Flat rate pricing....Who's actually doing it?

[Mule]

Ok, there's been talk in the past on the pro's and con's of flat rate pricing. So, Im curious who's doing it, and how's it working for you?

[brian john]

We use flat rate pricing for certain testing applicatons and it beats other methods (T&M) in all cases.

[satcom]

Ok, there's been talk in the past on the pro's and con's of flat rate pricing. So, Im curious who's doing it, and how's it working for you?

Flat Rate pricing is nothing more then a contract price, one price for a task or a series of tasks, In my state if the job price is $500 or more, you must have a written contractm and the price of the entire cost must be disclosed before work is started, so flat rate is nothing new here it has been the law since the late 60's

[Greg Swartz]

Satcom, I tend to look at it a little differently.

Getting a contract is one thing. And most of our work is contract based... Flat rate or not.

When I see flat rate, this is what I think:
Item x - Flat Rate price $xxx
Item y - Flat Rate price $xxy

The price is set. No matter how easy the install... no matter how hard the install...

The price could be a couple hundred or a couple thousand... still a flat rate price.

For example: One of our contractors asked us for a flat rate price sheet. That way, he knows how much it is going to cost before he even calls me. Now, it may be a few thousand dollars... I use the invoice system with him. No contract laws here.
But, he knows the price. Easy install or difficult... the price is the same.

Regarding Mule's question: Who's using it? Well, we are to some extent.
We are working more on a flat rate pricing scheme.

Right now, most standard residential items... we have a flat rate price in place.
Also, all A/C electrical items, we have a flat rate price.

Almost none of our commercial service work is flat rated.

I do agree with Brian John, that if done right, flat rate pricing allows much higher margins than T&M.

Greg

[bullheimer]

i'm hip to that. bummer part is lowballers like me trying to make their mortgage. i've been tryin to hold out and keep my prices but when other guys are getting my work i have bid on i find out what they bid and bid the same. only ones i can't touch is the one or two industrial jobs the ibew is bidding at below cost to keep their guys busy. i was getting $2200 to $2400 for service changes last year no questions asked. now guys are talking customers into panel changes instead of service upgrades, at $1600, and running circuits all the way across the house for a lousey $350 instead of $500

[al]

Flat Rate pricing is nothing more then a contract price, one price for a task or a series of tasks, In my state if the job price is $500 or more, you must have a written contractm and the price of the entire cost must be disclosed before work is started, so flat rate is nothing new here it has been the law since the late 60's

What state is this?

[emahler]

Satcom, I tend to look at it a little differently.

Getting a contract is one thing. And most of our work is contract based... Flat rate or not.

When I see flat rate, this is what I think:
Item x - Flat Rate price $xxx
Item y - Flat Rate price $xxy

The price is set. No matter how easy the install... no matter how hard the install...

The price could be a couple hundred or a couple thousand... still a flat rate price.

For example: One of our contractors asked us for a flat rate price sheet. That way, he knows how much it is going to cost before he even calls me. Now, it may be a few thousand dollars... I use the invoice system with him. No contract laws here.
But, he knows the price. Easy install or difficult... the price is the same.



partly...but not completely....a good flat rate system takes into account different variables...i.e. extend a circuit and install a receptacle...

you would have fixed prices for:

installing a receptacle (the actual device)
installing an old work box
installing a 4" metal box with mulberry cover
installing a new work box
installing an FS box
Installing NM-B in an open wall upto 15', additional price per foot over 15'
etc, etc, etc

so while you will have set prices for items based on your costs....you will use the flat rate manual like a chinese restaurant menu...and choose the correct method for your specific installation...


in terms of your contractor, if your electric is 10% of his total project cost and he's off by 10% on your cost, it's not gonna make a big difference. But it's also not flat rate in the sense of resi service flat rate....

[satcom]

partly...but not completely....a good flat rate system takes into account different variables...i.e. extend a circuit and install a receptacle...

you would have fixed prices for:

installing a receptacle (the actual device)
installing an old work box
installing a 4" metal box with mulberry cover
installing a new work box
installing an FS box
Installing NM-B in an open wall upto 15', additional price per foot over 15'
etc, etc, etc

so while you will have set prices for items based on your costs....you will use the flat rate manual like a chinese restaurant menu...and choose the correct method for your specific installation...


in terms of your contractor, if your electric is 10% of his total project cost and he's off by 10% on your cost, it's not gonna make a big difference. But it's also not flat rate in the sense of resi service flat rate....

"so while you will have set prices for items based on your costs....you will use the flat rate manual like a chinese restaurant menu...and choose the correct method for your specific installation..." This is one of the reasons many don't understand flat rate pricing, they don
t understand how to apply it, or write it up to cover the scope.

[satcom]

What state is this?
New Jersey

[satcom]

i'm hip to that. bummer part is lowballers like me trying to make their mortgage. i've been tryin to hold out and keep my prices but when other guys are getting my work i have bid on i find out what they bid and bid the same. only ones i can't touch is the one or two industrial jobs the ibew is bidding at below cost to keep their guys busy. i was getting $2200 to $2400 for service changes last year no questions asked. now guys are talking customers into panel changes instead of service upgrades, at $1600, and running circuits all the way across the house for a lousey $350 instead of $500

Pricing below your cost, is like taking a job, and paying the employer to work there.

[Mule]

i'm hip to that. bummer part is lowballers like me trying to make their mortgage. i've been tryin to hold out and keep my prices but when other guys are getting my work i have bid on i find out what they bid and bid the same. only ones i can't touch is the one or two industrial jobs the ibew is bidding at below cost to keep their guys busy. i was getting $2200 to $2400 for service changes last year no questions asked. now guys are talking customers into panel changes instead of service upgrades, at $1600, and running circuits all the way across the house for a lousey $350 instead of $500

Ok, with all due respect...Let's say you call a plumber to replace your sewer line at YOUR house....you get five bids, and Im adding a bit of humor here...

$5000 Big Shop, nice trucks
$4800 Big Shop, nice trucks
$3300 One man show, nice trucks
$3000 One man show, so so trucks
$2400 One man show, smells, truck really dirty

You tell me, and be honest, which one would you take?

My helper and I worked 9 hrs yesterday on a service conversion, material prices was just under $400. Havent billed yet but the price is going to be somewhere around $1500-$1600 and we were happy as Larks....customers next higher price was $2000, we did a code compliant job that looks nice, both the inspector and poco commented on it............no contract, only a hand shake......no laws telling me how to conduct by business

[emahler]

Ok, with all due respect...Let's say you call a plumber to replace your sewer line at YOUR house....you get five bids, and Im adding a bit of humor here...

$5000 Big Shop, nice trucks
$4800 Big Shop, nice trucks
$3300 One man show, nice trucks
$3000 One man show, so so trucks
$2400 One man show, smells, truck really dirty

You tell me, and be honest, which one would you take?

Seriously? Who cares? Maybe you are not your ideal customer. One of the problems contractors have is the complete inability to not project our decisions on others. Let people make their own choices.

[macmikeman]

Ok, with all due respect...Let's say you call a plumber to replace your sewer line at YOUR house....you get five bids, and Im adding a bit of humor here...

$5000 Big Shop, nice trucks
$4800 Big Shop, nice trucks
$3300 One man show, nice trucks
$3000 One man show, so so trucks
$2400 One man show, smells, truck really dirty

You tell me, and be honest, which one would you take?

My helper and I worked 9 hrs yesterday on a service conversion, material prices was just under $400. Havent billed yet but the price is going to be somewhere around $1500-$1600 and we were happy as Larks....customers next higher price was $2000, we did a code compliant job that looks nice, both the inspector and poco commented on it............no contract, only a hand shake......no laws telling me how to conduct by business

I'm not sure I understand this post. Are yoou telling us that your smelly and your truck is dirty?:D

[Mule]

Seriously? Who cares? Maybe you are not your ideal customer. One of the problems contractors have is the complete inability to not project our decisions on others. Let people make their own choices.

My point is this is America, and if a job is code compliant, passes inspection, why should the higher bidder complain if there are those whom can do the job for less?

[Mule]

I'm not sure I understand this post. Are yoou telling us that your smelly and your truck is dirty?:D

Ha Ha, I guess the answer is "YES" "Sometimes" :D Right now I smell good and my van is really clean, but last week?

[emahler]

My point is this is America, and if a job is code compliant, passes inspection, why should the higher bidder complain if there are those whom can do the job for less?

Because its the american way. We are in a race to the bottom. But, if basic accounting dictates a job should be $1000, and some guy who is too ignorant to learn basic account does it for $800 (and loses money) then he ha4 hurt a legitimate contractor directly. And the industry as a whole.

[Mule]

Because its the american way. We are in a race to the bottom. But, if basic accounting dictates a job should be $1000, and some guy who is too ignorant to learn basic account does it for $800 (and loses money) then he ha4 hurt a legitimate contractor directly. And the industry as a whole.

I totaly agree if the contractor "is Loosing money", and it does drag down the trade as a whole...... on the other hand, if the contractor is making money and does the work right, I starchly dis-agree

[bradleyelectric]

I totaly agree if the contractor "is Loosing money", and it does drag down the trade as a whole...... on the other hand, if the contractor is making money and does the work right, I starchly dis-agree


Well to me it looks like you could have made at least another 25%. Would that be a good thing? What if you were able to make another 50% and the customer was happy after you left. Would that be bad? What if you were good at selling a job and confident in your ability to do so? Would it be bad if someone called you for a service call and while there you noticed the problem was 1 of the busses of a split buss panel was damaged? Would it be bad to sell a service upgrade and have the customer comfortable enough with you to give the go ahead on the spot after you giving your price?

[Mule]

Well to me it looks like you could have made at least another 25%. Would that be a good thing?
That totaly depends on the business mind of the contractor, for me, finding the balance point where both parties are happy is golden, and breeds trust and repeat business

What if you were able to make another 50% and the customer was happy after you left. Would that be bad?
NO, but most of the time, that doesnt flush, customers start complaining because they know its too high

What if you were good at selling a job and confident in your ability to do so?
So....that must be the reason, I have such good customers and so many of them...

Would it be bad if someone called you for a service call and while there you noticed the problem was 1 of the busses of a split buss panel was damaged? Would it be bad to sell a service upgrade and have the customer comfortable enough with you to give the go ahead on the spot after you giving your price?
What's so hard about that? do it all the time

Not directed at any one person, but, I guess in truth there are two kinds of people, those that want it all, and those whom work together for the common good. And those whom want it all are the reason our economy is in such shambles as we speak. There is nothing wrong with dreaming about building a business larger and larger, but for me, I dont see it in the card's, Im too conservative...

[ike5547]

"...flat rate is nothing new here it has been the law since the late 60's"

Were you making a literal statement here? It is a law? As in an actual law?

[Rewire]

What's so hard about that? do it all the time

Not directed at any one person, but, I guess in truth there are two kinds of people, those that want it all, and those whom work together for the common good. And those whom want it all are the reason our economy is in such shambles as we speak. There is nothing wrong with dreaming about building a business larger and larger, but for me, I dont see it in the card's, Im too conservative...

Most businesses fail in the first two years fewer make it to five years.When I listen to business people I always give more credance to the business owner who has passed the five year mark.I believe many businesses fail because they take their own bad advice.The biggest problem I see with electricians is many go into business without one bit of business training,thats no different than a MBA going into business as an electrician with no training.

[Mule]

Most businesses fail in the first two years fewer make it to five years.When I listen to business people I always give more credance to the business owner who has passed the five year mark.I believe many businesses fail because they take their own bad advice.The biggest problem I see with electricians is many go into business without one bit of business training,thats no different than a MBA going into business as an electrician with no training.

Probably good advice and medicine for me....I'll take that with a full glass of water.

I tend to be too much in tune with the customer instead of the growth of my small business. However, from my corporate employment days, I set in a 40 hour class on "Customer satisfaction" it was very enlighting, and I find myself using the tatics that I learned in that class. I think businesses that listen to the customer and strive to meet the customers needs at a profit dont go out of business...but I guess the proof is in the pud'n

[ohm]

Probably good advice and medicine for me....I'll take that with a full glass of water.

I tend to be too much in tune with the customer instead of the growth of my small business. However, from my corporate employment days, I set in a 40 hour class on "Customer satisfaction" it was very enlighting, and I find myself using the tatics that I learned in that class. I think businesses that listen to the customer and strive to meet the customers needs at a profit dont go out of business...but I guess the proof is in the pud'n

My business model is simple: I keep my rates as is unless I'm working more than I want to or way behind schedule.

Also, how in the world can you flat rate a service call to fix an AFCI tripping? T & M sounds like the only way.

[celtic]

The biggest problem I see with electricians is many go into business without one bit of business training,thats no different than a MBA going into business as an electrician with no training.


I agree with a good electrician w/no business sense is doomed.
I do not necessarily agree that an MBA cannot run a successful contracting business.

The business man will hire the good electrician w/no business sense....and if the business exercises extreme diligence in hiring, he may obtain an electrician that also has good business sense ["the full package"].

Take for example: EMCOR
http://ecmweb.com/images/610ecmCStop50.jpg

EMCOR was #1 according to EC&M [EC&M's Top 50 Electrical Contractors (http://ecmweb.com/construction/electric_big_business/)]

EMCOR's CEO Frank MacInnis (http://www.emcorgroup.com/index.cgi/6591)is a business man[that started out as a lawyer]. What does he know about the nuts and bolts of putting together a piece of electrical apparatus?
Probably nothing.
Is that a bad thing?
No. He was able to hire someone who did:Salvatore Caputo (http://www.emcorgroup.com/index.cgi/6662)

Mr. Caputo is the President and CEO of Forest Electric [a subsidiary wholly owned by EMCOR].
Mr. MacInnis appears to have exercised extreme diligence in the hiring of Mr.Caputo...Mr. Caputo was also an electrician who has good business sense.
I doubt EMCOR would have hired someone who was only half "the package" to run Forest Electric.

[satcom]

Were you making a literal statement here? It is a law? As in an actual law?


New Jersey Law NJ:13:45A-16.2

[peter d]

I agree with a good electrician w/no business sense is doomed.
I do not necessarily agree that an MBA cannot run a successful contracting business.

The business man will hire the good electrician w/no business sense....and if the business exercises extreme diligence in hiring, he may obtain an electrician that also has good business sense ["the full package"].



I agree, and I've said it before, and I will say it again. The most successful contractors I have worked for or observed were excellent businessmen, but lousy electricians or not electricians at all.

[ohm]

Celtic, I agree a good manager should be able to go to any company and manage it IF they surround himself/herself with the right people.

A journey of a thousand miles begins with a single step (I didn't just make that up) and even huge jobs are nothing but a bunch of small steps one after another.

But IMHO unless you vastly overquote a troubleshooting job so it can't possibly loose money you probably won't get the job over someone quoting T & M.

[bradleyelectric]

The reason people buy is emotionally based. You need to fulfill their emotional needs to make a sale. If you do not tell them a price is to high they won’t know. If you don't believe in the price it is to high. If you do believe in the price it is not to high. It is emotional to you. When you stop believing it is to high is when you will be able to sell it at that price. When you educate the customer to the fact that they are supposed to get additional prices and take the lowest price that is what they will do. When you educate them to the fact that you are going to do a good job for them at a reasonable price they will except your price and ok you to do the job. What the price you present them with is irrelevant. How you present it is what matters.

There will always be people that buy on price alone. You need to know how to identify and dismiss these quickly. They will not want to pay a price that will be profitable and someone that doesn’t know what it costs to be profitable will do it at that price. This is directed at service work.

Competitively bid work is a different ballgame. It still pays different levels depending on the level of service expected. Meaning there will be projects that someone may or may not feel comfortable using you with. If you have not satisfied them emotionally that you can complete the project without a certain amount of hand holding your price will not matter. Some levels don't mind holding hands while others will run you over if your not on top of it.

[bradleyelectric]

But IMHO unless you vastly overquote a troubleshooting job so it can't possibly loose money you probably won't get the job over someone quoting T & M.

The problem with this logic is why would you bid a troubleshooting job? Do people ask you how cheap you would do a troublshooting job and hang up and than call you back after calling other people to see how cheap they would do it ? Are you able to tell them how long it would take to do the job? Can everyone troubleshoot to the same level? The way to sell a troublshooting job is by level of service. When they call tell them when you can be there. Not how cheap you are.

[celtic]

In my state if the job price is $500 or more, you must have a written contractm and the price of the entire cost must be disclosed before work is started, so flat rate is nothing new here it has been the law since the late 60's



13:45A-16.2(a)
12. Home improvement contract requirements writing requirement: All home improvement contracts for a purchase price in excess of $ 200.00, and all changes in the terms and conditions thereof shall be in writing.
http://www.nj.gov/lps/ca/electric/eleclaws.pdf


Might want to read up of that again :wink:

[celtic]

But IMHO unless you vastly overquote a troubleshooting job so it can't possibly loose money you probably won't get the job over someone quoting T & M.

We've had some lively discussions here about T&M vs. Flat on a TS job....I go T&M ~ and get yelled at by some here :D

[Mule]

No way can I compare myself with a one or two man shop to top 50 contractors...apples and oranges, or should I say mustard seeds and watermellons.....:)

I have a business model, but as a new contractor, I have to remain flexible, dynamic, and responsive to the market and conditions, especially in these times....and would be willing to bet that we will be around at the five year mark. If not, everyone will be down the tubes. But for now, contracting as a small shop is not rocket science.....IMO

I am however curious if contractors use flat rate pricing for repetative installs like panel changes, recessed lights, and the like. I dont use this approach as we are primarily T/M, but I know there has been alot of talk about it....

[satcom]

http://www.nj.gov/lps/ca/electric/eleclaws.pdf


Might want to read up of that again :wink:

The law page still says $200 but it was updated to $500

[bradleyelectric]

No way can I compare myself with a one or two man shop to top 50 contractors...apples and oranges, or should I say mustard seeds and watermellons.....:)

I have a business model, but as a new contractor, I have to remain flexible, dynamic, and responsive to the market and conditions, especially in these times....and would be willing to bet that we will be around at the five year mark. If not, everyone will be down the tubes. But for now, contracting as a small shop is not rocket science.....IMO

I am however curious if contractors use flat rate pricing for repetative installs like panel changes, recessed lights, and the like. I dont use this approach as we are primarily T/M, but I know there has been alot of talk about it....


There aren't a lot of people that start businesses thinking they wont be around in 5 years.

[celtic]

The law page still says $200 but it was updated to $500

I see where the discrepancy is:


56:8-151 Contracts, certain, required to be in writing; contents.
16. a.
On or after December 31, 2005, every home improvement contract for a purchase price in excess of $500, and all changes in the terms and conditions of the contract, shall be in writing. The contract shall be signed by all parties thereto, and shall clearly and accurately set forth in legible form and in understandable language all terms and conditions of the contract, including but not limited to:

..........http://www.nj.gov/oag/ca/laws/ContractorsRegistrationLaw.pdf
Dated 12/05


Where as 13:45A-16.2(a) [http://www.nj.gov/lps/ca/electric/eleclaws.pdf] (http://www.nj.gov/lps/ca/electric/eleclaws.pdf%5D)
is dated 08/03.


However, the Home Improvement Contractors Act [HICA] does NOT apply to ECs acting within the scope of their trade:


56:8-140 Inapplicability of act.
5. The provisions of this act shall not apply to:

c. Any person regulated by the State as an architect, professional engineer, landscape architect, land surveyor, electrical contractor, master plumber, or any other person in any other related profession requiring registration, certification, or licensure by the State, who is acting within the scope of practice of his profession;
http://www.nj.gov/oag/ca/laws/ContractorsRegistrationLaw.pdf

IMHO, $200 for ECs acting within the scope of their trade.

Now if you have Bam-Bam cutting in boxes for you and fishing wires like a madman ~ you may very well have an additional $500 in repair work :smile: ....and one might also need to register under the HICA.

[~Shado~]

partly...but not completely....a good flat rate system takes into account different variables...i.e. extend a circuit and install a receptacle...

you would have fixed prices for:

installing a receptacle (the actual device)
installing an old work box
installing a 4" metal box with mulberry cover
installing a new work box
installing an FS box
Installing NM-B in an open wall upto 15', additional price per foot over 15'
etc, etc, etc

so while you will have set prices for items based on your costs....you will use the flat rate manual like a chinese restaurant menu...and choose the correct method for your specific installation...


in terms of your contractor, if your electric is 10% of his total project cost and he's off by 10% on your cost, it's not gonna make a big difference. But it's also not flat rate in the sense of resi service flat rate....

I have to agree with Greg on this one. Maybe its because how its handled in our part of country. As long as I can remember, flat rate is just that...flat price for an install, no variables.

Your description doesn't seem any different than bidding a job. Particularly if using an estimating program...items with cost and labor and profit to install each....collection of items for an assembly. How does this play into being flat rate vs bid? Seems one and the same to me.

[ike5547]

Of course, one would expect flat rate contracting to very successful in a state where T&M is illegal. They neglected to mention this unimportant little detail while they were trashing on T&M contractors from other states.

[emahler]

I have to agree with Greg on this one. Maybe its because how its handled in our part of country. As long as I can remember, flat rate is just that...flat price for an install, no variables.

Your description doesn't seem any different than bidding a job. Particularly if using an estimating program...items with cost and labor and profit to install each....collection of items for an assembly. How does this play into being flat rate vs bid? Seems one and the same to me.

The only differnce is pricing onsite, getting approval, and performing the small job, collecting payment, repeat with next customer. All done by the tech in 1 trip.

Vs

sending out an estimator to look at the job, going back to the office, doing the estimate, sending it to the customer, waiting for approval, getting approval, translating SOW to installation team, sending installation team to job, installing job, invoicing customer, waiting for payment, repeat with next job.

[Mule]

There aren't a lot of people that start businesses thinking they wont be around in 5 years.

Just remember to check me out when that time comes.....I'll still be plugn along........:) And. I still be saying good things about your old ford tractor too...:)

[Mule]

Of course, one would expect flat rate contracting to very successful in a state where T&M is illegal. They neglected to mention this unimportant little detail while they were trashing on T&M contractors from other states.

Man, am I sheltered, T/M being illegal???.....I guess a man's word or a hand shake is worthless in some areas....wrong color of state for me...:D

[ike5547]

Man, am I sheltered, T/M being illegal???.....I guess a man's word or a hand shake is worthless in some areas....wrong color of state for me...:D

I wish it were illegal here. Sorta.

[ohm]

I see where the discrepancy is:

http://www.nj.gov/oag/ca/laws/ContractorsRegistrationLaw.pdf
Dated 12/05


Where as 13:45A-16.2(a) [http://www.nj.gov/lps/ca/electric/eleclaws.pdf] (http://www.nj.gov/lps/ca/electric/eleclaws.pdf%5D)
is dated 08/03.


However, the Home Improvement Contractors Act [HICA] does NOT apply to ECs acting within the scope of their trade:

http://www.nj.gov/oag/ca/laws/ContractorsRegistrationLaw.pdf

IMHO, $200 for ECs acting within the scope of their trade.

Now if you have Bam-Bam cutting in boxes for you and fishing wires like a madman ~ you may very well have an additional $500 in repair work :smile: ....and one might also need to register under the HICA.

Good catch Celtic, I can't immagine it's a law anywhere.

[celtic]

FWIW, T&M is not illegal in NJ...nor is Flat Rate.

[~Shado~]

The only differnce is pricing onsite, getting approval, and performing the small job, collecting payment, repeat with next customer. All done by the tech in 1 trip.

Vs

sending out an estimator to look at the job, going back to the office, doing the estimate, sending it to the customer, waiting for approval, getting approval, translating SOW to installation team, sending installation team to job, installing job, invoicing customer, waiting for payment, repeat with next job.

Ok....termonology just varies around the country...no worries. We call it 'Up front pricing"

[emahler]

Ok....termonology just varies around the country...no worries. We call it 'Up front pricing"

flat rate....up front...fixed....doesn't matter what you call it...it's all the same system...

[tonyou812]

Seriously, im sure much of it has to do with the fact that your in OKlahoma. All I can tell you is if I charged 1500 for a service change my truck would smell real bad and so would I. Sorry but it really kills me when you guys undersell yourselves like that. DO you find that you are always busy? maybe its for a reason that you might not be to proud of? your cheap....! Service changes are like a divine right to "Make some money on" and you sell it like cheap perfume. Why would you sell something for 1500 when a person is liable to pay much more for, and rightly so. It raises the question if you have any buisness sense. and perhaps in the long run you are more detrimental to the trade.

[tonyou812]

I would charge 12- 1400 for a simple panel swap out and at "least" another grand for a full service change.

[satcom]

I wish it were illegal here. Sorta.

T&M is not illegal here, or anywhere i know of, but the consumer laws do require a contract and a a firm price for jobs over a certin dollar limit

[Mule]

Why would you sell something for 1500 when a person is liable to pay much more for, and rightly so. It raises the question if you have any buisness sense. and perhaps in the long run you are more detrimental to the trade.\

Those are pretty strong words..and probably something I would never say to you or anyone else.

I dont really have much to say, except the same old story, that houses cost nearly twice for you as they do for us....My son lives near DC and is home shoping down south of there, so I know........and EC rates here likewise are half what yours is...I sub contracted a job a while back for a contractor from the KC area and their rates where almost the same as ours....I have close relations with a large union shop here in town, and we charge the same as they do.
So, as for your strong words, IMO someone that cant digest that information, is someone I cant really reason with not matter what....sorry every time I slip and state figures, I get hammered and talked down to, and frankly its pretty rude.

[ike5547]

T&M is not illegal here, or anywhere i know of, but the consumer laws do require a contract and a a firm price for jobs over a certin dollar limit

I'm not following. Is T&M legal on jobs over $500? Or only jobs less than $500?

[tonyou812]

your right, I shouldnt have said anything. It only winds up bitting me in the butt. But seriously how do you even get material for 400 bucks for a 200 amp service change?

[Mule]

your right, I shouldnt have said anything. It only winds up bitting me in the butt. But seriously how do you even get material for 400 bucks for a 200 amp service change?

Four runs or 1 1/4 EMT approx 14ft long....with #3 feeders, one burnt up QO2100 replaced and a few more fittings was all I furnished...poco furnished the meter pack, terminal box.and there was a existing UG lateral..bla bla........I never said it was a service change.
It was a bit labor intensive and took us all day.....and trust me $95-100/hr for jman and helper is the going rate.

And what's this about a divine right?

I dont go around stating that everyone eles is raping the customer, because I understand that prices are gross'ly different.....yes I was shocked when I first learned that.

I spent a week in Princeton one time serving on national eletrical electrical exam board and we stayed at the motel near the college, the rates then where like $350 a night and that's been 10 years ago..and hamburger was $10 in the motel....you can get a motel here for under a 100 bucks if not under 50.

I just did a search on a realtors website for northern New Jersey, dont remember the town but only found 4 properties between 100 and 200,000 bucks...you can build a new house here for $85-95/ft here and EC's get $4/ft all day long to wire them. A new 200 amp sercvice will cost you 900-1300.

Seriously Im not picking on you, because I like your post, but I wish you guys would back off and see the light....

[celtic]

T&M is not illegal here, or anywhere i know of, but the consumer laws do require a contract and a a firm price for jobs over a certin dollar limit

I'm not following. Is T&M legal on jobs over $500? Or only jobs less than $500?

For T&M work, you are giving the client a "firm price" ~ just not a "firm time" reference :)

You could structure the contract to state: Not to exceed $xxx.xx w/o additional authorization.....the "not to exceed" amount could be your rate x 4hr - 6 hr - 8 hr - 40 hr....whatever you have figured to a reasonable amount of time. The customer is, of course, free to decline the T&M offer.

[tonyou812]

Four runs or 1 1/4 EMT approx 14ft long....with #3 feeders, one burnt up QO2100 replaced and a few more fittings was all I furnished...poco furnished the meter pack, terminal box.and there was a existing UG lateral..bla bla........I never said it was a service change.
It was a bit labor intensive and took us all day.....and trust me $95-100/hr for jman and helper is the going rate.

And what's this about a divine right?

I dont go around stating that everyone eles is raping the customer, because I understand that prices are gross'ly different.....yes I was shocked when I first learned that.

I spent a week in Princeton one time serving on national eletrical electrical exam board and we stayed at the motel near the college, the rates then where like $350 a night and that's been 10 years ago..and hamburger was $10 in the motel....you can get a motel here for under a 100 bucks if not under 50.

I just did a search on a realtors website for northern New Jersey, dont remember the town but only found 4 properties between 100 and 200,000 bucks...you can build a new house here for $85-95/ft here and EC's get $4/ft all day long to wire them. A new 200 amp sercvice will cost you 900-1300.

Seriously Im not picking on you, because I like your post, but I wish you guys would back off and see the light....
Your right, I apoligize. It was a knee jerk reaction. No offense dude. For some reason I keep thinking that your from NY. But regardless I should be more civil.

[Mule]

Your right, I apoligize. It was a knee jerk reaction. No offense dude.

accepted, No problem........:smile:

[ike5547]

For T&M work, you are giving the client a "firm price" ~ just not a "firm time" reference :)


I consider T&M neither of those. Neither a firm price and nor a firm time reference.

[ike5547]

If we had laws like that in California the flat rate system would be the default system.

[celtic]

All I can tell you is if I charged 1500 for a service change my truck would smell real bad and so would I.

A new 200 amp sercvice will cost you 900-1300.


Not trying to keep the pot simmering, but the reality is:
There are EC's in NJ charging $1500 for 200A services:
http://tinyurl.com/b2u4pc

[It's a CL ad, but I used tinyurl to mask the reference to CL]

[Mule]

Most of our work is T/M and we quote labor hourly rates and material markup percentages, and have a handshake that the customer can run us off at any time, and we bill approximately every $2000 and payment is due upon receipt, except corporations will run you out there 30-60 days....works really well for us. We have discounts for our regular rates and markups for jobs that are "multiple 8hr days" but same conditions apply

[celtic]

If we had laws like that in California the flat rate system would be the default system.
:-?
Laws like what?
I just explained how to use T&M and be in compliance with any law.

[Mule]

Not trying to keep the pot simmering, but the reality is:
There are EC's in NJ charging $1500 for 200A services:
http://tinyurl.com/b2u4pc

[It's a CL ad, but I used tinyurl to mask the reference to CL]

Must be those BR builder packs from the big box stores and a smell'y contractor....:) With all due respect, we should blow out the burner on the pot and let it lay........:) This is a great forum and and alot of nice folks...:D

[ike5547]

:-?
Laws like what?
I just explained how to use T&M and be in compliance with any law.

That's not T&M as I understand and apply it.

Laws like what? The requirement that a fixed price be established for jobs over $500. That is a huge difference with respect to California and would fundamentally change the way things are done here.

[Mr. Wizard]

your right, I shouldnt have said anything. It only winds up bitting me in the butt. But seriously how do you even get material for 400 bucks for a 200 amp service change?

Did one two weeks ago, paid $471 dollars for materials, and charged $2000. It took me 4 hours to start and finish. I'll often charge $10 an amp on services. That number has worked well for me. I don't flat-rate many other things, I always end up getting bit by some unforeseen problem.

[LarryFine]

But seriously how do you even get material for 400 bucks for a 200 amp service change?Define "material."

With a back-to-back meter/panel, there's the panel, breakers, a few feet of SE, and grounding. The POCO provides meter bases and does everything line-side of the meter (exc. masts.)

Home Depot pricing:

Homeline 200a MB Value Pack 40/40 w/10 20a 1p = $154.00
15a 1p - 3.25, 5 = $16.25
30a 2p - 7.84, 3 = $23.52
40a 2p - 7.84, 1 = $7.84
SEU - 3.00/ft, 6' = $18.00
Ground rod, 9.25, 2 = $18.50
Ground clamps, 3 = $9.75
Ground wires = $25

Total = $272.86

Of course, there are variables, probably more circuits, and the POCO isn't so generous in other areas, but it's doable.

[Mule]

So, we use flat rate "estimates" but not quotes....In truth our estimates are a range.....like $800-$1000 or $1200-$1400....

[celtic]

That's not T&M as I understand and apply it.

Laws like what? The requirement that a fixed price be established for jobs over $500. That is a huge difference with respect to California and would fundamentally change the way things are done here.

Laws are like the NEC....it doesn't really say what you think it says :D

[ike5547]

So, we use flat rate "estimates" but not quotes....In truth our estimates are a range.....like $800-$1000 or $1200-$1400....

I'm under the impression that in New Jersey if the work will exceed $500 then a quote (as in fixed price) must be established for a specified job.

I wonder if it has to be in writing before the job is started or if an oral agreement can be made.

[ike5547]

Laws are like the NEC....it doesn't really say what you think it says :D

Well I always wondered why the flat rate contractors on this site seemed to be so heavily concentrated into one geographical area. The answer has clicked into place.

[celtic]

Define "material."

With a back-to-back meter/panel, there's the panel, breakers, a few feet of SE, and grounding. The POCO provides meter bases and does everything line-side of the meter (exc. masts.)

Home Depot pricing:

Total = $272.86

Of course, there are variables, probably more circuits, and the POCO isn't so generous in other areas, but it's doable.

I just ran your scenario using one of my handy dandy spreadsheets:
http://i207.photobucket.com/albums/bb119/Celtic_12557/220-221OHserviceExcel1.jpg
[old picture for illustration]
Material came to $650.49 w/o tax.


In NJ, we are responsible for the mast [POCO will give you a pan in some areas]

[celtic]

I'm under the impression that in New Jersey if the work will exceed $500 then a quote (as in fixed price) must be established for a specified job.


Why were you under that impression?

Well I always wondered why the flat rate contractors on this site seemed to be so heavily concentrated into one geographical area. The answer has clicked into place.

I do not think you are understanding the concepts.
No offense.

What is Ca. law?
Post a bit of it :wink:

[Mule]

I'm under the impression that in New Jersey if the work will exceed $500 then a quote (as in fixed price) must be established for a specified job.

I wonder if it has to be in writing before the job is started or if an oral agreement can be made.

Dont know, my head is spinning........:smile: This is educational to me, and sure makes me apreciate the conservatively governed state that I live in...but I guess if contractors cant be trusted and are screwing the customer the goverment has to step in and establish a method to quote jobs over a certain amount....

[ike5547]

Why were you under that impression?

Can you legally run up an hourly based tab of say $30,000 dollars in New Jersey with out prior specification of the amount for a specifically delineated project?



I do not think you are understanding the concepts.
No offense.

What is Ca. law?
Post a bit of it :wink:

California is silent on the issue.

[celtic]

Can you legally run up an hourly based tab of say $30,000 dollars in New Jersey with out prior specification of the amount for a specifically delineated project?

Sure.
"Firm numbers" only apply to residential and non-commercial jobs :wink:

For resi., like I detailed previously in post #53 (http://forums.mikeholt.com/showpost.php?p=999087&postcount=53):

You could structure the contract to state: Not to exceed $xxx.xx w/o additional authorization.....the "not to exceed" amount could be your rate x 4hr - 6 hr - 8 hr - 40 hr....whatever you have figured to a reasonable amount of time. The customer is, of course, free to decline the T&M offer.

As folks in business, we have to have some idea of how long it's going to take to fix/install something.
Sometimes, the path is not clear on how we are going to achieve this...troubleshooting is one example...sometimes it's clear, sometimes not so much.
A "not to exceed w/o additional authorization" figure covers the bases....for the HO, the EC, and the "legal department".




California is silent on the issue.
Silent?

I thought a contract was needed on jobs over a certain dollar amount as well as amount of deposit allowed [I forget if that number was $ or % based]

[celtic]

Dont know, my head is spinning........:smile:


Put down the wine glass :D


j/k Mule :smile:

[Mule]

Put down the wine glass :D


j/k Mule :smile:

Hey, that sounds pretty good actually......

[LarryFine]

Put down the wine glass :D

Hey, that sounds pretty good actually......

"Young man, sit down, and whatever you have in your mouth, swallow it immediately!"

"Hey, thanks a lot, Sister!" ~ Cheech and Chong

[ike5547]

Sure.


Silent?

I thought a contract was needed on jobs over a certain dollar amount...

I'm looking into it.


...as well as amount of deposit allowed [I forget if that number was $ or % based]

That's either 10% or $1000. Whichever is less.

[celtic]

That's either 10% or $1000. Whichever is less.

This is where the left coast differs from the right...
In NJ, we are not allowed to take final payment until after final inspection ~ but the State does not dictate a dollar or percent we must wait for....I like 1%. :D

[jmsbrush]

Mule I agree, Demographics play a big part in pricing. As long as you know your true cost and making a profit thats comfortable for you and you are where you are in your life. Then I think that is Fine.

I use flat rate for all service work and small jobs. The best thing I ever did!:smile:

[Mr. Wizard]

The POCO provides meter bases and does everything line-side of the meter.

Aorund here we provide the meter base, not the meter itself, but the enclosure it goes in. No offense to anyone, but I tend to shy away from SqD Homelite. If I use SqD, I go with the QO series. A little more pricey, but it helps me sleep better at night.

[peter d]

Homelite.

Yeah, I don't buy Homelite either. I prefer Stihl or Husqvarna. :D

[BryanMD]

Mule I agree, Demographics play a big part in pricing. As long as you know your true cost and making a profit thats comfortable for you and you are where you are in your life. Then I think that is Fine.

But NO ONE really knows what their (current) true costs are.

You may know what your costs WERE and project what they should or might be, and you may even be able to do that pretty close to accurate, but you can't know what your costs are for this month until after this month has passed.

[celtic]

No offense to anyone, but I tend to shy away from SqD Homelite. If I use SqD, I go with the QO series. A little more pricey, but it helps me sleep better at night.

I give the HO the option of choosing what brand panel they will be paying for....from what is available by me.

The HO will usually ask me: Well what do you think?
My reply is: I have a QO in my house.

I let the customer decide.
IMHO, it is more professional to give them choices and my opinion, rather than just force my ideals on them w/o regards to their wallets.

[LarryFine]

If I use SqD, I go with the QO series. A little more pricey, but it helps me sleep better at night.Okay, sleep easy. :smile: QO it is:

A QO 200a 40/40 is $209, a difference of $55.00, add the ten 20a 1p's that the VP included, for $64.70, and add the difference between the HL's and QO's for the others in my breaker list, $46.62, for a total of $166.32 to add to my previous $272.86.

New total: $439.18, still below $500. How's that? :D



Added: Can the typical supply house beat that total?

[Mr. Wizard]

Okay, How's that? :D

I like it :smile: If I can keep a 200 amp service material cost below $500, I'm tickled. I agree with Celtic, if the HO ask me what I'd use if it were my house, I tell the HO the I use SqD QO, and that's what I use. I've had a lot of trouble in the past with HomeLINE (thanks for the correction there, Peter D :roll:) breakers failing mechanically. Just my opinion.

[ohm]

IF some jurisdictions outlaw T & M (in any form or fashion) does anyone take on a troubleshooting job for a flat rate? It could take 5 min. or five days! What's the business model? The law of averages?

Would a doctor treat a cancer patient for a flat rate, with a cure being the end product?

[MarkyMarkNC]

Just to add a question on to the original question. For those that are using flat rate pricing, are you using commercial software, or have you developed the pricing yourself through trial and error, experience etc?

[emahler]

IF some jurisdictions outlaw T & M (in any form or fashion) does anyone take on a troubleshooting job for a flat rate? It could take 5 min. or five days! What's the business model? The law of averages?

Would a doctor treat a cancer patient for a flat rate, with a cure being the end product?

every doctor uses flat rate....when was the last time you got an itemized invoice listing time and material from a doctor?

[ohm]

every doctor uses flat rate....when was the last time you got an itemized invoice listing time and material from a doctor?

When I do a flat rate job I don't get paid unless I complete the job. Is that why a doctor doesn't DO a job they just PRACTISE, until they get it right.

[peter d]

(thanks for the correction there, Peter D :roll:)

You're welcome. 8-)

And it was a joke. :roll:

[LarryFine]

I've had a lot of trouble in the past with HomeLINE ... breakers failing mechanically.The scuttlebutt is that the internal mechanism is the same in both lines, with only case differences.

[peter d]

The scuttlebutt is that the internal mechanism is the same in both lines, with only case differences.

And the Visi-Trip window, of course. 8-)

[tonyou812]

Define "material."

With a back-to-back meter/panel, there's the panel, breakers, a few feet of SE, and grounding. The POCO provides meter bases and does everything line-side of the meter (exc. masts.)

Home Depot pricing:

Homeline 200a MB Value Pack 40/40 w/10 20a 1p = $154.00
15a 1p - 3.25, 5 = $16.25
30a 2p - 7.84, 3 = $23.52
40a 2p - 7.84, 1 = $7.84
SEU - 3.00/ft, 6' = $18.00
Ground rod, 9.25, 2 = $18.50
Ground clamps, 3 = $9.75
Ground wires = $25

Total = $272.86

Of course, there are variables, probably more circuits, and the POCO isn't so generous in other areas, but it's doable.

ground rods 9.25? 3 clamps ? let me see water heater- 2, water meter-2, ground rods-2,rebar ground, 6 ft of seu, I always do it in metal or pvc pipe, 19 circuts only? meter pan? ( even if you get it from Poco someone has to pick it up), do you mount it right to concret or what?do you use bugs or crimps? are you really only using 6 feet of seu or any service entry? are you resusing old breakers? .....Im not sure but I feel like your missing a bunch of stuff. And some of our prices dont match.
I just did three service changes and they were all above 2200 bucks and some a bit more. I do many of them alone so I usually have to go back to finish something small like grounding or labeling so maybe thats were we differ. But I am finding it nesacary to include small upgrades like swaping out a couple of outlets to new or tamper resistant(1.19 each at Home Depot). I did loose one service change, and the guy told me he found someone to do it for 1400 so I lost out.
My material usually comes out to 650- 800 bucks. And Permits are usually 60-90 bucks for 200 amp upgrades, not to mention the time spent doing or waiting for inspectors. ....but what do i know...all i know is what I need to do to make it work..

[jrannis]

your right, I shouldnt have said anything. It only winds up bitting me in the butt. But seriously how do you even get material for 400 bucks for a 200 amp service change?

OK Tony, I know you guys from Jersey have a different set of manners then we do down south.
If you are nice to some city folk they will think it is a sign of weakness and will take you for a long ride before you get your money. If at all!

Remember Mule is debt free, has his son-in-law working for him as a helper, lives in a rural area and took himself out of the rat race.
He might know his customers financial situation and knows he has to do the job because he is the "town electrician" and is expected to, and will, charge accordingly.
The guy living in the big house on the hill, overlooking the town, might expect to pay a little more.
Guy installing the million dollar silo operation might pay an industrial rate. All done by the "town electrician".
What ever he makes, he gets to keep.
All done on a handshake!
Mule works and lives in a small town and has to see his customers almost on a daily basis. Could be in town, at the diner but for sure in church on Sunday.
If Mule knows his costs and can get by on %20 margin then God bless him. That would be my goal.
Otherwise, here in the City we need to be in the mid to high 30% just to make it. When you can get a higher margin, it makes like easier.

[jrannis]

Oh yeah to answer the question.
I will only do flat rate pricing. Easier to close the deal.
Just get real good at defining your scope of work!

[bradleyelectric]

OK Tony, I know you guys from Jersey have a different set of manners then we do down south.
If you are nice to some city folk they will think it is a sign of weakness and will take you for a long ride before you get your money. If at all!

Remember Mule is debt free, has his son-in-law working for him as a helper, lives in a rural area and took himself out of the rat race.
He might know his customers financial situation and knows he has to do the job because he is the "town electrician" and is expected to, and will, charge accordingly.
The guy living in the big house on the hill, overlooking the town, might expect to pay a little more.
Guy installing the million dollar silo operation might pay an industrial rate. All done by the "town electrician".
What ever he makes, he gets to keep.
All done on a handshake!
Mule works and lives in a small town and has to see his customers almost on a daily basis. Could be in town, at the diner but for sure in church on Sunday.
If Mule knows his costs and can get by on %20 margin then God bless him. That would be my goal.
Otherwise, here in the City we need to be in the mid to high 30% just to make it. When you can get a higher margin, it makes like easier.


That would be all well and good. It doesn't apply here though. Mule likes to sell on price and isn't the only game in town.

[ohm]

OK Tony, I know you guys from Jersey have a different set of manners then we do down south.
If you are nice to some city folk they will think it is a sign of weakness and will take you for a long ride before you get your money. If at all!

Remember Mule is debt free, has his son-in-law working for him as a helper, lives in a rural area and took himself out of the rat race.
He might know his customers financial situation and knows he has to do the job because he is the "town electrician" and is expected to, and will, charge accordingly.
The guy living in the big house on the hill, overlooking the town, might expect to pay a little more.
Guy installing the million dollar silo operation might pay an industrial rate. All done by the "town electrician".
What ever he makes, he gets to keep.
All done on a handshake!
Mule works and lives in a small town and has to see his customers almost on a daily basis. Could be in town, at the diner but for sure in church on Sunday.
If Mule knows his costs and can get by on %20 margin then God bless him. That would be my goal.
Otherwise, here in the City we need to be in the mid to high 30% just to make it. When you can get a higher margin, it makes like easier.

The small time electrician doesn't have to lock and unlock his truck all day long, pay parking fees, bond his jobs, wait in traffic, wait to get a permit, wait to buy supplies, pay tolls, wait for the inspector (and friend), wait for zoning or septic tank inspection, deal with union rules & scale, get his truck inspected or weighed, wonder if a scrub jay will scrub his job. Also, if he needs a hand on a job the HO or another craft will often help him and loan him a tool or a fastener.

I can call my wholesale houses or HD and they will gather my material and all I have to do is go in and sign a ticket. I have their home and personal cell phone numbers and they send me business, no charge.

The mayor, city council, police dept, fire dept. , clerks, inspectors and most residents are on a first name basis with the town electrician and will usually help any way they can, even after business hours.

The list goes on and on. Life is good!

[Mr. Wizard]

The small time electrician doesn't have to lock and unlock his truck all day long, pay parking fees, bond his jobs, wait in traffic, wait to get a permit, wait to buy supplies, pay tolls, wait for the inspector (and friend), wait for zoning or septic tank inspection, deal with union rules & scale, get his truck inspected or weighed, wonder if a scrub jay will scrub his job. Also, if he needs a hand on a job the HO or another craft will often help him and loan him a tool or a fastener.

I can call my wholesale houses or HD and they will gather my material and all I have to do is go in and sign a ticket. I have their home and personal cell phone numbers and they send me business, no charge.

The mayor, city council, police dept, fire dept. , clerks, inspectors and most residents are on a first name basis with the town electrician and will usually help any way they can, even after business hours.

The list goes on and on. Life is good!

True words. Even here in my little town, it seems everyone knows everyone, and word of mouth can make you or break you. Cost of living, for instance, is also a big part of it. Tonyou812 is from NJ, where home prices are very expensive compared to where I live. I live in a 2100 sq ft. home, and it needed nothing done to it when we moved in, except for a little paint and personal touches, and we bought it for $70,000. Online, a similar house in NJ will set me back over $200,000. Pretty sure commercial real estate there is just as expensive. So labor prices are changed accordingly. I'm sure Mule knows what he's doing, and I'm sure Mule doesn't do this for a hobby. I suspect he makes darn good money in OK, and can sleep well at night knowing he has given his customers (some of which I'm sure are dirt poor) a good deal and a quality job.

[bradleyelectric]

True words. Even here in my little town, it seems everyone knows everyone, and word of mouth can make you or break you. Cost of living, for instance, is also a big part of it. Tonyou812 is from NJ, where home prices are very expensive compared to where I live. I live in a 2100 sq ft. home, and it needed nothing done to it when we moved in, except for a little paint and personal touches, and we bought it for $70,000. Online, a similar house in NJ will set me back over $200,000. Pretty sure commercial real estate there is just as expensive. So labor prices are changed accordingly. I'm sure Mule knows what he's doing, and I'm sure Mule doesn't do this for a hobby. I suspect he makes darn good money in OK, and can sleep well at night knowing he has given his customers (some of which I'm sure are dirt poor) a good deal and a quality job.

Why does that make it wrong to make enough to cover health insurance, the cost of a new truck even though the 1 you have now is paid off, retirement benefits, and have enough in the bank to cover a years woth of expenses if times go bad or you get hurt?

[Power Tech]

When I incorperated and created another entity that I work for.I seperated the business from my personal life. The question is: do you have a job or a business. I am an employee and the business pays me a salery. When managing the company, the job must pay the insurence, trucks, my wage or the serviec tech, the accountant and all the other overhead. Plus a profit for the company. The company account is not my money. My wage is not profit. If work falls off a cliff, the business can still pay me my salery.

Terry

[Mr. Wizard]

Why does that make it wrong to make enough to cover health insurance, the cost of a new truck even though the 1 you have now is paid off, retirement benefits, and have enough in the bank to cover a years woth of expenses if times go bad or you get hurt?

It doesn't make it wrong. I believe that we should get paid for what we do, and (hopefully) get paid well. An owner should be all about growing the business, and that includes a new truck, retirement, insurance, the whole nine yards. But my point is that if an EC is content with what he has and content with what he's getting, than the EC shouldn't be chastised on his prices. I know of several EC's that are two man operations. They don't charge as much as the big boys, but with just the two of them, and maybe sometimes an extra hand, they make a darn good living for themselves. The bigger jobs they'll refer to one of the larger shops, and don't bite off more than they can chew. I also know of some shops that have priced themselves out of business. Just use whatever numbers work for you, and sooner or later you'll know if you're too cheap, too high, or just right. And if it's just right, why change it?

[satcom]

Why does that make it wrong to make enough to cover health insurance, the cost of a new truck even though the 1 you have now is paid off, retirement benefits, and have enough in the bank to cover a years woth of expenses if times go bad or you get hurt?

Why are you using common sense, you need to learn that the half full glass is a better way of thinking, better to work harder not smarter.

[Mule]

Why does that make it wrong to make enough to cover health insurance, the cost of a new truck even though the 1 you have now is paid off, retirement benefits, and have enough in the bank to cover a years woth of expenses if times go bad or you get hurt?

Its NOT wrong at all...in fact those are the same things we are striving for. Just completing our first year in business, we have our two trucks (06&04) paid for, as well as, all of our tools,inventory, built a small office whse, sidewalks, carport for the trucks, computer, bla bla.....and we do have medical insurance. For 09' we are focusing on getting back to our 401k contributions and, that years savings your talking about. But the first year has been a bit of a juggling act as we have to be fast learners to survive in this climate.

I think what's true here, is we all have to realize that things can be drasticaly different in the various areas of the country, and we need to respect one anothers particular situations, not being too quick to judge without considering all of the facts....we all have a wondefull trade in which we all have common interest, and a wonderfull forum to help us share it.:)

[satcom]

I think what's true here, is we all have to realize that things can be drasticaly different in the various areas of the country, and we need to respect one anothers particular situations, not being too quick to judge without considering all of the facts....we all have a wondefull trade in which we all have common interest, and a wonderfull forum to help us share it.:)

No matter wher you are in the country, and what the business conditions are, you still have to operate a business, like a business, Muel, just so you understand we are discussing a topic here, not being critical of you, the entire EC's industry has been in the dark about business practices, for many years, only recently with a new generation has there been an intrest in , making it better.

[Mr. Wizard]

No matter wher you are in the country, and what the business conditions are, you still have to operate a business, like a business, Muel, just so you understand we are discussing a topic here, not being critical of you, the entire EC's industry has been in the dark about business practices, for many years, only recently with a new generation has there been an intrest in , making it better.

With that being said, a business can still function and operate like a business - profit and all, with lower numbers. The amount of cash, liquid or otherwise, flowing through your shop at any given time doesn't make a business. It's how that money is handled. A successful business of any size that can pay their bills and turn a profit is doing something right, regardless of how much money is involved. The more money the better :grin:, but use what works for you.

[Mule]

the entire EC's industry has been in the dark about business practices, for many years, only recently with a new generation has there been an intrest in , making it better.

Uh? ....Here I thought the sun just had not come up yet.:D Glad you pointed that out to me......Is this why folks are so far in debt these days, failed mortages, $40-50,000 vehicles, .....Glad the "New Generation" is here to save the day, There's always room for improvement for sure.......:smile:

[celtic]

No matter wher you are in the country, and what the business conditions are, you still have to operate a business, like a business, Muel, just so you understand we are discussing a topic here, not being critical of you, the entire EC's industry has been in the dark about business practices, for many years, only recently with a new generation has there been an intrest in , making it better.

Satcom does bring up an interesting point about the "new generation".

I haven't really seen any trade publications aimed specifically at ECs that covers the "How much do I charge...?" train of thought.
There are trade publications aimed at plumber, HVAC, mechanical contractors that DO address this issue of "price".

If someone is sitting on that trade publication aimed at ECs that covers pricing; estimating; flat vs. T&M; etc....please spill the beans for the class!


:smile:

[Mule]

I've got it !! So work is slow, so the folks on this forum write a book on the subject, publish and put it up for sale....It would be called "New Generation Electrical Contracting" Then all of us, could buy one, and split the profit........

See there I've got scruples !!

Just Kidding !!:smile:

[emahler]

Satcom does bring up an interesting point about the "new generation".

I haven't really seen any trade publications aimed specifically at ECs that covers the "How much do I charge...?" train of thought.
There are trade publications aimed at plumber, HVAC, mechanical contractors that DO address this issue of "price".

If someone is sitting on that trade publication aimed at ECs that covers pricing; estimating; flat vs. T&M; etc....please spill the beans for the class!


:smile:

there used to be one, but they couldn't get enough circulation to make it profitable:D

[SEO]

Electrical contractors keep everything a secret. I know many perhaps hundreds of EC's and only a few will share anything with each other. After all everyone is in competion with the other. Electricians will talk code until they are blue in the face but not business. There are probably more ideas shared on this forum than anywhere.

[emahler]

Electrical contractors keep everything a secret. I know many perhaps hundreds of EC's and only a few will share anything with each other. After all everyone is in competion with the other. Electricians will talk code until they are blue in the face but not business. There are probably more ideas shared on this forum than anywhere.

actually, electricalknowledge.com used to have a lot of talk about it...but then a few guys came in, and literally ruined the site by driving away posters...now it's got tumbleweed...

[bradleyelectric]

I talk about sales and pricing with all the guys I know. I think it's very interesting when someone says to me that xyz is charging $85 an hour and if they are doing it for that then we should be able to do it for $70/ hr. I'm more than happy to let them know I have no desire to do service work for $70, or $85/ hr. I tell them what I want to make an hr and how I do it. Again this is residential service work. Reason being I can bill a different number of hours a day if we are doing 2 hr jobs as opposed to 80 hr commercial service jobs or 650 hr construction jobs. Some areas of the business are more profitable than others.

[Deep South]

Great plan! We do not to exceed but adding the claus without additional autho is very good wording. I always learn something on these posts.

[Greg Swartz]

When I incorperated and created another entity that I work for.I seperated the business from my personal life. The question is: do you have a job or a business. I am an employee and the business pays me a salery. When managing the company, the job must pay the insurence, trucks, my wage or the serviec tech, the accountant and all the other overhead. Plus a profit for the company. The company account is not my money. My wage is not profit. If work falls off a cliff, the business can still pay me my salery. Terry
Agreed. This is how we run our business. While I am the President, I am also an employee. I receive a paycheck. The company money is not mine, although I do decide where all the money goes.

... the entire EC's industry has been in the dark about business practices ...
Oh how true that is! Many ECs I see that will still do a service changeout for $800 or less. They think they are working for wages, and not to grow a business. Not to cover lost time. Not to cover for time spent giving bids. Meeting with customers for estimates...
We get a Master's license, and we think we can run a business...

Electrical contractors keep everything a secret. I know many perhaps hundreds of EC's and only a few will share anything with each other. After all everyone is in competion with the other...
I have been struggling with this one. I want to share with other ECs, but cannot seem to let go of the concern that one will use the knowledge against me.
Although, recently, I did have a job that I did not bid because a "friend" contractor was there.
They called me up the next day and said "Here. This job is too big for us, and they called us to do it."
So, it can work out... but we all have to be careful.

[Sparky555]

My helper and I worked 9 hrs yesterday on a service conversion, material prices was just under $400. Havent billed yet but the price is going to be somewhere around $1500-$1600 and we were happy as Larks....customers next higher price was $2000

Honestly, I read the WHOLE thread. A thought for your consideration Mule. The next higher price was $2k. Wouldn't your customer be happy with $1900? I don't mean to suggest it like a used car salesman "leaving money on the table" way. I think you mentioned not adding to your retirement last year. That extra $3-400 is what could have gone into your retirement. Everyone's still happy, right?

[Mule]

Honestly, I read the WHOLE thread. A thought for your consideration Mule. The next higher price was $2k. Wouldn't your customer be happy with $1900? I don't mean to suggest it like a used car salesman "leaving money on the table" way. I think you mentioned not adding to your retirement last year. That extra $3-400 is what could have gone into your retirement. Everyone's still happy, right?

Thanks, but we like our price structure just as it is......

[Mr. Wizard]

Thanks, but we like our price structure just as it is......

I'm not taking sides or shooting anyone down, but mule has a point. Sometimes you just have to leave well enough alone. Did you know that the next lowest price was $2000 before you placed your bid? Probably not, but maybe. If so, you may have inched your price up a little. A lot of contractors do that, keep inching it up and inching it up, until that contractor finds he has overpriced himself. And by then, that contractor has already left the sour taste of greed in peoples' mouths, and then its another one bites the dust.

[Mule]

I'm not taking sides or shooting anyone down, but mule has a point. Sometimes you just have to leave well enough alone. Did you know that the next lowest price was $2000 before you placed your bid? Probably not, but maybe. If so, you may have inched your price up a little. A lot of contractors do that, keep inching it up and inching it up, until that contractor finds he has overpriced himself. And by then, that contractor has already left the sour taste of greed in peoples' mouths, and then its another one bites the dust.

Thanks but...., I really dont want to talk about our rates any more. I have a different business head, and Im not changing anytime soon. I am at peace with our structure and that's that... I dont go around telling others that I think they are charging too much....So lets leave it lay.

[emahler]

Thanks but...., I really dont want to talk about our rates any more. I have a different business head, and Im not changing anytime soon. I am at peace with our structure and that's that... I dont go around telling others that I think they are charging too much....So lets leave it lay.

yet....you continually start threads about rates and who is charging what....reminds me of the scene from Casablanca when the casino is raided and the local official, as he's taking his winnings from the casino says something to the effect of "i'm shocked there is gambling going on in here"

[Sparky555]

yet....you continually start threads about rates and who is charging what....reminds me of the scene from Casablanca when the casino is raided and the local official, as he's taking his winnings from the casino says something to the effect of "i'm shocked there is gambling going on in here"

I felt the same way. I guess I'll keep the responses to your threads to the point of your question.

"Ok, there's been talk in the past on the pro's and con's of flat rate pricing. So, Im curious who's doing it, and how's it working for you?"

I've used flat rate pricing for a few years and have returned to T&M on only one small commercial job. My pricing is set for a small net profit and I've been able to build a shop, pay a respectable salary, buy a new van, and fully fund my retirement. I'll never go back to T&M.

[lbwireman]

Its NOT wrong at all...in fact those are the same things we are striving for. Just completing our first year in business, we have our two trucks (06&04) paid for, as well as, all of our tools,inventory, built a small office whse, sidewalks, carport for the trucks, computer, bla bla.....and we do have medical insurance. For 09' we are focusing on getting back to our 401k contributions and, that years savings your talking about. But the first year has been a bit of a juggling act as we have to be fast learners to survive in this climate.

I think what's true here, is we all have to realize that things can be drasticaly different in the various areas of the country, and we need to respect one anothers particular situations, not being too quick to judge without considering all of the facts....we all have a wondefull trade in which we all have common interest, and a wonderfull forum to help us share it.:)

Mule,
Congratulations on all in the 1st paragraph! Re: your 2nd paragraph, amen ta all that! I'm CA born an' OK bred, livin' an' workin' in CA since leavin' the Army in the 60's but your post made me downright homesick. Good words.

[hardworkingstiff]

I've used flat rate pricing for a few years and have returned to T&M on only one small commercial job. My pricing is set for a small net profit and I've been able to build a shop, pay a respectable salary, buy a new van, and fully fund my retirement. I'll never go back to T&M.

I have a customer that wants to add a power center for a boat. Power center is a 200-amp load about 350' from the panel. How do I do a flat rate quote on this?

This is meant to be a serious question.

[Mule]

yet....you continually start threads about rates and who is charging what....reminds me of the scene from Casablanca when the casino is raided and the local official, as he's taking his winnings from the casino says something to the effect of "i'm shocked there is gambling going on in here"

I Invite all to view my " Threads Started" and make your own judgement. Emahler's statement is just destructive in nature and is not true. I didnt look all my threads, but I looked a bunch of them. Found one about Trip Charges, and one about Winter Rates and the Economy....I think Way Back when I first started this forum, I may have asked others rates.....geez give me a break

..Kind of reminds me of two kids playing in a sand box and fighting over toys, instead of a movie though.....

[Mule]

I have a customer that wants to add a power center for a boat. Power center is a 200-amp load about 350' from the panel. How do I do a flat rate quote on this?

This is meant to be a serious question.

For me that would not be a job I could flat rate because its not a repetitive task for me. I would have to price it out myself...:)

[jmsbrush]

I have a customer that wants to add a power center for a boat. Power center is a 200-amp load about 350' from the panel. How do I do a flat rate quote on this?

This is meant to be a serious question.
Very simple!
You go to your flat rate book, You go to the conduit page. That has a price for what ever type of conduit. Go to your wire page for the size of wire you need. Which also has the price included. Then go to the page for panels and load centers. Which also has the price included. Add those prices together and there you go. Your Price.
These figures already have your overhead and profit built in. Its up front prices right there for your customer to see.

[satcom]

Very simple!
You go to your flat rate book, You go to the conduit page. That has a price for what ever type of conduit. Go to your wire page for the size of wire you need. Which also has the price included. Then go to the page for panels and load centers. Which also has the price included. Add those prices together and there you go. Your Price.
These figures already have your overhead and profit built in. Its up front prices right there for your customer to see.

Perfect job to use a pricing book, you just have to understand how the book works, and how to apply it, all the estimating has been done and your overhead and burden, and profit is already figured.

[Mule]

Very simple!
You go to your flat rate book, You go to the conduit page. That has a price for what ever type of conduit. Go to your wire page for the size of wire you need. Which also has the price included. Then go to the page for panels and load centers. Which also has the price included. Add those prices together and there you go. Your Price.
These figures already have your overhead and profit built in. Its up front prices right there for your customer to see.

Good points, That's how I do it, and I find that data book is quicker for smaller projects than the software which Im not very good at......I can price up a job pretty quick. I use mostly the labor units however. I do take the material cost data and cross check it with local supplier quotes which is different...

As for my last post on this thread, My intent was that non-repetitive jobs are hard flat rate the whole job, but In jmsbrush's method breaking it down is exactly how I do it....

[hardworkingstiff]

Very simple!
You go to your flat rate book, You go to the conduit page. That has a price for what ever type of conduit. Go to your wire page for the size of wire you need. Which also has the price included. Then go to the page for panels and load centers. Which also has the price included. Add those prices together and there you go. Your Price.
These figures already have your overhead and profit built in. Its up front prices right there for your customer to see.

OK, I'm game, who's book do I buy? (or is it a service with a monthly charge?)

[Mule]

OK, I'm game, who's book do I buy? (or is it a service with a monthly charge?)

Not 100% on the name, its in the van, but I think one I have is Ecost electrical cost data. Got mine as a last years book for $25.....I use it mainly for the labor units.

[hardworkingstiff]

Thanks Mule. I've used "Means" for the labor units in the past (as well as Electrical Estimator). I've found them very useful when I get into things I don't have a lot of experience with (labor side).

I've been thinking about this and I believe the reason T&M users don't make as much money is they just don't know how much to put on the job.

Most of the work I do does not lend itself to the unit pricing methodology. I don't compete with the "normal" electrician. I'm usually too expensive and I need to find that atypical work to get my pricing. I guess when I think about it I do a hybrid type of estimating. A little T&M and a little unit pricing.

[emahler]

Start Here (http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla:en-US:official&hs=KwF&pwst=1&q=related:www.maiosuccess.com/)

[electricguy]

Start Here (http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla:en-US:official&hs=KwF&pwst=1&q=related:www.maiosuccess.com/)

I have seen this company poping up on Google ads lately

http://collierflatrate.com/

[jrannis]

I have a customer that wants to add a power center for a boat. Power center is a 200-amp load about 350' from the panel. How do I do a flat rate quote on this?

This is meant to be a serious question.

Do a voltage drop calculation and you might end up with 350MCM.
Start with knowing how long the trenching and backfill will take.
Backhoe for a day $500
350' of 3" PVC $350
8 Hours $360
8 hours
Pull Wire with
Helper $560
2200' 350MCM $8800
Gear $1500
Another 8hours
w/ Helper $560
Truck $250
Misc $200

COST $13,080

Marign %40 $8,720

Total $21,800 (Selling Price)

[macmikeman]

Guy's in South Florida who post numbers for trenching hours crack me up. You live where its all sand down to 4 feet. Try your numbers where there is extinct volcano below you and see how long it takes....:)

[peter d]

Guy's in South Florida who post numbers for trenching hours crack me up. You live where its all sand down to 4 feet. Try your numbers where there is extinct volcano below you and see how long it takes....:)


Or where your soil type is "rocks with some dirt here and there."

[aline]

It depends on where you're digging the trench

http://i95.photobucket.com/albums/l129/brucepri/Beach.jpg

http://i95.photobucket.com/albums/l129/brucepri/RockyGround.jpg

http://i95.photobucket.com/albums/l129/brucepri/jungle.jpg

and who's doing the digging

http://i95.photobucket.com/albums/l129/brucepri/rock-ground-squirrel.jpg

http://i95.photobucket.com/albums/l129/brucepri/Gorilla.jpg

[aline]

and what equipment you're using

http://i95.photobucket.com/albums/l129/brucepri/Trencher1.jpg

http://i95.photobucket.com/albums/l129/brucepri/Trencher3.jpg

[powerslave]

Flat rate is all I use. It works very well for me and I'd never go back to T&M.

[Mr. Wizard]

Do a voltage drop calculation and you might end up with 350MCM.
Start with knowing how long the trenching and backfill will take.
Backhoe for a day $500
350' of 3" PVC $350
8 Hours $360
8 hours
Pull Wire with
Helper $560
2200' 350MCM $8800
Gear $1500
Another 8hours
w/ Helper $560
Truck $250
Misc $200

COST $13,080

Marign %40 $8,720

Total $21,800 (Selling Price)

8 hours for $360? Can I use you as a sub sometime? Just kidding, but that is cheap. Flat rate for me and a helper is $1200 a day (8 hours). Other than that, your price is spot on.

[jrannis]

8 hours for $360? Can I use you as a sub sometime? Just kidding, but that is cheap. Flat rate for me and a helper is $1200 a day (8 hours). Other than that, your price is spot on.

Just looking at cost!
$36 is wages and burden. Could be closer to $45.

Regular service rate for a man and a boy is $150 to $170 per hour.

[jrannis]

Guy's in South Florida who post numbers for trenching hours crack me up. You live where its all sand down to 4 feet. Try your numbers where there is extinct volcano below you and see how long it takes....:)

We have coral rock in some area that will bend the end of a pick.
That would be a 6" deep IMC job.

[RNC]

My point is this is America, and if a job is code compliant, passes inspection, why should the higher bidder complain if there are those whom can do the job for less?
Its not that the higher bidder is complaining. Hes trying to sell a BETTER job that is more profitable. What is code compliant? I was taught that the code is a minimum requirement. Its the absolute LEAST you can do. It is not something to strive for. The better contractors are trying to exceed the code.

[wirenutt]

i worked for a contractor for almost a year that used only flat rates. to change out a sp switch it was around 95.00 plus trip charge . a gfci receptacle was about 250.00, service upgrade for a 100 amp about 2500.00 when the competiters about 850.00 for the same job and lots of the time with higher grade materials.

[powerslave]

i worked for a contractor for almost a year that used only flat rates. to change out a sp switch it was around 95.00 plus trip charge . a gfci receptacle was about 250.00, service upgrade for a 100 amp about 2500.00 when the competiters about 850.00 for the same job and lots of the time with higher grade materials.

Did they pay you well? Did you have any bennies? What do you think the competition at $850.00 would have paid you?