How Do You Cover Membership / Notification Costs

[PC Electrics]

All of us here know that it is not mandatory to be a member of a scheme to do electrical work in domestic properties. We are all aware of the alternative processes.

So, lets agree that a business that does a significant amount of domestic work, feels that being a member of a scheme is beneficial for the purposes of easier notification and cost effectiveness for the customer. From the customer cost perspective the cost is spread out over a number of clients.

However, as a business how do you recover the costs associated with membership and notification? It seems to me there are two choices:

1/ simply absorb the costs into your general overhead. This way every customer is contributing to the costs whether their job is notifiable or not. And, have you increased your hourly charge to take this into account? And do you charge for the time you spend at your PC doing the notification (and cert)

2/ make a small charge for notification which is only added to those jobs which require notification. This way, only those clients whose jobs require notification cover the associated costs. This leads to the question of how much to charge. And is this fair or appropriate?

It seems to me that #2 is fairer to all clients. After all the purpose of membership of a scheme is to make notification easier and more cost effective overall.

So, for the last 2 years I have been adding a

 

[Apache]

You can argue this until you are blue in the face. We have clients 1 mile away and some 20 miles away, we charge the same for a visit although it cost much more in time and fuel to get to the far away client.

TBH if it was me I'd lump it in as a general overhead and adjust hourly rate accordingly. There is no such thing as 100% fair system and unless you invoice for every last grommet some people will cover the cost of some sundries used on another job. You'd lose more money than you made billing each screw.........

 

[NozSpark]

Add it to the jobs that need it, but don't itemise your bill.

So instead of getting a bill for

 

[SPECIAL LOCATION]

Just cover your cost however you feel fit to run your business...

Provide a formal agreed written quote for a job..

customer either agrees total price for the agreed work you are going to do...

or doesn't!

But if they do everyone knows whats got to be done & is happy about the costs... All fair and happy...

exactly how the overall costs break down is neither here nor there!!!!

when you go to Sainsbury's and buy a box of cornflakes are you bothered which percentage goes toward staff wages, building costs, delivery & storage, insurance etc.. etc.. for Sainsbury.....

NO...

you just see the advertised price

you either accept it and purchase

or you go elsewhere!

but..

OVERHEADS are a part of every business everywhere..

to assume we don't all cover the overhead costs is just stooopid!

Do you ask your car insurance provider how much of your premium is paying for damages by Uninsured drivers?

I doubt it...

you just shop around for a suitable provider and pay the agreed price...

There are numerous goods and services that I purchase that are NOT the cheapest option..

because I know some elements of quality & reliability means additional charges are required.

Most customers are also able to suss out this basic principle of business and expect that overheads are in the bill somewhere.

e.g. A free quote is NOT free.. we all pay for it somewhere

Personally I itemise my bills into three boxes

Materials

Admin

Labour

I find customers like to see they are getting the materials at a good price..

e.g. NOT more expensive that they could buy them themselves at the DIY shed!

And they are happy to pay for my skill, knowledge & experience as to the best, neat, reliable way to install the said goods.

Administration includes all the non on-site and no-material costs incurred on the job..

e.g.

fetching materials

writing invoices

wear & tear on tools

meter calibration

Public liability insurance...

etc..

etc..

I will just also add....

Those listed admin costs have nothing to do with Part-P.

They were in existence before Jan 2005 in the days when Part P wasn't even a distant thought!

BUT basic overheads have always been a reality of running a business,

if you choose not to recover them then you reduce you profits!

:C :coffee

 

[green-hornet]

To be honest I have not read all the posts but I do get the gist of this.

This year I have only done 1 domestic job which is notifiable, last year I did about 4.

I still continue to be registered even though the majority of my work is commercial or industrial. I do have two definate domestic jobs to do in the near future which to me makes it worth while being registered with my scheme provider.

The costs of running any business should be worked out before any quotation is given, overheads and living expences should be known before any price it put in for any job.

If not then you will be out of pocket before you start.

Mistakes that I have made are, no mark up on materials, forgetting to include VAT on materials quoted, forgeting to pay the mortgage etc etc.

 

[Cirrus]

I just see it as an overhead such as insurance is. I know that each year I have to pay

 

[steptoe]

Add it to the jobs that need it, but don't itemise your bill.So instead of getting a bill for

 

[kme]

I`m very much in SL`s camp here - only my "admin" charge is called "certification".

Comes down to the same thing - time & cost incurred for off-site works, including notifying where necessary.

It has occasionally been queried; usually along the lines of "the other sparky didn`t have that on his quote".

So I reply that he has simply dissolved that cost within his material or labour pricing; or perhaps he isn`t intending to issue certification.

KME