How Should I Price Out Jobs? 5 Different Methods You Can Use to Estimate a Job!
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- Опубликовано: 8 июн 2024
- How do you price out a job that you are going to do? Certainly, a valid question as we don’t like to take on work and lose money!! In this episode, Dustin dives into this topic to shed some light on the subject.
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02:28 - 1 Time and Material Method. This is a great one to use if you don’t know what exactly you are getting yourself into! If something starts off small but has the potential to grow into a huge project, or there is a ton of troubleshooting or remodeling are great examples. In a nutshell, you are charging for your time it took you to do the work and the materials. Maybe the time for you to go get the materials also. It keeps the person doing the work from losing money by giving a cost up front that was too little for the unseen items or too high of a price for the person having the work done by giving a price that tries to account for EVERYTHING that you COULD encounter.
04:51 - 2 Cost Plus Method. This simply is coming up with the cost you THINK it will take to do the project and then adding in what you need to make as profit. This is most often used when you know the hours and materials it will take to perform the work and then you add what you want to make on top of paying all of your bills etc.
3. Square Foot Pricing. While normally used for new construction, this method uses information taken over time from the AREA that the work is being done in. So, say new homes in Austin Tx, on average, are being built for X dollars per square foot, with the electrical portion of that work being Y dollars. Then you just use that number per square foot, multiplied by the square foot of the project you are going to be estimating!
4. Task Based Pricing. A good one to use when just starting out, you simply charge per the task you are going to be doing and then can adjust a LITTLE BIT for being job specific. So, let’s say you come up with $60 to hang a light fixture- that covers the cost of all of your expenses and the time it takes to hang the light. Then adjust a bit if you need a taller ladder or if you have to move a bunch of their items out of the way or things like that. It can be a quick way to give a price but requires history in knowing how much you have made over time doing those types of things to be the most profitable.
5. Estimating Software. There are several different products that are available from a multitude of suppliers. Usually, larger companies use this method as the costs to own or lease the software can be high, as well as those companies needing very specific margins to be the most efficient. Typically, these software programs allow you to input your hourly rate, up to date pricing for materials, and an hourly time frame to install something. So, if you were estimating a project that wants 12 receptacles- the program would assign maybe an hour and a half (or whatever you set it at) times 12, then add the materials to install them, add something for fuel, vehicle maintenance, overhead, profit, and then says it would cost $X. A great system to use if you want to be as accurate as possible!
A few things to keep in mind. First, trip charge. Your time shouldn’t be free. And if you are making multiple trips to a single place and not get the work in the long run, it could end up being a huge waste of money for you. The other thing to consider is minimum charges. What is the minimum amount of money you would be willing to make to show up and do work? If $50 was charged to just replace a switch, is it worth your time to do the running around, replace the switch, do the paperwork to get paid, etc.? More than likely a $150 minimum or $200 minimum would be better. If you only accepted the $50, all the time invested in making that $50 you would not be able to be somewhere else potentially making more money.
#electrician #electrical #electricity
I like knowing annual fix cost (vehicle insurance, depreciation, rent, property taxes, etc) and monthly variable cost (mileage, fuel, tool wear, utilities, etc) then narrow the variable cost into both fixed cost ( I spend at least $x/month in fuel!) and the range of costs.
Knowing what owning a business costs at minimum for 365 days a year and only working 200 of those days means you're ass better be billing nearly double of your running costs.
All that before thinking about the cost of the job itself 😉
you kinda nailed the general idea here but didn't cover the aspect to the next level. Knowing your cost to open the doors every day is spot on and should be tracked. Now look at it from the perspective of your out of pocket $$ making money too. Somewhere in the math that money spent (fixed costs) needs to also have a percentage markup, instead of just passing it through. This is similar to your right hand man getting paid $25 an hour but he's got insurance, social security, uniforms, company tools, vacation time, etc. More likely his internal cost is closer to $50 per hour. See where this is going?
@@rupe53 yeah, I have a degree or two in accounting and took a few business courses. Next level stuff is why my employer 1099s my ass 😀 😡 😉
@@jfarley1221 ... Hmmm, subcontractors are another way to nail down your fixed costs!
Can’t agree more
I'm more of a computer building kinda guy, but I have the same problem that I think lots of people have, which is, if someone has an issue to get fixed or looked at, with their machine, whether I built it, or it's an OEM like Dell, that has the issue I'm diagnosing, I tend to just want to give them the "friends and family" discount, which is basically "free", because I have literally NO IDEA what I'm supposed to be charging... I mean, I literally live at home with my parents (AKA "rent free") and don't have a steady job, so all I have for bills is Around 600$ a year for car insurance and 30$ a month for unlimited cell/internet service, plus every few years if I decide to get an upgraded phone, then that's 300-400$ more... Obviously I'm only including stuff that might be job related, as far as odd jobs go, not including gas...
Discounts and buddy pricing screwed up a friends business. His friends told their friends his rates at their buddy rate. He brought me on as a manager and to run his office. When I explained how his "discount" price was his actual price and if he wanted to make more he needed to set a firm hourly and bring everyone up to that, his eyes kinda lit up with understanding. The first year I worked for him he cleared $75k net. The next year he cleared $350k net.
Hopefully you got a bonus.
You definitely earned it
Re-review this
Sounds like it made his business do better? I don't understand why you said "screwed up." If clearing $350k in a year is screwing up, then I must be doing something right.
@@joshbutler2563 read it again. He’s saying after he fixed his pricing he made 350. Before the fix it was 75
@@joshbutler2563 what he is saying the buddy prices screw up anyone's business....
One thing I've found is that if the client asks for something additional, and for whatever reason that extra is not costing me much, I may just itemize it on the bill as NO CHARGE. Everybody is happy to see they got something for nothing.
Don't forget you have to add the costs of your vacation time, sick time, money for a retirement fund...all those things that corporations figure into the real cost of work. And if you are self employed, you pay BOTH halves of ss/fica.
Customer: How much for replacing old ceiling fan with new dimmable ceiling fan?
Me: 75 bucks
Customer: Cool! Come by!
Me: *opens cover plate and no neutral*
Also me:
🥺😧😭
Never fails!! 😂😂😂
How about the old fan does have a fan box or was rigged with 50 screws 😂. I’d rather fish wire than attempt to fix a box 😂
How did the fan work with no neutral?
That’s what you get for charging $75
@@xxxNAYBOBxxx The ground was the neutral. Happens more than you know.
I have been self employed for about 17 years myself as a contractor and from my business experience I agree with pretty much everything you said Justin. I appreciate your channel, keep up the great work.
Dustin
@@MA-vm6jl what tools do you need to get started
@@jeremynguyen2346 hands
@@jeremynguyen2346 show up on time.
@@electricalron 👍
I am works as electrition for the last 7 years, Residencial and little bit comercial .Now I try to make my own business.Thanks God I saw I lot of this videos. This guy is one those amazing persons to helps others,people like this are a few on this world trying to help others. Thank you. God bless you and give you more and more blessings then you can handle Señor. Dustin stelzer.
Super smart guy.
35 years ago, when the company I spent 25 years with, decided estimating is now part of my job, I read a book named Means Standards of Estimating. I calculated set cost formulas for new construction. Installations in a finished area was a price range. I told my customers, if I finish earlier your price will go down. I always estimatedhigh in furnished dwellings. I'm not in the field anymore. Watching these videos keeps me connected to an awesome career I had.
I would never lower a price if i finished quicker. That would be a disincentive to work efficiently and also a disadvantage to the customer. I have priced things wrong in the past and let me tell you... I have never forgotten the jobs I lost money on! If I change my pricing because I was wrong on the estimate I would never learn anything about how to protect myself and my wage. If I did something for a particular price and finish it earlier that's an advantage for me and for the customer so why should I get paid less for working faster?😁👍
@@danielbuckner2167 As a general rule, I never lowered my estimated price either. I never lost money on an estimated job. If I foresaw possible problems, I estimated high accordingly and informed the customer, if those problems do not occur, I can lower my price about this amount. Trying to raise the price after I ate my shirt is a no no. The only time I lost money on a job is when the customer did not pay, and I eventually levied mechanics liens on the property. There's a book "Means standards of estimating" read it. You will never loose money on an under estimate again. The price of materials is rising so dramatically right now, that an estimate written today might not be worth the paper it's written on in 30 days because the materials prices doubled again. I never thought I would be paying $160 for a coil of 12/2 $8 for a length of 1/2 sched40 pvc is out of sight!
@@danielbuckner2167 I did custom electrical work with custom builders. NOT JOBBING! Estimating new construction with developers, wiring the same home after the same home is another breed of cat. The estimate is a bidding competition. Usually the Jobbers severely under bid us custom builders. It doesn't take allot of intelligence to pull cables and nail boxes. The jobbers hire immigrant workers that will accept a lower wage, and they work like an army of animals. The only way to turn a profit on repetitive new construction is to hustle, every lost minute is lost money, and use non name brand(knock off) fixtures.
I've been self employed for 35 years and I wish it hadn't taken 25 of those to really learn all of the things you just explained. I would be so much more comfortable here, shortly before I retire. I gave too many people who could afford to pay for what they wanted, great deals and now they're benefiting from my lack of enrichment. It's that key phrase: "know what you're worth and don't undervalue yourself". As important as learning your trade well.
Did 4×6" recessed lights the other day for $850. $200 was materials and $650 labor. Took me about 5 hours.
as it should be .I charge 210 a can and if its more than 12 ill give them a better price .I think everyone should be doing the same because where im at its all over the place.
Man, you hit the nail on the head about the six month mark. I'm right there and am finally starting to see the fruits of my labor. I was scrounging for work in the beginning just to try and make ends meet. It's getting to a point that I'm trying to be more consistent in my pricing, if I don't get a job now because of a price it's no biggie. I don't show up to work because I like wire and running conduit.
This is a Master Class on ANY small business pricing venture!
Dude I’m in Austin Texas,Fellow Electrician just wanted to say thanks for everything bro. I’ve used a lot of your content through the years!!! Big Fan buddy
I’m taking my career further taking my journeyman test soon and I appreciate everything you have helped me learn when im not at work wishing for your continuation education in Tennessee !!!
Hopefully soon!
DUSTIN,
I love how far you've come since first watching your earlier videos. I appreciate everything you've taught me and continue to teach me from the content you post.
Sincerely thank you for making me a better electrician.
~Luis Estrella
I started my own business 4 months ago and this was an amazing video for me to watch. Thank you for making it.
Appreciate your honesty as well as your well developed, well articulated knowledge base and experiential wisdom. You definitely seem to be out to help your brothers and sisters in our field regardless of their level of investment. Keep on rocking it! I'm enjoying seeing your successes.
This video is pure gold! We always have to think ahead and make sure all aspects of the job are covered. We also have to be realistic and make sure in the end that the job was worth our time. Preciate you, so many gems!
Not only educational, respectable, and enjoyable content... But very inspiring. I've been the 'low-price, high-quality' guy for a while, I need to step out of my comfort zone when it comes to pricing.
I’m in HVAC and this video does relate quite well to my own jobs. i utilise a mix of the methods used depending on the job. there’s not a one method fits all, and quite many times i find it helps to vary.
The main takeaway in this video that is universally important is never sell yourself short.
After leaving the IBEW, sixteen years as a commercial industrial journeyman, got my State license, that was ten years ago.
I wouldn't say the hardest thing is figuring out your rates, it is figuring rates for different clients. I do service work mostly, residential and commercial. But, about 70% of my work is doing service work for all the major film and television studios in Hollywood/Los Angeles, on locations during production, in homes, restaurants, hotels, hospitals, cathedrals, country clubs, office buildings, historic homes and just about anywhere. I had to figure some unusual pricing into my rates, things like working on light fixtures that are one off, 100 year old, irreplaceable, or museum pieces, chandeliers by weight and size, rates for same day job, where I have to cancel a regular client job and reschedule it so that I can drive sometimes 20 minutes sometimes two hours to a set where there are 100 people, crew and talent, shooting scenes but need me to fix some issue that someone forgot about or just discovered in the part of the house where filming will be taking place after lunch break, so now the pressure is on me to keep from holding up hundreds of thousands of dollars and keeping the film schedule on time. I get paid very well by the studios. Also, my minimum rate for just showing up on set, is $350 even if I work for five minutes. Rarely do I only charge $350. It's usually $550 at the very least and up to as much as $4500.00 or more, for a day. Plus, 95% of every studio job is two jobs because I come in and do my thing before actual filming starts and then when they finish shooting, I come back to restore whatever lights and switches or smoke detectors, exit and emergency signs and make it just like it was before the crew took over the property. So I get paid twice for almost every job. It's a good niche that I've gotten myself into.
That's really a good situation you have there! But I'm surprised that non-union work is even possible on movie sets. Did something change over the years from what it used to be there?
So now the trick is to save as much of the 'fluff' money as possible so if conditions change for the worse it's no big deal. 😀
@@MicahFunk ---- being an ex union brother helps, but because I am a sub contractor, I don't receive any credits when the credits roll, but I am trying to start asking for at the very least a "thank you" from the director/producers, how they do that at the very end. Only because on some films and shows, I'm putting in almost as many hours or more than the crew. I don't care about the credits I just want some acknowledgement and a little advertising, in trade for some of the work. They save a little money and my name is immortalized.
The thing is that the studio heads and producers and the IBEW (set electric and set lighting), the Set Decorators Union and Locations Union got together and since the set Lighting, and electric, are IBEW, they are not state certified to do any kind of permanent wiring of any kind in or on any location other than a stage, which is all temporary also. The different crews were still taking it upon themselves to remove light fixtures, replacing them with one from the art director and other things like exit signs, signs, anything hard wired and the liability insurance is through the roof because they are constantly shooting in mansions and historic homes and buildings, hospitals, hotels etc... and sometimes one light fixture can be worth hundreds of thousands of dollars, not to mention if a fire started in a $20 million home. So they all decided that instead of keeping a couple full-time union, certified, journeyman or masters, around when there isn't a "full-time " need, they would use a 3rd party sub contractor and have them responsible for all liability insurance and pay that contractor as a contractor not as crew, so no insurance or workers comp, etc... that would be cheaper for them in the long run and have no worries about quality work safety etc...
So, having had worked as a stage manager and done concert lighting and having been in front of the camera a couple tines, I was a great fit. Plus having over 20 yrs in the trade and very well rounded and having my own service business, it worked out and now what started as a couple of days every couple weeks, has become about 70% of my business, sometimes juggling up to four shows at the same time or in some cases I've been over 40 hours a week for six or seven days a week for three or four months 12, 14 hour days. But, it's always someplace different, usually very cool, sometimes challenging, stressful, under pressure, and with strict time limits. But I work well like that. It's about 80% easy going, and 20% busting your ass. And I smile all the way to the bank and as I leave the bank I'm still smiling.
Again you hit the nail on the head! I'm almost 57 and semi-retired. Occasionally I'll do some service work. The last part of your video was very intuitive. Thank you again and as always keep up the good work!
This is very helpful for me, I just found out I needed to here something like this, better have less work and charge what’s worth then having a lot and stressing out . Thank you!! I appreciate it .
I recently became licensed, after like 3years of doing side work, and just started my own business in Durham, NC. Pricing is definitely my weak point and this video is very helpful. So far I'm learning to not try and be the cheapest and take whatever.
It's hard when your starting out. We all do it ,but with time and a bigger ,stronger client base things will change.
I’m pretty close by if you need another guy!
The biggest advice I can offer is never feel guilty or hesitant when charging a price. I use to worry about servicing every call I got and never wanted to lose a customer and always still had that "side job" mentality until one day I didnt. You wake up and realize that you are running a business and not a charity and you have real expenses/insurance/etc. And at the end of the day most people are looking for a "deal" but you just have to be confident in your prices and stick with it.
Always emphasize VALUE to your customer, in any of the many forms it can take, to make the customer understand what you can provide that which others typically don't. Great customer service, peace of mind, expandablity, upgradability, how you are saving on his cost through having multiple vendors where you know which has an item(s) with the best pricing, etc.
Customer confidence is King, and the knowledge of your good work will spread by word of mouth, from satisfied customers to those seeking quality, reliable work.
If you do unique tasks required of unique needs, such as industrial controls, custom lighting designs and such, I suggest you build a visual portfolio documenting such jobs. Photographs and brief descriptions of what was needed and how you provided unique solutions are special advertising that demonstrates your special abilities in providing quality solutions.
Best of luck and success to you.
@@bmwmike3534 I couldn't agree with you more...it took me paying myself $70,000 to realize I'm an idiot...I would rather lose the job then to do it and barley make any money....my time alive is worth way more...I have wasted hours of my life doing work for customers and losing money just to make them happy...from now on I don't care ....I give them my price and if they don't like it...see ya!!! I'm here to make money and I lost a bunch of money...no more!!! That $70,000 was my money to purchase a house in NC and retire in 15 years...instead I felt bad for charging people ...so I got screwed and they got awesome work for cheap....it's my own fault but it took two years and $70,000 for me to wake up....whoever reads this don't let that happen to you ...peace
Dustin bro, seriously thank you. I needed this after a job I did today. This has been on my mind since I started.
You’re awesome brotha thank you for the knowledge. Just started my electrical shop and you’ve been such a help. God bless you. 🙏🏻
Thanks Dustin, these videos are hard to come by , appreciate the info from a master electrician in his second year still learning !!!!
Congrats on the continuing education. Keeping things interesting is what you do. It helps explain . I’ve learned a lot . School and with your channel. Thanks
One of the best videos for new Electrical Business owners! Thanks for your efforts.
As a manager of a HVAC company I watch guys undervalue themselves all day long. Keep in mind a customer called you because you are able to do something they aren’t. The only reason you think it’s “easy” is because you have years of experience and it’s second nature to you.
If you really feel you over priced after the job is done because it ended up being a lot easier then consider adding value before you discount your price (assuming you have a conscience). Replace a smoke detector or loose outlet. Something trivial for you but could potentially save the customers property, time or even life. You’ll sleep much better at night and the customer will be much happier and more willing to recommend you to friends and family.
Also if your self employed decline tips but in return ask then if they could recommend you. People will remember that conversation and at least be asked once if they know a good electrician. That will pay for that tip you lost 10x over. You’re basically gambling money you didn’t have or expect so it’s never a loss.
I just started my own company and this video its really helpful ,I truly appreciate you taking the time to make this video thank you !
I super appreciate you Dustin. Your videos are getting better and better
Pricing and collecting your money was the worst part of the job. Would give a customer a quote then after agreeing would want to place all kinds of curves in the road. Some customers did not want you to show up until after 10 AM. Fine my hours are 7 to 3:30. If you want one to show up at 10 ok. Will work til 3:30 and charge you for 8 hours. Had store owners wanting me to come in at midnight Saturday to do 8 hours work. Fine everything after 3:30 is overtime and double time for Sunday work. nice vid. Rich people were always the biggest pain in the asses along with doctors to work for.
Awesome video. Started my own side business a little over a year ago going strong but you gave me some great advice love the videos keep up the good work brother
Amazing info!! I appreciate the advice and without a doubt very honest in everything you said.
You rock bud.
This is the second video from pros that I watch and you both touch that sweet spot. YOU ARE DOING THIS TO MAKE MONEY FOR YOUR TIME.
Thank you
BTW I use an online page to help me out with pricing.
Hey Julio,
Just starting my business here. Would mind sharing that online page you use for pricing? I’ll appreciate it if you could help me out with that.
same to me sometimes peope are so hard for paying the real price
As a new estimator and Pm, I found this to be outstanding! Thanks Dustin!
Love this I'm a plumber almost 10 years experience just took my masters test. I am going on my own good info. One thing I might add is do the job right from the get go even if it costs a little more. I ran into this with my old boss. He would cut corners and do it differently then what code states to save a few bucks. It's just not worth it and can bite you in the ass.
As an electrical / solar estimator I'm the same way.
I told someone that there are no skeletons in the closet that can come for you, unless you put them in there. The lawyers charge more than our laborers.
Thank you very much for sharing about this brother, helps a lot when you working all by yourself and charging by yourself.
ive been waiting for this video! thanks!!!
Thanks for the video. Worth a closer look for sure. Today's bubble makes things even harder for the new guys. Today it's like picking money off a tree tomorrow could be slim picking again. I always tell my coaching clients to be ressession proof and have a system that's consistent but flexible at the same time.
I can't believe I found someone who I totally agree with, You've done a terrific job explaining what to do. I gave a price to someone and, like you said, the job went to elsewhere. Contractors have to learn how to read a potential customer and never give an estimate out. I learned to say, I'll put something together for you in a day or two. I've had people tell me what they're going to pay me. These morons are flushed immediately down into the depths of the sewer system. Keep up the great work. You speak the truth!!!👍👍
Is it so good to see people much younger than me that are so confident in their skills and actually take pride in doing what they do and I know once you develop a reputation I've hit the point where I will not start my truck for less than $500 and I still get thanks and tips and those things and tips allow me to do many charitable jobs for the elderly for actual people in need sometimes the appreciation of a customer is worth the pay
Thank you, I really appreciate this. I’m trying to advance my business skills now that my work skills are at a much higher level than when I started my business.
Great job doing this video exactly the video we need thank you
Dustin, thank you for this video! It was very informational! Keep being an awesome person! 🤙🏽👍🏽
Dustin thanks for the info and your guidance on pricing.
Thanks brutha, Valuable Knowledge full, helpful information!!!
Thumbs up and subscribed! Honest, experienced, and great comments
Thanks and welcome! 💪⚡
Definitely agree with these tactics especially about the “ what you are really worth “. Seems a lot folks are not wanting to pay their dues. I love what we do, we are magicians in a certain way. My biggest problem in our trade is the pricing. I appreciate your perspective on our trade. I find you relatable. I have three decades in our field and to me the hardest part is dealing with the management side but I’m learning. It’s not easy for me to charge, that’s my weak spot but I do realize this and getting better
one heck of a smart dude. been watching you for years.
Very inspiring. I just started doing my own thing and it's been good so far.
I been in business for 2 years and I have learned this very quick. This video is dead on.
Materials + labor + 25% is usually how I do it on your average job. That covers those "unforseen" expenses.
Hey Brad, Do you use a labor composite rate? Do you include any overhead, taxes, vehicles, benefits, etc?
@@ChemoWarrior sole proprietor. 1099s when I need them.
Out of all ur videos I watched of urs, this is the first one I thumbs up, thanks for the videos dude
Excellent video!! That's a lot of truth there!! Thank you Dustin!! 👍
Awesome ! I have been on all the sides of these situations 💯 😌!
Just start with $1000 per hour, add in $275 trip fee, $475 "begin the work" fee, $215 cleanup fee, and go up from there.
Dustin, thanks for all you do!
You are an invaluable teacher Dustin seltzer
In Dustin we trust.
Brilliant. Nice touch.
Thanks so much, it is very helpful your explanation about the cost. Thanks again
As a journeyman electrician all I can say is never sell your skill short. Skill! Is what this country is built with. Union is always the right route. Even if you want to start your own business go with the Union and you will succeed. Love for all the electricians out there.
Love this man been waiting for business content can’t wait to go out on my own as well…….do contracts and contracting next ! Lol
You are the best of the best, every single video I learn more from you thanks
Only people that get a discount are people I eat Thanksgiving or Christmas dinner with. ONLY PEOPLE THAT ARE FREE ARE MOM AND DAD. I'm not the only electrician out there. Don't like my price call some else. Just as you said, work load goes up, so do my prices. Work load goes down then my price will go down. Supply and demand. It is my time you are taking from my family. But my family likes to eat too.
I can stay home and be poor!
Thanks for sharing this narrative about bidding jobs.
Thanks for all your help🔥🔥🔥
Thank you for this much needed information 👍
I have taken a lot of positive things from this video to help my business. Thank you.
Solid advice.
The most important part was to be able to deliver what you are charging for.
Don't charge $200/hr and provide $75/hr worth of service.
Just because someone else is charging more than you doesn't mean you can charge what they are.
Well said
What’s a fair hourly rate range for a service call? New to this and just looking to absorb and learn from the best. TIA.
When I coach on our channel, I always want to know what your overhead is and what the competition is charging. Usually you will be between $79 and $129 but I have had guys tell me they charge in upwards of $199. I known Dustin mentioned he charges a lot, but that's because we have other income to rely on and we want to "Qualify" the client before we waste our time. REMEMBER the service call is not to make any money, it is simply to QUALIFY the client to see if he is willing to pay for your time, if they don't want to pay a service call fee then most likely they are cheap, not serious or just shopping around. Don't waste your time. If they say MY PANEL IS BURNING!!! don't charge a fee, you will most likely get the job. Everyone does something different. Before you decide, try what works and stick with it. Make it a part of your system. Bidding, selling, closing system. Don't guess, when times go bad again your system is what will help you survive. For example Mcdonalds doesn't change the Big Mac price every few weeks, there system tells them what to sell if for based on real numbers. Be a business, not an electrical handyman, blowing here and there depending on the moment. - Hope you got something out of that. See my video on Flowcharts for example.
@@The360Electrician hey there,
Thank you for the fast response, I really appreciate that. It’s really confusing, I came up with a number for hourly work based on what I think I’m worth but the problem is that I want to make sure that I’m not way off of what’s going on out there. I know Everyone is different and I shouldn’t compare myself to others but sometimes I just can’t help it, I guess I just want to do this the best possible way that I forget to follow my own system and just take the best out of others to grow and be the best out there. Also, low ballers out there are becoming a big problem cause it’s getting hard to compete with that when It comes to pricing. Been on the trade for 20 years but new in business so it really is overwhelming. Thank you once again and I sure will check out your channel.
@@ogrestless .. as someone who just retired, I can throw you a few items that might have been taken for granted. When he says to figure your fixed costs, you need to get with a friend or maybe even your accountant to make a list of things you probably forgot. How about misc office costs (paper, pencils, advertising, yellow pages) and the often overlooked share of social security for payroll, vehicle purchase with upkeep, etc. Yes, you always remember to buy a vehicle, but there's tires, brakes, gas, and oil between those purchases. Figure on replacing that truck every 5 years or 100k miles to reduce down time and take the tax advantage. Remember that a truck down can cost you near $1000 a day. (no truck = no work) Your truck is probably your bests advertisement... it's what people see. A ratty looking van is a bad first impression. Same goes for how you look. An extra few hundred a year keeps uniforms looking good. Buy a set of coveralls for crawling in the dusty attic or basement. I know it seems overwhelming, but if you can come up with an annual number for these things you can divide it by say 250 working days and come up with a daily number, which will help you on the hourly rate cost. Also remember that some states charge a tax on your inventory so you need to add in a percentage to cover that PLUS any inventory is also money tied up. How much would you expect to earn on say $50k investment elsewhere? Yes, add in a percentage here too. It costs money to open the door every day and if you don't know how much, then you don't have a clue where break-even is. See where this is headed? BTW, many will use this number as a measuring stick so adjust as needed. Your hourly rate to the customer might be around 3 times what you want to earn for yourself. If the numbers don't jive here then your other figures are off or expenses are too high. Good luck.
Thank you…you have helped me a lot with this channel
Glad to hear that!
Very good presentation and value.
Man, you really covered it all....it seems someone can use this info on handyman and other types of work too.
Thanks for the videos man I’m a journeyman lineman taking my final state test this week to be able to go out on my own
Excellent.....excellent video, thank u so much
Thank you so much for this tips.
Nice little blink there when you said don’t do side work. I got you
I've always done my own numbes for material+time but I appreciate all these other options. I tend to be fair (but not low ball) with my rates to keep my customers happy.
So much wisdom in this guy
Great info!!! Thank
We bid jobs cost per connection. I.e. $50 per 100 connections in a kitchen, bath, and bedroom addition might come to $5000. A service change and new panel is a flat rate. Homeowner add-ons are Time and Material. And remodel pricing is higher than new addition pricing to accommodate the additional time of deciphering and tie-in of existing wiring.
I'll add one thing to consider if you're a business owner. I was a master electrician, I was an IT/Security contractor who did Res/Com construction and service. I will give the advice, then explain. As a general rule, this works and it will save your sanity:
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GET RID OF 20% OF YOUR PROBLEM CLIENTS AND RAISE YOUR PRICES 15%, YOU WILL ALWAYS MAKE MONEY.
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Say you're an small to mid-size electrical contractor, and you dabble in a bit of everything: residential construction, commercial construction, residential and commercial service work, etc - diversity allows consistent money to be made, yes? So for one example, imagine:
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You are a Sub for a General Contractor who is consistently late on your draws. You eventually get your money, but it's like pulling teeth. (This happens a LOT, actually. When owners are late paying the GC, the GC eventually can't pay out draws to the subs. If you've ever worked for a sub-contractor who had problems making payroll sometimes, this is often the reason, your boss is at the mercy of the GC, you're at the mercy of your boss.)
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In addition, you have multiple jobs tied up with the same GC - this is a VERY common problem. As you build a rapport with a GC, the GC will accept bids with you for future jobs, even if you're not the cheapest. If they trust you, your work, your quality and precision, your adherence to schedule and budget, etc., you will get jobs even not being the lowest bidder. This is a good and bad thing. The more the GC offers you, the more "eggs you keep in one basket." The more jobs you have for one GC, the less jobs you can bid on or accept elsewhere, because you begin to run low on staff, crewing multiple jobs for the same company. This is where your stress will build exponentially, because now, you CAN'T afford for the GC to be late on your draws. This stress is compounded if the GC has tied themselves up with one main owner on all these jobs. Heed this: ALWAYS DIVERSIFY YOUR CLIENTELE. Never bind yourself up with just one or two companies. You make yourself at the mercy of just them to ensure your viability.
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You finally lose your patience, give up and refuse to staff a job you just started for them, because you haven't gotten the draws the GC owes you from another job yet, and now you can't trust that you'll get paid for this new one (If the GC is in arrears with other subs, they may take draws from this new job to pay draws on other ones, "stealing from Peter to pay Paul.")
You're struggling to keep up payroll (ALWAYS have capital reserves folks, preferably at least 3 months' employees wages, 6 months is better, if you are able), because the draws aren't coming in. The GC decides to stiff you on the draws longer because now you're holding up the new job. And it's a revolving door of insanity. Companies have gone to court over this very scenario, it's a business and morale killer, it can cost you your own employees if you miss or delay payroll too often. This GC is a company you have to let go. Don't bid anymore on anything they do. It's not worth your sanity, and it takes too long to get the money anyway.
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You're in business to make money. You can be understanding about occasional issues, but when the issues become too problematic, your business suffers. You have to look out for yourself first - otherwise you're no good to your employees. It can, and probably will, sting in the short term, to get rid of a problem company. But good work builds your reputation, which gets you more work. You will make up for it, often quicker than you'd think you would.
In my 40 yrs ive seen too many good business men/Ladies go belly up for dealingvwith GC, hreat advice
I love when customers can’t afford prices but have a nice boat or atv extra guns haha I love to barter when there’s value
Love it man!
The last part in the video hit hard for me. Thanks man! I’m pumped to make a profit! Lol
I always learn something good from these videos.
May I ask what you learned?
@@juliovalencia4948 sir if you are not in this construction, then we can not start arguing, if you are an electrician, plumber, or carpenter, watch videos of that so you can learn, make money 💴
@@dannydanielpulla1713 lol I'm an electrician I make plenty of money don't worry about that
This video is what I needed the most
Boy you sure are awesome i have learned a lot from you, thank you for sharing you knowledge
Nice im going over plans on wiring my first big house on my own so this could be handy
I agree! Very good video.
Great work my dude
Thank you so much. You are the best.
Thanks bro. Lots good info
Excellent advice bro!🇨🇦
Man I really appreciate this, thanks.
Depends on what it is. Material can be marked up anywhere from 100% to 173%
You have to know your labor rate including labor burden
A bunch goes into it but it is not hard
Residential service wise, rewires, remodels etc...
Dictate completion of JOB
Not completion of inspection as you have to pass that anyways. This way customers will not hold onto money, especially if they are prolonging everything getting inspected
Materials already up 300% 😂
Used to make money on material but since the internet came out we can't charge that 15%,on top anymore but I charge by the hour for picking it up or out or any other way to get it to the job
U cool men, I love your videos an all that u recommend, u help me out really good with electric work, keep up the good work bro.
I m from Honduras.
You may not realize this, but I’m certain that you just inspired at least one electrician… and most likely thousands more… thanks Dustin
if I ever try to hire Dustin to do a job, id ask my grandma to make the call " hi I am an elderly lady trying to wire up 6 houses in the middle of the woods, would you be a darling and do that for me? I don't have money to pay for the trip cost, but ill bake you cookies" XD thanks for the video, this one is especially helpful for me at the moment, sometimes I fall under pressure when pricing clients, and end up being too nice with the price, end up feeling underpaid...
You're the man, Dustin!