Pricing

[Edward_Currant]

As a self employed electrician, subbing direct to contractors or finding work via recruitment agencies, my hourly rate has always been dictated to me. Recently however, I was asked to help out in someone's home, extending a ring main to accommodate new sockets. This would be a first for me as I'm not a fan of working outside of work, but agreed to carry out the work as a favour.

While I was happy to charge the hourly rate that I am used to getting, my gripe came when it came to charging for materials. Asking the advice from a fellow electrician prior to doing the job, who does a lot of work outside of normal working hours, 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? If this is not the case, then the reality of this is that my hourly rate subsidies the materials cost!

What do others think of this and how do you set your prices?

 

[ProDave]

As a regular self employed spark I use cable all the time. I try to estimate how many metres I have used and charge that. The left over gets used on the next job etc and so it goes on buying more when a reel is getting low.

If you are sure this is the only private job you will ever do, charge them the full drum and give the left over cable to them?  You should have bought a smaller drum?

 

[Sharpend]

This Edward is the shortfall of doing a job on the side. As it’s a one off it’ll cost you money to purchase say a 100m of cable when really you only need 10m, it’s unfair to put full cost onto paying customer if you’ll have most of the drum spare to use on other customers jobs, if you were doing this regularly then the cost would be recouped over the use of the drum. You could of course go to a shed and purchase a smaller quantity for a premium and bill the customer accordingly I think they do cuts of varying lengths or there are some shops which allow you to cut too length. 

 

[Murdoch]

What do others think of this and how do you set your prices?

I send every customer a quote / estimate and let them make a decision. 

If you price includes a full reel of cable, clips, grommets etc and the customer accepts your price you are OK - especially as I'm guessing your price will be cash only so you're not exactly playing on a level pitch with the "competitors" so you won't have the overheads and tax and NI to include ...

 

[Sharpend]

Never mind the “P” compliance etc. 

 

[Edward_Currant]

This Edward is the shortfall of doing a job on the side. As it’s a one off it’ll cost you money to purchase say a 100m of cable when really you only need 10m, it’s unfair to put full cost onto paying customer if you’ll have most of the drum spare to use on other customers jobs, if you were doing this regularly then the cost would be recouped over the use of the drum. You could of course go to a shed and purchase a smaller quantity for a premium and bill the customer accordingly I think they do cuts of varying lengths or there are some 

Cheers for the feedback all.

Willing to pass on the full cost of the materials to the client, when I finalised the bill, it was far too extortionate. I therefore, reduced the price to reflect the amount of cable used. In total, I ended up doing a days work for about £30-£40 labour, just because I covered the cost of cable and other accessories that came as multipacks.

I take on board being able to use that same roll of cable and other accessories on the next job but this was a one time helping hand. Expensive lesson learnt!

 

[Murdoch]

 In total, I ended up doing a days work for about £30-£40 labour, just because I covered the cost of cable and other accessories that came as multipacks.

Sounds to me like your day rate is far too low ...

 

[Sharpend]

That’s better than mates rates! 

 

[Murdoch]

That’s better than mates rates! 

And well below the minimum wage for a 16 year old apprentice

 

[Evans Electric]

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?

No its not ,  unless you give the client whats left on the drum  .    Which he probably wouldn't want .    I wouldn't be happy if I paid for 100m  and you only used 10 m   TBH  .

As said above   to be fair and apparently  this was a one off job that you consider a "Foreigner"    you should have  had cable measured off at B &Q  .  

I usually have a box of 10  twin sockets  on the van  ,  if I install one socket  I don't charge the customer for all ten.      Also another example of  Part Pee being a sham .    

 

[Edward_Currant]

Never mind the “P” compliance etc. 

Alteration to existing ring main. Having my own MFT equipment, I left the client with a completed generic MEIW certificate

 

[Edward_Currant]

Sounds to me like your day rate is far too low ...

Another dilemma I was up against....charging the client an hourly rate or day rate(!)

Believing I wouldn't be there all day, I agreed an hourly rate prior to carrying out the work.  This brings me full circle back to my original question...how do people here set there labour charges? 

 

[roys]

You have maybe taken a hit on this job but it means your next job will earn you more than just your labour as your parts are already paid for, providing of course it is a similar jobs, and there is a good chance it is going to be sockets or lights so your quids in.  Swings and roundabouts, as you build up a float of stock it certainly becomes easier if you continue to do them that is.

I had to do start doing them in the 80s to pay my mortgage.

Re charging, depends on various factors, are they a mate, fellow trade say a brickie, plumber or joiner, family, stranger.

I rarely charge fellow trade if it is on their own house as they then do work on my house for nowt, only paying each other for materials used.

Did work for a game keeper once, about 2 hours work and £10 material, got my £10 from him and enough venison to keep me going for a couple of months. Saves tax man issues as well.

 

[Geoff1946]

Ah yes, the principle of barter is still alive and well. I once sorted out a problematic fault in France, (crossed neutrals between RCDs),  = Free accommodation next visit.

I'm retired now but I've enjoyed a few bottles of red for solving friend's problems for them.

 

[Edward_Currant]

I recall a story about an electrician who was called to a house because the kettle wasn't working. The person that called was an old dear. It transpires that the fuse had gone in the plug of the kettle. He charged her £25, which was his hourly rate for the first hour (subsequent hours would have been cheaper, and I must add that story is years old so his rates would have gone up by now). Granted, this was a call out, fault find and rectification scenario, but I see pricing like this way on BBC's Rogue Traders from trades like TV aerial, drainage, plumbing, etc.

There must be a strategy or protocol for pricing? I'm not speaking of exact monetary amounts, merely x amount for first hour, and then xy amount for additional hours, or do some of you here charge a minimum charge, with which you will work a x amount of hours for?

 

[UNG]

Willing to pass on the full cost of the materials to the client, when I finalised the bill, it was far too extortionate. I therefore, reduced the price to reflect the amount of cable used. In total, I ended up doing a days work for about £30-£40 labour, just because I covered the cost of cable and other accessories that came as multipacks.

I take on board being able to use that same roll of cable and other accessories on the next job but this was a one time helping hand. Expensive lesson learnt!

Not sure what hourly rate you are getting from day job but it sounds like it is really low

Cable aside what are you buying in multipacks that costs so much that you are taking a big hit even a drum of cable costs no more than a couple of hours labour unless you are buying the bigger sizes and most wholesalers sell 50m drums if you don't need 100m

Might help if you tell us what you were actually doing to end up making so little

 

[Doc Hudson]

As a self employed electrician, subbing direct to contractors or finding work via recruitment agencies, my hourly rate has always been dictated to me. Recently however, I was asked to help out in someone's home, extending a ring main to accommodate new sockets. This would be a first for me as I'm not a fan of working outside of work, but agreed to carry out the work as a favour.

While I was happy to charge the hourly rate that I am used to getting, my gripe came when it came to charging for materials. Asking the advice from a fellow electrician prior to doing the job, who does a lot of work outside of normal working hours, 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? If this is not the case, then the reality of this is that my hourly rate subsidies the materials cost!

What do others think of this and how do you set your prices?

In the modern internet, 'google everything to find the best price climate', have you never done a search for different options of purchasing cable sizes / lengths?   Screwfix & Toolstation are nearly as common as Greggs & Subway and they have both been selling smaller size cable length for years. e.g.

10m £9.78  https://www.screwfix.com/p/prysmian-6242y-twin-earth-cable-2-5mm-x-10m-grey/82572

25m £17.59 https://www.screwfix.com/p/prysmian-6242y-twin-earth-cable-2-5mm-x-25m-grey/78006

50m £25.00 https://www.screwfix.com/p/prysmian-6242y-twin-earth-cable-2-5mm-x-50m-grey/83956

And you also must be aware that a lot of customers, even if they don't know how to do the work, do know how to surf the internet to see what various products may cost. Its not rocket science for them to see how much they are being overcharged for 100m of cable when you only used say 10m or 15m.  Sounds to me as though your methods of pricing for both materials and labour are a bit unrealistic. 

Doc H.    

 

[Murdoch]

Another dilemma I was up against....charging the client an hourly rate or day rate(!)

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

Most of my work is quoted before hand and I have:

a "day rate" ,

a 1/2 day rate, 

an hourly rate I use when doing kitchens and bathrooms

a first hour rate

and a subsequent hourly rate chargeable by the 1/4 hour 

And of course tax and NI to be charged (I'm below the VAT threshold)

I'm SE, never subcontract, so I need to allow for no pension, no sick pay, no holiday pay, and have overheads of about £6K per year to consider

Then of course location matter a lot

 

[Sharpend]

How do you reach £6k, including a pension? Or is this the pension contribution? 

 

[Murdoch]

How do you reach £6k, including a pension? Or is this the pension contribution? 

Just the expenses of running the business excluding buying the van ....

it it all adds up and it’s been the same value pretty much for the last 8 years