guys, help me with this... i am one man operation, form time to time i seek the help of other electricians. the problem is... ,my wiring practices are different from that of my associates. on the jos site we get into , "how to" ... i want i done my way. sometimes i think ,the job will go better if i did it alone. any of you guys ever had this problem?

Well, yes and no.

On the "big job", I teamed up with another EC and good friend of mine. We decided to go into an unofficial "co-op".

He admitted having no experience at bidding (lucky b_____) and wanted me to handle it. I figured, hey, if I'm doing the work involved and am taking the risk, then I want to be the EC and he can be a sub.

This was a good plan assuming I'd make a profit, but we ended up coming in at a loss.

To make a long story short, paying him $30 per hour and a 20% markup on materials was a bad idea, seems I was paying a lot for him to disagree with me, and he also made some questionable decisions and got ahead of the game which caused problems later. We had almost $1000 in "not productive labor" for the job. Ouch!

So, no, it's not worth it to pay someone T&M to stand there and argue with you while you're losing at a bid price.

We ended up splitting the earnings in percentage of investment which saved me paying him almost another $600 in the end.

I'm now gearing up to get an apprentice for a helper.

Too many Chiefs and not enough Indians...

sparky, most of my jobs, i let the gc buy the materials, in that way he will owe me for labor only. that is the way like to do business, in case there is a problem with payment, i do not get screwed as bad. after the rough-in i always collect half the job labor amount. how do you guys handle the money collection process?

mj why would you loose the 25% or more mark-up you could make on the material? Supply houses will set up a job account for material used on a project and help you collect if the material portion is not payed. Dont you file an intent to lien when you start a project? It is ec's like you that let the gc's take advantage of our trade. I was asked to bid a project for a gc he told me his budget for the electrical work, I laughed when he told me his number. I had recently completed the exact same job and his budget was only $2,000.00 dollars over my cost on the last one. The project took 600 man hours and material cost w/ tax was $10,00.00, he wanted me to do the job for $23,000.00 I declined but he for another (sap)contractor to do the job. Our trade is the most important and complexed of any of the other trades and we need to be paid well for our services. If we as a group would stand up to the gc's we could make money like we did in the past.

mj,
as to your original Q, i have worked for many other electricians, and do it thier way when employed by them.

i think we all have our own methods/nomenclature/standards, so to simply respect those who's hand feeds is appropo...

as to contractual/payments/making $$$ methods..... simply put.... if your not ......stay home & watch opra

surge, i just dont think its right to mark up the cost of material 100-200 percent, i am in this business to make a fair profit, and not to rip-off my clients. most of the general contractors know the "real cost" of electrical materials. i know that the electrical trade in more techinical advanced then the other trades,but we must maintain our sense of fairness.

MJ, If the GC is going to have everything on site for you and go to the supply house and pick up anything else you need, then it's OK to let them buy it. But otherwise you should get at least 20% mark up for handling the materials. I refuse to let a home owner or contractor buy materials, not because I want the mark-up, but because the never buy the right stuff. I tried it once and ended up spending more time and money getting the right stuff than if I had just bought it myself anyway.

When I got started I provided materials at my cost and only wanted the labor, but I soon found that I wasn't being paid for about half my time. So unless you charge for driving time and the time at the supply house, you're ripping yourself off.

[This message has been edited by Electric Eagle (edited 11-24-2002).]

that bears emphasis EE......

Home Depot has taken care of our mark up. Mister home electrican shouldnt be able to buy a breaker for the same price or cheaper than we can buy it at the "WHOLESALE" house. MJ how much mark up do you pay for all your everyday needs? Gas, food, tools? Im sure 100% is on the low side. So what you are saying is that it ok for everyone else selling goods to make a profit on items but not the electrical contractor?

Surge....... can you hear me laughing??

I'm not sure I agree with this. I have only seen one supply house that won't sell to the general public. Furthermore, why do most suppliers stay open from 8-12 on a Saturday? Yeah, I know, a lot of electricians work on Saturdays now, but quite a few of the guys in there on the weekends are "Harry Homeowner."

The majority of the supply stores I have shopped at will sell their products for the same price that contractors pay. Money talks.

I agree with Eagle, you need to geet a markup of a min 20 %. I personally use the 1.5 x mat which most agree that that is 50 %. i look at i at 33 1/3 % myself.
for hight dollar items I lean more to the 20 and 25 % margin.
anyone else care to take a stab at it aout the mark up ect.

I have some commercial customers who prefer to purchase all of the materials. I let them know up front that my hourly labor rate is $45.00 per hour when I supply all materials and $55.00 per hour when I do not. I haven't had anyone argue with this arrangement.
Residential customers would probably throw a fit over something like this but commercial/industrial customers are more apt to understand that my hourly rate is much more than wages. It covers the cost of wear and tear on tools and equipment, insurance, fuel, vehicle costs, taxes and lost time. It's hard to get 8 billable hours in a 12 hour day. When I work for a commercial account who is supplying materials I start the clock when I get there and stop it when I leave for the day and subtract what time I took for lunch if I took any. I had this arrangement at a small manufacturing company where I worked every day for 21 months. They said that $55.00 per hour was a bargain. They figured it would have cost them $72.00 per hour for wages, benefits, their half of SS, tools and equipment and safety training. Then they would have to worry about retaining that employee. They also limit their employees to a maximum of 54 hours a week. I had to work many 60-70 hour weeks to meet construction schedules. It was a good gig for me and a real cost effective solution for them.

Did someone say Harry homeowner? I though he lived near me! I have one guy (J-man) who helps me occasionally but I then find myself more concerned with keeping him working than getting thigs done. And when he puts my stuff away in my truck....agghhh!

Why not just use the list price that's what it's there for as most other type of service companys do. and it has a built in markup that's fair

Markups on material are sort of silly.

If I hire a person to shop for food for me, they charge the cost of the food plus the cost of their time.

If I hire an electrictian to shop for materials for me, he should charge the cost of the materials plus the cost of his time.

You can keep the quantity discounts for combining my job with other jobs.

You can keep the 10% or more dicount theat many businees apply the end of each month.

You can keep the leftover parts (wirenuts and such).

If you have a cost plus contract and you add a markup to your costs, you may have legal problems one day.

roger that,george . i agree with you, sell the material for what i paid for it, any other cost with be labor.

George and MJ, would you run over to Best Buy and pick me up a t.v? Oh and make sure you only pay what they paid for it. Not going to happen. Guys I assume you are not in business because you need a little economics lesson. The markup covers the time spent to procure the items, (trip to supply house, phone calls searching for oddball items, etc)It also gives a bit of cussion for warranty work if needed. The most important reason for the markup is to make a little profit which is the reason I am in business. Quantity discounts? 10% discounts at the end of the month? Where do these things happen?

Contractors need to pay sales taxes, so you must add this to your markup for quarterly's & year end totals.

Of course here, all one need do is cross the state line to NH, and whala!, no sales tax
(applicable to the DIY'ers, as any running account takes in your biz residence)

Another issue is in the contractor 'backing' materials used.

There will allways be a % of failure to be addressed, especially as the level of quality slips ( many factors...)


and if you get food posioning.......

>>>If you have a cost plus contract and you add a markup to your costs, you may have legal problems one day.<<<

George, adding a markup to your cost is the definition of "cost plus".

All my cost + contracts have a cost + 10 to 25% of materials PLUS labor at 45.00/manhour. This is clearly stated in the proposal and in the contract. All costs (including taxes)incurred for a job are billed. The markup is for the overhead you pay when you use your nonbillible time to get and account for the materials. Some one has to pay for all the "office" expenses. If you sell materials for what you paid for them then you need to bill your customer for your "office" expenses. I doubt that you will get a customer to pay for your business insurance when it comes due.

Finally someone gets it. NEsparky Id say you are a successful business man. For every dollar you bill out to your customers it cost X number of cents to operate your business (duhhh).