Income

[emahler]

I can't speak for that particular contractor, but COGS also includes labor, permits, rentals, ect. Essentially it is all of the direct job costs.

usually, but in this case material runs him about $3mil +/-, his office is his wife and an answering service...

 

[Tiger Electrical]

Thanks for the correction RKing. I have an accountant because I'm so illiterate financially. My receivables are so small that I just look at my checkbook to guage how things are going.

So...$2 million/8 guys...figuring at least 8 because 2 are Superman
=$250,000 each/year. $250,000/1560 hours=$160/hour.

I use 1560...6.5 hours/day commercial, 20 days/mo, 12 months. That sounds very believable considering the level of productivity you're talking about. Pretty sweet for someone that can pull it off.

Dave

 

[aline]

So what is a resonable amount that a one man shop should pay himself for his income or salary?

30k?
40k?
60k?
Whatever is left over at the end of the year after expenses have been paid?

Do most of you guys budget for your salary or compensation and include this in your overhead or do you just charge the going rate and hope there's something left over for you at the end of the year?

It just seems to me if every electrical contractor would figure at least 100k of income for himself into his pricing this would cause everyones pricing to be higher and we would all be better off. We might even make as much as the plumbers and HVAC guys. But I guess that would take the fun out of being able to complain about them making more than us.

To be a contractor I have to pay for a minimum amount of insurance, license fees, etc. and factor these into my overhead and pricing.

Maybe they should have a new law requiring you to pay yourself at least a $100k a year in income to become a contractor.

What would happen if everyone included at least a $100k for their salary into their pricing? Would the whole trade fall apart and cease to exist because the customer wouldn't be willing to pay for the price increase?

I guess I'm setting my goal of a $100k per year of personal income to high. I guess I'll just have to be content with something less.

 

[ITO]

There is overhead and there is profit.

Your salary, insurance, office, bills ect ect ect comes out of overhead. If you did it all right there is profit on top of that but that comes after you pay your own wages.

Profit can either be rolled back into the company to buy your own office, pay debt, or just save it to bank roll bigger projects and help with cash flow. Profit can also be taken out of the company and put right in your own bank account to do what ever you please, that's the reward for making all this work.

 

[LawnGuyLandSparky]

So what is a resonable amount that a one man shop should pay himself for his income or salary?

30k?
40k?
60k?
Whatever is left over at the end of the year after expenses have been paid?

How can you determine a set amount, not knowing what kind and how much work you will do? Are you a one man shop that does a lot of old work residential, or are you out there in a bucket truck splicing fiber? I have to imagine you're not taking on too many 4000a services. If you're wiring houses, I can't see you earning more than 150% of what a typical residential field electrician is earning unless you're working very long days & weekends.

Do most of you guys budget for your salary or compensation and include this in your overhead or do you just charge the going rate and hope there's something left over for you at the end of the year?

It just seems to me if every electrical contractor would figure at least 100k of income for himself into his pricing this would cause everyones pricing to be higher and we would all be better off. We might even make as much as the plumbers and HVAC guys. But I guess that would take the fun out of being able to complain about them making more than us.

Not every electrical contractor is doing 100k worth of work, especially not the one man bands. And since there are plenty of them willing to work for themselves for 40k or 50k, you'll never be able to push that bar higher.

To be a contractor I have to pay for a minimum amount of insurance, license fees, etc. and factor these into my overhead and pricing.

Maybe they should have a new law requiring you to pay yourself at least a $100k a year in income to become a contractor.

What would happen if everyone included at least a $100k for their salary into their pricing?

You'd probably be prosecuted for collusion.

Would the whole trade fall apart and cease to exist because the customer wouldn't be willing to pay for the price increase?

I guess I'm setting my goal of a $100k per year of personal income to high. I guess I'll just have to be content with something less.

 

[aline]

Not every electrical contractor is doing 100k worth of work, especially not the one man bands. And since there are plenty of them willing to work for themselves for 40k or 50k, you'll never be able to push that bar higher.



You'd probably be prosecuted for collusion.

That's my point there shouldn't be any of them willing to work for themselves for 40k or 50k and not have paid vacations, sick leave, retirement plans, health insurance, steady weekly pay check, etc.
That's what I don't understand. Why is there so many willing to do this?
It's a shame that contractors are willing to give all these benefits and only pay themselves $40k or $50k a year. I know I'll never be able to push that bar higher. It would take all of us to push the bar higher but we're far to busy trying to figure out how we can undercut each other.


Why would you be prosecuted for collusion?

If you hire an employee you have to pay him or her at least minimum wage and factor that into your overhead and pricing.

So if there was a minimum wage law for contractors of a $100k per year you would have to do the same. How could this be collusion?

Don't take my posts too seriously. I'm just throwing crazy stuff out there.

 

[:-)]

Not only is it possible, but it is quite probable that the owner of a 6 to 10 man shop is making that much or more. I think I can safely say that the owner of a 2-4 man shop can make that much too.

I run a 3 man, 1 truck shop and clear $100,000+ a year.