Breaking down parts and labor

[Alden]

Hello All!, great forum which I have been reading for years.
I am an electrical contractor about 50 % resi, 50% commercial.
I learned from an old timer years ago about billing resi customers. He stated, I which I do, NEVER break down your parts/labor on resi service. His reason is people see the labor rate and don't understand all the costs going into it and therefore: YOU CHARGE TOO MUCH! I.E. The electrician charges almost 100/hr but I only make $20/hr at my job! My old boss said it's easier to add your parts mark up, labor rate for 1 final price the customer can see. The old timer also said to do this on bids to make it harder to bid shop, and they can't say hey! That panel you are charging 240 for I saw at (insert name of big box store here) for $120. Let me supply the parts!
HAve I drank the wrong kool-ade or is there something to this?

 

[brian john]

Are you making money?
Are your customers asking for more in their tickets?

If it is not broke, do not fix it, unless you feel you can figure a way to make more money.

 

[Alden]

Well, if I get my furnace guy, plumber, etc to my house, they all have itemized bills that show each part, and labor. While I understand their system, the average homeowner might not. I didn't know if some sort of "professionalism" was lost in my method.

 

[emahler]

do a search for 'flat rate'

 

[rt66electric]

guesstimating and customers

guesstimating and customers

Depending on the customer,on small jobs ,I have found its easier to say. I need to round up to the nearest 8 hrs for the day. Do not itemize specfic price per items, but round up for "etc items" . It works well for those customers who can goto BigBOX to price shop, but do not know what "items" go in the panel or attic.

IF a person questions my labor rates, I inform them how much I have to pay the govt, city, state, insurance man, per year , that usually softens up their demeanor a little.

 

[Alden]

I understand the whole flat rate system and have incorporated some of those ideas into my current process. I have never, though, seen a true flat rate bill before and how they do it. Flat rate has some good points to it but because it is not seen at all in my area, I do not use it exclusively. In theory it sounds great, but... (theres always the but) I do not have a full comprehesion of it, especially since I might work on the resi side in the A.M. 110 year old farm house, P.M. 10 yr. old unit at a trailer park, P.M. #2 - 20 year old stick built house. If all 3 want a new ceiling fan -how do you modify your pricing other than the fact I go to each one and shoot a bid out:-?

 

[220/221]

how do you modify your pricing other than the fact I go to each one and shoot a bid out

Develop 3 levels. Plug in your numbers.

1) Simple install, 1.5 hrs

2) Medium install, 2.5 hrs

3) Difficult install, 3.5 hrs

When in doubt, use level 3 pricing.

 

[petersonra]

Are you making money?
Are your customers asking for more in their tickets?

If it is not broke, do not fix it, unless you feel you can figure a way to make more money.

what he said.