New Master Electrician/Pricing

[blueheels2]

Around here we are definitely the lowest paid trade of the top 3--Hvac, Plumbing and then Electricians

Some of us are trying to change that around here but it is an uphill battle for sure.

 

[mtnelect]

What is a normal, market hourly rate for a master electrician to make at this point in time? How do you bake in the job without knowing the target number?

I don't get a lot of work right now, but the work that I do end up with always ends with a profit of at least a rate of $75/hr for labor time spent, though it usually is around $125. That seems reasonable to me, and just like what @James L said I feel like if I told a customer it was going to be the same to run a single circuit as it would be to replace their whole panel they'd laugh and go somewhere else.

I am legit asking: if everyone charges around a certain price for a task than great, I'll charge more. But how are you supposed to keep track of updated market rates? Or know what rough value your profession is worth? Aside from looking at IBEW rates for the local area there's no resource available that I know of for knowing what I should be charging.

Your bottom line, and QuickBooks is a great place to start. You can look at your bottom line daily. The hard part is you have to enter your operation figures daily. I save that task for that evening, sometimes the next day.

 

[Greg1707]

What is a normal, market hourly rate for a master electrician to make at this point in time? How do you bake in the job without knowing the target number?

I don't get a lot of work right now, but the work that I do end up with always ends with a profit of at least a rate of $75/hr for labor time spent, though it usually is around $125. That seems reasonable to me, and just like what @James L said I feel like if I told a customer it was going to be the same to run a single circuit as it would be to replace their whole panel they'd laugh and go somewhere else.

I am legit asking: if everyone charges around a certain price for a task than great, I'll charge more. But how are you supposed to keep track of updated market rates? Or know what rough value your profession is worth? Aside from looking at IBEW rates for the local area there's no resource available that I know of for knowing what I should be charging.

This has been covered many times on this site. Calculate annual overhead. Add expected salary/income and divide by the number of possible work days. The result will be the necessary income per day.
So-- $50K overhead plus $150K salary divided by actual work days will mean about $1,000 per day. The problem of course is that every day without billing $1K makes the daily rate higher!

In my own business I doubt that I ever have 8 billable hours. I do a lot of service work so it is 2 hours here, two hours there, estimates, pickup supplies, rinse and repeat.

 

[letgomywago]

Some of us are trying to change that around here but it is an uphill battle for sure.

I think you'll find that people will live without ac or a toilet for less time than a busted gfi or even working lighting in a room.

 

[Fred B]

Around here we are definitely the lowest paid trade of the top 3--Hvac, Plumbing and then Electricians

And least respected. Get this too often "You move your stuff if our install creates a violation of your code on your already installed equipment." Have come back for finals, and suddenly there is plumbing or HVAC right in front of your panel. And if the inspector stands by you (the electrician), you're the bad guy for making an "issue" just because you can't even get to cover screws or panel door opened ("well, you can get it about 30 deg opened, what's the problem?").

Some of us are trying to change that around here but it is an uphill battle for sure.

Too many trunk slammers and GC willing to undercut electricians who have spent significant effort, time and money to be trained and keeping current on codes.

I think you'll find that people will live without ac or a toilet for less time than a busted gfi or even working lighting in a room.

Or just run long extension cords under the carpeting to bypass the non functioning outlet. Then get this response, "It's been like that for years, what's the problem." And usually won't get addressed until they try to sell the house, and then its somehow an emergency and you're expected to be able to drop everything to get to them.

Overall, I think part of the problem is 75% of the work done for electrical installation is totally unseen, behind the walls.

 

[Rdcowart]

I’ve started practicing at 50% gross profit. Find out how much it cost you to produce the work and multiply it by 50%. Since doing this I have been working less and making more. I stopped doing free estimates, and I have cut out about 95% of the tire kickers. I will take the estimate fee and apply it to the completed work.

 

[Whale Rage Forever]

I’ve started practicing at 50% gross profit. Find out how much it cost you to produce the work and multiply it by 50%. Since doing this I have been working less and making more. I stopped doing free estimates, and I have cut out about 95% of the tire kickers. I will take the estimate fee and apply it to the completed work.

What exactly do you mean by "how much it costs you to produce the work and multiply it by 50%"? Your verbage is unclear to me, as multiplying anything by 50% will only decrease the value.

 

[Whale Rage Forever]

This has been covered many times on this site. Calculate annual overhead. Add expected salary/income and divide by the number of possible work days. The result will be the necessary income per day.
So-- $50K overhead plus $150K salary divided by actual work days will mean about $1,000 per day. The problem of course is that every day without billing $1K makes the daily rate higher!

In my own business I doubt that I ever have 8 billable hours. I do a lot of service work so it is 2 hours here, two hours there, estimates, pickup supplies, rinse and repeat.

How does one calculate projected supply costs?

Things like rent, utilities, insurance, etc...are all fairly predictable. But a given electrical job could inhabit any point in the spectrum of profit vs cost. There are jobs that make a lot of money with minimal supply cost and there are jobs that cost a shit ton for marginal profit.

Not knowing the kinds of jobs that you're going to come across over time, how do you project the cost of supplies into a yearly expectation?

 

[ptonsparky]

What exactly do you mean by "how much it costs you to produce the work and multiply it by 50%"? Your verbage is unclear to me, as multiplying anything by 50% will only decrease the value.

Then add the 50% to cost. (Cost plus 150%)

 

[James L]

How does one calculate projected supply costs?

Depending on what kind of work you're doing, you should be able to get a feel for a percentage of the sale. And over time, you can get much more accurate

For instance, I do primarily residential remodel work. With my opening prices, I already know that I can figure materials to be 20% of the total price. And it works out across various types of remodel work.

When I did service work, materials were about 30% of the total price. That's why someone previously said materials x 3 might be a good ballpark price.

 

[Greg1707]

How does one calculate projected supply costs?

Things like rent, utilities, insurance, etc...are all fairly predictable. But a given electrical job could inhabit any point in the spectrum of profit vs cost. There are jobs that make a lot of money with minimal supply cost and there are jobs that cost a shit ton for marginal profit.

Not knowing the kinds of jobs that you're going to come across over time, how do you project the cost of supplies into a yearly expectation?

By supplies do you mean shop supplies? If so, shop supplies would be part of overhead. If just starting out in business some guessing will be needed to determine overhead, however; after six months or a year in business, overhead should be a known amount.

The $1,000 per day would be considered the break even number. So when pricing or estimating jobs, just take the number of days plus cost of materials. So a five day job with $3K of materials would be A MINIMUM of $8K.

 

[Whale Rage Forever]

In my own business I doubt that I ever have 8 billable hours. I do a lot of service work so it is 2 hours here, two hours there, estimates, pickup supplies, rinse and repeat.

I was just rereading this and this is going to sound like a stupid question, but what actually constitutes what we all refer to as service work? and what is the alternative?

 

[letgomywago]

I was just rereading this and this is going to sound like a stupid question, but what actually constitutes what we all refer to as service work? and what is the alternative?

I'd say it's not remodels or new construction it's is a less than day catch all type category. Examples would include replacing a single device or installing a small item and circuit or small alteration to lighting.

 

[jmellc]

Not to mention actually finding the work in the first place, which is a whole other beast. I regret to say that most of my work right now comes from Angi's list. I can see why a lot of contractor's hate them. There's definitely money and opportunity there, but you can't slip for a moment with how expensive their leads are. I have a meeting later next week with a marketing company to see about optimizing my website and spreading out over more sources, but I basically don't have a lot of knowledgebase on where to actually find work.

Been a few years since I did many estimates & I'm not sure how good I was on them. But I may have some advice on finding work, maybe. Yes, if you have a website, keep it updated. I made the mistake of not having a website, but I did buy space on DexKnows, a sort of forum at the time. Not sure if they are still around. I got a few jobs from it. I could easily go on there and remind people about smoke detector batteries, not overbulbing lights, still an issue then; less now. That site didn't reach all that many people but it was very cheap, don't recall exact price. Keep some kind of updates on your site; some hazard you just fixed, a great new product, etc. Show pics of recent jobs you did, with customer's permission.

Keep a good supply of business cards. Old school but still fairly cheap and easy to use. Leave one on the table with your tip every time you eat out. Put them on bulletin boards, what few of them are still around.

Visit every realtor nearby with a card and/or a flyer of some kind if you use them. Realtors can be a pain but can bring you in some bread and butter business at times, and a bigger job sometimes too. If you already work for some realtor, mention it to the prospects. Make a reference list to hand out. Same with places that sell sheds. They may hire you to prewire them or may refer customers to you aftermarket.

Visit general contractors nearby and ask to get on their bid list. Hand them your license and insurance information on a flyer along with any good references. Do the same with maintenance managers at office buildings and shopping centers. Same with apartment complexes and churches.

A former boss got some work from a larger out of town contractor. They did a building here and got him to do their warranty work. They were too far away to come do it. I think they paid him some flat rate and some per call, don't remember for sure. But he had been glad to get it. Visit any sites like this in your area and give the foreman your information.

Be careful about paid leads and high priced ads. I never did Angi's list but was called by many others with high priced stuff that would have buried me sooner that I buried myself. I did try to contact Angi's at one time but kept going in circles on their website and gave up. They started calling me after I shut down. Were embarrassed when I told them about it.

Get a few yard signs made for your jobsites. Always put one up when you start. Phone # in huge print. Phone # on your truck in huge print.

Good luck. Hope some of this is helpful.

 

[ptonsparky]

I was just rereading this and this is going to sound like a stupid question, but what actually constitutes what we all refer to as service work? and what is the alternative?

For me, it was one hour on up to maybe a day or two. Usually on something existing. No estimates involved, just go and get it done.

 

[Whale Rage Forever]

Been a few years since I did many estimates & I'm not sure how good I was on them. But I may have some advice on finding work, maybe. Yes, if you have a website, keep it updated. I made the mistake of not having a website, but I did buy space on DexKnows, a sort of forum at the time. Not sure if they are still around. I got a few jobs from it. I could easily go on there and remind people about smoke detector batteries, not overbulbing lights, still an issue then; less now. That site didn't reach all that many people but it was very cheap, don't recall exact price. Keep some kind of updates on your site; some hazard you just fixed, a great new product, etc. Show pics of recent jobs you did, with customer's permission.

Keep a good supply of business cards. Old school but still fairly cheap and easy to use. Leave one on the table with your tip every time you eat out. Put them on bulletin boards, what few of them are still around.

Visit every realtor nearby with a card and/or a flyer of some kind if you use them. Realtors can be a pain but can bring you in some bread and butter business at times, and a bigger job sometimes too. If you already work for some realtor, mention it to the prospects. Make a reference list to hand out. Same with places that sell sheds. They may hire you to prewire them or may refer customers to you aftermarket.

Visit general contractors nearby and ask to get on their bid list. Hand them your license and insurance information on a flyer along with any good references. Do the same with maintenance managers at office buildings and shopping centers. Same with apartment complexes and churches.

A former boss got some work from a larger out of town contractor. They did a building here and got him to do their warranty work. They were too far away to come do it. I think they paid him some flat rate and some per call, don't remember for sure. But he had been glad to get it. Visit any sites like this in your area and give the foreman your information.

Be careful about paid leads and high priced ads. I never did Angi's list but was called by many others with high priced stuff that would have buried me sooner that I buried myself. I did try to contact Angi's at one time but kept going in circles on their website and gave up. They started calling me after I shut down. Were embarrassed when I told them about it.

Get a few yard signs made for your jobsites. Always put one up when you start. Phone # in huge print. Phone # on your truck in huge print.

Good luck. Hope some of this is helpful.

Thank you.

1-Have a website. Getting it optimized right now with a company, actually.
2-Have business cards. I don't know how much good they do, but people seem to like seeing them-for whatever that's worth.
3-Will get in touch with some realtors and GC's. Been meaning to try and find some GC's anyway.
4-Never would have considered shed sellers. I can actually think of a few places like that I could try around where I live.
5-Angi's sucks. I haven't subscribed to any other paid lead sites like thumbtack or taskrabbit or anything because I don't want to risk paying multiple sources. I manage to make Angi's work VERY carefully, but it could just as easily turn sour really fast.
6-I'd love to get the signage for my truck, but don't quite have enough money to comfortably drop for a truck wrap.

 

[jmellc]

Thank you.

1-Have a website. Getting it optimized right now with a company, actually.
2-Have business cards. I don't know how much good they do, but people seem to like seeing them-for whatever that's worth.
3-Will get in touch with some realtors and GC's. Been meaning to try and find some GC's anyway.
4-Never would have considered shed sellers. I can actually think of a few places like that I could try around where I live.
5-Angi's sucks. I haven't subscribed to any other paid lead sites like thumbtack or taskrabbit or anything because I don't want to risk paying multiple sources. I manage to make Angi's work VERY carefully, but it could just as easily turn sour really fast.
6-I'd love to get the signage for my truck, but don't quite have enough money to comfortably drop for a truck wrap.

I had a place make magnetic signs, one for the rear and one for the driver door for 2 vehicles. I think they were about $100. Same place made 2 yard signs for about $50 I think. Very reasonable. I got some direct calls from both. Some people think they look too small time but I think they are better than nothing. I have no idea what a wrap costs but I've seen a few that I thought were too flashy. Customer might wonder how much of his billing goes to pay for such.

I shut down 10 years ago but I still get an occasional call from a card in someone's wallet. I had a former boss to sell out to the next boss. Next boss got a call from an interior decorator. We had given her partner a card a year or 2 earlier. We got 5-6 jobs from her. So cards have a long life.

Another thing that may help indirectly is to post a lot on forums. I have posted on City Data (city-data.com) for years. They don't allow advertising but I would see people post electrical problems or contractor issues and respond. Sometimes just about an issue, sometimes about how to deal with a contractor. I had 1 or 2 people to PM me and thank me for advice. Didn't turn into any business but it may have if I had been in business longer after that.

Sure hope it goes well for you. It's tough out there and getting tougher.

 

[Ricko1980]

So, without fear of me showing my own ignorance here...

How much money do you feel I should be charging? At the $1475 price I quoted for the hot tub for 3 hours work, I am still making about $135/hr for my time as profit. If I charged them $3000 then:

1-I think they'd call me a scam and don't think they'd do it.
2-If they did I would be making an effective rate of $625/hr for a total profit of around $1875. Are you telling me that this is legitimately what other electricians are charging? Because that sounds insane.

That seems unbelievable.

I also find these prices to be a bit low. I think there are lots of hours of work that don't get counted when one takes the "bottom up" approach of adding up only those hours actually performing labor on the jobsite. What about meeting clients? How many clients turn you down? How many do you meet and then decide not to work for because you don't have a good feeling about them? What about shopping time, or time pulling the permit?

We try to target $130/hour, but on small projects that are less than 1 day our quotes sometimes are a bit higher to account for all these fixed time costs that don't get counted in the normal "hours worked." We also add in a larger factor for material markup for smaller jobs since there's more wasteage.

For services, our utility routinely requires us to use expensive equipment and upsize conduits, so it generally costs more due to this PITA.

In some cities, we often only get 3-hour windows for inspections, so we sit around a lot just waiting for inspectors to show up sometimes, and no matter what we have to reserve half a day.

 

[jmellc]

I also find these prices to be a bit low. I think there are lots of hours of work that don't get counted when one takes the "bottom up" approach of adding up only those hours actually performing labor on the jobsite. What about meeting clients? How many clients turn you down? How many do you meet and then decide not to work for because you don't have a good feeling about them? What about shopping time, or time pulling the permit?

We try to target $130/hour, but on small projects that are less than 1 day our quotes sometimes are a bit higher to account for all these fixed time costs that don't get counted in the normal "hours worked." We also add in a larger factor for material markup for smaller jobs since there's more wasteage.

For services, our utility routinely requires us to use expensive equipment and upsize conduits, so it generally costs more due to this PITA.

In some cities, we often only get 3-hour windows for inspections, so we sit around a lot just waiting for inspectors to show up sometimes, and no matter what we have to reserve half a day.

My experience with myself and bosses I've worked for is that in a good economy where you win most of your quotes, these issues are not so bad. But when you win very few, the same issues become killers. I helped 2 bosses bid jobs. 1st was getting about 7 out of 10, 2nd got 5 or 6. When I started in 2008, the economy was heading down and stayed there. I was lucky to get 3 out of 10. My last few months, I told callers it would be a $50 service call to come look a job over. They declined but I was already burned out by then and had nothing further to lose.