rates, winter, and the economy

[Fulthrotl]

Do most of you think that our market will recover "some what" during the spring reguardless of the economy, or not? like April or the middle of march? what time typically in the spring do things break loose? I dont expect things to pop back to normal due to the economy, but at least the spring pop back?

i vote for, "or not".

the "spring back up" is a function of weather in many areas of the country.
at this juncture, it isn't the driving force in the nation's economy.

aside from the fact that as a nation we spent all our money, and are
somewhat broke, the real obstacle facing us in the next three months is
blind fear. the situation we face nationally is not entirely unlike what was
faced at the inauguration of 1932. it obviously isn't as bad, but what exists
now, that didn't exist then, is an almost instantaneous response time in our
global financial markets.

that's the unknown variable now, and how it will play out remains to be seen.
we've been in depressed economies before, but we've never had the level of
interconnectivity that we possess today. that's why the markets are
oscillating like they are.

in the past, the herd could stampede, but it didn't have the throttle response
to go from calm to deranged in 3.1 nanoseconds. if you were a car freak, like
i am, it's like driving a big block, with an extreme cam, and no flywheel, in
bumper to bumper traffic.

the talking heads in the news media aren't helping.. obama did this, obama
did that, obama had gas from his raisin bran this morning.... how well could
*any* of us do our job if we had a quarter billion people peeking over our
shoulder, murmuring "he tightened the last wire nut a quarter turn tighter
than the one before it, we feel this means he lacks confidence in the quality
of his connections...."

in the first 100 days of his presidency, roosevelt's level of communication
with the american people amounted to 2 fireside chats, and thirty press
conferences.

the talking heads have provided more than that in the first 100 hours since
the inauguration.

nobody's wristwatch seems to have an hour hand anymore. it took 25 years
for our current economic situation to get to this point. it's gonna take more
than a week and a half to fix. have a beer. relax. it's gonna take a while.

right now, there is less work to do than there are people to do it. i personally
don't like making less money for a given amount of work than i have made in
the recent past for that work.

however, i like even less watching someone else do it for less, while i do
nothing but watch and complain loudly that "it isn't right"....


randy

 

[aline]

the answer is simple.....

reduce your hourly rate by 15%, then always take 30% longer to do the work...

win-win

emahler has got it right.

For those customers who's only concern is to find the lowest possible hourly rate you need to hire the green electrician fresh out of high school, who just started doing electrical last week, takes 3 to 4 times longer to complete the task as opposed to an experienced electrician and pay him $10 per hour.

Comparing hourly rates of contractors is a poor way to determine how much the work is actually going to cost.

A customer of mine, that I do a lot of service work for, uses me even though he can find someone with a lower hourly rate. The guy they were using before had a low hourly rate but provided poor service. Took a long time before sending someone out and sent out inexperienced electricians.

A lot of the work that I did when I first started working for them was to fix things that the other contractor failed to fix or screwed up on. Things like tying emergency exit lights into the hallway lighting so they didn't have power to them when someone turned off the hall lights.

They replaced a wall pack fixture and didn't wire the ballast correctly. The fixture never worked from the day it was replaced but the owners of the building never noticed until about a year later. They called me because they thought the lamp had burned out. I told them it wasn't wired correctly and had never worked to begin with and that whoever installed it probably didn't cover the photo cell and test it.

Just because someone else is willing to do the work for a lower hourly rate doesn't necessarily mean the customer is going to save money. You may already be cheaper than the guy with the lower hourly rate.

 

[aline]

When a customer wants to know your hourly rate ask them if they want the hourly rate for the really slow electrician or the hourly rate for the really fast electrician.

 

[JES2727]

I've got a extra can of soup for you when you need it....

I won't be needing your soup, thank you very much.

You asked a question, I offered an opinion, and you come back with a wise crack. I'm sorry you didn't like my response, I won't answer any more of your questions, ok?

 

[Mule]

I won't be needing your soup, thank you very much.

You asked a question, I offered an opinion, and you come back with a wise crack. I'm sorry you didn't like my response, I won't answer any more of your questions, ok?

If I've offended you with my humor , I apologize.....I meant nothing serious...that's why it had a "smily face'

You are correct , I ask for opinions and I apreciate your comment....

 

[Mule]

Thanks for the comments....While my focus was on the timeline, not the price reductions, I do apreciate the comments.

A few thoughts...............

Supply and Demand is a dynamic thing

It is true that my expenses dont flucuate.....but my workload does..and so does my 401k

It's not in my soul to purposely slow down my productivety to try to ''trick" a loyal customer. by providing "less value"....besides he's far smarter than that

These customers "do" buy blocks of my time..but I would not think of charging them for a schedule interruption. In fact we have schedule interuptions all the time caused by either party and we just reschedule.

In truth this economy frustrates me to no end.....because I didnt do anything to bring it on, and its my belief that those that caused it should pay the price...no me.....but I assure you, I will do everthing in my power to ensure that I have groceries and a roof over my head. We have been blessed by work that seems to come out of the woodwork, and its most always from "word of mouth" and I personaly believe it comes from the trust placed in me, by my customers.

 

[aline]

It's not in my soul to purposely slow down my productivety to try to ''trick" a loyal customer. by providing "less value"....

If he's a loyal customer you shouldn't have to lower your hourly rate to keep him.

 

[emahler]

When competing on price, you can only be as ethical as the people you are competing against.

 

[peter d]

Electricians and electrical contractors are their own worst enemies.

 

[Fulthrotl]

We have been blessed by work that seems to come out of the woodwork, and its most always from "word of mouth" and I personaly believe it comes from the trust placed in me, by my customers.

you don't know where it's gonna come from, and after a while i've learned
to trust that it just does....

i had a customer, industrial door, out of chatanooga, tennesee. hurley
campbell. did large bay doors, aircraft hangers, blimp hangers, etc.

i never met hurley, i've never been to chatanooga, neither of us knew
the link that caused him to get my phone number, we tried to figure that
one out once and gave up...

i worked for him for three years. he'd call up when he had something that
needed doing in southern california, we'd figure out what it probably would
cost, he'd fedex me the prints and any PLC controls i needed for it, i'd go
do it, and tell him what it finally costed out to, and he'd fedex me a check
the next day.

there's a hurley or two here for everybody.

if i take care of the work put in front of me today, treat the people i come
into contact with, with dignity, charge a fair price, and am not afraid,
everything that i require will show up when it's needed.

faith will solve every problem now. the problem isn't what we think the
problem is, it's what we have put our faith in as the solution to the problem.

my head always has a solution to a problem, that will not work. the best
and most efficient solutions to what i thought my problems were, did not
show up as a result of any plan that i had.


randy

 

[Rewire]

Of all the things I have considered to remain profitable and productive lowering my rates has not been nor do I ever see it to be an option.The day I lower my rates will be the day I put the for sale sign in the window.You cannot win in a race to the bottom.Once a customer knoiws you will lower your rate to stay busy you have handed them the biggest leverage they could want.Somebody has to be the most expensive electrician in town ,it might as well be me.

 

[aline]

Somebody has to be the most expensive electrician in town ,it might as well be me.

Sometimes the guy with the lowest hourly rate ends up being the most expensive.
Hiring the cheapest guy in town can sometimes be the most expensive thing you can do.

I've cheaped out on purchases before only to regret it and ended up buying the more expensive item that I should've bought in the first place.

Being a cheapskate sure can cost you a lot of money.

Sometimes people will equate a higher price with higher quality.

 

[Rewire]

Sometimes the guy with the lowest hourly rate ends up being the most expensive.
Hiring the cheapest guy in town can sometimes be the most expensive thing you can do.

I've cheaped out on purchases before only to regret it and ended up buying the more expensive item that I should've bought in the first place.

Being a cheapskate sure can cost you a lot of money.

Sometimes people will equate a higher price with higher quality.

Myself I have found that the higher the quality the higher the cost,of course you will always have that 1%.In all things someone is the lowest and someone is the highest I would rather be selling my time as the highest.

 

[ceb58]

Of all the things I have considered to remain profitable and productive lowering my rates has not been nor do I ever see it to be an option.The day I lower my rates will be the day I put the for sale sign in the window.You cannot win in a race to the bottom.Once a customer knoiws you will lower your rate to stay busy you have handed them the biggest leverage they could want.Somebody has to be the most expensive electrician in town ,it might as well be me.

I agree with Rewire. If they see a chink in the armor you are done for. Just keep doing quality work in a timely fashion. If their bottom line is hurting they will cut you loose regardless of what you do. The only thing you could do IF YOU feel YOU must do something is look at material cost and mark up. Tell them that since some prices have came down you can pass that on to them. You may be able to reduce your mark up on material. Some times it's better to have some gravy than no gravy at all.

 

[electricmanscott]

Let's not over estimate our importance. We are EASILY replaceable. In these times it is about price. The lowest gets the work. Not in all cases but in too many.

 

[peter d]

Let's not over estimate our importance. We are EASILY replaceable. In these times it is about price. The lowest gets the work. Not in all cases but in too many.

Right, supply and demand and the fact that electricians are always expected to work cheaply.

 

[electricmanscott]

I agree with Rewire. If they see a chink in the armor you are done for. Just keep doing quality work in a timely fashion. If their bottom line is hurting they will cut you loose regardless of what you do. The only thing you could do IF YOU feel YOU must do something is look at material cost and mark up. Tell them that since some prices have came down you can pass that on to them. You may be able to reduce your mark up on material. Some times it's better to have some gravy than no gravy at all.

This paragraph is rather contradictory.

 

[electricmanscott]

I would rather be selling my time as the highest.

So would I.

The fact is that people will rather be buying the lowest.

 

[cowboyjwc]

I don't have much to say about lowering your prices Mule, but like you said you have to pay your overhead whether you're working or not, and I think someone already said some income is better than no income.

As far as an upturn, I just got out of a Planning Dept meeting, if they were to approve something now it would probably be to us within the next six months. They haven't even had a substancial project submitted in the last six months and several that would almost be ready for us have been withdrawn. I'm talking about a new Target store, 4 multi-building multi-family projects, a tract of custom homes, all dead in the water. I wouldn't bet on seeing a change anytime soon.

 

[electricmanscott]

Lowes just pulled out of a large developement south of here. The development is now dead.

When the dust clears there will be fewer of us left standing. I intend to be one of the few whatever it takes.