Arlington catering to the hack?

[mivey]

How is that playing games?

Why don't you ask this guy:

...Why not play the same game the big box stores play...

Because I want to make more than the average 5% net profit that electrical contractors make.

Then set a margin that you like, say 10% or 15%.

...Why should I benefit or reward myself for being more efficient than the competition?...

If you are better than your competition, set your rate higher to compensate. If you really are better, your customers should recognize.

...Needless to say the homeowner wasn't very happy and he told me he would never hire this guy again.

Then think about that. If someone who also does good work (like you do) comes in and does the same work and makes a decent margin but cuts your price (because you opted to take a high rate of return), they will not call you back either. Figure out a fair rate of return and charge a fair price. Then you can look the customer in the eye and honestly tell them they are getting a fair price.

Why do you think some customers distrust the quotes (forget the "hack" quotes)? If someone who does the same quality work as you can cut your price, the customer can put 2 and 2 together and know they were paying you a high rate of return. I'm assuming that the lower priced contractor has properly priced his service to include T&M plus overhead plus a 10-15% margin.

 

[aline]

Why don't you ask this guy:

Why not play the same game the big box stores play and advertise your installation at the $399. You could say something like "Flat screen TV installations starting at $399." or you could put in the fine print, like the big box stores do, does not include the mount, cables or electrical power.

I admit this was a bad choice of words on my part. The truth is I don't believe they are playing games at all. They tell you what you get for that price. For anything beyond that they give you a price for it as well before they do any work. You have the option to get other prices.

In my case she thought the big box store's price was too high so she had me come out and give her a quote as well. She went with them on the low voltage stuff because I wasn't any cheaper. She didn't like the price they were going to charge her for the mount so she shopped online and bought the mount herself. No where did they try to trick her or play games. She knew exactly what it was going to cost before they started including what they wanted for the mount.

Again look at the websites and you can see they spell out what's included and not included. I don't see any game playing there.
http://www.bestbuy.com/site/olspage.jsp?skuId=8464057&type=product&id=1186003679923

I find it ironic that we complain on these forums about how low ballers & side jobbers charge so little and are keeping the pricing on electrical down but when we have an opportunity to make some decent money on A/V installs we do it for half of what the A/V guys are doing it for.

To the A/V guys the electricians are the low balling side jobbers dragging their industry down. We come along and decide we're not losing enough money pulling in romex so we figure we should start pulling in A/V cables because there's more money in doing that. Then we decide we can do it for half the price the A/V guys were doing it for so we cut the price in half so we can start losing money doing that too.

I still think it's nuts to charge half the price of the A/V installers for doing the same work. Very few contractors have a net profit above 10%. I doubt the ones that do acheive this by charging half of what the other guys are charging. I'd be willing to bet their prices are right at the top of the price range.

 

[aline]

Im am just wondering.

Many of the folks here been up in arms when they have another installer run a 110V outlet for their own use, such as a burglar alarm panel or such.

Yet I have been reading on this thread how they have been installing all sort of video and audio equipment and wiring, including mounting TV's on the wall, etc. What gives? What is yours is mine, but what is mine is mine only?

I have no problem when another installer runs a 110v outlet for their own use as long as they are licenesed to do the work, don't work under my permit, and don't mess up my work.

The difference is I'm licenesed to do both the line voltage stuff and the low voltage stuff. That's one of the benfits of me doing the work they don't have to hire two contractors to get the job done.

Most of the A/V installers are not licensed to do the line voltage stuff. If they want to get licensed to run the 110v outlet it's fine with me.

 

[aline]

I'm assuming that the lower priced contractor has properly priced his service to include T&M plus overhead plus a 10-15% margin.

You would be assuming wrong.

Most of the lower priced contractors don't know what their overhead is, what a P&L statement is and don't know if they're making any money until the end of the year when their accountant tells them. They try to find out what the competition is charging and then charge less than that. They come to forums like this one and ask how much they should charge. If they knew their T&M, their overhead and how much it costs for them to be in business and make a profit they wouldn't have to ask.

The lower priced electrical contractor is lucky to make a profit at all. This report doesn't show it but I saw one somewhere where it showed about half the contractors didn't show a profit at all.
http://bizstats.com/reports/corp.as...tractors&profType=income&var=&coding=23.8.210

Some of the best and most profitable companies do well to make 10%-20% net profit and from what I've seen they're not the lower priced contractors.

Do you operate an electrical contracting business?

 

[weressl]

I admit this was a bad choice of words on my part. The truth is I don't believe they are playing games at all. They tell you what you get for that price. For anything beyond that they give you a price for it as well before they do any work. You have the option to get other prices.

In my case she thought the big box store's price was too high so she had me come out and give her a quote as well. She went with them on the low voltage stuff because I wasn't any cheaper. She didn't like the price they were going to charge her for the mount so she shopped online and bought the mount herself. No where did they try to trick her or play games. She knew exactly what it was going to cost before they started including what they wanted for the mount.

Again look at the websites and you can see they spell out what's included and not included. I don't see any game playing there.
http://www.bestbuy.com/site/olspage.jsp?skuId=8464057&type=product&id=1186003679923

I find it ironic that we complain on these forums about how low ballers & side jobbers charge so little and are keeping the pricing on electrical down but when we have an opportunity to make some decent money on A/V installs we do it for half of what the A/V guys are doing it for.

To the A/V guys the electricians are the low balling side jobbers dragging their industry down. We come along and decide we're not losing enough money pulling in romex so we figure we should start pulling in A/V cables because there's more money in doing that. Then we decide we can do it for half the price the A/V guys were doing it for so we cut the price in half so we can start losing money doing that too.

I still think it's nuts to charge half the price of the A/V installers for doing the same work. Very few contractors have a net profit above 10%. I doubt the ones that do acheive this by charging half of what the other guys are charging. I'd be willing to bet their prices are right at the top of the price range.

How can 'Big Box' store compete?

Think about it. (Or rather have your HO think about these issues.)

Do they pay they electricians the same rate what you earn? If they do, then the hourly rate for those electricians are higher, because they usually pay more for their benefits.

They profit margins may be smaller because they generate acceptable margins by the volume.

Their overhead will be significantly higher than a one-man shop or even a small company.

By law they can - or rather should - NOT sell the products to their inhouse 'contracting' department than they sell it to you.

It is possible that they are willing to take a loss on the installation and ballance it with the sales of material. If stockowners pay any attention they should stop them doing it. This is predatory marketing tactic to drive YOU out of business and then where is no longer a competition they raise the prices. This is how SUpermarkets were able to drive mom&pop stores out of existence.

Most likely they hire people who are not productive or skilled enough to surviwe in a competitive marketplace and may not even be electricians.

Lastly, as you demonstrated, they will not provide the same level of service and integrity of the installation as you do for many reasons.

 

[aline]

Figure out a fair rate of return and charge a fair price. Then you can look the customer in the eye and honestly tell them they are getting a fair price.

What do you consider a fair rate of return?

I've bid jobs where I was twice as high as the next lower bid and I have always been able to look the customer in the eye and honestly tell them they are getting a fair price.

I know what I'm making and believe me it's not much and yet there are plenty of contractors charging less than me.

I don't have the flat screen TVs in every room, the mercedes, the hummer, the nice boat, the six car garage, hot tub, swiming pool, tennis court and the second vacation home, people that come to my house, clean it and do my yard work so I can play on the weekends like many of my customers do.

So yeah, I have no problem looking them in the eye and telling them they're getting a fair price.

 

[aline]

Their overhead will be significantly higher than a one-man shop or even a small company.

Dollar wise this is true but percentage wise the small company or one-man show could have higher overhead.

Dollar wise the bigger companies have more overhead but also have more employees bringing in more revenue so their overhead costs as a percentage to sales could be lower.

Dollar wise the small contractor or one-man show may have less overhead but also has fewer employees bringing in less revenue so their overhead costs as a percentage could be more.

A one-man show has to bring in enough revenue to cover all the overhead expenses. He doesn't have employees generating revenue to help cover these expenses. So it's better to look at overhead as a percentage of sales not a dollar amount. How much could he lower his overhead percentage of sales if he hired another electrician that brought in more revenue?

 

[weressl]

Dollar wise this is true but percentage wise the small company or one-man show could have higher overhead.

Dollar wise the bigger companies have more overhead but also have more employees bringing in more revenue so their overhead costs as a percentage to sales could be lower.

Dollar wise the small contractor or one-man show may have less overhead but also has fewer employees bringing in less revenue so their overhead costs as a percentage could be more.

A one-man show has to bring in enough revenue to cover all the overhead expenses. He doesn't have employees generating revenue to help cover these expenses. So it's better to look at overhead as a percentage of sales not a dollar amount. How much could he lower his overhead percentage of sales if he hired another electrician that brought in more revenue?

I was specifically addressing 'big box' stores whose electrical contracting arm is a side-business, not core operation, therefore it is not profit optimized or even profit-centered.

 

[mivey]

Do you operate an electrical contracting business?

Not any more. I went back to school and got my electrical engineering degree.

 

[mivey]

What do you consider a fair rate of return?

I would not consider less than 10% fair. While I would not necessarily base my rates on how many big screen TVs a person has, I have given a price reduction to people who seemed to be less fortunate than me.

Sometimes, the people with a lot of big screen TVs can be more demanding. In that case, I would charge a higher fee, depending on how irritating they were (to cover my future medical bills caused by stress :smile.

 

[weressl]

Not any more. I went back to school and got my electrical engineering degree.

Do you have frequent arguments with yourself?

 

[mivey]

Do you have frequent arguments with yourself?

Yes and no.

 

[quogueelectric]

I've given this some thought and you're right.

The faster and more efficient I get at doing a job the less I'm going to charge.
After all I've covered my time, material, overhead, and can still maintain my same margin so why charge more?

Why should I benefit or reward myself for being more efficient than the competition?


I hear complaints on these forums that you can't charge more than what the market will bear or more than the going rate. Here's a case where the market will bear twice whats being charged. I guess it's about time electricians started doing more A/V installations so we can bring the prices down to our level.

I got interested in doing A/V installs because I could see where they were making more money than I could with electrical installs. It sounds like this is going to change as more and more electricians start doing this type of work.

Then do a few of them and then come back and we will talk instead of complaining about something you are new at. Look the tail doesnt wag the dog the dog wags the tail. I am posting this stuff to try and help others make a nice 500$ day in a nice clean warm dry environment and when you do a customer right you get repeat buisness. Sorry frizbee about the tail and all............

 

[aline]

Then do a few of them and then come back and we will talk instead of complaining about something you are new at. Look the tail doesnt wag the dog the dog wags the tail. I am posting this stuff to try and help others make a nice 500$ day in a nice clean warm dry environment and when you do a customer right you get repeat buisness. Sorry frizbee about the tail and all............

What makes you think I'm new at it?
I've done plenty of these and I'm far from new at it.

My point is if the big box stores are getting $1,000 for the same job you're only getting $500 for what's so great about that?

Are you saying your work isn't worth the same amount the big box stores are getting?

Are you saying your customers wouldn't be happy and you wouldn't be doing them right if you charged them a $100 less than what they would have paid the big box store?

They also didn't have to hire two contractors to get the work done.
I'm just trying to help others make a nice $900 day in a nice clean warm dry enviroment. Sometimes that enviroment is a nice dry 135 degree attic full of rock wool insulation like the last install I did.

Electrical contracting is very competetive and we're often having to price our jobs lower than we would like just to get them. Here you're dropping your price by half of the other guy's price for what reason? Are you saying you wouldn't get the job by being $100 cheaper instead of $500?

If you want to sell your jobs for $500 less than the other guy that your decision but I still think you're nuts for doing it.

When I was over installing the dedicated circuits for the equipment rack I wore booties, put down drop clothes and kept the place clean.

The big box guys show up throw their tools and materials all over the cutomer's carpet, start cutting in speakers letting sheet rock dust fall all over the carpet, cut the hole for the cables at the equipment rack right in the center of a stud then had to chisel and drill out the stud, installed the center channel speaker way to high on the wall and installed the flat panel display too high as well.

I saw how high the display was and thought to myself why did they put it so high. I wasn't going to say anything to the customer though. Then I started talking to her and she kept mumbling to me I wish it wasn't quite so high but I guess I'll just have to live with it.

My thoughts were "Yeah, you should have hired me to do it."
I use the blue painter's masking tape and mask off where the display and speaker will be before cutting any holes. This way I can verify the site lines for the display and make sure the customer is happy with the location.

People will spend a lot of money on their home theater equipment. But one of the most important factors for how well the equipment performes is the room itself. There's good money to be made designing the room and installing the proper room treatments for the optimum sound. I see a lot of poorly designed home theater rooms. A properly designed room can make a $5,000 system sound like a $10,000 system in a poorly designed room.

Here's a great book on acoustics and room design.
http://ebooks.ebookmall.com/ebook/124175-ebook.htm

Here's a free magazine I subcribe to for A/V installers.
http://cepro.com/

Here's a link to some good information on home theater design.
http://hometheatermag.com/bootcamp/137/

Here's a link to a home theater room calculator spreadsheet.
http://www.carltonbale.com/home-theater/home-theater-calculator/

I have another one called sweet spot that I downloaded years ago but don't remember where I got it. It's for calculating axial modes.

I found the link. http://www.ultimateavmag.com/news/10388/index.html

 

[aline]

Just a note.
You should charge for your design knowledge as well as your installation knowledge. Both are valuable.

 

[aline]

The ultimate way to sell A/V systems.
Bring the showroom to the customer.
http://www.cepro.com/article/mobile_showroom_offers_new_way_to_reach_customers/

 

[quogueelectric]

Look Im not doing this for free.
How much to move a duplex outlet up 4 feet and a cable outlet up 4 feet? 125 apiece fair??
Now I bolt a bracket to the wall, fish a couple of wires up and down and hang a tv for annother 250.
How far out of line is this so far?? I dont know why you are getting so twisted about this?
I throw in a 15'-15 dollar 5 conductor component video/audio cable I buy in bulk on ebay and maybe 10 ft of 14-2 and at the most 20 ft of rg6 Quad shield which I buy in bulk I have a mile of it ready to get jacked tommorow.
Couple of boxes decora plates and one receptacle resi grade 15 a.
Btw I allways use dropcloths cover the floor and furniture and bed/couch dustbowls cordless dewalt vacuum 1/2 gal wet/dry takes extra 5 minutes

 

[LarryFine]

Btw I allways use dropcloths cover the floor and furniture and bed/couch dustbowls cordless dewalt vacuum 1/2 gal wet/dry takes extra 5 minutes

Priceless! :smile:

 

[quogueelectric]

What makes you think I'm new at it?
I've done plenty of these and I'm far from new at it.

My point is if the big box stores are getting $1,000 for the same job you're only getting $500 for what's so great about that?

Are you saying your work isn't worth the same amount the big box stores are getting?

Are you saying your customers wouldn't be happy and you wouldn't be doing them right if you charged them a $100 less than what they would have paid the big box store?

They also didn't have to hire two contractors to get the work done.
I'm just trying to help others make a nice $900 day in a nice clean warm dry enviroment. Sometimes that enviroment is a nice dry 135 degree attic full of rock wool insulation like the last install I did.

Electrical contracting is very competetive and we're often having to price our jobs lower than we would like just to get them. Here you're dropping your price by half of the other guy's price for what reason? Are you saying you wouldn't get the job by being $100 cheaper instead of $500?

If you want to sell your jobs for $500 less than the other guy that your decision but I still think you're nuts for doing it.

When I was over installing the dedicated circuits for the equipment rack I wore booties, put down drop clothes and kept the place clean.

The big box guys show up throw their tools and materials all over the cutomer's carpet, start cutting in speakers letting sheet rock dust fall all over the carpet, cut the hole for the cables at the equipment rack right in the center of a stud then had to chisel and drill out the stud, installed the center channel speaker way to high on the wall and installed the flat panel display too high as well.

I saw how high the display was and thought to myself why did they put it so high. I wasn't going to say anything to the customer though. Then I started talking to her and she kept mumbling to me I wish it wasn't quite so high but I guess I'll just have to live with it.

My thoughts were "Yeah, you should have hired me to do it."
I use the blue painter's masking tape and mask off where the display and speaker will be before cutting any holes. This way I can verify the site lines for the display and make sure the customer is happy with the location.

People will spend a lot of money on their home theater equipment. But one of the most important factors for how well the equipment performes is the room itself. There's good money to be made designing the room and installing the proper room treatments for the optimum sound. I see a lot of poorly designed home theater rooms. A properly designed room can make a $5,000 system sound like a $10,000 system in a poorly designed room.

Here's a great book on acoustics and room design.
http://ebooks.ebookmall.com/ebook/124175-ebook.htm

Here's a free magazine I subcribe to for A/V installers.
http://cepro.com/

Here's a link to some good information on home theater design.
http://hometheatermag.com/bootcamp/137/

Here's a link to a home theater room calculator spreadsheet.
http://www.carltonbale.com/home-theater/home-theater-calculator/

I have another one called sweet spot that I downloaded years ago but don't remember where I got it. It's for calculating axial modes.

I found the link. http://www.ultimateavmag.com/news/10388/index.html

Thanks for the links they are very informative this is kind of like the pc when it first started and we all have to work together to work the bugs out.

 

[bradleyelectric]

Working the bugs out does not have to mean taking a very profitable segment of the trade and bringing the price down. If a special service is a good money winner when the call comes in, treat it as such. There is no reason for other professionals to be able to enjoy the finer things in life and us to have to talk about them in the sense of "when I pull in a driveway and see..." We are professionals and should act like it. That includes when we have an opportunity to do a job that normally brings in more than the average day treat it as such.