ECN Electrical Forum - Discussion Forums for Electricians, Inspectors and Related Professionals
ECN Shout Chat
ShoutChat
Recent Posts
Canada for the win
by gfretwell - 12/06/22 08:28 PM
Tiny Homes and the NEC
by gfretwell - 12/06/22 01:43 AM
EMC Glands on Motors
by Trumpy - 12/01/22 06:12 AM
Ground Rods: Installation and Hook-Up
by Trumpy - 12/01/22 05:54 AM
Happy Thanksgiving all!
by gfretwell - 11/30/22 05:55 PM
New in the Gallery:
240/208 to a house
240/208 to a house
by wa2ise, October 9
Now you know.
Now you know.
by Tom_Horne, September 7
Who's Online Now
0 members (), 21 guests, and 12 robots.
Key: Admin, Global Mod, Mod
Previous Thread
Next Thread
Print Thread
Rate Thread
Page 1 of 2 1 2
#157891 02/06/06 05:18 PM
Joined: Aug 2001
Posts: 466
Likes: 1
J
Jim M Offline OP
Member
For those struggling with setting their prices, here are some thoughts.
http://journals.iranscience.net:800/www.pmmag.com/www.pmmag.com/CDA/ArticleInformation/features/BNP__Features__Item/0,2379,3743,00.html

Latest Estimating Cost Guides & Software:
#157892 02/06/06 07:16 PM
Joined: Jan 2003
Posts: 1,429
L
LK Offline
Member
"There will always be good plumbers who are poor businessmen, charging less than they can afford."
___________________________________________

There will always be good customers, who are looking for good work, and willing to pay, they also expect your business, to be in good condition, should they need your services in the future.

#157893 02/09/06 10:57 AM
Joined: Apr 2005
Posts: 35
V
Member
Thanks and questions.

First the thanks. I enjoyed the article and agree with its basic points – you should take the risk & headaches of running a business only if you are rewarded with higher pay than working for someone else; to do this, you have to charge enough to cover ALL costs – depreciation, office help, taxes, etc., etc, etc.; if you want to make money in service work, you need to build a reputation for quality, not low prices.

Here is the question #1: Something does NOT compute in the article. Is the going rate really $35 per hr for service work and a ONE-MAN-SHOP has to charge $83.99 to make the trip worthwhile? What is going on here? I think part of the answer is that overhead & profit costs per job decrease with number of crews. For example, if Ron hires a crew or two, PART of his overhead and his profit target don’t increase but the number of jobs increase. This means he can charge less per hour and still put the kids through college. However, I find it impossible to believe that even with 10 crews, he can get them even close to $35 per hour. Perhaps someone can enlighten me. Is the $35 per hr just plain wrong?

Here is Question #2: What is the approach used by the “Flat Rate Book” folks to arrive at their prices? I am NOT looking for specific prices here only an understanding of the concepts and logic they use to develop them.

Again thanks

Vince R

#157894 02/09/06 12:01 PM
Joined: Jul 2002
Posts: 717
M
Member
Vince, get your hands on a copy of a book called " How much should I charge" by Ellen Rohr. It is really good mind opening stuff in there. The whole flat rate system is also included in the book.

#157895 02/09/06 08:17 PM
Joined: Feb 2003
Posts: 687
A
Member
I also found this good to read. I must say I thought I remember reading this a few years ago. Someting to keep in mind is it does not have dates so it could have been a long time ago. But the point is still good.

Tom

#157896 02/09/06 08:22 PM
Joined: Nov 2005
Posts: 507
M
Member
LK, not all overhead. for example, you have 2 people in the office, rent, phones, office equipment, computers, etc and are running 4 men. if you add 2 men, none of that will change. so the cost per man to cover these items will decrease.

you will increase, in some cases, other OH items like trucks, fuel, benefits, etc. But these should be directly covered by the new hires.

#157897 02/10/06 10:45 AM
Joined: Apr 2005
Posts: 35
V
Member
Thanks, for the book suggestion, I just ordered a copy.

I take it from mahliere's comments there are no MAJOR advantages to being big from an operations point of view. This brings back to my question re the "going rate of $35 per hour" If this it really is $35, most of the folks competing with Ron should be going out of business soon AND those in business for more than a year or 2 are 3 times more expensive than the start ups. Next time I need a plumber, I will ask him how much experience he has a plumber and how long he has been in business. I will hire the guy who knows his trade, but does not yet know how much he has to charge to stay in business.
VinceR

#157898 02/13/06 08:20 AM
Joined: Dec 2004
Posts: 52
K
kd Offline
Member
I could not get the article to load, but I assume that it was written in the 1970s and needs to have the per hour rate doubled.

#157899 02/13/06 05:20 PM
Joined: Dec 2005
Posts: 44
T
Member
The article first ran in 1989. It was re-published in June of 2000, and this is what is currently listed at the top of the article:

"The following feature story ran in the June 1989 issue of Plumbing & Mechanical. While the prices have changed since the late 1980s, this article remains as useful now as it was then."

Note that the publisher freely acknowledges that rates have changed since that time. The $35.00/hr rate ONLY applied to the going rates in the Tulsa, Oklahoma area for 1989. Even back then I'm sure the rates varied from one part of the country to another, but they definitely have changed in the past 17 years.

Kevin


Kevin
#157900 02/14/06 07:32 AM
Joined: Apr 2005
Posts: 39
W
Member
Can't view the link. Can someone email me a copy of the article? jamie@electricservicetech.com. Thanks

Page 1 of 2 1 2

Link Copied to Clipboard
Featured:

Tools for Electricians
Tools for Electricians
 

* * * * * * *
2023 National Electrical Code (NEC)
2023 NEC Now Available!
 
* * * * * * *

2020 Master Electrician Exam Preparation Combos
2020 NEC Electrician
Exam Prep Combos:
Master / Journeyman

 

Member Spotlight
The_Lightman
The_Lightman
Orlando, Fl, USA
Posts: 49
Joined: August 2001
Top Posters(30 Days)
Trumpy 6
NORCAL 3
Popular Topics(Views)
300,622 Are you busy
230,304 Re: Forum
215,084 Need opinion
Powered by UBB.threads™ PHP Forum Software 7.7.5