estimating simple residential jobs

[quogueelectric]

Does anyone have any advise on how much to charge on residential jobs please differentiate between new work and old work and what the going hourly rate for your area is. If I am undercharging it hurts all of us.

[jimport]

You really need to figure out YOUR cost, not what it costs someone else to do the job. Their costs can be different than yours and if you charge that elusive going rate your could find yourself out of business because you didn't charge enough.

Try this to figutre out your cost.

http://www.masterplumbers.com/utilities/costcalc/

[quogueelectric]

That was a great link but in my area it is very hard to get customers to go for a t+m price they want to know what a job is going to cost before you start

[LarryFine]

If a customer prefers a straight price, I give them one, along with the explanation that I must assume the worst-case scenario with variables, such as trouble-shooting, wall-fishing, etc.

It's easier to lower the final price than it is to raise it.

[electricguy]

I like how Ellen Rohr sums it up Read Line 3 :)

1. You want to make money in your business.
2. Youve been basing your selling prices on what the other guy charges and
you just found out that the other guy is going out of business.
3. Youve discovered the going rate is good for one thing...going down the
drain.
4. You have plenty of hobbies. You dont want your business to be another one.
5. You have been pulling selling prices out of thin air and you dont want to do
that anymore!
6. You read all the business For Dummies... books, and now you feel like a real
dummy. The information was too complicated! You want easy. This is it.
7. You want to do what you love, and you want to make a decent living doing
it.
8. You have been in business for years...and you have less money than before
you started.
9. You are thinking about starting a business and you are wise enough to look
into pricing before you lose lots of money.
10. You want to make LOTS of money in your business.

[mdshunk]

... but in my area it is very hard to get customers to go for a t+m price they want to know what a job is going to cost before you startThat's either a geographical oddity, or they don't trust you for some reason. I find it hard to belive that there does exist demographic pockets where flat rate is the only thing that customers will accept. If that does happen to be the case, just buy yourself a flat rate book, work hard, and retire early. :D

[satcom]

If you work T&M they still want to know, how long the job will take, so you may as well master the art of estimating, or buy a crystal ball with instructions, and give them a lump sum price.

The price books are designed to be used as a guide in field estimating, a take off price point, that enables you to build a job price, often price sheets are thought to be a book, with ready to go prices, so even with a price book you will still need to consider the job conditions, and additional tasks required for each job.

Then there are the sales books, you can buy, that have inflated prices, something I would not use, but they are out there. We have used price sheets for years, and they are a big help in doing field estimates, but not something you would pick a price out of to give a customer.

Find your real cost of dong business, add your desired profit, and do the best job of estimating you can.

[JES2727]

Does anyone have any advise on how much to charge on residential jobs please differentiate between new work and old work and what the going hourly rate for your area is. If I am undercharging it hurts all of us.

Everyone on this board is here to help, but it seems everyone is reluctant to talk about real numbers. I don't understand it. Figuring your costs and adding your "desired profit" is good advice, but if you're prices are still half of the going rate it's bad for the market and you're cheating yourself out of potential income. There's nothing wrong with making more than your "desired" profit.
Call some local contractors from the phone book. Tell them you need some things done in your home and ask them what it would cost. That will give you a good benchmark for setting your own prices.

[j_erickson]

Everyone on this board is here to help, but it seems everyone is reluctant to talk about real numbers. I don't understand it. Figuring your costs and adding your "desired profit" is good advice, but if you're prices are still half of the going rate it's bad for the market and you're cheating yourself out of potential income. There's nothing wrong with making more than your "desired" profit.
Call some local contractors from the phone book. Tell them you need some things done in your home and ask them what it would cost. That will give you a good benchmark for setting your own prices.

I agree with this. I'd add that if figuring your cost and added profit puts you much higher than the competition, you might have trouble selling a lot of jobs.

[IllinoisContractor]

For new residential construction you really need a quality estimating program. If you really want to determine your exact cost there is no substitute for completing a thorough take-off from the blue print.

1) Every house has its own electrical layout.
2) Every house has its own construction factors that could make the job easier or harder.
3) Every contractor has their own material prices.
4) Every contractor has different overhead.
5) Every contractor has different methods of installation. Some take longer than others.
6) Every geographical area has different labor costs.

The list goes on and on. My point is that there is no magic number that works for all contractors. Each contractor needs to be able to calculate their own costs. If they can't, then that is what truly hurts the industry.

Buy a good residential estimating program. It will make you money. Better yet, it will prevent you from losing money.

Click here (http://turbobid.net) for the estimating program that I use.

[ceknight]

Everyone on this board is here to help, but it seems everyone is reluctant to talk about real numbers. I don't understand it.

The vagueness of the question brings this on. We're all busy people, and if someone asks "what are your rates?" it can take quite a bit of time to sit down and spell it all out. And we have no idea whether our answers are really going to be relevant to the OP. :)

Questions like "I live in X city, what do you folks from there charge for this specific (with details provided) residential service?" might provide an opportunity for more helpful answers.

Just a suggestion,

[cowboyjwc]

I agree with most of the posters in that there is no magic number. The company with 10 guys and 5 fully loaded service trucks working out of a shop, is probably going to charge more than a single guy working out of his house. LA, New York City, or any other big city it will probably cost you more than some little town in the mid-west.

[quogueelectric]

I feel that I am at a clam convention and that in itself is teaching me to never give out your numbers unless you have a customer or something silly like that that wants a hard number.

[bradleyelectric]

$105/ hr 1 man and a van for T&M service work. I like to give a firm price when I can, and am looking into flat rate books at the moment. I don't make money sending trucks running around doing 1 or 2 hour jobs all day. It would be nice if I could schedule 8 hours a day of jobs that could be done like that, but that takes a lot of coordination. We did a T&M job not real long ago that took off and on around 18 months. It was full days for the most part when we were there and sometimes guys were there more than a month at a time. I'll take that all day everyday. The only part I had to concern myself with was getting the job rolling in the beginning, when the meter banks had to be disconnected and reconnected, invoicing, and cashing checks. I make more money on "I can hang those 4 ceiling fans in a day for you for $800, or we can do that above ground swimming pool for you Tuesday for $1500. including permit and trenching, service change to 200A $1500." Trencher costs me $175 or I can sub it for $400 and there is around $125 in other materials for that pool. The service change cost me about $500. in materials including a Cutler Hammer BR 30/40 panel with breakers. We do not supply the meter in my area, so both those scenarios are $1000. days. The 4 ceiling fans in a day are around a $650/ day. Hopefully we can upsell a little there. That is just a little better than a break even day. I'm still learning.

[LYNXelectricsocal]

YEAH!! Give me a break man. how is anyone supposed to start spitting out numbers to you? Every little technique learned from one journeyman to another, can dictate a transparent variable that changes their bid. Not to mention all the variable differences from one AREA to another, the CUSTOMER, the JOB, the E.C., MATERIALS, on and on...If you ask me what i charge for a specific job w/ a good idea of the exact scenario, I would be glad to tell you. As well as telling you how I got that number in detail. Because I DO AGREE that we should all have a good idea of what we are charging in order to keep a descent pace w/ eachother and eliminate those damn "trunkslammers"

[IllinoisContractor]

Because I DO AGREE that we should all have a good idea of what we are charging in order to keep a descent pace w/ eachother and eliminate those damn "trunkslammers"
You should have a good idea of what your costs are for a job, what your overhead is and what you need for profit. I understand that it is helpful to know where your competition is so that you can adjust your profit margins so as to be able to get the job but other than that, how does that eliminate trunk slammers? Don't they just low ball everyone?

[quogueelectric]

Im not feeling the love here I guess some are afraid to quote a solid number that is sad.

[IllinoisContractor]

No offense but why do you need someone to quote a number for you?

[tadavidson]

Based on your signature you have the rate thing down pat. Stick to that, If your to high you'll soon know it.

[celtic]

Does anyone have any advise on how much to charge on residential jobs please differentiate between new work and old work and what the going hourly rate for your area is. If I am undercharging it hurts all of us.
So what are YOU charging?

That's the way the game is played....you ask a question, include some actual info...and then WE can gang up on you and tell you what's right/wrong about it. :)

Here's a great example of the "game":
Am I charging too much? (http://forums.mikeholt.com/showthread.php?t=55055)

I threw numbers all over the place. Now people have some hard data to compare. To arbitrarily say " What's the going rate in your area?" means nada.

Other examples of the "give and get approach":
Just for fun....(another bid) (http://forums.mikeholt.com/showthread.php?t=55839)

Just for fun...(bid) (http://forums.mikeholt.com/showthread.php?t=55795)

Here's one that failed:
Restaurant (http://forums.mikeholt.com/showthread.php?t=54636)
I didn't supply much info ...I can't, don't and won't expect other people to do my work for me.

This is how I "play the game". I give - others get - others give - I get. It's not a big secret...it's simply laying my cards on the table. If my competitors see my numbers ~ GOOD. My "going rate" has no bearing on their "going rate".

Here's another good one:
Estimating Service Upgrades (http://forums.mikeholt.com/showthread.php?t=84840)
A new EC from NJ asked me a few questions...I like think I helped him a little bit ;)

I feel that I am at a clam convention and that in itself is teaching me to never give out your numbers unless you have a customer or something silly like that that wants a hard number. That's not true at all.
Maybe you need to work on your approach?

[mark henderson]

I have been kiking around the idea off putting together a flat rate for all our service work. I like the idea of it. Right now I have a flat rate for the material for various extras then I charge my 1 man rate or 2 man rate on top of the material flate rate.

Mark

[emahler]

the answers are simple:

our residential techs make approx $300/day with their burden
our apprentices make approx $125/day with their burden
My overhead per truck is approx $300/day (includes shop, advertising, office, etc.)

I need $725/day/truck to keep the lights on.

Our goal is $1000/day

Our material runs approx 10%, which leaves us with an average of $900 gross

$900-725 = $175/day/truck gross profit.

Now, how do you get those prices?

by not worrying about the "going rate". Why would I, or should I, concern myself with some guy who doesn't know his costs. Just because he's happily charging $55/hr on his way to bankruptcy, doesn't mean I need to follow.

Residential service work is the easiest field to not compete on price. It's apples to oranges on every job. There are no blueprints. There are no scopes of work. Your 200A service upgrade and my 200A service upgrade are not the same thing.

You use SER cable, T&B panel, galvanized ground rods, aluminum ground wire

We use PVC and copper, Sq D QO panel, copper ground rods, etc.

You charge $2200, we charge $3500 ...my cost is about $300 dollars more than you.

You know what, I'll get the $3500. Not everytime, but I only need to get 1 for every 2 you need to make the same money.

If we both close 50%, i need 1/2 as many calls as you.

You can worry about what the going rate is, or you can learn your costs and figure out how to sell them.

The key is, and this is the most important part, is does not matter what your price is, you have to give the customer more than you charged them.

You can not stay in business charging $3500 for a service and doing the same job as the guy charging $2000. That won't work.

But charge $3500 and make them feel like they got $4000 worth of work, and you will have happy customers and make good money.

That is the key. The rest is just ways to make that key work.

[jaylectricity]

First of all charging double with the homeowner helping is all wrong. It should be triple.

Second of all, I hope you are enjoying yourself.

Third of all, Celtic...that was a brilliant response.

Am I out of touch on this one?

[celtic]

Third of all, Celtic...that was a brilliant response.

Am I out of touch on this one?
If you are agreeing with me, I'd suggest some serious "couch time" for you...
http://www.the-funneled-web.com/images/Lucy%20the%20psychiatrist.gif


:D
:D

[quogueelectric]

my spell check program took the whole network down. Ok I am starting to feel the love around here you are a tough crowd to please. I try to get 165 a 14-2 hr 225 a 12-2 265 a 12-3 hr and basically 45 per box with simple devise one is included with hr. 3 ways and gfi are higher 80 and 65 respectively . 125 an Icat HH and 165 for 4 in lv. I dont like to leave money on the the table however I do want to give my customers a legitimate fair price that is all I am trying to do. I have been a worker for 30years never concerned myself with pricing now I am finding it to be my biggest challenge. The work is easy the pricing is hard for me and when you hesitate in front of a customer it looks like you dont know what you are doing.