Time and material jobs

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arnettda

Senior Member
On time and material jobs Do you charge the same hourly rate for all journeyman. I have a customer who is complaing about his bill in two ways. He says I should not charge as much for my journeyman employee as I do for myself. He thinks that since I am the owner I should be the one to make more, he also does not think that I should make any money off of my employees labor? My mark up on material is to much as well. 15% Any opinions would be appreciated. Thanks Dave
 

SEO

Senior Member
Location
Michigan
Keep your journeymans hourly rate the same as it is and raise yours. If you can't make any money off your employees why would you have them? 15% mark up on material is close depending on volume. I like to see between 20 and 35 %. Can't always get it.
 

satcom

Senior Member
arnettda said:
On time and material jobs Do you charge the same hourly rate for all journeyman. I have a customer who is complaing about his bill in two ways. He says I should not charge as much for my journeyman employee as I do for myself. He thinks that since I am the owner I should be the one to make more, he also does not think that I should make any money off of my employees labor? My mark up on material is to much as well. 15% Any opinions would be appreciated. Thanks Dave

The simple is your customer is a horses tail, dealing with people that have no business knowladge is rough, the reason we charge a flat rate, or a contract price, T&M is no way to make money, at best it is a job and usually a bad one at that, as far as material mark up 50% is the least we mark-up.
 

bradleyelectric

Senior Member
Location
forest hill, md
80% of your time is spent on 20% of your customers problems. Raise your prices and these problem customers will leave. You will make as much money, have more time, and these problems will be waisting your competitors time.
 

brantmacga

Señor Member
Location
Georgia
Occupation
Former Child
satcom said:
The simple is your customer is a horses tail, dealing with people that have no business knowladge is rough, the reason we charge a flat rate, or a contract price, T&M is no way to make money, at best it is a job and usually a bad one at that, as far as material mark up 50% is the least we mark-up.

spot on analysis
 

Fulthrotl

~Autocorrect is My Worst Enema.~
arnettda said:
On time and material jobs Do you charge the same hourly rate for all journeyman. I have a customer who is complaing about his bill in two ways. He says I should not charge as much for my journeyman employee as I do for myself. He thinks that since I am the owner I should be the one to make more, he also does not think that I should make any money off of my employees labor? My mark up on material is to much as well. 15% Any opinions would be appreciated. Thanks Dave

15% on the material isn't enough, in my experience.
25% is about right, as that will cover the oopsies, and
little bits and pieces that add up.

labor units are labor units. a jw is a jw, irregardless of if he owns the
shop or not.

apprentices, in every shop i've ever worked out of, are billed at
JW rate as well. the difference between jw and apprentice money
is the incentive to hire muppets.

honestly, the customer is a clown. squeeze his wheeze, and
put the bozo on the bus.

i flushed one this morning. this guy called me week before last,
a referral from a friend, and needed a sparky. ok. i get to the
house, it's about a $3.5M house, and it's largely gutted.

lots of electrical problems. #14 wire on 30 amp breakers,
and they are still tripping from overloading. backfeeds. open
circuits.

i'm the fourth electrician he's used.
that's not a red flag, it's a stall horn in the cockpit for this pilot.

he want's to know if i can drop my price, 'cause i'm too high.
sure, i say, i'll drop it $10 an hour, and no markup on the
material. why? i was flat at the moment, and something is
better than nothing.

so, after 3 days, the bill is $1,900, labor and materials.
everything he wanted is done, and it all works. it's all to
code as well.

i made $1,600 clear on a dead week. not fabulous, but better
than nothing. and the check didn't bounce. i took
the precaution of hammering it at the bank it's drawn on.

now, this week, he's redoing the kitchen, stripped to bare
studs, and he want's a hard price.

the cabinet maker looks like a tweeker on crank, and the
plans are done on a bar napkin. no way i'm hard bidding it.
i tell him it'll be not over 3 days labor, and 600-800 in
materials. i'll do it in steel boxes, and smurf tube, and pull
wire. then when they make changes, i'm not tearing soapstone
off the backsplash to accomodate it. after seeing this customer
in action, no way would i romex it. he has the attention span
of a flashbulb, and no concept of planning anything whatsoever.

so, the customer shows up, pulls up in a $140k maserati, wearing
$1k italian shoes, and tells me my prices are still too high, he's
found a handyman off of craig's list who'll do it for $25 an hour.

then he wants to know if he can have me come out after it's done
and spend an hour checking the guys work to make sure it's done ok.
he actually says this to me, honest to god. like i want to warranty
someone else's work for a hour's worth of labor.... some people....

oh, yeah... the appliances for this kitchen? 2 refrigerators, sub zero.
2 ranges, dacor. 2 dishwashers, miele. plate warmers, viking. 2 range
hoods, viking. 2 ovens, viking.
countertops, starfire granite. backsplashes, soapstone.

poor thing doesn't have any money left for the electrician. imagine
having to live like that..... can you feel his pain? i sure can.

i said, sure, give me a call, and left. then i changed my caller specific
voicemail for his number to a bogus message saying that the number
he is calling is temporarily unavailable due to the hurricane.

i live in california. i think he'll figure it out eventually.


randy
 

Rockyd

Senior Member
Location
Nevada
Occupation
Retired after 40 years as an electrician.
Fulthrotl,

Nice job on the Hurricane! Even with a million dollars, he couldn't buy a clue.
 

brantmacga

Señor Member
Location
Georgia
Occupation
Former Child
Fulthrotl said:
so, the customer shows up, pulls up in a $140k maserati, wearing
$1k italian shoes, and tells me my prices are still too high, he's
found a handyman off of craig's list who'll do it for $25 an hour.

you think he got that maserati by overpaying electricians? :D
 

220/221

Senior Member
Location
AZ
If I told them anything, I'd tell them that they are underpaying me so it's a wash. Then I'd blacklist them.

100 percent minimum mark up and materials up to 500 bucks.

Think about it in real life terms. 15% mark up on a coverplate won't even cover the cost to account for it. If it cost 40 cents, you will make 6 cents.

Even if you are only charging sixty dollars an hour, that 6 cents is gone in the 4 seconds it takes you to write it on the invoice and add it up.

I wouldn't even mark up a $5k piece of switchgear as low as 15%
 

Rewire

Senior Member
The box stores kill us when it comes to mark up. We do 20% across the board if I sell a panel for $200.00 and that same panel is in the box store for $100.00 it would not take long for word to get around that I was ripping people off but at $125.00 I will get referals.
 

brian john

Senior Member
Location
Leesburg, VA
arnettda said:
On time and material jobs Do you charge the same hourly rate for all journeyman. I have a customer who is complaing about his bill in two ways. He says I should not charge as much for my journeyman employee as I do for myself. He thinks that since I am the owner I should be the one to make more, he also does not think that I should make any money off of my employees labor? My mark up on material is to much as well. 15% Any opinions would be appreciated. Thanks Dave

You set your rates he doesn't.

I do charge more for myself and 15% IMO way too LOW.

Tell him you usually do charge more for yourself and you cut him a break charging the same for both men. As for markup I would have said 15% it was suppose to be 50%.
 

220/221

Senior Member
Location
AZ
I sell a panel for $200.00 and that same panel is in the box store for $100.00 it would not take long for word to get around that I was ripping people off

If they ask, I tell people that there is no way I can compete with the Home Depot. If they want to go pick up the panel, fine....I'll install it. If there is an issue with installation (open box, wrong panel, missing parts etc) I am on the clock while somebody gets it taken care of. That 100 bucks they saved will evaporate pretty quickly and they will think twice next time.

I obviously I wouldn't warranty the panel either and I let them know that.
 

satcom

Senior Member
220/221 said:
If they ask, I tell people that there is no way I can compete with the Home Depot. If they want to go pick up the panel, fine....I'll install it. If there is an issue with installation (open box, wrong panel, missing parts etc) I am on the clock while somebody gets it taken care of. That 100 bucks they saved will evaporate pretty quickly and they will think twice next time.

I obviously I wouldn't warranty the panel either and I let them know that.

Not to worry, the people that complain about mark-ups, are the same ones that try to bring their own oil to the garage for an oil change, or spark plugs for a tune-up.
 

quogueelectric

Senior Member
Location
new york
Fulthrotl said:
15% on the material isn't enough, in my experience.
25% is about right, as that will cover the oopsies, and
little bits and pieces that add up.

labor units are labor units. a jw is a jw, irregardless of if he owns the
shop or not.

apprentices, in every shop i've ever worked out of, are billed at
JW rate as well. the difference between jw and apprentice money
is the incentive to hire muppets.

honestly, the customer is a clown. squeeze his wheeze, and
put the bozo on the bus.

i flushed one this morning. this guy called me week before last,
a referral from a friend, and needed a sparky. ok. i get to the
house, it's about a $3.5M house, and it's largely gutted.

lots of electrical problems. #14 wire on 30 amp breakers,
and they are still tripping from overloading. backfeeds. open
circuits.

i'm the fourth electrician he's used.
that's not a red flag, it's a stall horn in the cockpit for this pilot.

he want's to know if i can drop my price, 'cause i'm too high.
sure, i say, i'll drop it $10 an hour, and no markup on the
material. why? i was flat at the moment, and something is
better than nothing.

so, after 3 days, the bill is $1,900, labor and materials.
everything he wanted is done, and it all works. it's all to
code as well.

i made $1,600 clear on a dead week. not fabulous, but better
than nothing. and the check didn't bounce. i took
the precaution of hammering it at the bank it's drawn on.

now, this week, he's redoing the kitchen, stripped to bare
studs, and he want's a hard price.

the cabinet maker looks like a tweeker on crank, and the
plans are done on a bar napkin. no way i'm hard bidding it.
i tell him it'll be not over 3 days labor, and 600-800 in
materials. i'll do it in steel boxes, and smurf tube, and pull
wire. then when they make changes, i'm not tearing soapstone
off the backsplash to accomodate it. after seeing this customer
in action, no way would i romex it. he has the attention span
of a flashbulb, and no concept of planning anything whatsoever.

so, the customer shows up, pulls up in a $140k maserati, wearing
$1k italian shoes, and tells me my prices are still too high, he's
found a handyman off of craig's list who'll do it for $25 an hour.

then he wants to know if he can have me come out after it's done
and spend an hour checking the guys work to make sure it's done ok.
he actually says this to me, honest to god. like i want to warranty
someone else's work for a hour's worth of labor.... some people....

oh, yeah... the appliances for this kitchen? 2 refrigerators, sub zero.
2 ranges, dacor. 2 dishwashers, miele. plate warmers, viking. 2 range
hoods, viking. 2 ovens, viking.
countertops, starfire granite. backsplashes, soapstone.

poor thing doesn't have any money left for the electrician. imagine
having to live like that..... can you feel his pain? i sure can.

i said, sure, give me a call, and left. then i changed my caller specific
voicemail for his number to a bogus message saying that the number
he is calling is temporarily unavailable due to the hurricane.

i live in california. i think he'll figure it out eventually.


randy
You my friend are really funny. The voice of experience.
 

jrannis

Senior Member
Fulthrotl said:
so, the customer shows up, pulls up in a $140k maserati, wearing
$1k italian shoes, and tells me my prices are still too high, he's
found a handyman off of craig's list who'll do it for $25 an hour.


oh, yeah... the appliances for this kitchen? 2 refrigerators, sub zero.
2 ranges, dacor. 2 dishwashers, miele. plate warmers, viking. 2 range
hoods, viking. 2 ovens, viking.
countertops, starfire granite. backsplashes, soapstone.

poor thing doesn't have any money left for the electrician. imagine
having to live like that..... can you feel his pain? i sure can.

randy

You can sometimes work with people like that pretty good but you gotta stay up on your game.
Kids, dont try this at home:
I would have said 6 grand, 3 grand up front and held out my hand to shake on it. I found that people like this are good on their word but bad on paper.
Knowing that you couldnt really get hurt at three grand would make it ok to gamble on him.
 
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