How to raise rates in your area??

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khixxx

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I hear a lot of guys saying we need to raise the bar when it comes to a rate to charge a customer. That is fine and dandy but how??

Could you try to make being able to operate a business in your area harder by setting up higher standards?

Stiffen the penalty for unlicensed and under insured companies?

Do what AZ is doing when it comes to hiring illegals and strip them of their license if they are caught?

I am sure guys would love to charge $150/hr but just can't.

I am just curious on how you guys would handle this. Would you contact your local licensing agency City, county, or state and recommend higher standards or other options?
 
the easiest way to raise your rates in resi work...get away from T&M.

people equate T&M with their own payscale. Most have no idea what their company charges the customer, they only know what they make an hour.

They don't equate us to attorneys. They equate us to general labor...
 
maybe it will take turning in unlicensed contractors. i take a house burning down as a prime example of how bad an installation done by an unskilled and unlicensed (in the proper catagory) contractor can get. in the big city it may be easier to turn someone in, but if you are in the boonies then you may have to tread water very gently. if you are more skilled than your competition you can put that you are qualified by such and such classes or years of working in the electrical field.
 
pricing is a funny thing. two guys can look at the same job, same specs, same scope of work and come up with two prices for that work, often they can be worlds apart.

i would not worry so much about your pricing as your profit.

do more of the things you do well. the more you do of them the better you will get and you will make more. and stay away from things you don't do well.

cut your costs where you can. material pricing can vary radically and in most cases is well over half your expenses. cutting 10% off your material costs is usually very doable, and is a big number.

if you have employees, remember that they are not your friends. you can be friendly toward them, but they work for you and you need to make sure they are making money for you, and not pissing it away.
 
One way not to do it is to put "Lowest Price Guaranteed" in your advertising.

One contractor has this in his ad in the same phone book I advertise in.

My brother knows this guy and tells me he is very busy. He says the guy is cheap but makes it up in volume.

I had to laugh about that one.

Sure he may be busy but is he making any money?

For some people selling themselves on being the lowest price is the only thing they know how to do.
 
aline said:
One way not to do it is to put "Lowest Price Guaranteed" in your advertising.

One contractor has this in his ad in the same phone book I advertise in.

My brother knows this guy and tells me he is very busy. He says the guy is cheap but makes it up in volume.

I had to laugh about that one.

Sure he may be busy but is he making any money?
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We lose money on every job, but we make it up in volume:D

That was the business plan of cars.com back in the late 90's....they lost about $2,000 for every car they sold, but they were just buying their way into the market...well, they ran out of VC money and went out of business....the name and site were, however, resurrected...
 
It's a free market. Too many electricians= too little pay. Some need to go out of business. But theres always the problem of more companies starting up.

A viscous never ending cycle.
 
SmithBuilt said:
It's a free market. Too many electricians= too little pay. Some need to go out of business. But theres always the problem of more companies starting up.

A viscous never ending cycle.
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I don't think it's so much a matter of too many electricians but rather too many electricians willing to work for too little pay.
http://www.maintenanceworld.com/Articles/newswires/Massive-shortage-electricians-predicted.html

With a shortage of electricians you would think electrical contractors would be charging more and paying their electricians more.

Everyone seems to talk about how they have plenty of work and are so busy. Customers are complaining that they're having to wait weeks to get their jobs done. Yet contractors are still working dirt cheap.
 
You could get all the electrical contractors in your area together and agree on a min price - but thats price fixing and illegal... Or you could just raise your rates - hope for the best - and advertise/brag about how much you are getting through your new pricing and hope all the other will get greedy and want the same. But someone will always think that low-balling that will give them the volume...
 
e57 said:
You could get all the electrical contractors in your area together and agree on a min price - but thats price fixing and illegal... Or you could just raise your rates - hope for the best - and advertise/brag about how much you are getting through your new pricing and hope all the other will get greedy and want the same. But someone will always think that low-balling that will give them the volume...
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or, you can get everyone to understand Business 101 and account for all overhead and expenses....you'd be surprised at how close the rates would be and how much they would increase...that's not price fixing and it's perfectly legal...but it's harder than just charging the going rate.
 
SmithBuilt said:
It's a free market. Too many electricians= too little pay. Some need to go out of business. But theres always the problem of more companies starting up.

A viscous never ending cycle.
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hate to classify that at as a "problem". I beleive it's called free enterprise.
and more power to anyone who can make the grade. that's America, isn;t it.

there seem to be a number of builders and general contractors looking for "newbies" to "use and abuse" We have a couple locally that have managed to break the back of newer, smaller firms, but every job theres a new, hungry contractor waiting to take the bait.
 
aline said:
I don't think it's so much a matter of too many electricians but rather too many electricians willing to work for too little pay.
http://www.maintenanceworld.com/Articles/newswires/Massive-shortage-electricians-predicted.html

With a shortage of electricians you would think electrical contractors would be charging more and paying their electricians more.
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They have been predicting a shortage of electricians ( and lawyers ) for the last thirty years at least. A predicted shortage only causes more people to enter a given field.

In this state there may be a shortage of plumbers because the number of plumbers hasn't increased in the last 15 years but the number of electricians has continued to grow and grow and grow.

There would even be more electricians if they could make a decent living at it. Many of the electricians that I have worked with gave up years ago and went in search of better opportunities. One guy with about 15 years went to work for UPS ( better pay & benefits ).
 
I just talked to my mentor when I first went into the field, He is now working grounds maintenance for a multi millionaire making $15k more than what he was making being an electrician for 24 years. He said the guy gave him $5k for his retirement as a sign on bonus. He told me he never got 1 cent for retirement form the EC working all those years. LOL it was funny the EC told him I hope it doesn't work out, My mentor said I hope you go bankrupt. I would have loved to been a fly on the wall.
 
Why do some lawyers charge $160 per hour & some Charge $600 p/hour?
Is it a difference of fighting a traffic ticket or murder charge? Or a matter of reputation? forget about the overhead and material cost.

I've always said if we would all ban together, union or not, we could all charge $200 per hour. Look at the largest nonunion unions.... Doctors & Lawyers
 
Jeff Weissman Electric said:
Why do some lawyers charge $160 per hour & some Charge $600 p/hour?
Is it a difference of fighting a traffic ticket or murder charge? Or a matter of reputation? forget about the overhead and material cost.

I've always said if we would all ban together, union or not, we could all charge $200 per hour. Look at the largest nonunion unions.... Doctors & Lawyers
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Jeff, while I agree with this, please go back and reread the thread about the service upgrade pricing...we kicked each other in the nads on that one...
 
Do what AZ is doing when it comes to hiring illegals and strip them of their license if they are caught?
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Doh!

I have used illegals many times in the past for personal projects because those guys can load a dumpster and clear landscape like a son of a gun.

My business partner persuaded me not to pick them up in a company vehicle any more.

I picked one up several months ago in my personal car and promptly got pulled over...before I left the parking lot. They made him get out and sent me down the road.

Lesson learned..... NEVER use a company truck :)
 
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