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Electrical installation work, as all self-employed electricians will know, is a highly-competitive business. My own business operates mainly in the greater Glasgow area, and I have to say that I'm finding it increasingly difficult to compete on a level playing field.
I was recently approached by a builder who enquired as to what my fee would be to carry-out an EICR and some PA testing in domestic properties. I told him that I charge £100 for a one-bedroom house, £125 for a two-bedroom property, and £150 for a three-bedroom. Inspection and testing of outbuildings incur an additional fee. Imagine my surprise when he told me that my prices were "way too much". Imagine my further surprise when he told me that "the young electrician" that the builder currently uses to carry-out EICRs charges a flat-fee of £40. Aye, you read that correctly, £40 for an EICR regardless of the size of the property. My response was that I couldn't possibly compete with such a ridiculously low price unless I was willing to work for around £8-£10 an hour, or was willing to cut corners to save time, neither of which I would even begin to contemplate.
I occasionally use MyBuilder as a source of generating business, particularly during times when business is slack. I recently received a lead through the site inviting me to quote for a consumer unit upgrade. Upon contacting the customer to further discuss, the very first question that I was asked was the inevitable "how much is this going to cost me?" I told the customer that although I could provide an estimate, I could not, however, provide a fixed-price quotation prior to me having visited the customer's home and completed a survey. The customer responded by telling me that "all the other electricians I've shortlisted have given me a quotation so why can't you?"
I then explained to the customer that I was somewhat surprised to hear that electricians would even think about providing a fixed-price quotation for a consumer unit upgrade without having first attended the property and carried-out the requisite inspection and testing that needs to be done prior to a consumer unit replacement. The customer was having none of it. They wanted a price there and then. I once again reiterated that I could provide only an estimate at this stage, and told them that the work would cost anywhere between £250-£400 depending on a variety of factors. Imagine my astonishment when the customer told me that they had been given a fixed-price quotation of £200 over the phone by a "nice young man", and that they would now be offering the job to the comedian .... sorry .... electrician who quoted that unrealistically low price.
These two examples are but the tip of the iceberg. There are plenty more that I could cite. What particularly disturbs me is that it isn't "Dave down the pub" who is undercutting me, but young electricians who have not long completed their training. I just can't compete with the insane prices that these young electricians are quoting, particularly when some of them are evidently not even bothering to carry-out any essential inspection and testing before issuing quotations.
My gut instinct tells me that such scoundrels are most likely still living at home and being propped-up by 'the bank of mum and dad'. Perhaps the fools erroneously believe that the way to get ahead in business is to ruthlessly undercut everyone else. The strategy of a newly-started business using 'loss-leaders' as a means of winning customers is one thing, but I don't see how such a business model can possibly be sustained indefinitely. The end consequence of people quoting absurd prices is that a race to the bottom is instigated. It's a race that I have absolutely no intention whatsoever of ever participating in.
I'd be very interested to hear the views of other forum members regarding this issue as I'm sure plenty other electricians will have had similar experiences of cut-throat competition negatively impacting on their own businesses.
I was recently approached by a builder who enquired as to what my fee would be to carry-out an EICR and some PA testing in domestic properties. I told him that I charge £100 for a one-bedroom house, £125 for a two-bedroom property, and £150 for a three-bedroom. Inspection and testing of outbuildings incur an additional fee. Imagine my surprise when he told me that my prices were "way too much". Imagine my further surprise when he told me that "the young electrician" that the builder currently uses to carry-out EICRs charges a flat-fee of £40. Aye, you read that correctly, £40 for an EICR regardless of the size of the property. My response was that I couldn't possibly compete with such a ridiculously low price unless I was willing to work for around £8-£10 an hour, or was willing to cut corners to save time, neither of which I would even begin to contemplate.
I occasionally use MyBuilder as a source of generating business, particularly during times when business is slack. I recently received a lead through the site inviting me to quote for a consumer unit upgrade. Upon contacting the customer to further discuss, the very first question that I was asked was the inevitable "how much is this going to cost me?" I told the customer that although I could provide an estimate, I could not, however, provide a fixed-price quotation prior to me having visited the customer's home and completed a survey. The customer responded by telling me that "all the other electricians I've shortlisted have given me a quotation so why can't you?"
I then explained to the customer that I was somewhat surprised to hear that electricians would even think about providing a fixed-price quotation for a consumer unit upgrade without having first attended the property and carried-out the requisite inspection and testing that needs to be done prior to a consumer unit replacement. The customer was having none of it. They wanted a price there and then. I once again reiterated that I could provide only an estimate at this stage, and told them that the work would cost anywhere between £250-£400 depending on a variety of factors. Imagine my astonishment when the customer told me that they had been given a fixed-price quotation of £200 over the phone by a "nice young man", and that they would now be offering the job to the comedian .... sorry .... electrician who quoted that unrealistically low price.
These two examples are but the tip of the iceberg. There are plenty more that I could cite. What particularly disturbs me is that it isn't "Dave down the pub" who is undercutting me, but young electricians who have not long completed their training. I just can't compete with the insane prices that these young electricians are quoting, particularly when some of them are evidently not even bothering to carry-out any essential inspection and testing before issuing quotations.
My gut instinct tells me that such scoundrels are most likely still living at home and being propped-up by 'the bank of mum and dad'. Perhaps the fools erroneously believe that the way to get ahead in business is to ruthlessly undercut everyone else. The strategy of a newly-started business using 'loss-leaders' as a means of winning customers is one thing, but I don't see how such a business model can possibly be sustained indefinitely. The end consequence of people quoting absurd prices is that a race to the bottom is instigated. It's a race that I have absolutely no intention whatsoever of ever participating in.
I'd be very interested to hear the views of other forum members regarding this issue as I'm sure plenty other electricians will have had similar experiences of cut-throat competition negatively impacting on their own businesses.
