How do you maximise the profit on every job ?

[Dustydazzler]

Other than keep increasing your hourly rate how do you make each job more profitable ?

I know other trades put a much bigger mark up on materials , my brother in law who does landscaping puts 100% mark up on core materials to pay for his time driving around collecting stuff

I know Some companies charge an admin fee for certification etc

any other ideas ?

 

[littlespark]

Charge twice and hope they don’t notice.

 

[mattg4321]

Keep your costs down I suppose.

Negotiate better material prices
Use cheaper materials
Drive an older/cheaper van
Do the job quicker
Shop around for insurances/accountants too
Negotiate an ‘incentive’ payment with wholesalers if you pay on time.

Some of the above are not desireable though really. The easiest/best way is to charge more if possible. You can only every charge what the market will bear though, based on your reputation/skills etc.

 

[buzzlightyear]

Keep your costs down I suppose.

Negotiate better material prices( haggle for carp gear)
Use cheaper materials (the old gear you ripped out of a old job)
Drive an older/cheaper van ( by driving up on a camel )
Do the job quicker ( has fast you can if you boggy the job)
Shop around for insurances/accountants too ( a scam insurance company for Nigeria that will never pay out)
Negotiate an ‘incentive’ payment with wholesalers if you pay on time. (pay up front or nowt over counter )

Some of the above are not desireable though really. The easiest/best way is to charge more if possible. You can only every charge what the market will bear though, based on your reputation/skills etc.

 

[buzzlightyear]

I know other trades put a much bigger mark up on materials , my brother in law who does landscaping puts 100% mark up on core materials to pay for his time driving around collecting stuff

if dont make monie on gear you has well give the customers at cost .

I know Some companies charge an admin fee for certification

now let me think about this ,i do spend all me time doing the job pulling cables but putting pen to paper now that takes a lot of thinking especially bloody paper work .test certs paper or pc or part p or using it for bog paper .

 

[Vortigern]

No wastage. Ensure no thefts. It's a long haul thing making profit and can be looked at from the perspective of a whole year. There are some jobs you will lose out on and have to make up the loss on other jobs. Being mindful of not making a loss. Be prepared to lose jobs. Work on the basis you must earn £300 per day or don't do the work. Mark up is 25% for delivery on site. Make sure it is an honest quote, over time this will put you in good stead. Be scrupulously honest. Charm has a lot to do with it along with luck. Estimate correctly the labour charges. Pay labourer one rate charge a day rate higher than the cost. This is important because inexperienced people cost time and resources. Make sure the client knows that things happen, and that may affect the cost. Tell them you will consult and make absolutely sure any variation of contract is costed and agreed in writing. Always use a contract especially for domestic. Make sure the contract meets trading standards, i.e. cooling off period (differs in home and on line!) Make sure contract stipulates materials are your property until paid for. Get a sizeable deposit for materials on site. Try to stage payments at first fix and second fix. All these thing ensure loss will be mitigated in the inevitable SNAFU situation.

 

[Dustydazzler]

I think from a personal stand point I have always struggled to cost up a job with a significant profit in mind.
I have always found it easier to tot up materials and whack this at roughly cost to me plus what ever Labour I think the job will require And that’s my price.
I don’t add a proper profit margin to the final estimate, to cover for potential material loses or over runs etc.

if I costed a say 4 bed rewire at £1000 materials plus say I reckon I could do it in 2weeks and 3 days at £300 per day. My estimate comes to £4900.00

should I really be saying its a £6000 job. Not quoting say £5000 ?

 

[Rigpig]

I think from a personal stand point I have always struggled to cost up a job with a significant profit in mind.
I have always found it easier to tot up materials and whack this at roughly cost to me plus what ever Labour I think the job will require And that’s my price.
I don’t add a proper profit margin to the final estimate, to cover for potential material loses or over runs etc.

if I costed a say 4 bed rewire at £1000 materials plus say I reckon I could do it in 2weeks and 3 days at £300 per day. My estimate comes to £4900.00

should I really be saying its a £6000 job. Not quoting say £5000 ?

Depends on market conditions in your area I suppose. You are a professional and deserve to be compensated as such. If you don't make a profit you will eventually go out of business or sicken of grafting and getting nowhere.

 

[mattg4321]

I think from a personal stand point I have always struggled to cost up a job with a significant profit in mind.
I have always found it easier to tot up materials and whack this at roughly cost to me plus what ever Labour I think the job will require And that’s my price.
I don’t add a proper profit margin to the final estimate, to cover for potential material loses or over runs etc.

if I costed a say 4 bed rewire at £1000 materials plus say I reckon I could do it in 2weeks and 3 days at £300 per day. My estimate comes to £4900.00

should I really be saying its a £6000 job. Not quoting say £5000 ?

Yes, especially on bigger jobs there has to be a margin for things not going to plan/profit.

You could easily cut a pipe, through almost no fault of your own and have to cover the cost and hassle of fixing, including any decorations. Potentially dealing with insurance.

I had a job once where the back of the flooring had been routed out to accommodate a pipe sitting proud of the joist. I always set my saw to cut through all but the last 1mm of flooring if I don’t know what’s under. Didn’t help me this time!

 

[Vortigern]

You must add a mark up to goods you purchase. You have spent time listing the materials and possibly researching. For instance inrush currents on LED panels. Then you have to deliver on to site. All of which comes at cost to you. Therefore this cost must be attributed to the customer. You are not a charity you are a business. Who is paying for the petrol, insurance, MOT, repairs for your vehicle, you or your customer?
HINT; Customer!

 

[Dustydazzler]

You must add a mark up to goods you purchase. You have spent time listing the materials and possibly researching. For instance inrush currents on LED panels. Then you have to deliver on to site. All of which comes at cost to you. Therefore this cost must be attributed to the customer. You are not a charity you are a business. Who is paying for the petrol, insurance, MOT, repairs for your vehicle, you or your customer?
HINT; Customer!

I fully agree but have always felt uncomfortable adding a big mark up on goods.
But after speaking to my brother in law who does landscaping who adds 100% to near everything he buys , I suddenly realised this pays for a brand new van every 2-3 years.

 

[nicebutdim]

I fully agree but have always felt uncomfortable adding a big mark up on goods.
But after speaking to my brother in law who does landscaping who adds 100% to near everything he buys , I suddenly realised this pays for a brand new van every 2-3 years.

Every link in a supply chain adds a mark up to goods. Why should you be any different when supplying materials?

Not sure I'd aim for 100% mark up, but you'd be mad supplying goods at cost. Consider every minute spent procuring and transporting goods, dealing with the admin created by their purchase and then factor in the potential loses involved in honouring future warranty claims. Everything has a cost.

 

[pirate]

As others have said, you must put a mark-up on cost of materials because you have to source them, collect them and invoice them and also pay for them, often done bt settling invoices online in the evenings...it's all time and effort. OK, you can easily pick up a drum of cable, but if the customer has unusual requirements it may take you time to source the components, and your expertise in that alone is worth charging for. Also, there is time in designing and calculating, so your experience is chargeable too. There's always the chance you will lose the job to a cheaper quote, but you need to expect that. it's a fine balance, but better to be paid properly, use good gear, and avoid call-backs.
Another thought, which may suit a sole trader, and one I've mentioned before...find a retired person with enthusiasm! An old git like me is quite happy to fetch and carry, assist with running cables, cutting out for back-boxes, numerous trips to the van etc. It saves you tons of time, makes the job easier, and said old git will only expect beer money in exchange for having something to do...if he expects a proper wage he is not for you.

 

[i=p/u]

No easy yourself sometimes, better off with soneine to help

 

[littlespark]

As others have said, you must put a mark-up on cost of materials because you have to source them, collect them and invoice them and also pay for them, often done bt settling invoices online in the evenings...it's all time and effort. OK, you can easily pick up a drum of cable, but if the customer has unusual requirements it may take you time to source the components, and your expertise in that alone is worth charging for. Also, there is time in designing and calculating, so your experience is chargeable too. There's always the chance you will lose the job to a cheaper quote, but you need to expect that. it's a fine balance, but better to be paid properly, use good gear, and avoid call-backs.
Another thought, which may suit a sole trader, and one I've mentioned before...find a retired person with enthusiasm! An old git like me is quite happy to fetch and carry, assist with running cables, cutting out for back-boxes, numerous trips to the van etc. It saves you tons of time, makes the job easier, and said old git will only expect beer money in exchange for having something to do...if he expects a proper wage he is not for you.

Unfortunately most of the old codgers I know are on this forum .....

 

[pc1966]

It is quite common to cost the job parts based on the list price (or what you would see in B&Q etc) and then whatever discount you get from the wholesale places is your markup.

Usually though that is not going to amount to much on cable, nor will it allow for partly-used reels, etc, that you end up with and might not be long enough to be usable in the near future on other jobs.

Also don't forget the "misc" stuff that adds up without you realising it, so clips, label tape, screws, glands, grommets, wagos, etc. If you can look back over, say, a year's worth of jobs and a year's worth of out-goings, you should get an idea of the non-obvious expenses that you need somehow to assign to each job's costing.

 

[Dustydazzler]

I think I should be adding material mark up , have avoided doing this for years as felt it was a bit awkward deciding by how much should I mark up.

but talking to my brother in law it makes you realise how much money he makes of stuff he buys from the builders merchants. he did some fencing for my neighbour and doubled the cost of the materials. Doesn’t sound much but he collected £240 worth of stuff from the merchants and billed them £500 materials.
that’s like an extra full days money on every job of this size

 

[pc1966]

Some other put on a standard mark-up of 20% on parts to cover any warranty work, that is a simple one to explain if a customer asks why.

Also when estimating the job time don't forget to put down an extra hour for the paperwork you have to do, like issuing the certificate.

 

[i=p/u]

Price your work and be able to break it down when they ask why is what it is, just a question but have the awnser

 

[Gavin John Hyde]

I pay for all business expenses using my company credit card, then paying it off in full each week or after each job, reason being the 1% cashback quickly adds up! this year I have around £500 that gets added to the balance as a credit. means some jobs the materials cost me nothing.
Used to have an amex but rexel got funny about accpeting it. got 1000s of points with that and was a good bonus.
Another trick is to use the online stores of the suppliers such as rexel,denmans etc as they often have a 10% or 15% off promo most weekends. I tend to order my car chargers then as a charger, hub and harvi is then nearly £100 cheaper! also a good time to order your cable as its then cheaper than the diy sheds
it might seem a lot of messing about but simple things like this probably save me a few thousand each year.
The promo offers are also a good time to order big ticket items as the saving quickly adds up.
Add a margin onto everything within reason.
Look at this way add £5-10 on to every job and that is probably going to be around £1k extra profit per year with no additional work required. Small things multiplied quickly add up