Material mark up an hourly labor pricing.

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wpaul29

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First of all I would like to that everyone in advance that posts any replys for your input I greatly appreciate it.

I am fairly new to doing electrical work for my self an would like some input on different things. I have my master's license in the state of WV an have been in the trade for about 10 years. I have done some side work in the past but am increasingly looking at going full time into business for myself. Right now its just a part time thing until I get a feel for the whole way things should go.

I have a full time job with a large contractor an make about 26hr. plus benefits an vacation.

Basically I have 2 questions

1. What is a fair mark up percentage for residential an light commercial work for material considering the fact that people can go to Home Depot an other places to see the actual cost of some materials.

2.What is a fair hourly rate to charge for residential work an light commercial.

Right now I am charging 25hr.for residential an
35 for light commercial.

20 % mark up on materials to cover my time for getting materials and just in case I miss something in the estimate.

Please excuse my ignorance for anything posted as this is a new venture for me and I am just trying to get some expert opinion.

I mainly do work in small communities not citys and I am about 70 miles outside of Washington DC.

Depending on which state I work in the area in WV has a average family income of about 45,000 a year and in MD about 65,000 a year. Also I work under my fathers masters license in MD until I get mine there.
 
Re: Material mark up an hourly labor pricing.

The best advice I was ever given is you can itemize all the items you use, but do not itemize the costs. The customer will pick apart a bill that is itemized, but has little room to argue with a total cost. And I always add in a miscelaneous charge for the little things we use every day, like tape and screws, and to cover some of the cost of wear and tear on materials, Most automotive shops charge a "shop fee" why shouldn't we?
 
Re: Material mark up an hourly labor pricing.

$25.00 an hour you must be working under the table. i live in the northwest about the same income level as you. i started my ec about 12 months ago. the going rate around here is $70.00
so i started charging $55 ( just couldn't justify charging that much money ) and soon found out i couldn't make it, so i jump the price up to $65 and now just barely keeping my above water. my best advice is don't sell your self short, like i did my first year. i add 20% markup on material because i alway forget something in the bid. most of the bid jobs i get are the ones that i think i bidded too high on

best of luck
 
Re: Material mark up an hourly labor pricing.

sir,
you don't have to apologize for your thoughts,
this is a very good question,
why would you make less working for yourself than you would working for someone?
if you have the van thing going on, and all the insurance's,to go along with the biz..you wont make it at 25.00an hour.
im from the suburbs of Boston and the going rate here is 70.00 for me and an additional 30.00 for the apprentice."residential"
you have much more responsible now than you did working for someone,
best of luck!!
 
Re: Material mark up an hourly labor pricing.

I too fail to understand why you would work for less money on a one time job that provides no benefits. I bet your employer would give you $25/hour and not withhold taxes if you provide him the truck and insurance documentation.

Think about it.


Then ask yourself why you are working for $25/hour.
 
Re: Material mark up an hourly labor pricing.

When I started out 12 years ago I charged $20/hr. I would get phone calls complaining and yelling at me at 2 in the morning because I hadnt finished something yet. The higher I raised my rates the less the complaints and the faster I would get paid. You dont want to be the walmart of electricians. They are a dime a dozen. I get clean work now without a lot of discovered code violations. The ones that hire you cheap hire cheap inexperienced handymen types. You dont want to fix 3 hours of dumb stuff just to get to the original job. Then have em complain about how long it took. Charge the going rate. Ask and shop around for what others are charging and you will get to go fishing 3 days a week and still make what you wanted to charge to begin with.
 
Re: Material mark up an hourly labor pricing.

To Wpaul29: For T+M jobs a good markup price is 30 percent on majority of items. Think about all the time wasted in lines at the wholesale house for starters. Big ticket items like dry transformers get the 20 percent markup.(this is about the avarage markup that the ac contractors are getting for their central ac units). On jobs you are in competitive bidding for such as govt work, then all mat across the board will need to be at a lower rate in order to not overbid the job. I found I was still getting the jobs at 10 percent mat markup for these type bids. When ever customers start complaining about markup I try to calmly remind them that the big department store chains are getting 80 % markup on the clothes that the customer is wearing at the time.
 
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