ECN Forum Forums General Topics of the Trade Business Related Discussion Electrical Success

It seems to me that charging $150.00 per hour sounds great, but if it only goes towards the additional overhead associated with increased advertising costs (full page phone book ads $15,000 / year) shiny new trucks, crisp uniforms, dispatchers, increased travel time & unbilled hours, increased fuel costs, increased insurance costs, etc., then you will still only be able to offer the same service that can be offered by other, less "inspired" contractors.

No?

IF I knew nothing about business AND I had $20,000 of expendable cash, then I might could see how joining one of these organizations could help. But having been in sales jobs for quite a few years in the past, as well as doing a fair amount of research on the internet, I think that I have gained enough information to do flat-rate work and develop my own flat-rate pricing system. It's not exactly rocket science, after all.

From a practical standpoint, I have dealt with the public long enough to know that anytime you can legally and morally not disclose information about your pricing - the better off you are. As a property manager and homeowner myself, I want to know up front how much the work is going to cost so that I don't get a huge bill that I wasn't expecting and end up in a major dispute with someone. In fact, I have even paid a little more to get a job done at flat-rate than it probably would have cost me to have it done on T&M just for the simple fact that I was guaranteed a specific price that I could bank on. So, there is no doubt in my mind that flat-rate is the way to go for service work.

Insofar as the "system" is concerned, I think that there is enough information available on this forum to set up a pricing system without spending $2500 on special software. If you're good in Excel, you can easily set one up yourself that does all of the math for you. I track my time on each job, then compare it to the times listed in the National Electrical Estimator to see if I am slower or faster than the national average. I have found the NEE to be pretty accurate - if not a little generous.

As far as scheduling and the actual service is concerned, just use a little common sense as to how you would like to be treated when someone comes to your home. Call Sears and have a technician come out to clean the coils on your refrigerator or something, then watch what they do and ask the guy questions. They get their money for service calls up front, over the phone. They show up on time and cover their shoes with protectors before they come in the door. They are clean-cut, wear clean uniforms, and drive clean vehicles with clear graphics. In fact, you can learn a lot just by observing other service companies and talking to their technicians - such as plumbers, HVAC, computer services companies, and the like.

A little time spent on research can easily save you $20,000. After all, even companies like ESI started out with one guy doing a little research. If he can do it, I figure I can too.

Redsy: I can assure you that ESI members charge well above $150 per hour. Of course its all tied in standardized pricing, so unless you can get charged for a "diagnostic fee", you will never be able to guess the amount. And there is nothing wrong with any of this, in my opinion. Each business has costs of doing business, and frankly, thats all that matters. Figure your costs of doing business, and what type of profit you need to make and THAT is all that matters. Who cares what Mr. '87 Malibu station wagon is charging, and who cares what the most expensive ESI member in your area is charging? Its not REALLY relevant to you. You are in business to make a profit. PERIOD. Thats the long and the short of it.

TNSunny: Why not call all the electrical contractors in your area with big YP ads, and see their act. Pay their dispatch fee, ask them to price this list of stuff you need to do in your house (your wife has a list I bet), and learn... The lessons will be priceless, and you can see how the other guy lives. Plus its OUR industry, not Sears or Mr. Plumber.

If you have an ESI member in town, more reason to see the "Act".

Good Luck

[This message has been edited by dougwells (edited 01-17-2006).]

Just going to paste this from the gereneral thread

electure
Moderator posted 11-23-2005 07:42 AM
--------------------------------------------------------------------------------
Did you understand that? Not too difficult, huh?
OK, then putting dirty words in your posts with a symbol in place of one of the vowels is no different, is it? The meaning isn't changed in the slightest.
I've posted this info every couple of months now in one place or another, and it doesn't seem to be getting any better, instead I end up editing more and more posts for this kind of j*nk.
CUT IT OUT....please. This ruins some pretty good posts with good information.

Use a thesaurus, think for a minute for a different word, do something, but stop this practice. I'm going to begin sending entire posts to the trash can if it keeps up. There's no reason for this on ECN. Remember, this site is "G" rated.

Thanks

Here is the Thread
https://www.electrical-contractor.net/ubb/Forum1/HTML/006554.html


[This message has been edited by dougwells (edited 01-17-2006).]

BTW i have had a request that if this topic gets into any heated discussions that we move it to Wed Business Chat Room
Thanks


[This message has been edited by dougwells (edited 01-17-2006).]

Belectrician,

I would like to invite you, to join us this wednesday evening 01/18 at 9:00 PM ET, on the Business Chat, please reply if you will be able to join us.

Thank you,

Les

I would be glad to join you tonight. Let me know how to get in the chat room.

Brooke

In response to Kiwiholland's post on the previous page.....

1) Do you sue attendees of your Success Days for sharing info they learned at Success Days? And were you not so surprised to learn that you were making nearly as much money suing these prospective customers, as you would make getting their business, that you freely share with/warn attendees about this?

*We do not make it a practice to sue attendees of Success Days. If this were the case, we would not have much interest in attending. Whomever told you this was either misinformed, misunderstood, or just plain wrong. We do have the right to enforce our intellectual property. This means that anyone that is not licensed to use our materials (management, marketing, group buying, training, pricing, etc.)...basically anyone who copies our info. without permission (non-members) do not have the rights to our stuff. We have had people try and they are typically stopped. No one likes to go to court or sue anyone. Generally, I would think that the expense would outweigh the cost.*

2) What is Better about ESI than Nexstar?

*We are not Nexstar, so I can not speak for them. I also make it a policy not to demean competitors and recommend the same to client members. I can say that I would rather get advice from a profitable company that is already using the same materials that we give you to generate nearly a hundred million dollars in sales throughout North America in businesses that our parent company owns. The stuff is proven to work every day. Nexstar was founded by people that are now members of our organization (especially on the electrical side). It was also formed out of members of our predecessor organization Contractor Success Group (CSG) in the early 1990's. We invented this industry. ESI is the only company of it's kind focused only on independent electrical contractors. This is not the case with Nexstar or any other group. Most of all, electricians should choose ESI because the proven success of our membership base.*

3) Other than the idea to look in old phone books for the numbers of competitors that went of business, would you throw us another bone from the vast group of tips you share with attendees? The guy from ESI who profiles members of the Electrician Board, I believe named Troy, told me that obvious one. He called me 5 or 6 times, but could never remember my first name. Felt like I was buying a mattress.

I am sorry that you felt that way. Our sales dept. is not staffed with trained advisors. We do not always want them to know everything about the system, because giving parts of it away is not protecting the interest of our membership base who pay to have the rights to utilize our tools. Keep in mind what we give you is a system. If you use only parts of it, it can only be partially successful. For example, if I gave you the rights to use our yellow pages and your got a huge volume of phone calls but did not use a proper phone script to book the calls, did not dispatch for profits to maximize revenue on those calls, did not utilize StraightForward Pricing and our recommend SOP for running each service call on those calls to maximize revenue and service to the client, you would not be nearly as effective as members that do all of these other basics.*

4) Would it be fair to say you have collected at least $4,000,000.00 in revenue from your first 200 members? AND would it be fair to say ESI will make at least $10,000,000.00 when its goal of 500 members is met? Is it true that these figures are only for the first years fees, and don't include revenue from the yearly dues?

*I have done some quick math and I do not think that these numbers are quite accurate. At 500 members in weekly fees this would probably be closer to $5M. This is assuming that the company runs operationally excellent, does not have to float members that struggle in the beginning, does not have notes to finance members, etc. However if this were true, we would not need to staff the number of accountants that we have. In my eyes this revenue is peanuts. If we were an electrical const. company that was fairly well established $10M/yr would be simple. We have some members that do 4 times this amount with their const. dept. It is true that you do get acess to the best staff of people in the contracting industry for less than the price of a minimum wage worker!
Your weekly fees amount to much less than one call per week. The amount of additional revenue on this one call (from using our stuff) will actually pay your dues. So if you are asking if I think we charge too much...my answer is definitely "no." Back in the early 90's our founders charged what we do today (15 years w/o inflation is pretty good.) Most of our growth has come from starting other successful entities.*

5) Would you share some of the comments made by those who decided they didn't want to follow your systems, and backed out. No specific names, just real comments. Did those people get their $20,000.00 back?

*We have had people that have not used our info. to improve their companies. This number is very, very small. Most of them were potential start-ups. I say potential b/c it actually requires that you put forth the resources to start a service company. Two guys were journeymen for electrical utilities trying to start this up in their spare time. One was transfered to the day shift and that basically ended his attempt to be a businessman. One just could not devote the time to hiring someone, training that person, etc.
We had one person that was a FedEx worker. His wife was not for him leaving to start the company. He ended up quitting and trying to come back and had the same problems. Three went bankrupt before they could get off the ground...Oh the horror stories I have heard in Industrial and Const. Work. One guy sold out to another member. We have a few more. What really gets me are those guys that join and don't use the stuff for a long time. Yes, they actually pay all this money and let the stuff sit on a shelf. These are ones that bug me the most.
We don't make a policy of chasing struggling contractors and financially breaking them...we would not have a great reputation and would not be a financially strong company if we did this. Imagine if you treated your clients that way. How successful would you be?*

Brooke

To enter the chat room, simply click on the oval icon (above left, under the flag) that says "ECN chat." Your name and password are the same as what you use here.

Thanks Brooke
For your very professional response to the members questions.
The following thread should explain in about the 5Th post how to log on tonight.
the Chat starts about 9 pm EST and some are a bit earlier.
https://www.electrical-contractor.net/ubb/Forum1/HTML/004291.html

[This message has been edited by dougwells (edited 01-18-2006).]

Kiwisholland: I'm not sure that I fully understand your reply. I'm an electrical contractor myself - I just happen to be the property manager of a shopping center as well.

In regard to the dispatch fee, I don't know of any EC's in my area that charge them. Everything here is free estimates and free dispatch. It definitely makes it tough when one company is trying to charge a reasonable trip charge and the rest do not.

With respect to "its OUR industry," I'm not really sure I understand what you mean. My only point was that Sears and other service companies have a much better system than most EC's - especially those in my area. I have learned a lot about how to run my own business by simply watching what they do. That's why in the near future I intend to have my secretary/dispatcher to run the customer's credit card for the trip charge before I even head out to their home. At least then I'll know that my expenses are covered if I don't get the job.

Finally, I believe that no business model is going to be a perfect fit for everyone. It all has to be tailored to fit your business plan and your market area. So, the information that I am sharing is simply my opinion and what I believe works for me in my area.

Thanks for your response and best wishes to you.

Sincerely,

Kevin