Talking about raising the hourly rate, the way I see it is how much do you need to pay yourself, if it is just you, cover your OH, Which in reality should cover your salary. Because, what happens if and when because you are the best around that you have more work than one guy can handle, and you hire a J-man and a helper.
If you need a $150,000 to cover you and overhead, then at a 50% GP you would have to produce $300,000 in Revenue. Less gross profit margin, means a higher revenue to cover the $150K. And that is without a profit to grow your business. Whatever $$ amount you want or need that to be.
8 hours a day @ $150, 5 days a week for 50 weeks is $300,000. 2000 hours. But most of what I see for an hourly figure for a service electrician is a 1000 hours.
I thought the idea would be to not have to work as many hours to provide the better living
Obviously understanding that material is going to make up some of that $300K, But unless it is some bigger job, (which may not classify as service), material for most is small in comparison. If you were being the employer type, and they were worth it then you would want to keep them when the work slows down. Now what charging double each ones pay rate to cover. What should the normal payrate be?
Now if it is only you, are you billing your jobs out at this 2 times this (rate + material)? How many jobs are you going to do in the year?
What is your average ticket? Will Two times the T&M be enough to produce $300K?
