Too much money

[hardworkingstiff]

Email from a Non-Customer

Email from a Non-Customer

I bid a job 4 months ago, and this is the response I got from the customer.

I estimate at most there is $1,000 in materials. Therefore if you are
charging $100 per hour (which is high) I calculate 40 hours of labor. Now I
really don't think this a week job. At this price I will probably get my
son to help me and get an electrician for some of the connections if needed.
I have done electrical work in the past and believe this is an excessive
quote.

I recently sent him an email inquiring as to how the job went. This is the response.

It was awkward as you had anticipated and materials exceeded what we had
estimated. There was also a great deal of work to do in pulling an extra
wire from the fuse box in the garage to the conduit under the porch to the
pier as although it had 4 wires only 3 had been pulled underground to the
pier. We were running 220 to the boat lift and then 110 back for lights.

I had preferred to go with you but your estimate was almost $2,400 higher
than another certified electrician's quote. I went with a friend that has
done a very good job but he has probably spent a 100 man hours as he was
learning on the job. He did bring a friend that was an electrician over to
check his work.

In general I don't use friends for this type of thing but the guy has been
out of work for some time and he estimated it would only take 2 to 3 days
including water to the end of the pier. Oh well.

Thanks for your follow up and may contact you in the future for other work
although you seemed very busy on the one customer you had at hand. For
future reference what is your hourly rate?

I don't expect I will get any work from this person, but at least I didn't have to fight about the money with him, and he did find out is was not as easy/simple as he thought.

I have a saying, "I work for money".

 

[emahler]

god bless people....you take a loss on the job....and they still say you are too high

 

[brantmacga]

Its a good thing I own the trencher because if I had to rent one they really wouldnt have liked my price.

Thanks for all your replies.

Yeh, if I didn't own the truck I work out of there's no way I'd be able to stay competitive.

 

[emahler]

Yeh, if I didn't own the truck I work out of there's no way I'd be able to stay competitive.

nice........

 

[tmbrk]

Most home owners are ignorant about the trades and don't understand what an electrician or plumber are worth. They think " I paid such and such an amount to get my landscaping done, how come you are so expensive?" Or,"I paid that much to have all of my gutters cleaned out, Why is that new receptacle location so expensive?"

What are some of the ways you guys address this. Aside from just walking away from each and every customer who balks at the price. Are there ways to educate the general public? I know some or even most HOs are just a lost cause, but does anyone have any success with a certain technique? Or is it just chalked up to good salesmanship?

 

[romexking]

Most home owners are ignorant about the trades and don't understand what an electrician or plumber are worth. They think " I paid such and such an amount to get my landscaping done, how come you are so expensive?" Or,"I paid that much to have all of my gutters cleaned out, Why is that new receptacle location so expensive?"

What are some of the ways you guys address this. Aside from just walking away from each and every customer who balks at the price. Are there ways to educate the general public? I know some or even most HOs are just a lost cause, but does anyone have any success with a certain technique? Or is it just chalked up to good salesmanship?

If you look and act like a landscaper or gutter repair person, you will be paid like a landscaper or gutter repair person. You must bring something different to the table. Look and act like a professional, insist that your employees look and act like a professional. Train your employees to look and act like a professional. Get rid of the ones that don't meet your high standards because they will ruin your company's reputation before it even begins. Be a professional and you can be paid like a professional.

There are probably dozens of EC's in your area, each of them claim to do the best, most efficient work, "at a reasonable charge", so what can you do to make yourself different in your potential customer's mind? Find those qualities, implement them into your company, and charge accordingly.

 

[jimport]

I wish someone could explain to me why people expect to pay high rates for a plumber or for working on a car, but expect us to do the work and give them money. Why is our trade different?

Auto parts seem to have a 100 percent markup, and they don't even stock some of the parts. We add any markup to a part and the customer says you charged me $xx for the same part I can get at HD for $zz.

Painters don't seem to have too hard a time getting several hundred dollars per room. Heck Sears charges $125 or so to show up at the door to tell you your washer is broken and parts and labor will be additional, even after waiting a week for them to show up. Best Buy will install your flat screen and plug in your TV for a couple of hundred.

 

[Mark Twenhafel]

Sounds low, and here's why:

• 4.5 hrs * $90/hr = $405
• $200 materials * 1.45 = $290 (add 45% overhead to material cost)

Total: $695​

That's just off the top of my head, based on some things I've heard.

 

[satcom]

I have recently became incorperated at the begining of this year. I have an addition that im wiring for a contractor. The homeowner asked me to do run a wire to a flagpole and set a light with a photocell and 30ft of trenching. Also he asked me to wire a shed. The shed was 125ft of trenching. After materials about $200 and 4.5 hrs for me and my help I charged $585. Does that sound crazy to you?

The contractor is a friend of mine. He told the contractor that next time he will deff get a rock bottom price for my work. I asked him if the work was exactly what he wanted and he said that he was happy with the work. I showed up when he wanted it done with no wait list. I dont think I was unreasonable with my price. It just aggervates me that he would say that.
For now on Im going to tell people the about price before even when they tell me to just do it and bill them. I understand that but I still have bills to pay.

If im going to be broke I will also be well rested.

Oh my oh my!

First the $585 would be a good down payment on that job.

"The contractor is a friend of mine."

You soon will learn frends have no place in business decisions.

"He told the contractor that next time he will deff get a rock bottom price for my work"

What you need to do is have them sign a written extras order with the scope of work and price spelled out before you proceed with any extra work, no expections.
"For now on Im going to tell people the about price before even when they tell me to just do it and bill them." not the about price but the contract extra cost in full.

"Im trying my best to be fair with out working for free. Some are telling me that for the first year I should be basically working for free to gain a client list."

Anyone telling you that, has no idea what operating a business is about.

Get some help with estimating for profit, there are many courses out there that may help, and some of the guys on here may be able to suggest some that helped them.

Turn off the rear view mirror and start charging what you need to make a living wage, and earn a small profit.

 

[emahler]

there is great irony in all this.....many guys on this board, and in the industryin general, have very negative feelings towards outfits like, Nexstar, ESI, mr. electric, mr. sparky, etc....but those organizations teach their members the very things that many on this board ask about daily:

overcoming cheap customers
selling service not price
running a more efficient company
pricing for profit
etc

no real point...just find it ironic....

 

[bth0mas20]

All of your responses are much apprecieated.

 

[Controls]

Wow, that is really cheap.!!!. Great price for the customer.When, I estimate a job : if the customer thinks that I am charging a lot they have the option to go somewhere else. I will not work for nothing. Need to agree on the price before you start the job.

 

[aline]

there is great irony in all this.....many guys on this board, and in the industryin general, have very negative feelings towards outfits like, Nexstar, ESI, mr. electric, mr. sparky, etc....but those organizations teach their members the very things that many on this board ask about daily:

overcoming cheap customers
selling service not price
running a more efficient company
pricing for profit
etc

no real point...just find it ironic....

I think a lot of guys that have these negative feelings and think the contractors that belong to these organizations are overpriced rip offs don't even do small residential and service call jobs.

They comment on how much they think the price of the job should be but then in the next sentence say they don't do that type or work because there's not enough money in it.

In one particular case someone made the comment about how these companies where ovecharging and a rip off. They went on to say how much they would have charged to do the same job. Then made the comment that they knew all about overhead expenses and what it costs to do this type of work because they "used" to have twelve trucks on the road doing this type of work.

The key words here are "used to".

When asked about why they "used to" have twelve trucks on the road doing this type of work they said something about it not being worth all the headaches and problems so they quit doing it.

So here you have a guy saying these guys are overpriced rip offs but quit doing this type of work himself because it wasn't worth the trouble at the prices he was charging.

The point is if you charge enough to make it worth doing you'll have plenty of people saying your an overpriced rip off. If you're customer's aren't saying it other contractors will.

 

[aline]

Often times the customer has no idea how long jobs will take. They usually think things will take a lot less time then they really do. Quite often when I give the customer a price they'll think it's high but after I do the work they comment on how they had no idea it was that much work and would take that long.

I get calls all the time where people will tell me on the phone it's just a little job and shouldn't take you more than an hour. They really have no clue they just think they know. One lady told me the guy at home depot told her the job shouldn't take more than 15 minutes.

I've had people call and rattle a list of things off that's about 2-days worth of work, and then want to know if we can come out and get it done that day after 4:00pm, because that's when they get off work.

 

[quogueelectric]

Okay, I'd like the 10 feet to my shed trenched, please. :grin:

Plus the hourly rate and gas and tolls to Virginia and back I can be there on sat morning 8 am. :smile:

 

[haskindm]

The reason that many people feel that electrical work should be done cheaply is that there are so many "electricians" (friends, co-workers, side-jobbers, former electricians, want-to-be-electricians, etc.) that are willing to work cheaply, often doing the work "under-the-table" and without permits or inspections. I am fully convinced that in this area there is as much work done by unlicensed electricians as is done by legal, licensed electricians. Until we stop "shooting ourselves in the foot" it is going to be very hard to make a living doing residential electrical work.
Most of the people doing this type of work do not have the slightest clue as to the costs of running a real business. And customers do not care. They want it cheap and fast. They don't care about safe and/or legal until something goes wrong. I sit on our county electrical board and we receive complaints every month about some "electrician" who either didn't finish the job, did sub-standard work, or now can't get the work inspected because they are not licensed. The homeowners almost invariably claim that they did not know that electricians had to be licensed! We really have a screwed up profession.
I yield the soapbox....

 

[ultramegabob]

I've had people call and rattle a list of things off that's about 2-days worth of work, and then want to know if we can come out and get it done that day after 4:00pm, because that's when they get off work.

I just love how people want to dictate what your hours of operation are, they want you to come out and start a project after 4:00 or work on a weekend, I will do it, but they usually drop a brick when they find out what my after regular hours rates are...

 

[nizak]

With the advent of the big box stores, homeowners are able to go in there and pump the sales associate for just enough info to be dangerous. Almost immediatetly they are told that "it's a do it yourself job" and yes we have all the material here to do it with. After that statement has been made, it's virtually impossible to get them to accept a labor rate of let's say $75/hr.Like someone else made reference to, almost everybody knows an "electrician" and this person usually has a full time job and is able to do it for them on the "side". If I had another source of income that paid me let's say $40K a year w/full benefits I could work much cheaper than I currently do. I'm fortunate in the line of work that I do,(residential fire repair) I owe most of my livlihood to homeowners and their buddies who do electrical work.Some of the more intelligent ones are smart enough to quit dabbling in our trade when you tell them after they've lost their house and contents that thre's a very good chance the fire started due to wiring that was installed incorrectly and unprofessionally. I leave it at that statement, and never press the fact that the person who may have lost their life as well could still be here.JMO.

 

[tmbrk]

If you look and act like a landscaper or gutter repair person, you will be paid like a landscaper or gutter repair person. You must bring something different to the table. Look and act like a professional, insist that your employees look and act like a professional. Train your employees to look and act like a professional. Get rid of the ones that don't meet your high standards because they will ruin your company's reputation before it even begins. Be a professional and you can be paid like a professional.

We try really hard to do this:
Uniforms, jackets, winter coats w/logo (bought new every year so as not to look worn.)
Profesionally lettered vehicles.
Tool bags and hand tools are replaced on a regular basis so as not to look dirty and ragged. (and yes I do offer a tool allowance to my guys for this)
Professionally prepared business cards,invoices, proposals and contracts w/logo.
Website.
Professionally handled advertising.
My techs and I are all clean cut, neat and good mannered.
We are very professional and have been told many times that we beat out another EC because of this.
And BTW most landscapers in my area drive in brand new lettered clean vehicles. I'm sure they look more professional than many ECs.


What I'm talking about is the customer who doesn't know there's a difference. The one's that don't know that electricians have to be trained (not just high school shop class). Do you think the average HO has ever seen a copy of the NEC and is aware of just what we are responsible for? How do you explain to them that the average landscape worker gets paid $8-$15 an hour and electricians get paid $20-$40 an hour plus benefits? They are not as savvy as you or me about the trades.

We close about 90% on referrals but how do you sell to that person who calls out of the phone book or saw your website through Google Adwords and balks at the price of installing a ceiling fan and say, "Why, that's more than I paid for the fan itself!"

Do you just throw them all to the roadside and move on or is there a way to make them come around?

I know this may come across as ranting but I am seriously asking. And if the answer is yes, forget them and move on to the next customer, that's fine too. I just was wondering how many of you handle this. Thanx.

 

[BryanMD]

We close about 90% on referrals but how do you sell to that person...
Do you just throw them all to the roadside and move on...?
...if the answer is yes, forget them and move on to the next customer, that's fine too.

If you are closing on 90% at the prices you need to get...
Sounds like you have a real good handle on things. Well done.

That last 10% is almost required to know you aren't leaving too much on the table with the 90% that you do get; if you get 100% you are probably too low.