VachonElectric

I have been in business since Febuary, 90% residential. i am just barely keeping my head above water and would love to be able to run a succesful business. i am currently hooked up with networks and yodle out of the two networks seems to be paying for it self with the jobs i get from it. What i am looking is advice on what i can do to run a better business, weither its reading books or just talk to people here.
I use quickbooks for keeping track of everything and writing estimates. I think that i might be putting to much on my estimates because i include everything on it that i would use for the job. And i am not sure i am charging enough. I Charge $60.00/ hr for all my work which seems to be about the going rate in the NH are.
Any advice will be greatly appreciated and i hope that i can start to make progress in running my business.

HARRY304E

Well there are a lot threads here on the subject.

Keep in mind that getting a steady stream of business takes time and is the hardest work you will ever do but in the end it will pay off.

Use the search function and read some of the flat rate pricing threads hopefully that will get you to move away from the hourly rate pricing so you will make what you are worth.

At $60 per hour you will not be able to make enough to get by when it is slow and you will not be able to sink enough money into your business to make it grow.

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Shockdoc

Do at least one large job a week or a service call daily for cash. You'll need it for a rainy day.

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Podagrower

4 months is not a long track record to figure out if you are doing it right, and there is always panicky period when you doubt yourself and your abilities. Somebody around here said once that a good electrician does not necessarily make a good electrical contractor, and vice-versa. It's something to keep in mind.

I used to list all my parts and prices on QB as well, but finally gave up explaining to customers why I was charging $5 for a receptacle they could pick up at HD for $.39, now I still list all the parts, but it's just one price at the bottom.

Somebody recommended "The Electrical Estimators Manual" by William Penn, and it is worth a read if your estimating skills need work. If you are doing mostly service work, remember that you are selling yourself with the service.

Find one of the cost calculators in these threads to figure out how much you need to bill to make what you are looking to make. (Basically adds all your annual expenses, including salary and retirement and divides by the number of hours available).

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Magnettica

Harry's right about price and he's close to NH so it can't be that much different than running a business in MASS. "The Referral Engine: Teaching Your Business to Market Itself" is one of them. There's also "Mark Up and Profit" for construction by Michael Stone, among many others.

VachonElectric

So flat rate pricing is the way to go, I have tried to research it and it just seems so expensive and feels like you would charge way to much. i mean to install a ceilling fan i would chagre $125.00 to do the install plus the $20.00 for the fan rated box and the price of the switch weither its a single pole switch or a fan control.

Boomer

and...

HARRY304E

Let's say you get one call and it is for the ceiling fan and your total invoice is $145.

How much time did you use to go pick up that fan box and any other stock that you also used all the gasoline , now take a look at that number and think about how much you really made do the math and you will realize that the $145 that you charged ends up being less than $100 After you take into account your costs.

How are you going to build your business if you are making less than $100 per call?

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ES2 Flat Rate , The best $99 I've ever spent ..

HARRY304E

And by the way even at $200 per call it will still be hard for you.

The flat rate system may look like you are charging too much but if you want to make it you must make a lot more for your time spent on a job.

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FranklinsApprentice

I have been in business for 6 weeks and I use flat rate. The hourly price I plug in to the program, is $206/hr. So that fan you installed, if there is a light and I need to convert it to a fan rated box, I charge $537. $59 for the service call, $189 for the fan rated box, $200 to install the fan, and $89 for the dimmer. My customers pay it, thank me, and leave reviews.

It's all about selling. And no I am not ripping them off. This is what I need to charge for my business to be viable.

Boomer

It wouldn't hurt to do some benchmarking. Call and pose as a customer for say a ceiling fan installation or even a service (use a 3rd party's home). Call the three top competitors and observe their estimating process and pricing. You will learn a LOT about where you stand in your area and where to set your price point.

It's easy when starting out to underbid everyone and be the cheapest guy in town. You only hurt your business and the possibility of actually getting paid what you're worth in the future. People want to afford the BEST or what they perceive to be the best and 99/100 times they equate that with cost. Great products and service cost a premium and they want that. Now if your competition is driving new vans, uniformed techs, etc and you're showing up in your pick up (have to start somewhere), you realistically have to adjust your pricing accordingly...your customer's are going to expect it. As your business grows, your image will grow as well as your work load and sales

voltsky

$500+ for a ceiling fan install? i call SERIOUS bs.

"It's all about selling"

Ok pretend I'm your customer sell me your $500 install lets hear this.....

FranklinsApprentice

I have to disagree. When he calls for a "benchmark" He's gonna find all kinds of price structures. It will be mostly the blind leading the blind, because this is what most new guys do. And it doesn't matter what truck you drive. Your overhead matters. Like Harry said, you need to find the pricing calculators here on the forum for a residential service contractors, plug in your overhead, and your salary. As a business owner you should pay yourself $100,000/year when first starting out. Of course this will be hard in the beginning, but you still need to price your services as if you are paying yourself.

I use flat rate, but sometimes my program doesn't have something a customer asks of me. On friday a customer asks me to move a thermostat. Well my flat rate program says I need to charge 206/hr, so I figure it will take me 1.5 hours and I tell them it will be $300. They gladly accept, and even give me a tip when I'm done. And when I got home they had left a great review on my Facebook page. And no they were not rich. He is a pipe fitter, and she is a teacher.

People will pay you what you deserve and need, but we have too many "benchmark" contractors who are struggling and still think they are expensive that I have to compete against. If we all charged what we're suppose to charge I would have a 95% close rate. Right now its about 50%

FranklinsApprentice

Welcome to the forum.

No I charge $200 for the fan install. If there is already a fan rated box and all I have to do is unpack the fan, assemble it, and hang it.

VachonElectric

i understand i need to make money and thats why i on this site asking for advice but $189.00 for an $11.00 fan box just seems odd to me...and as far as the service call is that $59.00 for every job you go to.

I just get a call or and email from a leed service and then schedule to look at the job, once i look at the job and give an estimate. i will schedule it for a time in date. lets say i schedule the job do a charge the service call fee?

theres been some good info posted to my post and i thank you for all the help.

VachonElectric

FranklinsApprentice what type of flat rate program are you using?

Hairbone

For starters you have to add in the cost of doing the"Free Estimate" into the job!

I charge $125 for a service call for starters!

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electrictim510

$11 box has little to do with the job. It takes time and is a permanent fixture in the home now. It is worth more than $189. If you nickel and dime yourself you may as well work for another contractor.

You will learn in time that you MUST charge a decent service fee whenever you possibly can. $59 is a pretty good one too. Not too high and not extremely cheap. Do you do free estimates on all calls? What happens when they don't want you to do the job? You lose! At least if you charged $59 you got gas and a little bit of overhead paid, and it would help sel the rest of the job.

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VachonElectric

So is the service call charge what you charge to show up to any job? Also if anyone is using quickbooks is there a chance you can email me an invoice so i can see how it looks?

electrictim510

I use it for most jobs. Some panel or big jobs get free estimates but I even try to get them to pay service fees when I can. I usually apply the service fee toward the job a lot too. So they do the job and don't pay the service fee or gimme my service fee!

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"Understand one thing every one has a place in this trade, and no matter what your skill set I doubt you know it all." brian john