Well that was depre$$ing

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mivey

mivey

Senior Member
CHWflorida,

I feel your pain. There are many here that will look at someone's quoted rate and immediately say "that is too low" when they have absolutely no clue as to how that rate is being billed. It sounds like to me there are some guys who either: 1) Don't get off their behinds and put in a full week or 2) Charge only for the time they are actually turning a screwdriver. Even on that part, I'm just speculating and I really could care less.

I think it would be obvious to say a $30/hr billing rate is too low unless you were doing charity work, but where do you draw the line? You will never know until you look at the details. I find it stupid for someone to say: "you can't make money at $80/hour" when they have no clue how the business is run. Obviously, there are people making money at that rate, but they are doing things different from the guy who says his rate is $200/hr and may even be in a different cost zone.

I like Marc's post #76 as it makes the most sense. Be sure you have covered all of your real costs. You may also find ways to change your business methods that make things work better as well.

I see this site as a place to get input, then take those inputs and shape them into what I want, not to be a site to get a complete cookie-cutter model or billing rate.

That being said, I do like to look at the many salary survey websites to see if the net wages and benefits are competitive. This information is almost impossible to get from a billing rate.
 
jrannis

jrannis

Senior Member
Location
Fort Lauderdale/ Miami
Rates

Rates

Pick up a yellow pages and call about 8 large ad electrical contractors and see what they are charging.
Should take about 20 minutes to do.
There are some very rual and inexpensive places to live and work in central Florida. Some places with very little work within many miles.
We have people coming into the SouthEast area from the West coast and trying to make a quick buck and leave.
Its sad to hear how they have to spend 8 hours to pull a permit, and have to pass inspections and then try to get paid.
I had a West coast roofer tell me how proud he was that he was $40,000 dollars cheaper on an $80,000 job than the next three local roofing contractors and the customer gave him a bottle of Chivas Regal when he signed the contract.
This is the guy that failed his tin cap inspection twice, failed for not having an OSHA ladder for the inspector and other misc problems.
He also let me know that he didnt pay for dumping either.
Nice guy. I hope he stays on the other side of Alligator Alley.
 
E

emahler

Senior Member
i know this is page nine, and it will get lost, but here goes....

hourly rates don't mean anything....what matters is your billable hourly for each hour worked...

ie...if you are a service company, you can expect 4 hrs productive work, in an 8 hr day....

if you bill the customer for travel, getting material, etc, your hourly rate might be $60/hr, but your billable rate is actually $120/hr.

now throw in service truck fees, trip fees, and any other nickle and dime fee you can think off, and suddenly, your billable rate is $150+/hr...

if you are a construction company, my guess is that your billable hourly is also higher than that $60...since when we bid (god i hate that word) projects, we assign a time to every task. And if we can come in under the projected man hours for a project, we just upped our billable rate. Not to mention that anything we can make on material goes towards this number as well...

Now, are you charging enough? if you are doing it T&M, and not billing as described above, probably not...

lets say a mechanic costs you $30/hr with burden...he runs service work...for an hour day, he costs you $240...just for labor...

you bill $60/hr...so you make $30/hr to cover overhead, right?

only if you bill out at least 8 hours. Too many guys think that they have to match the hourly, and only bill for the productive...so they are only billing 4 hrs @ $60/hr per day...

so they are billing $240/day + material, and paying their mechanic $240/day in labor and burden....wait a second...

so, hourly rates don't mean anything...its the billable hourly that matters...

and try running a resi/lt commercial service company hourly, billing for travel...good luck.

I don't mean a construction company that services their existing customers...I mean the company that specializes in the service market...

light commercial is defined as the small mom and pop shops, 1 location stores...not corporate chains or factories, or larger commercial. I'm talking the places that can basically be interchanged with residential.
 
powerslave

powerslave

Senior Member
Location
Land of Lincoln
mivey said:
CHWflorida,

I feel your pain. There are many here that will look at someone's quoted rate and immediately say "that is too low" when they have absolutely no clue as to how that rate is being billed. It sounds like to me there are some guys who either: 1) Don't get off their behinds and put in a full week or 2) Charge only for the time they are actually turning a screwdriver. Even on that part, I'm just speculating and I really could care less.
Click to expand...

Wow. All I said was that it was too low for my area. You obviously have no business training. It's called a billable hour. Ask the billing department at your place of work. You may be surprised. If you think that an EC is going to turn a screwdriver for forty hours a week and put in no other time you are way off. I really don't know how else to respond to this post except for....Wow.

And if you are frustrated because we won't give up our billable hourly rate, don't go right to the insults. It comes across as childish.;)

You're an engineer. You can show better class than that.
 
brian john

brian john

Senior Member
Location
Leesburg, VA
I have seen this discussion in many forms here and on other forums. FACT IS.

This is basically a free enterprise open market, If Joe can make it on $50.00 and make a living, support his family and is happy and hopefully do decent work then go for it. If Jake is charging a $100.00 an hour in the same area and making it, so be it.

There are way too many differences in how one chooses to live, big house, no house, Cadillac, Yugo, 5 kids no kids, how much debt incurred, and on and on. No one is right or wrong till either go out of business one for undercharging a livable amount or charging more than the road can bear.

I also posted earlier about EXTRAS some folks charge above an hourly rate.

A local government was allowing only $37.00 an hour billable. I asked the EC how he could make a living at that rate.

4 hour minimum his guys billed 12-16 a day at T&M, plus 15% overhead and 10% profit, material at the line 4 rate plus 15 and 10 and the aforementioned truck fee, mileage, fuel surcharge, tool rental.

THE POINT, IS DO WHAT FLOATS YOUR BOAT. Those of you that think someone undercharges I feel you pain BUT ALAS this is America and they can do what they want within reason. They'll either be your competition or they won't.
 
peter d

peter d

Senior Member
Location
New England
brian john said:
This is basically a free enterprise open market, If Joe can make it on $50.00 and make a living, support his family and is happy and hopefully do decent work then go for it. If Jake is charging a $100.00 an hour in the same area and making it, so be it.
Click to expand...

That's all well and good, but you're leaving out a huge piece of this puzzle. An EC who charges too little simply will not be able to provide decent pay and benefits for their employees. And if you have any hope of growing your business, you need employees who are well paid, and loyalty comes with good pay, among other things. It's just not going to happen with the small companies unless they raise their rates.
 
iwire

iwire

Moderator
Staff member
Location
Massachusetts
peter d said:
That's all well and good, but you're leaving out a huge piece of this puzzle. An EC who charges too little simply will not be able to provide decent pay and benefits for their employees.
Click to expand...

And if they do not, is it not the employees responsibility either stay or go?

What I am saying is this.

IMO it is my right to start a business and run it as stupidly as I want. If I can not provide good pay and bennies then I will not get good help. The market will weed me out.

But in the end it is not my responsibility to help keep the rates up for my competitors. This is likely why guys like emahler and Marc will say don't set your rates on the others in the area.

That would be like telling Walmart they have to raise their prices so that the Mom & Pop shops can compete.

It is a cruel world and life is hard.
 
peter d

peter d

Senior Member
Location
New England
iwire said:
It is a cruel world and life is hard.
Click to expand...

Yes, but some people make it unnecessarily hard on themselves when it doesn't have to be that way. My comments were directed mostly at the small contractor who wishes to grow their business and retain good employees. Charging too little is the best way to prevent that from happening, simple as that.

But the bottom line is that I could not care less how people run their businesses. I'm just trying to help out.
 
iwire

iwire

Moderator
Staff member
Location
Massachusetts
peter d said:
Charging too little is the best way to prevent that from happening, simple as that.
Click to expand...

Sure is. :smile:

And if they are not the sort of person that recognizes it perhaps they are not suited for running a business?


My point being is that I think it is the minority of electricians that are really capable of becoming business people.

I look at running a business and being an electrician as two entirely different skill sets, not mutually exclusive but it is certainly not common.

I am good electrician, would that make me a good news reporter, Chef, Liberian or social worker? Nope.

So why would we assume an electrician would automatically be a good businessman.

That gentleman in Dover I sort of work for started as an electrician but then went and got his masters degree in business. He knew that he did not know..... :smile:
 
bradleyelectric

bradleyelectric

Senior Member
Location
forest hill, md
iwire said:
That would be like telling Walmart they have to raise their prices so that the Mom & Pop shops can compete.

It is a cruel world and life is hard.
Click to expand...

Have you ever heard about WalMart and Vlasic Pickles? There are a lot of reasons WalMart is ranked right up there with the Clinton's with me. I'll probably be there sometime this week though.

I do see what you mean about this button. It is my friend.
 
powerslave

powerslave

Senior Member
Location
Land of Lincoln
bradleyelectric said:
Are your jobs based on an hourly rate to come up with the flat rate for that task or just a number used from historical numbers and raised at intervals based on market conditions?
Click to expand...


We use historical data to see how long a task should take and then use what we need to charge per billable hour to assign a price.
 
C

CHWflorida

Member
peter d said:
That's all well and good, but you're leaving out a huge piece of this puzzle. An EC who charges too little simply will not be able to provide decent pay and benefits for their employees. And if you have any hope of growing your business, you need employees who are well paid, and loyalty comes with good pay, among other things. It's just not going to happen with the small companies unless they raise their rates.
Click to expand...

I may be settling for less, I don't know, but I think I'm treated pretty decent. Of course I wouldn't mind better benefits and pay but don't assume they are not adequate simply by our service rates. I think it's important to note the difference between service work billed time and material (what I was talking about before) and contract work, which takes into account all factors to insure profitability. I'm just an employee so I don't see the whole picture, but the bottom line is our company brings in big profits. I'm sure we lose on jobs sometimes merely to keep the big ones rolling in. Again, I was speaking of hourly service rates, not a big secret. Like someone else said, you can call around and get them over the phone. I really don't have the time nor do I care to do that while I'm already busy working. And as far as growing the business, the one I speak of has 200+ employees.
 
peter d

peter d

Senior Member
Location
New England
CHW,

When I say these things, I am speaking in extreme generalities and nothing is aimed directly at one person, unless I actually say so. If that's the case at the company you're at, then great. :)
 
lbwireman

lbwireman

Senior Member
Location
Long Beach, CA
bradleyelectric said:
I thought that meant it couldn't be true
Click to expand...

Since the poster making the original comment included himself in the group, the comment struck me as more "self deprecating" (as in "we're all Bozos on this bus") than "defamatory". However, the AHJ has spoken....:)
 
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