New Contractor Needs Advise

RandyMc

Hello everyone, I am a new electrical contractor in N.E. Ohio and want to learn to do estimates for commerical and residential. What is a fair hourly rate, I was thinking around $55/Hr. And what is a fair rate to charge on new construction per box/switch/outlet and is the service usually included. Also on commerical jobs I can do the work but need help bidding the job so I don't lose the job or my rear end. And lastly is it better to be sole pri. or maybe L.L.C. Thanks in advanced.... Randy

ProWallGuy

I don't know crap about electrical work so can't help much.
But I can tell you this:
There is no such thing as a 'fair' rate. Your pricing needs to be determined by your costs of doing business. Your overhead needs to be covered, profit is involved, etc etc. There is no magic number.

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Wallpaper Hanger St. Louis
Digital Murals Installation

Double-A

Fair for whom, and can you tell me what you mean by "fair".

I'm not trying to pick on you, just find out how you're trying to approach this "working for myself" thing and hopefully help keep you from making some simple-to-make mistakes.

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"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

RandyMc

OK, when I said a fair hourly rate, I just meant not too high and not too low

jbfan

That can only be decided by what it cost you to do business.
What is the cost of ins, gas, truck payment, etc, etc. Only after you have these things priced per hour, can you tell how much profit you want to make. Then you can come up with your hourly rate.
The prices you charge in Ohio may be below or maybe higher than the charges for the same job where I live.

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We are the people (our parents warned us about) (Jimmy Buffett)

Double-A

If you don't mind not getting a paycheck, living from check to check and worrying that if you don't land the last job you bid you're gonna be late paying off that $220.00 you owe the electrical supply house then by all means, charge what the other guy's charge.

If you want to be fair to yourself, and your family, your suppliers, your employees and your clients, then do your homework and find out what your labor burden is, tack on a reasonable profit and then worry about how to charge by the "hole".

With apologies to DaveH, A buck is hole isn't an estimate, its a crap shoot!

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

Speedy Petey

I will say that you definitely need to find what your cost of business is, but the first year this is extremely hard to do. You do not know some of your actual overhead. Your insurance will change according to your business' income, your fuel will change dramatically according to prices and how much traveling you do. Along with other varible overhead.

Do your absolute best to figure what it will cost you to do business, including income for yourself. Then look at what MOST of the other contractors in your area are charging. Use these numbers to find a comfortable rate.
If it cost you $45 an hour, and everyone else is charging $50-$55, you can bump up to $48-$50. This way you can make more money and still be on the low end of the competition.

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RobertWilber

Govt has many statistics available that can help you
http://stats.bls.gov/oco/ocos206.htm
One that they don't provide, however, is a rule of thumb.
You will probably starve for 2-1/2 years, then find you have been "discovered" and work comes fairly easy
I don't much care what anybody else charges

Based on experience, I figure that, over the course of the year, I can count on BILLING for 24 hours a week.
I have to live and run my business and family on that. [unless, of course, you want to work six 18 hour days .. and yes that billed time has to pay for keeping records, oil changes, new work clothes, the wife's new earrings and an occasional bouquet of skunkcabbage in February, even though I might not have made a dime in 2 weeks]

RandyMc

Thanks for all the feedback, and I welcome more. I figure the first year will be hard, but with the wife working full time with health insurance and the company i currently work for is buying out my job, I will be ok.

ron schenker

Randy.. You're in a great field (electrician) and you will probably always have more than enough work. If you are good at what you do, don't sell yourself cheap. Self employed electricians in Toronto never earn less than $70/hr
That's probably equivalent to $60 u.s

B-MAN

Randy..I am just months into the electrical business as well. The SBA has some great advice for new business ventures you should check them out. As far as the bidding goes if your not comfortable or sure about your numbers back away its not worth the risk. You should maybe look into taking some night courses on bidding and estimating. I did and it helped me tremendously. I was also able to talk to other contractors at the classes and get a feel for how and what they charge for their services. GOOD LUCK you'll do just fine.

brian11973

Having lived & worked 99% of my life in NE Ohio, I can speak from some experiance. I have been through somewhat of a mess the last couple of years. I have been totally on my own about the last 1 1/2 years. $45 / hour for resi IS NOT ENOUGH here. Although the customer always complains that this is too much. Maybe that is why I have taken a "leave of absense" from my busness. I am currently working in North Carolina for, pretty much from a cell phone company ( for as the boss said, "an obscene amount of money".

Before this job offer, I was thinking of at least $60 / hour PLUS about $100 "show up fee" per day for the durantion of the job.

jguypepco

Hi!

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Marathon runners with bad shoes suffer the agony of de feet

Double-A

Speedy is dead on here. You really need to do your homework, much as you might not like it, to figure what you need. Using 'some other guys rate' is playing craps with your income.

Once you have a good idea of what that is, start tracking your job costs carefully and compare them to the bugeted amount. This will tell you how close your first set of figures are to your actual costs. Adjust as needed from there.

Oh, and once you start tracking job costs, don't stop. The more information you have about your costs of doing business, the better off you are.

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

Speedy Petey

......so I will post a nice advertisement instead.



That post should be DELETED. It is blatant advertising and is against the TOS of this forum!

jguypepco, read this:
http://www.contractortalk.com/info/adrules.php

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Double-A

I think he gunned the motor.

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

RobertWilber

MD made a brilliant observation in a thread about underground pools regarding pricing using "unit cost"
I thought about it, and this is about what I do to estimate prices.
It works pretty well, and is easy to adjust for materials cost changes and labor increases, as well as variables.
If it takes 2 hours and $3 of materials [after markup] plus $1 expense and 1 hour of overhead and you get $1 an hour, then the job will be $7.
If you have to do it 20 times to complete the contract, then the price is $140.
You just do this for each item type and add the whole mess up!
Simple!
Comprenez vouz?