Billable hourly wage

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staticcontrol

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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
 
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.
 
service calls

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.
 
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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staticcontrol said:
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
Click to expand...

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 6:pm) 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.
 
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 said:
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".
Click to expand...
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.
 
edward said:
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.
Click to expand...
But the customer decides how much he will pay.
 
staticcontrol said:
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?
Click to expand...

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.
 
kwired said:
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.
Click to expand...

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.
 
Besoeker said:
But the customer decides how much he will pay.
Click to expand...

That is when sales training will help the service tech or the business owner to persuade the customer to buy from you instead of the competition.

Price is a factor but the customer does not buy based on price ONLY.
 
edward said:
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.
Click to expand...
I agree with everything you said. I wouldn't necessarily call that non ordinary situation true flat rate pricing, more like a bid in a way, you had the chance of seeing what was needed to be done then gave them a price to do it. Having them sign in agreement of the estimate makes it a contract. You underestimate you have less profit, overestimate you have more profit, customer still pays what they agreed to.

Most of my work is time and materials, but I don't itemize hours and hourly rate on invoices. I get nearly no complaints on what I charge after I started doing it that way. Invoice them for $300 dollars of labor and they don't say anything, invoice them for same work but itemize as 3 hours at $100 an hour and some complain about how high you are.

I still will give estimates beforehand if they want to know how much it will cost, otherwise they still get surprised by the total amount either way if they don't have a clue on how much professional services cost these days.

edward said:
That is when sales training will help the service tech or the business owner to persuade the customer to buy from you instead of the competition.

Price is a factor but the customer does not buy based on price ONLY.
Click to expand...
Customers that do buy based on price only generally are not customers you want to have anyway.
 
staticcontrol said:
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
Click to expand...


Here's a website I've used ro figure out hourly rates. It states for plumbing contractors but, it works well for an EC to give you a general idea. See link below.

http://www.masterplumbers.com/utilities/costcalc/
 
flat rate vs anything else

flat rate vs anything else

To further the conversation I offer the following:

A customer calls me and asks how much I would charge to install a ceiling fan.

For arguments sake I see three possible answers:

A. It will charge you $250 to install your fan.
B. I charge $100 per hour and I have no idea how long it will take.
C. I charge $100 per hour and it will probably take two to three hours.

Or along the same line. How much would you charge to wire my new house?

A. $10,000
B. I charge $100 per hour and I have no idea how long it will take.
C. I charge $100 per hour and it will probably cost $8-10,000.

Did I miss something or are there other answers?
 
Fulthrotl said:
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.
Click to expand...

Step 1 is figure out what you want to make. Thats the easy part

Step 2 is getting to the point where you can find enough clients who will pay that. That is the much harder part.

Huge differences in markets too no doubt. Here in rural upstate ny there is no licensing, no permits, not a lot going on. Half of the GC's "do their own" resi electrical. Def waters things down a lot. That is why I work in Seattle often :happyyes:
 
Believe it or not, a lot depends on the county you're in. The closer you are to NYC the more $$ you can get. The further south or west you go the $$ start to drop down. If you're part of a contractors association you can get a lot of info there. Just an FYI, up here in northern NJ you can't get a plumber to change a faucet washer for less than $120-150.00/hr. I wish electricians would stick together like plumbers do but we seem to cut each others throats. Also, a lot depends on the type of service work you're doing. If you primarily do residential work you're not going to be able to get as much $$ as you would in commercial or industrial work.

Also, you're not going to be able to charge the same $$ for helper as you do a mechanic (in case that wasn't obvious). Not sure what you're getting now but IMHO I'd stay somewhere in the $95.00-$125.00 area for residential. In commercial or industrial work you could get up into the $150-$175.00 range depending on the type of work you're doing.
 
IMO, instead of focusing on the hourly rate and how long it will take, lets focus customer's attention on buying the service/the value that we provide.

Doing flat rate instead of hourly you will make more per hour and work less, but it has to be coupled with a good sales training.
 
edward said:
IMO, instead of focusing on the hourly rate and how long it will take, lets focus customer's attention on buying the service/the value that we provide.

Doing flat rate instead of hourly you will make more per hour and work less, but it has to be coupled with a good sales training.
Click to expand...

yep. all of that.

unless the scope of the work cannot be defined, there is
no reason i'd not give a flat price for something.

when asked what my hourly rate is, i simply say $80.
that comes to $640 per day. i've not done any work
hourly in three years.

the reality is, my pricing is based on what the market
for that work is. programming lighting systems is a good
example.

Lutron and nLight both offer programming, at a national
level, and at the lighting rep level.

the nominal rate is $1,500 per day. for that you get a
programmer with a laptop, who shows up for the day.

the minimum daily charge kills small jobs. you have two
daylighting sensors in an office suite, and it's a half day
charge, if that is offered, at $600. it's 30 minutes worth
of work. that is $1,200 an hour.

nobody even blinks when given the price.

i've offered when i program stuff, to show their electrician
how to do it, so they don't have to hire me to do it in the
future. i've offered to my customers, and to the sparky
who meets me at the office when i go to program. i'll
mention to him that he can easily make $1,000 a day
programming, due to the shortage of programmers.

so, i'm telling a guy making $250 a day how he can
make four times that amount, without getting dirty.
he'll say "really?" and then go back over and sit down
and text while i program, ignoring the free offer.

and they will call back in two weeks, needing to do it
again. and it'll still be $600 for the hours work. and
the customer will complain about the cost. and i'll offer
to teach their best sparky how do it, for free. and they
won't want to spend $300 for a laptop for him to use.

and they will call back in two weeks.......
 
Fulthrotl said:
yep. all of that.

unless the scope of the work cannot be defined, there is
no reason i'd not give a flat price for something.

when asked what my hourly rate is, i simply say $80.
that comes to $640 per day. i've not done any work
hourly in three years.

the reality is, my pricing is based on what the market
for that work is. programming lighting systems is a good
example.

Lutron and nLight both offer programming, at a national
level, and at the lighting rep level.

the nominal rate is $1,500 per day. for that you get a
programmer with a laptop, who shows up for the day.

the minimum daily charge kills small jobs. you have two
daylighting sensors in an office suite, and it's a half day
charge, if that is offered, at $600. it's 30 minutes worth
of work. that is $1,200 an hour.

nobody even blinks when given the price.

i've offered when i program stuff, to show their electrician
how to do it, so they don't have to hire me to do it in the
future. i've offered to my customers, and to the sparky
who meets me at the office when i go to program. i'll
mention to him that he can easily make $1,000 a day
programming, due to the shortage of programmers.

so, i'm telling a guy making $250 a day how he can
make four times that amount, without getting dirty.
he'll say "really?" and then go back over and sit down
and text while i program, ignoring the free offer.

and they will call back in two weeks, needing to do it
again. and it'll still be $600 for the hours work. and
the customer will complain about the cost. and i'll offer
to teach their best sparky how do it, for free. and they
won't want to spend $300 for a laptop for him to use.

and they will call back in two weeks.......
Click to expand...

Can't always reason with bean counters, they step over dollars to pick up dimes sometimes, I think they do this because the dimes are shinier and that attracts them to it:)
 
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