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Thread: Billable hourly wage

  1. #1

    Billable hourly wage

    Hello Fellow Electricians.
    Can someone please share some knowledge here.

    I have a small company in NJ. What is an acceptable hourly rate to invoice a customer for 2 guys doing service work? And do you charge a higher rate for the 1st hour and then default to another rate for each additional hour? If so, is it to much to ask what going rate is? My goal is to maintian a level of what's expected as to keep our trade thriving without under cutting anyone which hurts us all.

    I'm a long time member here and aware of the obvious factors such as my own overhead but what is going rate these days?

    Our trade has seen some big changes with regards to handymen and others dumming down our value. That has made it harder to cover my overhead as it seems contractors and other companies beat us up over costs.

    Any input particularly from a company in NJ would be appreciated.

    SINCERELY
    STATICCONTROL

  2. #2
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    One problem I can see with service work is not all calls have a need for two technicians. This makes you too high priced if you want to collect labor for both when only one could have done the work in about the same time. Now if two show up but the problem is simple and fixed in minutes - you probably charging an minimum charge that hopefully still covers at least one hour of what you paid both employees. If this only happens once in a while then eating a little profit here and there still keeps customers happy, which is better then them telling everyone you are too high and losing jobs because of that. Otherwise if majority of your work is service calls you should maybe only send one person initially and if they find they need extra help for some reason send someone else over to help, or if the first trip determines you need additional parts and some extra muscle to do a task send two people on the return trip.

  3. #3
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    service calls

    There are lots of schemes but it all comes down to collecting enough money on the front end to cover the cost of arriving at the job. Therefore, some companies charge $XX for the first hour and $X for the second hour.

    Some companies charge $X for the first thirty minute or fifteen minutes. However it is structured, around here, Northern Virginia, most companies are looking at $150 to $200 for the first hour.

  4. #4
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    I know there are some members from NJ in here that will hopefully answer, but if not, I'll tell you what I did years ago; I just started calling around to various electricians and asking them .


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  5. #5
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    Quote Originally Posted by staticcontrol View Post
    Hello Fellow Electricians.
    Can someone please share some knowledge here.

    I have a small company in NJ. What is an acceptable hourly rate to invoice a customer for 2 guys doing service work? And do you charge a higher rate for the 1st hour and then default to another rate for each additional hour? If so, is it to much to ask what going rate is? My goal is to maintian a level of what's expected as to keep our trade thriving without under cutting anyone which hurts us all.

    I'm a long time member here and aware of the obvious factors such as my own overhead but what is going rate these days?

    Our trade has seen some big changes with regards to handymen and others dumming down our value. That has made it harder to cover my overhead as it seems contractors and other companies beat us up over costs.

    Any input particularly from a company in NJ would be appreciated.

    SINCERELY
    STATICCONTROL
    I can tell you how we did it. There was a standard hourly rate for normal daytime hours worked and a higher rate for out of hours (after 6m) weekends etc. And the rates applied to travel time. It kept things simple.
    A number of customers negotiated a service coontract that gave them preferential rates, a 24/7 support/contact line, and guaranteed mobilisation time. I think a lot depends on what sort of customer you are dealing with.
    Si hoc legere scis nimium eruditionis habes.

  6. #6
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    It will depend on the cost calculation that have done for your business.

    I may charge $50 per hour that includes a healthy profit and my neighbor nay charge $400 per hour that includes a healthy profit.

    You and only YOU can decide how much to charge. By the way if you go what the market charges then you are among the average. Learn sales (take contractor related sales class) and charge for what you are worth and what your employees are worth. Pay them extra, benefits, medical, vacation pay....

    Don't forget the healthy profit.

    You can also charge flat rate. I know some will cringe on the thought of "Flat Rate".
    Edward
    Education is a progressive discovery of our ignorance.


  7. #7
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    Quote Originally Posted by edward View Post
    It will depend on the cost calculation that have done for your business.

    I may charge $50 per hour that includes a healthy profit and my neighbor nay charge $400 per hour that includes a healthy profit.

    You and only YOU can decide how much to charge. By the way if you go what the market charges then you are among the average. Learn sales (take contractor related sales class) and charge for what you are worth and what your employees are worth. Pay them extra, benefits, medical, vacation pay....

    Don't forget the healthy profit.

    You can also charge flat rate. I know some will cringe on the thought of "Flat Rate".
    Flat rate works fine with regular recurring types of tasks/sales. In service work there is always those abnormal things that come up that you don't have any past basis to determine a flat rate for that particular task, and at very least you may need a certain amount of labor just to assess those situations and come up with a cost if customer wants to know what final cost of solving their problem will be.

  8. #8
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    Quote Originally Posted by edward View Post
    It will depend on the cost calculation that have done for your business.

    I may charge $50 per hour that includes a healthy profit and my neighbor nay charge $400 per hour that includes a healthy profit.

    You and only YOU can decide how much to charge.
    But the customer decides how much he will pay.
    Si hoc legere scis nimium eruditionis habes.

  9. #9
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    Quote Originally Posted by staticcontrol View Post
    I'm a long time member here and aware of the obvious factors
    such as my own overhead but what is going rate these days?
    ellen rohr
    bare bones business plan

    https://ellenrohr.com/the-bare-bones-biz-plan/

    $10

    takes a weekend to do.

    i had extremely low overhead. my hourly rate was extremely low,
    about $130 an hour. most guys in this area were above $175 per.
    so, you need to bring in about $1k per day, 'cause you won't work
    every day, to remain solvent.
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  10. #10
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    Quote Originally Posted by kwired View Post
    Flat rate works fine with regular recurring types of tasks/sales. In service work there is always those abnormal things that come up that you don't have any past basis to determine a flat rate for that particular task, and at very least you may need a certain amount of labor just to assess those situations and come up with a cost if customer wants to know what final cost of solving their problem will be.
    For me I would rather stick with flat rate. Since abnormal issues are rare, then I would guess how long it will take and charge a flat rate accordingly. If I guessed incorrectly then that is my lesson for next time to charge more for that abnormal task.

    For the hourly jobs the customer is always asking out loud or silently, "why is the electrician charging $$$ when I only make $$", "why does/did it take so long to do the job, my neighbor said he could do it in less time"

    With flat rate and sales training you will be able to charge healthy rates. The customer knows the job/repair will not exceed "X" amount of dollars.
    Edward
    Education is a progressive discovery of our ignorance.


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