horly rate

[martinxxxxxx]

Hi

I really sympathise with your position, but the other pollsters are correct.
If you let a dutch auction take place where the guy can get five sparks in and get the price down to basically a PAYE rate but with you picking up the overheads then it is to the detriment of us all.

Try and neg, tell him £23.50 is you bottom rate if he can make a commitment to use you for at least x hours, you decide what x is. But don't give anything for nothing else he will think you a walk over.

If these 18.50 guys are so good, where are they, prob too busy for him ie unreliable, not real co, some thing wrong there. Ask him who they are. What have you to lose. Bet he won't tell you cause he is having you on. Anyhow we have to live and we won't do on that money.

I am learning that the rate should be min £37.50 and that anything I do for below this should be a loss leader. That is it should serve a purpose. Such as I have a builder who I do work for. When he is doing a new loft I work for him at our agreed rate, but he gets lots of enquiries for electricians and refers them to me, or me to them and I charge them my new rate. So the arrangement serves a purpose. It is a frm of advertising/ marketing of my services.

This is being learnt day by day, I a still prob doing it all wrong. But that is what the forum is for to swap ideas

Good luck

Martin

 

[Steve_P]

I've finally got round to reading some stuff here. Will hopefully post some stuff soon too but here goes.

There are some spot on answers regarding rates. As yet, I'm not an electrician, start my course very soon though. For quite some years I worked for myself in the IT industry. the so called 2k bug was ammusing but then the rates started to drop. From about 35/40ph on rollouts down to about 25 in 2001, then Marconi layed off a load of IT staff followed by HP and Compaq merging. The rates dropped to less than a khazi cleaner in London. I bided some time in a permie job then got out of the industry all together and took on a shop. Now I'm getting back into something I can actually use my brain for but I am not planning on selling myself short (taking I can get through all the exams and the likes). The average round here is about £25/30ph, new to the trade or not, so long as I know that I'm capable of doing the job, I'll charge that or more.

A lot of it is about confidence. If you go to look at a job and start talking so much per hour, the customer straight away knows that you're trying to work out how long it'll take and how much slack you're working into the job. If you get there and say the job will cost £600 and you know it'll probably only take a day and a half but you tell them 3 days and there'll be a few extras thrown in, they're probably going to be more than happy. When all's said and done, most of them only want to know how much they will want to hand over once you're done anyway.

Working for yourself gives you the freedom to make money, that's why we do it. When I was in IT, I would phone other people in the area to see what they charge. I'd then take the average and add a few quid.

I noticed a couple of mentions about plumbers. I know a few from the Legion and local pubs, they may take the preverbial but they do need their work signed off and quite often will not wire in the boilers they're installing. If you've been messed about by one, remember the name, they may call you in one day . . . . . . . . . . .

Hope this rambling helps somehow,

Steve P.

 

[drywax]

One thing I've learnt over the last 2 yrs working with the public is they watch these money saving programs and will naturally try and bring the price down your job is to stay put with the price. We have a ruling at our place even sometimes I think the price is too high but " it is what it is, if they don't like it then tough ****, you don't go into business to do favours " particually electrical when you have a whole lot of liability on your shoulders.

I've also noticed that the most wealthiest of clients are the worst they are megger tight you don't get there type of money by spending it and alot of them will take that attitude to the grave.

I sell kitchens by the way and we deal with 10,s of thousands of pounds but we know we offer a high end product without the ridiculous price discounts for a good fair price and it is what it is.

we quoted a customer £8K for a kitchen he had a second quote for exactly the same kitchen at £14k but it had 50% discount and believe you me, we did the maths right there for him £9.3K he still went for the 50% off because he was getting discount effing crazy or what.

the moral being stick to guns fools are born every minute don't become one.

I'm currently in transition and going down the self employed route as a spark by the time I become registered etc. in late spring I will have spent ~£3-4K and I not even got my 1st job I'll be damned if some ponce is going to get me out of bed for less than £25 per hour after the intial time and money investment not to mention the ongoing costs related to this line of work.

perhaps that might seem a little arrogant or am I standing up for the everyday spark who are continuly being under priced by rogues or customers who expect the moon on a stick

 

[cornburn]

7 pages of very encouraging reading here, and a lot of good advice for new start ups. As so many have said, to make a go of it you need to be a businessman first and an electrician second. Things I've learned in the past 3 years:

Saving money is as good as making money, and sometimes a lot easier.
Knock your suppliers down and always have a backup locally.
Stock up on things when they're cheap or there are silly offers.
Budget wisely as there will be times when nothing's coming in ( I just had a 3 week holiday with no income and have 3 weeks training over the next month, allow for this in your hourly rate)

My rate works out between £25 and £75 / hour depending on what work we're doing (not all electrical). You can't really compare one job to another if the customer's different - some have higher or lower expectations or different priorities and at the end of the day you have to work out how to get the most out of them while still leaving them happy with the job and wanting to call you back next time. That's where the skill is, the actual work you're doing doesn't really come into it - it's the customer service.

It's nice to see people encouraging others to charge a decent rate as some of the figures knocking about are ridiculous. Out of an average working week of 60 hours (sometimes including weekends) I'll get paid for 30 hours of it with all the other crap I have to do to keep the business running. Take off training, tools, van, diesel, servicing, van insurance, tax, public liability insurance, membership to various ******** organisations, clothing, advertising, phone bill, bank charges ....................... and you'd be lucky to break even with some of the figures being mentioned on this forum.

Enough of a ramble anyway, one final point I want to make to anyone who hasn't looked into it is the VAT flat rate scheme. If most of your customers are VAT registered then you could be making another 7.5% each year for the hassle of filling in a very simple form every 3 months. Wish I'd done it sooner. For those doing public stuff it wouldn't be worth it as they couldn't claim it back but for everyone else it might as well be in our pockets!

 

[Steve_P]

Don't you have to be VAT registered for a couple of years so that an average can be taken or do they just assume that out of your turnover you'll be spending a certain figure on stuff you offset against your final VAT bill? It is dead easy though, you take £xxxxx and give the VAT man a set %age.

 

[cornburn]

No, I went straight on flat rate from the beginning (they even give a 1% discount on what you have to pay them for the first year). As long as you spend more than 10% of your turnover on materials then you get the good rate of 8.5% (or 7.5% for the first year). No need to offset anything, you just pay them 7.5% of your total turnover (including VAT) each quarter, leaving you with an extra 7.5% (roughly) in your pocket at the same time.

You can still get the VAT back on capital goods too (anything over £1k) so a flash new PC or van can go VAT free

HM Revenue & Customs: Flat Rate Scheme for VAT

 

[Janner Sparks]

Things are a bit different down here in the South West. I'm in Plymouth and charging £11/hr or £70/day, no mark up on materials, full PIR from £30, LABC notification £3, new CCU from £150. And I'm still being undercut !

 

[bugsy]

You should be charging £25 / £30 per hour , ( don't forget the van still needs taxing and insurance you still pay p/l even when your not working.)
It's a case of suuply and demand and at the moment there's not much demand.
If you go in too cheap all will be well for a couple of months until reality kicks in, there are a lot of contractor's going bust because there buying work - don't be one them.

 

[mars6394]

would love £60 an hour get me that job,i live in Manchester and people are moaning about £10 an hour complete p**s take but with work so rubbish at the mo ill rather take the work thn do nothing

 

[andyb]

No, I went straight on flat rate from the beginning (they even give a 1% discount on what you have to pay them for the first year). As long as you spend more than 10% of your turnover on materials then you get the good rate of 8.5% (or 7.5% for the first year). No need to offset anything, you just pay them 7.5% of your total turnover (including VAT) each quarter, leaving you with an extra 7.5% (roughly) in your pocket at the same time.

You can still get the VAT back on capital goods too (anything over £1k) so a flash new PC or van can go VAT free

HM Revenue & Customs: Flat Rate Scheme for VAT

Cornburn, this sounds interesting. Do you mind saying what you turnover & what you save.
Cheers.

 

[ezzzekiel]

When i started out i charged a million pound an hour, i only ever got one job but hey now im retired

 

[cornburn]

Cornburn, this sounds interesting. Do you mind saying what you turnover & what you save.
Cheers.

My turnover isn't very relevant (or accurate), as last year I also resold quite a lot of expensive goods which I would have done better on being fully VAT registered. You can easily work it out though on any figures.

In a year you take 40k, and you've spent £5k on bits.

That leaves you pre-tax of 35k profit as non VAT company

On standard VAT if you invoiced 40k+VAT, your bits cost you £5k-VAT = £4255

That leaves you pre-tax of £35745 profit ( so not worth the hassle of the paperwork for £700, especially if some of your customers can't reclaim the VAT)

On flat rate VAT if you invoiced £40k+VAT, your bits cost you £5k (can't reclaim VAT on them)

40k+VAT=£47000
-7.5% to VAT man = £43475
-bits of £5k = £38475

So if all your customers are VATed and aren't bothered about you charging it then you're £3,485 up at the end of year 1 for the sake of filling in 4 returns (5 minutes each), and you can also get the VAT back on any capital goods over £1k. Everyone's different so you'll have to do the sums to see how much you spend on parts and how much is on labour, that's the key. Hope this helps

 

[andyb]

Looks good, I need to work it out with materials being a bigger part of my turnover, it' s more than 12.5% as your example.

 

[cornburn]

Yes each year might also be different from the next but you'll get the general idea what's likely to be best for you. Also take into account that the quarterly flat rate return form only has 2 numbers on it - that quarters turnover and the percentage of that you're paying them, that's it. Going fully VAT registered means totalling up all your receipts for the quarter and calculating the VAT so will suck more of your time (unless you're into book keeping)

 

[R.J.C.]

Very true. Where I live undercutting from the "cash jobs on the side using company materials pilfered from the company van" sort of fellow never seem to go away. I recently quoted £150 for a good 4-5 hours work and was swiftly undercut by a young lad fitting the above description for 50 quid on his day off. The client has since spread the word that my rates are extortionate.