Customer Wants a Breakdown

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bobbyho said:
"I went to college for 6 years, I know contracting is difficult but I don't believe someone should make $2000.00 dollars in 1 day."
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First he should ask for a refund from his college, they failed to teach him how to reason simple business practices, he din't learn a thing if he thinks the entire $2000 is profit.
 
satcom said:
First he should ask for a refund from his college, they failed to teach him how to reason simple business practices, he din't learn a thing if he thinks the entire $2000 is profit.
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That was my first thought as well. "I wonder how much the waitress down at the local greasy-spoon makes when she collects $10 to $20 from each customer?"

"Geez, that guy at the gas station is getting filthy, stinkin' rich.... every person in the door hands him a 20 or a 50."

I think I'll quit ropin' houses and pipin' offices and get a job down at WallyWorld as a cashier. I'll just rake the money in all day long.
 
It really gets me when customers who are business owners try to pull this. They know what it costs to be in business and they still act as though I'm going to pocket all the money.
 
Gee, I wonder what the Lawyer breakdown would look like. Or the banker, or the shrink, medical doctor, dentist, or the judge in a court of law. Nobody dares to ask them for a breakdown of the charges. Do as the mighty Satcom say to doith... and thrive.
 
I would ask for a breakdown as well.

Consider you are bringing your car in for service and the mechanic tells you its gonna be $1500, would you not be interested in how that price was reached?

Also im sure the customer wants to see the cost per item to make sure you arent screwing him on material prices. Im not saying that you would be dishonest, but some people can be.

Maybe he wants to see the prices you pay for material versus what he could get them for?
 
It seems like most EC's get offended when the price of an estimate is questioned, and take the stance that "if you can find it cheaper, more power to you". WHich works well, let the customer get it cheaper both in price and quality.

But it also seems that as soon as a price is questioned the EC jumps right into the above mentioned defense mode.

Just because the customer is questioning your price, doesnt mean they are saying it is too high. Most people just want to know where the cost comes from.

If i hired a contractor and they said here that will be $8000, there is no way im goign to just accept it at face value. I would want to know exactly how the contractor came up with that $8000.

As a contractor do you really expect people to just accept your price without knowing what they are getting for the money?
 
James@CHA said:
If i hired a contractor and they said here that will be $8000, there is no way im goign to just accept it at face value. I would want to know exactly how the contractor came up with that $8000.

As a contractor do you really expect people to just accept your price without knowing what they are getting for the money?
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The scope of work covers what will be done, your contracting, not paying a day labor.
 
Exactly. The SOW tells them exactly what they getting.

But it's not really any business of theirs that I pay a man $40/hr +benefits.

It doesn't matter if I figure it for 40 hrs @ $200/hr or 80 hrs @ $100/hr.

All that matters is that we'll get it done on time and for the price gave them before we started.

James - you are not a contractor, are you?
 
James@CHA said:
I would ask for a breakdown as well.

Consider you are bringing your car in for service and the mechanic tells you its gonna be $1500, would you not be interested in how that price was reached?

Also im sure the customer wants to see the cost per item to make sure you arent screwing him on material prices. Im not saying that you would be dishonest, but some people can be.

Maybe he wants to see the prices you pay for material versus what he could get them for?
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You're going to ask to see the mechanics books? Do you really think he's going to take you into the back office and let you go through his financial statements?

The OP gave a breakdown per task. He did not just say "here it's this much for the whole job."

Of course the customer is going to be able to obtain the material cheaper on his own. It's called mark up. It's a perfectly acceptable practice and a necessary one as well.
 
James@CHA said:
Consider you are bringing your car in for service and the mechanic tells you its gonna be $1500, would you not be interested in how that price was reached?
Also im sure the customer wants to see the cost per item to make sure you arent screwing him on material prices.
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You just try to get wholesale prices from the shop the next time you take your car in for repair. They will be more than happy to tell you how much you are going to pay for a part but they are never going to tell how much they paid for it.

And yes you can buy the parts cheaper at the auto parts store but now you have to find someone to install them. If you want to do the work yourself you can save some money ( if you know what you are doing) just like electrical.

The mechanic quotes book rates (flat rate ) for labor cost and not actual time spent. You are welcome to take your car down the street and pay another diagnostic fee and get a quote from them, probably about the same.

Is there some reason that an electrical contractor should operate any differently from an automotive shop. Business is business.

I'll bet that you don't know the actual mark up on anything in your home from what it cost the builder to build the house to the cost of tooth paste in the medicine cabinet.
 
James@CHA said:
Just because the customer is questioning your price, doesnt mean they are saying it is too high. Most people just want to know where the cost comes from.

If i hired a contractor and they said here that will be $8000, there is no way im goign to just accept it at face value. I would want to know exactly how the contractor came up with that $8000.

As a contractor do you really expect people to just accept your price without knowing what they are getting for the money?
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James,

Have you ever bought a new home built by a home builder?

Do you ask for a breakdown of all the materials that went into building this home?

Do you want to know what every 2X4, nail or piece of sheetrock costs?

If the builder tells you it will be $300k to build the home do you demand that he breaks down all the material costs and labor costs for you?
Do you think he's going to sell you the home for less because you want a breakdown of all the material costs?

How about buying a new car?

Do you expect them to list all the parts, part prices and labor that went into building the car?

If someone gives you a breakdown of material and labor costs what does that tell you?

It doesn't tell you how much profit they're going to make. For that you would need to see all of their overhead expenses as well. You just as well ask to see their P&L statements so you can see how much profit they're making.

How much do you consider too much per hour for labor?
How much do you consider too much mark up for material?
How much profit do you consider fair?

If a customer wants to know what he's getting for the money he can specify certain brands and exactly how he wants the work performed.

If I'm having a concrete driveway poured I can specify that I want 1 foot of the existing soil excavated and what type of base I want brought in and compacted. I can specify the slump of the concrete and the thickness of the slab. I can specify the what kind of reinforcement wire or rebar I want in the slab. The color of the concrete, etc.

The contractor can give me a price based on these specifications and that's all I really need. I can get other estimates based on these specifications and make a decision. Knowing what I'm being charged for materials and labor doesn't mean much without knowing what all of his expenses are. What a customer really wants to know is how much you're making.

James,

How much do you make per hour?
What's your annual income?
How much of that do you keep and how much do you pay in taxes?
 
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I had one customer that after I finished the job he calculated what he was charged per hour for the work and said he was being overcharged. He then went on to say that he was a real estate broker and that he feels lucky when he makes $50 per hour. How dare an electrician make more than him.
 
Maybe if we had a fair shot at electrical service work , than trying to compete with the recently laid off factory electrical worker, that hasn't figured out what it costs to do contracting yet ,[that might take him years to figure out]

The underground home renovators that wont even leave a truck parked in front of a site there working on so the neighbors and city inspection wont notice ,because they dont want to take out permits and they do the electrical work also.

The Customers who pay in CASH so they get a break on sales taxes and the contractor makes unreported income. Cash is too easy not to put into the bank and get taxed on.

Our Service Industry wouldn't be in such a shamble.

I am losing work because some home owners figures it is okay for the renovation contractor to do the electrical because that way they dont have to wait for inspections and it seems like we are blamed for holding up the project to follow the rules.


Looks like even professional people here dont have a clue on how to make a business make a decent income

I cant believe that an Electrical Engineer has no Idea what is involved running a service oriented business.
 
Aline, I had the same situation with a real estate agent. About 5 months after I did the job, he called me up saying that he referred me to someone. Well, they were talking about the work I did when his friend said, "Wow that is a lot of money for such a short amount of time" So he called me up to explain my pricing. How I ended up talking to him about this is beyond me but I went through the various items. He said wow thats about $150.00 per hour. I told him if he took a customer to see a house and they said yes, bought the house he made, let's say 6000.00 for a car ride. Then he seemed to get it. JimCHA, try sking your doctor, or your grocery store or ANYONE else where they came up with their prices. You are an engineer, so you have been to college. You must have sat through at least one class on business. There is no need for your friendly neighborhood contractor to explain business 101 to you or anyone else who demands a price breakdown (Especially on a FREE ESTIMATE)
 
Seems like th OP's customer wants him for an employee, without having him for an employee.

Wouldn't be long before he'd be coming around telling him not to leave so much wire in the boxes.
 
Next time someone asks for a breakdown, give 'em one:

mancrying2.jpg


"Jeez, man, I don't know what I'm going to do.
I can't make any money these days because of
spiraling gas prices, and insurance is through the
roof! You should see my balance sheet. It'll make
you puke. My ex is forcing me to pay her lawyer
to sue me for back child support. And the IRS, cripes,
there's no stopping them! There's no way I can buy
more duct tape and baling wire to keep my 1984 Mazda
pick-up running. And the Department of Transpor-
tation wants to evict me from living under the I80 bridge....."
 
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