pricing

[iamelectric]

jeeeezzzz i must be well cheap i would have only took a ton plus material , am just bk from putting up an outside light for an old lady , only took 20 quid off her , i find when i hit them with a major price they just look at you as if you have 3 eyes

 

[Hawk]

Just replacing an outside light? I would have only charged 20 for that especially as she is an oap.

 

[Hawk]

Iamelectric a ton plus materials for the job I did is 160!

 

[iamelectric]

not replacing , installing

 

[iamelectric]

am not implying that other peoples prices are too expensive i know they have overheads and prices depend where you live just saying up my way everyone wants it done for nearly nothing and when you try n charge roughly what you should be they usually tell you to forget it

 

[Guitarist]

Just replacing an outside light? I would have only charged 20 for that especially as she is an oap.

Where I live, they're the ones with all the money...they just don't like to admit it.

 

[danzor]

Northern Ireland. What is the average going rate?

Depends on the area, also if your billing for 1/2 a days work you need to allow for travel time to next job etc

 

[Dave 85]

How some of you people make a living is beyond me....

I have three clients who I will work for £25 per hour for on the basis that....
I get an 8/9 hour day out of it, they give me very regular work, I don't have to view/price the jobs beforehand and they know other electricians who are as cheap/cheaper. They are all companies.

Generally speaking though, for ALL other clients I will try and price the job in advance, even just from drawings and I will be looking to make £35-75 per hour spent on the tools (including mark up on materials) depending on the type of job.
As far as I'm concerned having a set hourly rate which you use for all clients and doing quotes on the basis of (hourly rate x predicted hours labour + materials) for every job displays extremely poor business sense unless your hourly rate is £50+ and the phone is ringing off the hook.

Its all about charging as much as possible whilst....
Keeping the client happy
Keeping a good reputation
Keeping a clean conscience (I tend to go easy on pensioners)

 

[moospark]

Hourly rate o.k. materials o.k. What about factoring in the concept of profit? to grow your business? That is what gets you to the £300 figure. You are never going to come up with the dosh for a new van on £20 an hour, thats what you take out to survive.

 

[BlueToBits]

I apologise for the long rant. I have little better to do at the moment.

I can't understand why so many electricians are so keen to under-price themselves in comparison to other trades.

Plumber: £1000 on a 1 day boiler swap and £350 to sit and watch a flushing machine for 2 hours
Garage mechanic: £60 per hour + £££ in profits on parts that are rarely needed
Drain "technician" £180 per hour, most of which is spent holding a hosepipe to fill his tank
Plasterer £50 per metre (ceiling). = 1 minute 35 seconds
Taxi driver can charge £30 per hour just to sit and wait
Kitchen/Joiner £40 per hour - and he usually does his own electrics.

I don't think a business can run by charging just "wages". Prices also have to include overhead contributions. This is my guesstimate of typical overhead costs for a self employed domestic installer supervising his or her self, working for just JIB wages of approx 30K /year or £120 per day before tax.


Non-productive days per year
sick pay 5 (no SSP)
holiday pay 22 (2 weeks + bank holidays) if I'm working, I deserve holidays.
down-time pay 50 ,(approx average total of 7 hours of quiet or non-productive time per week)
TOTAL 77 non productive days per year.

Annual costs (Typical guesstimate for a 1 man outfit).

Insurances 200
vehicle depr'n 1000
fuel 500
phone internet mobile 1000
subscriptions, NIC/ECA 500
accounting IR 200
tools plant access R&R 500
banking 200
training 300
office heat & light 100
advertising 3000
office supplies& equip 100
taxes (NIC class 4) 1000
waste material 1000
waste disposal 300
bad debt 500
TOTAL £10,400

Max working days per year 253
Non productive working days 77
actual earning days 176

To earn employee wages and £10.5K in costs in 176 earning days
the daily charging rate would be need to be
£230 per day.

This is just to work for employee's wages and would not produce ANY profit, contingency or investment and assumes 30K per year for life is considered to be a 'desirable' wage.
This also assumes the self employed electrician is perfectly happy and willing to come home after a hard day's work and devote several hours most evenings and weekends to the business end of book-keeping, estimate call outs, estimate preparations, certification. filing and preparing drawings just for the love of it.

A more realistic target figure would be £350 per day.

There is no satisfaction whatsoever in running a business for the same wages that business would pay an employee. The owner of such a business would be better off working for someone else for 37 paid hours per week on the tools, and also unpaid evenings and weekends for estimating, accounting, meeting clients and catching up on work that was falling behind. By offering these extra 40 or so free hours they would almost certainly get a job. They would also be sure of getting paid holidays, sick pay, pension contributions and promotion prospects. They would not be at risk of losing their family home either. In fact, I would take them on myself, but somehow, I don't think I would get many applicants. I suspect it would work out below minimum wage, and outside the working time directive, so I'd be breaking the law by doing so.

It took me some time to realise that there are no promotion prospects for the self employed, The self-employed person is the boss from day one to the day they retire or go bust. Potential earnings will never rise above inflation without expanding the business and becoming more profitable. This needs money in the bank and regular profit. A business already running at minimum overhead cost and maximum efficiency can only increase profit by charging more. It is easier to charge more from the outset and keep prices constant than to charge low at first in the misguided hope the customer will happily pay more for the same thing later down the line. As the banks won't lend to a one man band who isn't making a profit a self employed electrician charging wage rates can never afford to employ anyone in order to expand and therefore never earn any more than they did on day 1.

Many people seem to believe that if they are working every possible hour, they are making money. So , in order to win enough work to do this they often cut their prices to become more 'competitive'. But a business that cuts it prices to win work can only sustain this if it is already profitable. If it is already profitable it won't need to cut prices. Cutting prices to win work is surely therefore then the first step down the very short and steep slope to insolvency and bankruptcy.

This site is really interesting and very revealing:
Electricians: how much should you pay? - Which? Local
The average rate charged by 100 surveyed electricians seems to be between £40-£50 per hour.

 

[Guitarist]

I apologise for the long rant. I have little better to do at the moment.

I can't understand why so many electricians are so keen to under-price themselves in comparison to other trades.



This site is really interesting and very revealing:
Electricians: how much should you pay? - Which? Local
The average rate charged by 100 surveyed electricians seems to be between £40-£50 per hour.

Great post. What worries me though, is that the prices quoted from the above link for rewiring a "typical" house don't take into account many things...
1) If it's an occupied rewire, the homeowners will want you to "get the power back on" every night.
2) Most householders say that they'll move furniture, but then conveniently have to go out or have "forgotten" (including emptying dressers).
3) Many householders want you to do all the ordering/paperwork/clearing up in your own time, as you're "not actually working are you?"

There are loads more which you guys will all have come across, too numerous to mention.

 

[VoltzElectrical]

I apologise for the long rant. I have little better to do at the moment.

I can't understand why so many electricians are so keen to under-price themselves in comparison to other trades.

Plumber: £1000 on a 1 day boiler swap and £350 to sit and watch a flushing machine for 2 hours
Garage mechanic: £60 per hour + £££ in profits on parts that are rarely needed
Drain "technician" £180 per hour, most of which is spent holding a hosepipe to fill his tank
Plasterer £50 per metre (ceiling). = 1 minute 35 seconds
Taxi driver can charge £30 per hour just to sit and wait
Kitchen/Joiner £40 per hour - and he usually does his own electrics.

I don't think a business can run by charging just "wages". Prices also have to include overhead contributions. This is my guesstimate of typical overhead costs for a self employed domestic installer supervising his or her self, working for just JIB wages of approx 30K /year or £120 per day before tax.


Non-productive days per year
sick pay 5 (no SSP)
holiday pay 22 (2 weeks + bank holidays) if I'm working, I deserve holidays.
down-time pay 50 ,(approx average total of 7 hours of quiet or non-productive time per week)
TOTAL 77 non productive days per year.

Annual costs (Typical guesstimate for a 1 man outfit).

Insurances 200
vehicle depr'n 1000
fuel 500
phone internet mobile 1000
subscriptions, NIC/ECA 500
accounting IR 200
tools plant access R&R 500
banking 200
training 300
office heat & light 100
advertising 3000
office supplies& equip 100
taxes (NIC class 4) 1000
waste material 1000
waste disposal 300
bad debt 500
TOTAL £10,400

Max working days per year 253
Non productive working days 77
actual earning days 176

To earn employee wages and £10.5K in costs in 176 earning days
the daily charging rate would be need to be
£230 per day.

This is just to work for employee's wages and would not produce ANY profit, contingency or investment and assumes 30K per year for life is considered to be a 'desirable' wage.
This also assumes the self employed electrician is perfectly happy and willing to come home after a hard day's work and devote several hours most evenings and weekends to the business end of book-keeping, estimate call outs, estimate preparations, certification. filing and preparing drawings just for the love of it.

A more realistic target figure would be £350 per day.

There is no satisfaction whatsoever in running a business for the same wages that business would pay an employee. The owner of such a business would be better off working for someone else for 37 paid hours per week on the tools, and also unpaid evenings and weekends for estimating, accounting, meeting clients and catching up on work that was falling behind. By offering these extra 40 or so free hours they would almost certainly get a job. They would also be sure of getting paid holidays, sick pay, pension contributions and promotion prospects. They would not be at risk of losing their family home either. In fact, I would take them on myself, but somehow, I don't think I would get many applicants. I suspect it would work out below minimum wage, and outside the working time directive, so I'd be breaking the law by doing so.

It took me some time to realise that there are no promotion prospects for the self employed, The self-employed person is the boss from day one to the day they retire or go bust. Potential earnings will never rise above inflation without expanding the business and becoming more profitable. This needs money in the bank and regular profit. A business already running at minimum overhead cost and maximum efficiency can only increase profit by charging more. It is easier to charge more from the outset and keep prices constant than to charge low at first in the misguided hope the customer will happily pay more for the same thing later down the line. As the banks won't lend to a one man band who isn't making a profit a self employed electrician charging wage rates can never afford to employ anyone in order to expand and therefore never earn any more than they did on day 1.

Many people seem to believe that if they are working every possible hour, they are making money. So , in order to win enough work to do this they often cut their prices to become more 'competitive'. But a business that cuts it prices to win work can only sustain this if it is already profitable. If it is already profitable it won't need to cut prices. Cutting prices to win work is surely therefore then the first step down the very short and steep slope to insolvency and bankruptcy.

This site is really interesting and very revealing:
Electricians: how much should you pay? - Which? Local
The average rate charged by 100 surveyed electricians seems to be between £40-£50 per hour.

What a fantastic and enlightened and informative post that exemplifies what a proper 'business model' should incorporate. This post should be made a 'sticky' for all those who wish to dash into the self-employed market. It's the sort of concise advice you'd expect to pay for!

 

[Guitarist]

What a fantastic and enlightened and informative post that exemplifies what a proper 'business model' should incorporate. This post should be made a 'sticky' for all those who wish to dash into the self-employed market. It's the sort of concise advice you'd expect to pay for!

Agree. I'm going to print it off to show one of my customers who thinks that £20 per hour is the "going rate" for an electrician, just because he read it somewhere...

 

[Dave 85]

I apologise for the long rant. I have little better to do at the moment.

I can't understand why so many electricians are so keen to under-price themselves in comparison to other trades.

Plumber: £1000 on a 1 day boiler swap and £350 to sit and watch a flushing machine for 2 hours
Garage mechanic: £60 per hour + £££ in profits on parts that are rarely needed
Drain "technician" £180 per hour, most of which is spent holding a hosepipe to fill his tank
Plasterer £50 per metre (ceiling). = 1 minute 35 seconds
Taxi driver can charge £30 per hour just to sit and wait
Kitchen/Joiner £40 per hour - and he usually does his own electrics.

I don't think a business can run by charging just "wages". Prices also have to include overhead contributions. This is my guesstimate of typical overhead costs for a self employed domestic installer supervising his or her self, working for just JIB wages of approx 30K /year or £120 per day before tax.


Non-productive days per year
sick pay 5 (no SSP)
holiday pay 22 (2 weeks + bank holidays) if I'm working, I deserve holidays.
down-time pay 50 ,(approx average total of 7 hours of quiet or non-productive time per week)
TOTAL 77 non productive days per year.

Annual costs (Typical guesstimate for a 1 man outfit).

Insurances 200
vehicle depr'n 1000
fuel 500
phone internet mobile 1000
subscriptions, NIC/ECA 500
accounting IR 200
tools plant access R&R 500
banking 200
training 300
office heat & light 100
advertising 3000
office supplies& equip 100
taxes (NIC class 4) 1000
waste material 1000
waste disposal 300
bad debt 500
TOTAL £10,400

Max working days per year 253
Non productive working days 77
actual earning days 176

To earn employee wages and £10.5K in costs in 176 earning days
the daily charging rate would be need to be
£230 per day.

This is just to work for employee's wages and would not produce ANY profit, contingency or investment and assumes 30K per year for life is considered to be a 'desirable' wage.
This also assumes the self employed electrician is perfectly happy and willing to come home after a hard day's work and devote several hours most evenings and weekends to the business end of book-keeping, estimate call outs, estimate preparations, certification. filing and preparing drawings just for the love of it.

A more realistic target figure would be £350 per day.

There is no satisfaction whatsoever in running a business for the same wages that business would pay an employee. The owner of such a business would be better off working for someone else for 37 paid hours per week on the tools, and also unpaid evenings and weekends for estimating, accounting, meeting clients and catching up on work that was falling behind. By offering these extra 40 or so free hours they would almost certainly get a job. They would also be sure of getting paid holidays, sick pay, pension contributions and promotion prospects. They would not be at risk of losing their family home either. In fact, I would take them on myself, but somehow, I don't think I would get many applicants. I suspect it would work out below minimum wage, and outside the working time directive, so I'd be breaking the law by doing so.

It took me some time to realise that there are no promotion prospects for the self employed, The self-employed person is the boss from day one to the day they retire or go bust. Potential earnings will never rise above inflation without expanding the business and becoming more profitable. This needs money in the bank and regular profit. A business already running at minimum overhead cost and maximum efficiency can only increase profit by charging more. It is easier to charge more from the outset and keep prices constant than to charge low at first in the misguided hope the customer will happily pay more for the same thing later down the line. As the banks won't lend to a one man band who isn't making a profit a self employed electrician charging wage rates can never afford to employ anyone in order to expand and therefore never earn any more than they did on day 1.

Many people seem to believe that if they are working every possible hour, they are making money. So , in order to win enough work to do this they often cut their prices to become more 'competitive'. But a business that cuts it prices to win work can only sustain this if it is already profitable. If it is already profitable it won't need to cut prices. Cutting prices to win work is surely therefore then the first step down the very short and steep slope to insolvency and bankruptcy.

This site is really interesting and very revealing:
Electricians: how much should you pay? - Which? Local
The average rate charged by 100 surveyed electricians seems to be between £40-£50 per hour.

Good post. Nice to see someone who actually understands the point of running a business.
one thing though.....mechanics charging £60 an hour...garages, yes but their overheads aren't comparable to that of an electrician. Most mechanics are paid peanuts. Same with most chippies these days. I wouldn't swap trades for love nor money.

 

[danzor]

Then factor in those times people try to knock you

 

[overskilled]

Had a customer asked me for a price to swap out a shower (supplied)
Quoted £50 (bout an hour and a bits labour but an easy job that can easily go pear shaped so told her would be about 2 hours)
I'll have to think about it was the reply....thats despite mentioning testing it, making sure the switch hasn't just burned out (seen that before...once with a 4 inch insulation burn back....)
Probably get some wet pants in to do it......

 

[overskilled]

Part of the problem locally is its a "lower" wage area generally.....and a lot of people have either been made redundant and now working minimum wage or have had their hours slashed right back...
So I've slashed my overheads back severely....older vehicle bought outright, do all my own spannerwork, energy saving light bulbs all round, shop at cheaper stores for food etc, hold minimal stock levels....
And its still a fight to get enough work sometimes....no wonder a mate refers to it as "self unemployment".....

 

[BlueToBits]

Part of the problem locally is its a "lower" wage area generally.....and a lot of people have either been made redundant and now working minimum wage or have had their hours slashed right back...
So I've slashed my overheads back severely....older vehicle bought outright, do all my own spannerwork, energy saving light bulbs all round, shop at cheaper stores for food etc, hold minimal stock levels....
And its still a fight to get enough work sometimes....no wonder a mate refers to it as "self unemployment".....

I fully understand, and emphasise with your situation, but this is exactly my point.


Any extra work you may now win is work that would otherwise have gone to the other guy, who will now cut his prices below yours to win the next job. So what do you do now? You have already trimmed yourself down as far as you can, and so has the other guy.
If you cut prices further you will be working at a loss and eating into capital or savings. The other guy will have to do the same. The winner is the one that can last the longest before going bankrupt, but will then have the problem of convincing customers into accepting a significant price rise.

I was going to stop here but I got carried away AGAIN, so for those that want to read on:

I believe the only way to avoid this is to stand back and let others fight the price war for you. A business must keep it's prices at the rate needed to keep out of the red with enough profit to allow the business to flourish when the price war is over and the rest have hung up their Stetsons. To do this a business needs to find a way of getting customers to pay you more than the next guy will charge them. FWIW I think there are ways a business can achieve this. I may be wrong, but here goes:

1) Have or be a brilliant salesperson. Success in sales is paramount. If you do not sell yourself the only reason someone will buy your services will be because you are the cheapest. Selling myself whilst pricing a job was the aspect of my self employment I liked the best, partly because I truly believed, rightly or wrongly, I was worth the fair price I was expecting my customers to pay for the services they wanted me to supply. It may be a bit arrogant but I believe the customer will pay a fair price if they see what they consider to be the correct balance of knowledge, expertise, modesty, confidence and assurance. I found the trick is to tune my demeanour into that balance in conversation to meet what the customer wants to see and hear. Unfortunately you don't know what that balance will be , there is no formula, you have to find it before you dig yourself into a hole you can't get out of. I have never ripped anyone off or sold anything anyone didn't need or want. I just listened carefully to fully understand all the issues they had, offered as many solution options as possible, giving the benefits and drawbacks of each. Then I would help them decide exactly what they wanted, and explain why I was the best person to provide it.

2) Have a desirable USP or Unique Selling Point. - Something that is offered that few or no other business can, does or seeks to offer. I can think of several things but mentioning them here will no longer make them unique.

3) Rather than fighting against the competition, meet them part way. Before Part P, The NICEIC used to facilitate this to a degree, and I'm sure the ECA had a similar ethos. The NICEIC guys were often accused of sticking together in their 'exclusive' club. Now that anyone can 'join', it has lost that benefit, but in it's 'hay-day', there was always a sense of respect, an unwritten 'code of honour' or 'rules of engagement' if you like between approved contractors at a local level. I'm not suggesting price fixing was going on, more of an unspoken agreement that one would not tread on another's toes, or knowingly enter into Dutch bidding against other NIC guys in their area. There is no reason why a few electricians working in the same area can't get together in a pub one evening and come to a similar mutual 'understanding'. This is how most of the traditional trade associations were originally formed, and a few still operate this way today.

3) Specialise. Drop undertaking low profit work and utilise any skills the business already has and any that can be gained or bought to undertake specialised work that has less competition and bigger margins. Lighting and sound system installation was one of my specialist fields. This could be service based such as underfloor heating, PV installation, home cinema, low energy, home automation etc or property types, architectural homes, listed buildings, thatched wattle and daub houses etc or client based, elderly, vulnerable, disabled, 1st time buyers, single women, pink sector, Arsenal supporters etc. There are lots of specialist areas and it's easy to advertise them over the internet. Obviously, research and a business plan is needed first. Offering exclusive services to Liverpool FC fans in Trafford may not be very fruitful. A speciality can, of course be a USP.

4) Plan and Diversify. Do more than one thing and let the thing that proves to be most profitable become the main activity. Maybe machine control panel design and fabrication, or energy management controls, heat pumps, Air Conditioning and environmental controls, knitting, wine importing, selling shampoo on ebay, dog walking, etc.

I would not put myself up as a good businessman and I am not saying this is the way it should be done, only that I have learned from my mistakes over the past 25 years and if I were to start again, this is the way I would re-approach it.

At the end of the day I believe it comes back to the same few things.
Someone may be the best electrician, plumber, dressmaker or whatever in the whole country, but unless they are also a good business person they will always struggle to be successfully self employed.
A good business person will only ever work in an environment that generates good profit.
A good business person knows when it's time to stop bailing out and to get out altogether.

I apologise if I have offended or appear judgemental or preaching. It's not intentional. I'm not a writer and it I don't always make it read PC or the way I intend it to.

 

[overskilled]

Its alright, your points are salient.
However having some lower paid work is better than having no work at all...
At the moment everyone is broke so its a lot of smaller jobs, however its having an eye for stuff thats needing done in the nearish future and upselling the customer.....its surprising sometimes the jobs that aren't hard that people have been neglecting due to lack of time/unsure who to call....
Other thing is building work relationships with other trades - you scratch my back, I'll scratch yours or offering the complete package to a customer, doing the legwork to organise other trades for them.....but make sure you charge for the time spent doing the organistation.....