This is a major reason for small business failures. Labor alone will not sustain a business, material sales are as big if not a bigger contributor of profit on a bid job.
This customer won't like it, but I would tell him that your labor rates for a job where material is furnished by others is 10% higher, and it will be a charge per hour, not a quote on the estimated time if you were to furnish material.
This would also add to the senario presented by Steve, in that while my crew waits, they are on the clock and said time is being charged to the customer.
I mean why deliberatly try to go out of business, in the best case, another person besides this one is going to try to help you.
Re: Bid breakdown?#25845 05/21/0312:57 AM05/21/0312:57 AM
Outside of specialty items, such as light fixtures, whoever buys the materials installs the materials. If you included $500 to go to the race track what difference is it to the customer? You made it clear what work would be done for what price. If you do the job for labor only make sure you tell them it is for actual labor hours. Include travel time, time shopping for materials they didn't get and stand around and bulls**t with them hours. Good luck Russell bob
Re: Bid breakdown?#25846 05/21/0307:51 AM05/21/0307:51 AM
And what about warantee callbacks. If you has purchased the materials and made a profit on them, well then by the quasi standard of the industry, at least around here, for 1 year, we'll come back and replace a defective part. However, if Mr. Penny Pincher is so tight, you might remind him that those would be T&M service calls. Elecbob is right; bigger chain stores such as WalMart, McDonalds or such supply the interior lighting package or lot lighting package. They lock in not only price, but uniformity, special fixtures if needed, and usually a free from the manufacturer lighting design. If there is a problem with even 1 fixture, any addition time incurrec can be billed as extra. It depends on how good a customer the GC is I guess if you want to nick him for a small item, but larger blocks of time would be expected. I know times are not the best, but too many contractors bite at the carrot dangled in front of them only to find it tainted. Roger is right also. Material problems, the job grinds to a halt, on the customers dime; Hell, if you had supplied the materials they would have been right , and on time.
Re: Bid breakdown?#25847 05/21/0310:54 AM05/21/0310:54 AM
Hi guys: I'm not an electrical contractor, but the concept of "you fetch, I install" bothers me for two reasons; 1)The quality of some items sold at the big orange or big blue stores leaves a lot to be desired - which means that Mr. Pennypincher will usually purchase the lowest quality items for the EC to install (sacrificing safety and durability along the way), and 2)Some items may not be suitable for use together in every instance.
This is where the EC's experience kicks in. He (or she) knows from experience what components work well together and which ones don't. If you are going to hire an EC to do the work for you in a professional manner, allow him to do the WHOLE job.
I had my own construction company for a few years. My view is that you've got to make $X every day to stay in business.
You can make it on high labor rates or make it with lower labor rates and mark ups on materials. Either way, you can't afford to walk away with less in your pocket.
Asside from the PITA factor of depending on the HO to have what you need on site when you need it, letting them buy materials CAN'T effect your take home. If you don't get to mark up materials, your labor rate had better double or you're only working for wages. If you want to work for wages, you're better off doing it for someone else who can provide insurance, a vehicle, health benefits, holiday pay, sick time, and money for warranty service. You can't work for wages and pay for all these "extras" for yourself.
If you let the HO buy materials and give up the markup, you're getting taken advantage of.
To get a good answer on this subject try your auto mechanic and tell him you brought your own parts. Or Try telling the plumber you will supply all the pipe and fittings. Roger has the answer, your material mark-up is what makes your business survive. The customer that wants to supply the material is a caution flag, that means I may not be able to find my checkbook.
I've been trying to think of a time when a situation like this had ever worked out for me, but I can't.
Maybe a simple way to look at is that it takes time to estimate and plan out a job that includes an accurate and complete material list. A markup on materials helps to pay for the time involved in laying out a job.
Quality and suitability of materials aside, sometimes things have to change depending on unexpected circumstances encountered. And having the flexibility to change methods and materials along the way instead of being committed to using what someone else bought can be a big deal.