Pricing

[Edward_Currant]

Why was it a dilemma? As a spark you would know how long it would take.

Alas, it was one of those jobs that you know you're NOT going to be there all day, but the best part of it 

Out of interest, how many hours would a client expect to receive if you were to charge them a 'day rate'? 

You also mentioned choosing to charge an hourly rate for work in kitchens and bathrooms. Why is this? 

 

[Murdoch]

Alas, it was one of those jobs that you know you're NOT going to be there all day, but the best part of it 

Out of interest, how many hours would a client expect to receive if you were to charge them a 'day rate'? 

You also mentioned choosing to charge an hourly rate for work in kitchens and bathrooms. Why is this? 

Unfortunately I think you have a lot to learn about pricing jobs .

A day is 7.5 hours plus 30 mins for lunch

Unless you can get customers to accept the bill afterwards, you need to learn by trial and error. If you estimate the job will take 5 hours and it actually take 7 it’s your fault then you have to suck it up. Same goes for parts ..... estimate what you need, then reflect afterwards on what you used.

kitchens and bathrooms need multiple visits ....

ive been SE for 10 years 

what type of work do do you normally do? I thought this foreigner was a 1 off

 

[SPECIAL LOCATION]

Out of interest, how many hours would a client expect to receive if you were to charge them a 'day rate'? 

If you were paying someone to do work at your home, (gardener, decorator, fixing your car, replacing your windows), and they were going to charge you for a days work....

How many hours would you expect them to be there?

Or how many hours would an employer expect you to be there for to earn a days wage?  

I would guess the average man on the street still thinks of the traditional 40hr working week, 5x8hr days.

and/or the 39hr week with 8hrs Mon-Thu, 7hrs on Friday.

But also many official factory/office working hours would have been 5hrs before lunch, 3hrs after lunch.

So half a day could have been 3,4 or 5hours if you worked it to the traditional lunch break of working day.  

But the 24hour economy, and lots of jobs being part-time, job-share, unsociable hours, supermarket shifts etc, possibly means some have lost sight of what the traditional working day used to be like.

Anyway if you are approaching 7hours or more attendance on a job, most reasonable customers would not bat an eyelid at invoice for 1xday labour. (whereas 6hrs or less could be in the hourly or nearing half day rates)...

Also if I am at a customers for 8hrs, that would include a few tea breaks etc..  so 8hrs on site isn't 8hrs of actual work for the customer..  typically 8hrs on site = 7hrs work + tea breaks...   (Or some customers who like to chat  8hrs on site = 5hrs work + 3hrs tea & chat).

But the bottom line is...  that there is no bottom line or fixed rule of how or when day becomes a day or half day or hourly rate!

It is all about how well you know your customers, your ability to do the work they want, your sales pitch to get the best money for your time. And if you are doing the job to earn a real wage to pay the bills & cover your overheads, or just a bit of beer & crisps money as a charitable not for profit job.  

I am approaching my 21st anniversary of going Self Employed this February, so I do have a broad base of regular returning customers who know what to expect from my work & invoices.. 

But sometimes the hours on site also have extra off site hours for various aspects of prep for a job, or ordering/collecting non-standard items etc..  etc...

So really can't put a one size fits all formula for what is or isn't a day!

Guinness

 

[SPECIAL LOCATION]

he said it would unfair to charge the client the full amount for a roll of cable when only part of it would be used. I was stumped by this! Surely the cost of all materials has to be passed onto the client?

You'd get one hell of a shock if the fuel station adopted this approach...... :C

I put 45lts of Diesel in the tank....

Go to pay and get told.. 

Sorry you have got to pay for 27,000ltrs as that's how much we had to buy when the tanker came to refill the pumps!!!!

:coat  

:innocent

 

[Edward_Currant]

 What type of work do do you normally do? I thought this foreigner was a 1 off

It was supposed to be a one off but I'd like to do more private work, hence starting this topic about pricing.

As for the type of work that I normally do... installation electrician working predominantly on new build commercial projects. 

There has been some golden nuggets of information here and have taken a lot on board about what has been said.

Cheers everyone 

 

[Murdoch]

It was supposed to be a one off but I'd like to do more private work, hence starting this topic about pricing.

As for the type of work that I normally do... installation electrician working predominantly on new build commercial projects. 

There has been some golden nuggets of information here and have taken a lot on board about what has been said.

Cheers everyone 

What insurance do you have?

if you are in England and Wales how do you plan to comply with Part P

private work needs to be declared to HMRC too ....

 

[binky]

if you want more private work, then you will incurr expenses such as inusrance, part P  registration, van running costs and time spent off the job writing certs, doing the accounts etc etc. In short you hve to lay a lot of money out to get private work and this needs to be reflected in your labour charges. Now you can get £17 / hour on sites these days, sometimes more. So factor in the above costs and if you aren't working on £25 / £30 an hour you will be permanently skint! 

As for little old ladies, I do tend to take sympathy on them, but you still really need to charge your hourly rate at least and should really be charging a call out charge  higher rate for the first hour. This by no means makes you a rogue trader.

 

[Sharpend]

What you are seeing is the smoke and mirrors aspect of going from employed to self employed, the reality is as others have directed is there is much more work involved in being self employed as opposed to employed,  this work has costs which need to be reflected in your charge, you have to also factor in family time which is dramatically reduced so is another cost. 
too many people think when doing the odd foreigner whilst being employed that they could earn a fortune being self employed without knowing the real costs. You don’t get rich on what you think but by what you do with your thoughts. 

 

[SPECIAL LOCATION]

It was supposed to be a one off but I'd like to do more private work, hence starting this topic about pricing.

As for the type of work that I normally do... installation electrician working predominantly on new build commercial projects. 

There has been some golden nuggets of information here and have taken a lot on board about what has been said.

Cheers everyone 

A common pricing mistake that loads of young start-ups make when they take the jump to go self employed is thinking that pricing labour is somehow different to pricing materials...

In reality the same rules apply to both...

Quality = Higher price.

Rarity = Higher price.

Lower quality = Lower price.

Bulk purchase easy availability = Lower price. 

Just like your weekend supermarket shopping....

i.e.  If you want to buy a product cheaply you normally have to buy in bulk...

And if the shop wants to sell a product cheaply they have to sell in bulk...

Occasional one-off specialist products have no Bulk-Buy options..

and high quality or premium products don't have a fat lot of discount either..   

So looking at labour costs...

If the quality of your work is shoddy and quick and you can cram loads of jobs into one day..

Or are willing to work long days and weeks..  (12hr Day, 7days a week, 360+ days of the year)..

You can probably earn sufficient money by adopting the sell in Bulk at Cheap rates model...

But if you want to offer good standard, high quality work, and have available time for holidays,

or days off sick,  or have a bit extra to save toward your pension pot..

And that bit of a buffer for if/or when the jobs coming in go a bit slack..

Then you can't normally get enough work in to sustain any significant cheap labour charges..

So reasonable normal, non-discount, labour rates have to be applied...

Any fool can gain work at stupidly undercut prices compared to those working to a sustainable labour rate..

But in the long run it is the realistic pay rates that keep a business buoyant.

As a side thought...

Last week my wife and I attended a friends funeral...

My wife's boss said she could take half day compassion leave,

which she did...  and still got paid.. with no penalty to her holiday entitlement...

I am my boss.....

I lost the possibility to earn half a days wage..

and I am not aware of any customers willing to pay me or government grants that would allow me to claim back money for my potential loss of earnings?

So in four & half days I somehow had to earn five days wage...  Or just carry the loss!

Self employed labour rates have to be higher than what you take home as an employee if you want to sustain the same standard of living.

When I was starting out self employed I read a guide that basically said something along the lines of......

If you are currently employed and living within your means, covering your bills & having enough for at least one decent 2-week holiday per year..

Then you need to charge your customers at least double what you were taking home as an employee to stand any chance of maintaining the same standard of living.

As a practical example you need to see what an employer charges the customer, and pays out to HMRC, NI, Pension contributions etc.. 

compared to what they pay you.. and what you actually take home after deductions..

The customer is normally paying one hell of a lot more per hour than what you are getting per hour at take home rates!

And the old lady's special cheap rates is a load of bumkum as well...  Although there may be a few pensioner discounts...

95%+ of the time the "little old dears" have to pay the same costs that you do at Sainsbury, or at the Petrol station, or at Halfords, or at the shoe shop, or for holiday accommodation etc..

Why should self employed electricians have to shoulder the costs of subsidising their electrical work??

In todays economy more pensioners are Cash-Rich, than the young people struggling to get on the property market and start a family..

IF you were looking to offer discounts,   it's probably more applicable to the 25-35yr old newly-weds,

trying to establish their own home and break free from the bank-of-mom-and-dad.....

Rather than the old generation of home-owners, who purchased at a price of £2000, or less, and now own a property valued at £450,000 or more!!!

:coffee