I’ve only been in business for going on three years and have a lot to learn about the business end. I have read every post on this forum about pricing all the way back through the pages trying to form an opinion. I’m trying to do mostly service work and commercial new construction. I shy from residential new construction because its to competitive, I don’t like having to work so fast to keep up and make money (I’m a one man shop), and I don’t get to use skills that I have worked hard to acquire. Troubleshooting, running conduit, pulling wire ect.
Anyway, back to pricing. I see people talk about high-ballers and low-ballers. It seems that high-ballers charge what the market will bear. It also seems that high-ballers think that the low-ballers are hurting the trade and themselves. Which I agree on. I seems that myself and some of the other forum members could be considered mid-ballers or fair-ballers. Not to be confused with low-ballers. And not to say that top dollar isn’t fair, if you can get it more power to you. It makes the rest of us look even better.
The high-ballers are easy to spot. And I see nothing wrong with charging what the market will bear. I believe that a 200 amp upgrade is worth more than most of us charge but maybe not quite as much as some of us charge. I believe that a service upgrade is different than your average call. More responsibility and more at stake. And we should get paid accordingly.
In my neck of the woods it would be real easy to price yourself out of business. And also many jobs I do are for people who don’t have a lot of money. And the ones that do have money are cheaper than the poor people are. If you told someone around here $4000 dollars for a service change, they would probably sic there dog on you (just kidding). The last three calls for 200 amp upgrades I quoted $1200. Two never called back and one hung up on me. I am courteous, and well known for doing quality work. I work T&M generally $45/hr resi. And 50 to 70 for commercial service work. Another contractor told me he was charging $1200 for 200 amp upgrades so I figured I would try it. It has not worked yet but that’s my price and I’m sticking to it or I won’t be doing any more upgrades. Just the responsibility is worth that. My price may go up even more because I don’t like to do service changes anyway. For 4 grand I will do the upgrade and mow your yard for the next 2 years. Anyone who says you can charge top dollar and still get plenty of work has never worked in a town like this. About flat rate My auto mechanic uses this method. Works great for him and me because there are not that many variables. For me in my business it’s to much of a gamble. Like playing poker, you win some you loose some. But we all no how poker is and I can’t afford a very long loosing streak. And if you set the prices high enough to come out a winner, the customer where everything goes right gets a raw deal and the guy that’s job causes you all the headaches gets a great deal. What’s fair about that? On Bidding No ones fault but my own. I’m a terrible bidder. I either price myself out of a job or loose my rump. My ultimate goal is learning to bid but I am not willing to risk bankruptcy just yet considering my lack of skill. I have given one GC rough estimates on two different jobs with the understanding that they were only estimates and that I only worked T&M. When the jobs were done both came out almost exactly double what I estimated. I did my best on the estimate and tried to include every mile every part and every hour. Some of the differences were extras but not all. He paid me without a complaint, I suppose because he liked my work and knew I did my best. Back to T&M With time and material every one is a winner. If I’m honest (which I am). Most people know me and trust me or someone who was happy with my work has referred me. Bottom Line is, if I know my cost and can get an honest rate/hr the only variable left is billable hours per year, which I don’t think anyone can accurately predict. If I keep my hours up I can stay afloat.
Like you I am trying to structure my prices better.
T&M penalizes you because when you work faster the less money you make. With T&M the customer will compare what they make per hour with what you are charging. They will not think about your lost time, insurances, overhead costs etc.
Start to track your times so that you can develop accurate costs and times so that your future estimates accurately reflect YOUR cost of doing business.
I went out and bought a digital voice recorder some time ago, and boy oh boy it is great for just that. It fits into my wiggie case also so I have it constantly available. Now I am into recording all the times I take for seperate little tasks and I can down load the seperate recordings via the usb cable right to my computer. (Before I couldn't, but now I have a an intel dual processor mac, and I can now do it all.) I convert them later into text and transfer to my database system. Its getting better all the time.
good luck with it all. but until you stop selling on price, you'll never make a good living.
you can't quote a service over the phone. If you want people to pay you $4000 for the job, you need to sell it. Sell yourself, sell you workmanship, sell your service, sell your promptness, sell everything.
But if someone calls you up and says 'how much?' and you tell them over the phone '$1200' all they can base you on is your price. meanwhile the guy they called before you said $1000. Since you are both simply numbers to them at this point, who's gonna get the job?
Go out, look at the job, meet with the customer, tell them $1300 (to cover your time) and you'll see that you'll start getting them.
I can also tell that you have never run your true numbers. If you had, you'd be over $45/hr for residential service. You are trying to price the 'going rate'
if you are not priced high enough to cover your true costs, you are pricing yourself out of business the same as the guy that is too high. the only difference is, you are working WAY harder to get to bankruptcy.
I don't know about you, but I can think of many other things that I would rather be doing on my way to bankruptcy. Wine, Women and Song are 3 that come to mind.
bear this in mind as well. if we do a service upgrade correctly, with good material, it will last the customer 30-40+ yrs. If material cost is $500. You need to 5 services at $1200 to make the same gross as 1 service at $4000. good luck
[This message has been edited by mahlere (edited 04-30-2006).]
I've been in business 21 years now & you're in the difficult time now kdal. It's much easier after you get a client base & reputation.
To compound your problem, Florida is loaded with retired tradesmen who made great pay & full benefits throughout their career & are now working to get out of the house & make a little spending money. This is undercutting your business. It makes everyone a little hugrier for work.
It's your challenge to figure out your expenses & what you need to stay in business. As for your estimating, by your own admission you need to double your current estimates. Try tracking your time & when you estimate, break a job down into very small pieces & estimate them as small pieces, then add them up plus a little pad for safety.
Hi All I've been reading these posts on pricing for T&M, service changes and new construction.
In my area, electricians are getting $80.00 to $90.00 per hr for 1 man...$120.00 to $130 for 2 men.
200amp service for sinlge family are around $2,300.00 to $2,500.00
And yes...we have same low-ballers doing mostly crap work which I've had to repair there kobs many times. I would rather get my price for 3 jobs than lower my cost and do 10 jobs. Most of my work is residential, additions and remodel condo's. My business is doing great. Also, with the increase cost of copper I adjust my cost accordingly. I‘m here to make money not give it away.
The model I have, Olympus VN-240PC does not timestamp entry's. It does have a schedule folder that stores entry's by the date recorded and automaticly advances every day. So you can tell what day you recorded something if you use that folder to record into. If you use one of the other three folders which you can customize to whatever you want them to store, you have no date stamp, but I just voice stamp the time and date onto my messages when I feel the need to store a time and date on them. There are more expensive models and one of them may have timestamp. Radio Shack.
My motorola i560 Nextel phone has built in voice record. I scrolled through the customize buttons options and changed my hot keys so with the press of (2) buttons (right next to each other) I am recording. It automatically stamps time and date and duration. If you want you can add a label to it.
Why carry more devices than you need?
For the downloading into PC, don't know if you can do that yet.