited by DougW (edited 03-13-2005).]

Doug,

BGE is my supplier, but they don't carry SQ-D, so another check was written for another supplier.
Got the call on Sunday evening, Lineman shows up at my house. Cool, love to help. He thinks its a bad main. I find loose lugs throughout and a crackling Main.

Monday: Being the only thing we can replace without an inspection, I opted to change the main first, which was full of ladybugs and was crunchy and iffy, but it didn't fix all of the problems.

So we open the Meterbase, sure enough, corrosion city.

I pick up a meterbase at BGE, free-of-charge, there seems to be enough slack in the cables, and the lineman will see-no-evil if I can get a meterbase and he'll hook-up with no inspection.

Tuesday: OK, so I wait for him to show up to disconnect, and the weather knocks out the power... OK, so I climb a ladder and cut the drop myself so I can start to work. Then I find the SEU to be totally unsalvageable and rotted, and all of the fittings are solid fast.

Crap... third trip... get it all back together in 2.5 hours, which was the whole job, the rest being redone.

No inspection, saved the customer a thousand or so... easy.

Lineman didn't make it until Wedesday for hookup... Good thing I hooked up illegally or customer would have no power for four days.

I'm sure they really appreciated it...



[This message has been edited by sparky66wv (edited 03-13-2005).]

On a Sunday evening I might consider charging overtime or double-time, perhaps also an Emergency Response Charge. You might also consider having a Travel/Service Charge, and also a minimum fee. I think the Service Charge alone would have been very helpful for you in this situation. You should also be charging for the time to go to the supplier.

Dave

P.S. $1000 job-10% discount= $900, not $280. There's a big difference between discounting it and giving it away.

Another invoice... This time is WAS a little old lady on oxygen during a power outage...

Transfer Switch Installation

Materials Used
Quantity--Description------------------------------Cost Each---------------Amount
6-------WireNut Wire Connectors--------------------0.0120------------------$0.06
1-------Twistlock Plug Male 120/240V 20A---------19.0280---------------$19.03
1-------Twistlock--Plug Female 120/240V 20A----25.2630----------------$25.26
1----Transfer Switch 120/240V 20A 6-Circuit-240.0430-----------------$240.04
4--------Screw Hex #10 x 1-1/2"-------------------0.0418------------------$0.16
20-------Cable 12/4 SOW---------------------------0.6342----------------$12.60
0---------Motor Oil SAE 30 Quart--------------------1.1900--------------$2.38
1--------Gasoline 87 Octane Gallon-----------------1.9900----------------$1.99
-----------------------------------------------------Subtotal------------------$301.52
----------------------------------------------------Sales Tax 6%-----------$18.09
----------------------------------------------------Total Materials---------$319.61
Labor
Time In-----Time Out----Hours-----Date-------Rate -------Total
13:10--------14:25-----------1.25-----3/8/05-----$23.38-----$29.22
16:05--------16:40-----------0.58-----3/8/05-----$23.38----$13.64
17:10--------17:55-----------0.75-----3/8/05-----$23.38----$17.53

------Total Labor------------2.58-------Man-Hours---------$60.39

------------Total Amount Paid----------------------------$380.00




---------1 bounced check------------($30.00)------------Total Bounced Checks
--------2 Trips to BGE @ 75 min--($15.00)------------Total fuel costs
--------------------------& $7.50 fuel--------2.5------------hours not billed
------------------------------------------------5.08------------Total Time

----------------------------------------------$15.39------------Money Left for Labor
------------------------------------------------$3.03------------Average hourly wage



[This message has been edited by sparky66wv (edited 03-13-2005).]

Revised my original response - had a fire call. Sorry

Let me start by saying I’m not Mr. Electric Success either. But I do understand some things.

Let me get this strait.
You own your own business.
You did some service repair.
You charged to the penny and last screw what materials cost you.
You charged a labor rate of $25 per hour which sounds more like a pay rate.
You charged to the .01 of an hour.
You did not charge a service call fee or figure in several trips.
You did not charge anything for overhead, profit, or figure extra for problems (like a bad check).

I can’t tell you what you numbers should be. I would have figured of charging 1 days rate of at least $400 (8 hours x $50). I don’t think you can figure a rate of less then $50 but it should be your numbers. Then about $200 for materials. Service work gets more money also. Add $50 for a 2nd trip if you foreseen that. Add $100 for leeway and misc. (like a 3rd trip or bad check). That come to $750 and that might be too low.

For the bad check fees you should charge the customer that. Don’t take a check the 2nd time. I don’t know if the local police will help you collecting. Writing bad checks is a crime but not enough is done about it. Right or wrong I may be doing a disconnect until I collect cash payment if I got stiffed.

A lot could be said about your situation. You should try reading all what has been said on this forum. Seems like a lot of guys are making the same mistakes.

To sum it up you are running your business like a job. You punch in an out to the minute on the job. You think your getting $25 an hour but wonder why you are broke. You turn in receipts to the customer, like you were buying material for a company with your cash and just want to be paid back.

You already know you lost on drive time, fuel, & material pick up time. How much of that $25 an hour is paying for taxes, retirement, insurance, accountants, truck upkeep, tools, equipment, advertising, collections, legal expenses, training, payroll, and PROFFIT.

You need to figure your overhead, come up with a real labor rate per hour & day. You need to charge mark up on material. Don’t itemize the repair bill. Just give the customer one number like $750.

You will need to do big changes or you will be better off working as an employee for an EC. Working for someone else gives you a lot more benefits and rights.

Tom

I guess I should mention that the bad checks were ones I wrote for materials... (not the customers checks...)

It's a self-perpetuating problem, Virgil. You aren't charging enough for the service, so you don't have the money for...materials, gas, another truck, advertising, tools. It's a strange concept for non-accountant types like us, but if your overhead is $35/hour and you're only getting $25/hour, you're losing $10/hour. The only thing that will fix it is to lower your expenses, or increase your average annual hours invoiced, or increase your hourly rate.

Dave

The Transfer Switch Deal was a real humdinger...

The "Heart-String-Tension" scenario played heavily...

Power out, lady on oxygen...

The second trip to BGE was for the correct sized chord ends... I'd asked for 20A, but got 30A Twistlocks... Didn't he notice the 12-4 SOW? He got that right! Grrrrr!

Ironically, both these jobs were local, within a few miles of my house, but the important thing is distance from the supplyhouse, not home!

Then, the rest of the story. I finally get everything connected, then I check the oil before a test run... it's empty... bought on ebay and drained for shipping.... OK, another trip, this time to the gas station, which isn't reflected in the invoice breakdown...

Well, gas station doesn't have name-brand 30W oil, just multi-viscosity... so, I buy the cheap crap. Mistake...

Oh you see this coming don't you...

No I didn't have to buy her a generator, thank God....

But after a 30 second run, the oil foamed just like a blown head gasket in a water cooled engine, but this things air-cooled... Huhn?

So a call to my sax player / head mechanic friend. Water or Air he says...

So I drain (in 20ºF mind you...) and flush with Kero (no charge for the two gallons of Kero I ruined) to rid the foamed oil. OK, second try, same result.

Go back next day and neighbor got to be the hero and I'm stuck with a Quart of Pennzoil SAE 30W...

*shaking head ruefully*

[This message has been edited by sparky66wv (edited 03-13-2005).]