Acceptable rates

[Stever_777]

Hi guys,

If you read my first post you will have seen that i am new to running my own show, cause I subbed for a big company for years never having to worry about cost of materials, pricing jobs etc,

So my question is, what is an acceptable labour rate per hour for myself and also a rate for a mate? What sort of % on top for materials as well?

I`ve moved to the other end of the country, so I assume the rates are less down here in South Wales than in the South East.

I`m not VAT registered BTW.

Thanks for any replies

Steve

 

[Amp David]

25-35% on all materials for me

 

[Electricalserv]

10% on materials to cover petrol £20 per hour on domestics. £30 on commercial

 

[GOODWIN]

10% on materials to cover petrol £20 per hour on domestics. £30 on commercial

wow thats low 20ph, i thought i was low 35 for first hour then 25, larger jobs prob abit lower but with the % on the parts of a large job it brings it back up

in north wales btw

 

[Electricalserv]

20ph for me is more than enough. It covers my business and a decent living. Fault finding I charge on a per case basis. But domestic rewires £20 per hour and I give myself 5 days. I end up finishing in 4 my money goes up. £35PH is very expensive on domestics....£280 a day? outrageous

 

[accordfire]

There is no right or wrong amount to charge.

To get the rate you *should* be charging isn't a case of guessing either though.

Essentially, you need to cover your overheads in you labour charge, and potentially a small amount of profit. If you're spending an equivalent of £20 per hour in running costs, electric, light, phone, and so on - you need to charge more than that to keep ahead.

Similarly, the bulk of your profit will come from mark up on materials - in very simple terms (it isn't really as simple as that - because material markup generally has to cover the cost of you getting that material to site) - so as others have said - somewhere in the 30 - 35% mark.

Hourly rates really aren't worth guessing over - they've got to be right, and built from facts, or the odds of your business failing increase drastically. Start by working out what you spend on overhead costs in a year. Then divide by an hourly figure - there are as few as 1800 working hours for most self-employed folks - and that will tell you the absolute minimum you need to earn each working hour to stay afloat.

Then add a margin to that - to ensure that you cover non working hours over and above the ones we've already accounted.

Then look at markup on your materials - somewhere in all of this, you are looking to adjust these mark up figures to end up with a nett profit in the range of what you expect to earn in a year.

I wrote a post on this subject somewhere in the business forum - I'm sure it's still findable.

 

[Stever_777]

Hey thanks Guys,

Are those rates for a sparks only and also are they South Wales rates?

Another quik question, I`ve just been asked to give a bloke a ball park figure about a complete rewire, new CU, all bog standard accessories for an average three bedroom house.
Any thoughts?

I am just starting and busy with price schedules ( estimates ) for these sort of situations when asked. Am litterally days into my business.

Thanks for any replies guys.

Steve

 

[Electricalserv]

There is no right or wrong amount to charge.

To get the rate you *should* be charging isn't a case of guessing either though.

Essentially, you need to cover your overheads in you labour charge, and potentially a small amount of profit. If you're spending an equivalent of £20 per hour in running costs, electric, light, phone, and so on - you need to charge more than that to keep ahead.

Similarly, the bulk of your profit will come from mark up on materials - in very simple terms (it isn't really as simple as that - because material markup generally has to cover the cost of you getting that material to site) - so as others have said - somewhere in the 30 - 35% mark.

Hourly rates really aren't worth guessing over - they've got to be right, and built from facts, or the odds of your business failing increase drastically. Start by working out what you spend on overhead costs in a year. Then divide by an hourly figure - there are as few as 1800 working hours for most self-employed folks - and that will tell you the absolute minimum you need to earn each working hour to stay afloat.

Then add a margin to that - to ensure that you cover non working hours over and above the ones we've already accounted.

Then look at markup on your materials - somewhere in all of this, you are looking to adjust these mark up figures to end up with a nett profit in the range of what you expect to earn in a year.

I wrote a post on this subject somewhere in the business forum - I'm sure it's still findable.

I couldn't agree more with that but for me some people really do take the biscuit with their hourly rate....

 

[accordfire]

Hey thanks Guys,

Are those rates for a sparks only and also are they South Wales rates?

Another quik question, I`ve just been asked to give a bloke a ball park figure about a complete rewire, new CU, all bog standard accessories for an average three bedroom house.
Any thoughts?

I am just starting and busy with price schedules ( estimates ) for these sort of situations when asked. Am litterally days into my business.

Thanks for any replies guys.

Steve

As a VERY rough rule of thumb - around £1000 a bedroom - so a three bed house - £3000 or so.

For estimates, you really need to think about some kind of basic spreadsheet - a list of the materials you need, the cost you pay for them.

Then the time it takes you to install those items.

Add the two together, and put on a markup and you've got a price.

Tip: Don't worry too much about what other sparks are charging - they're not running YOUR business.

It'll take a little time - but get your hourly rate right first, even if it means a day's delay on getting your prices out - start by writing down everything you put in to being in business (your overheads) - cost of van, tools, light, power, phone, internet, rent, and so on. Get an hourly rate equivalent for those items as I said above. Then add something to it, to make sure you're covered. That will be your hourly rate.

For materials - let's say you come to a total from your supplier of £975 - including VAT (you're probably not VAT registered yet?) - add a markup to that to equate to some amount of profit you are happy with.

For South Wales - I'd estimate that you'd be looking for an hourly rate broadly in the £25 to £35 range - providing it works out to more than you are spending each hour!

Tip: Visualise the job you're doing - mentally walk through the whole job, and write down everything you use - e.g. start at the consumer unit, and walk each circuit in your mind.....e.g. 32A MCB, 2.5 T&E, ten switched doubles, next circuit.

Then add up all the materials - e.g. 4 32A, 2 6A, 2 16A, 1 20A = 9 ways = 10 way 17th ed board. (Blanks), tails, etc. 26 switched twin sockets, 10 1G1W plate switches - you get the picture.

Then, TIP: Put the whole job list out to two or three suppliers - figure out who's giving you the best deal. Don't just take online prices as the final deal - most will do better on a "quote". Add your mark up. Add your hours. Bingo.

 

[Electricalserv]

As a VERY rough rule of thumb - around £1000 a bedroom - so a three bed house - £3000 or so.

For estimates, you really need to think about some kind of basic spreadsheet - a list of the materials you need, the cost you pay for them.

Then the time it takes you to install those items.

Add the two together, and put on a markup and you've got a price.

Tip: Don't worry too much about what other sparks are charging - they're not running YOUR business.

It'll take a little time - but get your hourly rate right first, even if it means a day's delay on getting your prices out - start by writing down everything you put in to being in business (your overheads) - cost of van, tools, light, power, phone, internet, rent, and so on. Get an hourly rate equivalent for those items as I said above. Then add something to it, to make sure you're covered. That will be your hourly rate.

For materials - let's say you come to a total from your supplier of £975 - including VAT (you're probably not VAT registered yet?) - add a markup to that to equate to some amount of profit you are happy with.

For South Wales - I'd estimate that you'd be looking for an hourly rate broadly in the £25 to £35 range - providing it works out to more than you are spending each hour!

Tip: Visualise the job you're doing - mentally walk through the whole job, and write down everything you use - e.g. start at the consumer unit, and walk each circuit in your mind.....e.g. 32A MCB, 2.5 T&E, ten switched doubles, next circuit.

Then add up all the materials - e.g. 4 32A, 2 6A, 2 16A, 1 20A = 9 ways = 10 way 17th ed board. (Blanks), tails, etc. 26 switched twin sockets, 10 1G1W plate switches - you get the picture.

Then, TIP: Put the whole job list out to two or three suppliers - figure out who's giving you the best deal. Don't just take online prices as the final deal - most will do better on a "quote". Add your mark up. Add your hours. Bingo.

The case with mark-up on materials can cost you face with a customer. If they ask to see invoice of costs of materials and see a staggering 35% mark-up they are not going to be happy. Yes you get trade discount but nowhere near 35%. I sup;pose this is why i will never be a rich man because I am so honest

 

[spraymate1]

Sorry, but how would the customer know what your mark up is, I personally put 20% on mine, but at the end of the day, if the customer doesn't like it, then he can go and do it themselves, its tough out there at the minute, but we have try and earn a living, otherwise whats the point.

 

[Electricalserv]

Sorry, but how would the customer know what your mark up is, I personally put 20% on mine, but at the end of the day, if the customer doesn't like it, then he can go and do it themselves, its tough out there at the minute, but we have try and earn a living, otherwise whats the point.

No doubt everyone makes abit on materials. As far as making living thats where your wage comes into it. I'm not out there to rip anyone off and by the way you can make a living without marking up on materials

 

[accordfire]

No doubt everyone makes abit on materials. As far as making living thats where your wage comes into it. I'm not out there to rip anyone off and by the way you can make a living without marking up on materials

Um, yeah - of course you can.....by bumping up the labour element. Nothing wrong in that.

Of course, if you charge "list" price for all your materials, you're pretty sure to be on a big win from most suppliers - given that list for a hundred metre roll of 2.5T&E is currently around £235.00 minimum.

Most folks apply mark up on the price they pay, not on list - which still works out pretty competitive.

Aside from that a mark up on materials is NOT ripping folk off in any way at all. It's called covering the cost of the work - of specifying the job, of the time in contacting the supplier, picking up or waiting in for the parts, transporting them to site, and so on.

I don't really like the insinuation that by putting a mark up on materials we are ripping our customers off, to be honest.

 

[spraymate1]

I agree with you accordfire, thats why we have wholesalers, its called business, otherwise we might as well all go down to screwfix, or better still let the customer supply the stuff. Its not ripping people off, its business, There appears to be people out there who quote just to get the work, which I have to say I dont understand, its that situation that has got the industry where it is today, if people all try and stay within a price, then the customer would have to make ther choice, on who appears to offer the best service and not just whos willing to work for the lowest possible price, no matter what the service is like.

 

[Electricalserv]

Um, yeah - of course you can.....by bumping up the labour element. Nothing wrong in that.

Of course, if you charge "list" price for all your materials, you're pretty sure to be on a big win from most suppliers - given that list for a hundred metre roll of 2.5T&E is currently around £235.00 minimum.

Most folks apply mark up on the price they pay, not on list - which still works out pretty competitive.

Aside from that a mark up on materials is NOT ripping folk off in any way at all. It's called covering the cost of the work - of specifying the job, of the time in contacting the supplier, picking up or waiting in for the parts, transporting them to site, and so on.

I don't really like the insinuation that by putting a mark up on materials we are ripping our customers off, to be honest.

I think marking up on material 35% is ripping someone off tbh. My opinion though.

Transporting goods and alike would be covered by 10% on your average rewire. which is what I do. Most wholesalers now deliver to site for a small fee. Each to their own. But marking up is basically selling goods on for a bigger fee than the customer could in all honesty get themself

 

[accordfire]

I think marking up on material 35% is ripping someone off tbh. My opinion though.

Transporting goods and alike would be covered by 10% on your average rewire. which is what I do. Most wholesalers now deliver to site for a small fee. Each to their own. But marking up is basically selling goods on for a bigger fee than the customer could in all honesty get themself

Nearly - I almost replies to your initial ballpark statement of a global 10% mark up. Either way, making a comment like "a 35% mark up is a rip off" is pretty naive, being honest.

Perhaps you haven't seen the cost of diesel lately? I don't know how much it is in Liverpool, but at the moment, I'm paying an average £1.45 a litre on around 360l a month of the stuff. Somewhere I have to recover that cost - both for the travel to the job and for my guys collecting stuff from suppliers.

Of course, as I said earlier, I could, conceivably, take that mark up off my materials, and add it back to my labour element - which would penalise customers NOT using my materials. That's closer ripping someone off, IMO.

What about guys that buy in stock ahead of time - should they not cover the cost of storing that?

We're talking about a difference here, by the way of around £2.50 in every ten quid. Or put another way, we're talking about charging a 35% mark up on parts, with a say, £30 an hour labour charge - OR, we're talking about a 10% mark up on materials and a £35 labour charge.

The point is, neither is a rip off, per se. What is is, though, is a business model. It's about applying mark up in the fairest way, or in simple terms making a profit in a way which reflects what your customers use from you.

Nobody HAS to apply a 35% mark up, any more than they have to apply a 10% mark up - the fact that you apply 10% is what works for YOUR business - not necessarily anyone elses. And that doesn't mean they're ripping anyone else off either.

What you're saying, certainly the way you've written it, is that anyone charging more than 10% mark up on parts is, defacto, ripping their customers off. That's a damn silly thing to say without knowing how their business works. IMO.

As for your comments about selling goods on for a bigger fee than the customer could in all honesty get for themselves......well, yeah.....what do you think your wholesaler is doing to you? You think they're only putting a few percent on what they pay from the manufacturer?

Here's a thought - what about underwriting the warranty on the manufacturer's goods - who pays for that? The manufacturer? Wholesaler? Not likely. When was the last time (apart from major recalls) that you got back your petrol and time for replacing a "widget" that failed under warranty?

That mark up doesn't just cover what the customer COULD have paid for it, but your time in getting it, selecting it as best for the job, transporting it, storing it safely, tracking warranty on it, and so on and on.

I'm not trying to suggest that you;re wrong, by the way, in what you mark your products up by - that works for you. But what I am saying is that suggesting blanket fashion that a 35% markup is a rip off, is wrong when you don't know why it's been marked up by that amount.

 

[Electricalserv]

Nearly - I almost replies to your initial ballpark statement of a global 10% mark up. Either way, making a comment like "a 35% mark up is a rip off" is pretty naive, being honest.

Perhaps you haven't seen the cost of diesel lately? I don't know how much it is in Liverpool, but at the moment, I'm paying an average £1.45 a litre on around 360l a month of the stuff. Somewhere I have to recover that cost - both for the travel to the job and for my guys collecting stuff from suppliers.

Of course, as I said earlier, I could, conceivably, take that mark up off my materials, and add it back to my labour element - which would penalise customers NOT using my materials. That's closer ripping someone off, IMO.

What about guys that buy in stock ahead of time - should they not cover the cost of storing that?

We're talking about a difference here, by the way of around £2.50 in every ten quid. Or put another way, we're talking about charging a 35% mark up on parts, with a say, £30 an hour labour charge - OR, we're talking about a 10% mark up on materials and a £35 labour charge.

The point is, neither is a rip off, per se. What is is, though, is a business model. It's about applying mark up in the fairest way, or in simple terms making a profit in a way which reflects what your customers use from you.

Nobody HAS to apply a 35% mark up, any more than they have to apply a 10% mark up - the fact that you apply 10% is what works for YOUR business - not necessarily anyone elses. And that doesn't mean they're ripping anyone else off either.

What you're saying, certainly the way you've written it, is that anyone charging more than 10% mark up on parts is, defacto, ripping their customers off. That's a damn silly thing to say without knowing how their business works. IMO.

As for your comments about selling goods on for a bigger fee than the customer could in all honesty get for themselves......well, yeah.....what do you think your wholesaler is doing to you? You think they're only putting a few percent on what they pay from the manufacturer?

Here's a thought - what about underwriting the warranty on the manufacturer's goods - who pays for that? The manufacturer? Wholesaler? Not likely. When was the last time (apart from major recalls) that you got back your petrol and time for replacing a "widget" that failed under warranty?

That mark up doesn't just cover what the customer COULD have paid for it, but your time in getting it, selecting it as best for the job, transporting it, storing it safely, tracking warranty on it, and so on and on.

I'm not trying to suggest that you;re wrong, by the way, in what you mark your products up by - that works for you. But what I am saying is that suggesting blanket fashion that a 35% markup is a rip off, is wrong when you don't know why it's been marked up by that amount.

Marking up 35% is a smoke screen to the customer. If you mark up on labour at least the money isn't hidden.

 

[spraymate1]

Am sorry, electricalserve but you make it sound as if we are ripping off the customer, if you let the customer have the materials at cost, then why not just do the work for nothing, and then everyone is happy. Its business, if every, business not matter what it is, didn't put a markup on the stuff unless you labour/sevice charge was well over i cant see any business surving. Don't get me wrong over a certain percentage does seem a bit unfair, but to say that any is basically ripping people off is wrong, IMO,
Dont mean to offend anyone.

 

[Electricalserv]

Am sorry, electricalserve but you make it sound as if we are ripping off the customer, if you let the customer have the materials at cost, then why not just do the work for nothing, and then everyone is happy. Its business, if every, business not matter what it is, didn't put a markup on the stuff unless you labour/sevice charge was well over i cant see any business surving. Don't get me wrong over a certain percentage does seem a bit unfair, but to say that any is basically ripping people off is wrong, IMO,
Dont mean to offend anyone.

Well I also don't mean to offend you. I do mark up but I only mark by 10% which covers the expenses of getting it. I just think a hidden figure of 35% is rather devious. Thats my opinion though. Again I don't mean to offend. You only mark up by 20%

 

[spraymate1]

Well I also don't mean to offend you. I do mark up but I only mark by 10% which covers the expenses of getting it. I just think a hidden figure of 35% is rather devious. Thats my opinion though. Again I don't mean to offend. You only mark up by 20%

Each to there own

Are still friends LOL

 

[dim_bulb]

If I go down the pub or wherever and for a drink its say 2.50 for a bottle of x I could get that same drink same bottle cheaper in say tescos and everybody knows it didnt cost them that much

the point im making is they have a mark they provide a service as do we

 

[Electricalserv]

If I go down the pub or wherever and for a drink its say 2.50 for a bottle of x I could get that same drink same bottle cheaper in say tescos or wherever

the point is they have a mark they provide a service as do we

No that's what their service is selling products. Ours is providing our skill. Therefore marking up a third on materials is secretly adding more £ to the job. If you put it on labour the charge is not hidden

 

[Electricalserv]

If I go down the pub or wherever and for a drink its say 2.50 for a bottle of x I could get that same drink same bottle cheaper in say tescos or wherever

the point is they have a mark they provide a service as do we

No that's what their service is selling products. Ours is providing our skill. Therefore marking up a third on materials is secretly adding more £ to the job. If you put it on labour the charge is not hidden

 

[Electricalserv]

If you write that on a quoteost would tell you where 2 go 35% is a big markup

 

[pennywise]

No that's what their service is selling products. Ours is providing our skill. Therefore marking up a third on materials is secretly adding more £ to the job. If you put it on labour the charge is not hidden

In my personal experience customers resent seeing a large labour bill as a-posed to material costs.

 

[Guest123]

TBH gents, and absolutely no offence to anyone but price sensitive threads like this do more harm than good to our industry.

Any potential customer could be reading this the same as we all are as this is a public forum that anyone can view.


As for rates in South Wales, South Wales is a big generalisation, a difference of 10 miles can mean a big difference in rates.

 

[Electricalserv]

In my personal experience customers resent seeing a large labour bill as a-posed to material costs.

That's exactly my point the resent the labour bill because it isn't hidden Mark ups are hidden charges and customers will rarely check this. Can you see where I am coming from?

 

[GOODWIN]

20ph for me is more than enough. It covers my business and a decent living. Fault finding I charge on a per case basis. But domestic rewires £20 per hour and I give myself 5 days. I end up finishing in 4 my money goes up. £35PH is very expensive on domestics....£280 a day? outrageous

BTH day rate is about 160-80 depending on the job (length) plus % on parts brings you to 200 a day, and the 35 is just for first hour then 25 and im non vat reg (larger firms around here charge around 40/45 ph + vat), i think your selling yourself short youve put the effort in with training and slave/apprenticeship for years

 

[dim_bulb]

perhaps lennys right maybe move this post to the electricians arms page...










ohhh wait im not a member someone get us in lennyyyy

 

[Octopus]

20ph for me is more than enough. It covers my business and a decent living. Fault finding I charge on a per case basis. But domestic rewires £20 per hour and I give myself 5 days. I end up finishing in 4 my money goes up. £35PH is very expensive on domestics....£280 a day? outrageous

£35.00 per hour on domestics is very high!!

Well if its a 2+ man organisation that's only about £28.00 + VAT. That's not outrageous and also bear in mind you're in Merseyside - different parts of the UK can charge very different rates.

Are you supporting all your business overheads PLUS a wife, kids and a mortgage on £20.00 PH?