How do we make this job pay?

[Octopus]

Hi Murdoch,
1,First I dont change van very often and do any running repairs myself
2,In my experience yes, its more economical to do it myself
3,I havnt had to advertise once in last 14 months (first couple of years I did though)
4)PPE costs very little
5)Elecsa is not much more than £400
6)good tools dont need replacing often if looked after
And yes I do quotes and other paperwork in the evenings - all these things give me an edge, so dont knock it!

So you're not allowing for replacement of your van and your tools - not ideal - but I guess that's up to you.

I pay an accountant but that's my choice and it amazes me what he does to my final tax and NI bills. Yes it costs but takes a large weight off my shoulders and when he's doing it I'm out earning.

 

[Rockingit]

I've been reading this thread with interest. It's highlighted to me the fact that whilst we all have common ground as sparks, those (many) of us who also work for ourselves all have different approaches to being businessmen, as well. Personally, I work the hours it takes to make a decent living, no more no less, and whatever that is, is whatever that is.

Some weeks you spend on the tools, come home at 4 and put your feet up, others you get behind in the VAT return, or quotes or the accounts and you're up at 5 for site, back early evening and head buried in your computer for another six hours to meet deadlines. I'm lucky that Mrs Rockingit is also career self employed so we both know when to cut the other some slack.

Times are hard, definitely, so you spend as much time looking for work as you put into doing it, and that's a whole 'family' thing. As I type, the OH has gone for a dog walk around an area that is 'unexploited' (in the business sense), armed with a pocketful of A5 glossy advertising flyers to do a Crimbo offer to install outdoor sockets for lights.

I don't trade on price as I don't believe in getting into a pee-ing up the wall contest, everyone loses, but what I DO trade on is customer service, reliability, fair and honest advice, and warrantying my work (and I don't mean the Part P warranty schemes).

There IS money to be made out there, even in todays climate, you just have to be a little more savvy and inventive as a business man to find it. I have lost count of the number of times a quick £25 light fitting change or a cooker rewire has produced many hundreds £'s of follow-on work either for them or their neighbours.

I think you also have to be careful in choosing your markets to target, too. It's pointless wasting time chasing a bigger commercial project which you won't get as all the bigger commercial contractors are out in force to do the same, at the expense of a job for Mrs Jones down the road that's not as sexy but DOES pay the bills that week and DOES actually pay on time as well.

As for the whole 'registered' electrician thing - yes, it's a mess, and needs sorting out. To a LIMITED extent I have a degree of sympathy with NICEIC as they are sort of on the right lines with the Approved Contractor scheme, not just the DI one.

 

[hyperloop]

I haven't moaned about making a living, luckily we're flat out at the moment and have been for a while. My point is that its bad business not to make profit on materials. If you had an accountant to do your books, he/she'd be telling you the same.!

I know you didn't moan about making a living - the guy who started the thread was, and it was his post I was responding to. He said he wasnt getting jobs as he wasnt competitive I just think if your earning £150 per day labour whats the point in adding £££'s on the parts and getting undercut as a result.

 

[J&M Electrical]

At the end of the day if your only getting 1 out of 10 jobs your quoting maybe you need to start looking at trying to reduce your costs or reducing your hourly rate. We have only just set up and have decided to pay ourselves the bare minimum, that way we can keep getting the business bank account full and hopefully keep getting the work we quote for.
As for rewires, we quoted £3200 for a 4 Bed rewire of an empty property. I quoted that using prices from screwfix/electricfix, but got materials from our wholesalers who we have good terms with so we made money on materials. We would rather keep busy and keep getting 6 Days a week work than 'over charging' and only having say 3 or 4 days work.

And 2 weeks for a rewire. At the old company we used to work for we were doing 1 3 bed rewire a day. There was 2 Qualified sparks and 2 apprentices. We did 4 a week, it was a graft but the weeks flew. No we arent rough or Bodgers either, we just had a system that worked for us 4 and we knew the properties like the back of our hands.

 

[nikmet]

"We have only just set up and have decided to pay ourselves the bare minimum, that way we can keep getting the business bank account full"

How does this work then???

 

[J&M Electrical]

How does this work then???

Pay ourselves £140 a week therefor we are within the tax limit (pay no tax). Keep the business account full. that way we can pay ourselves directors bonus' which we dont have to pay as much tax on. If the bank account is kept healthy that way we know we have money there for emergency's ie van breaks down/flat tyre, sickness, damaged tools etc.

I'm not saying this is the best way for everybody, but its working for us at the moment.

 

[Octopus]

Pay ourselves £140 a week therefor we are within the tax limit (pay no tax). Keep the business account full. that way we can pay ourselves directors bonus' which we dont have to pay as much tax on. If the bank account is kept healthy that way we know we have money there for emergency's ie van breaks down/flat tyre, sickness, damaged tools etc.

I'm not saying this is the best way for everybody, but its working for us at the moment.

Building up a reserve of funds is the ideal way to start a business. Most new businesses fail due to poor cash flow.

 

[OldeSparky]

are all you guys VAT registered??

 

[Rampage]

Pay ourselves £140 a week therefor we are within the tax limit (pay no tax). Keep the business account full. that way we can pay ourselves directors bonus' which we dont have to pay as much tax on. If the bank account is kept healthy that way we know we have money there for emergency's ie van breaks down/flat tyre, sickness, damaged tools etc.

I'm not saying this is the best way for everybody, but its working for us at the moment.

What's the rate of tax on a directors bonus?
i didn't know you could do this!

 

[Dave 85]

I quoted recently for a 3 bed rewire, habited and went in at £4600.00

This was all MK
Each day they would have floorboards replaced
Each day a cleaner would attend for 1 hour
Each day they would have electric.
It would take my team 2 weeks

I was £1600 more than the guy who got the job.

2 months into the job said customer phones me in tears, they have been living in a hotel for 2 months with a 1 month old baby and said electrician still felt it would be another 8 weeks.

They could no longer afford the hotel bills and could I please come in and finish off????

If I could have done it I would, this ended costing a lot more for a lesser job.

I use this as an example when asked why I am so much more than joe bloggs

16 weeks to rewire a 3 bed? I'd do that in less than 2. Alone. Sounds like this was probably a guy who'd done college but never actually lifted a carpet in a house. Ah well look on the bright side, its not exactly sustainable is it? £2500 profit for 16 weeks work.

 

[Dave 85]

It's weird because I know a few self employed sparks, all in their 20's and they've all been pretty much flat out for years. I've been running my own business for about 3 years and in the last 2 have also been plenty busy. I do a lot of day rate work, £200 a day until Jan 2012 when I put it up to £225. Whenever I see my mate, he always goes on about how Im far too cheap and he can't believe I work for so little. He turns over £150k+ every year and generally has 1 mate working for him.

I understand that the guys who are really struggling for work have gotta do whatever it takes to keep the money coming in but I know there are people out there who feel that if they are making any profit on materials they are ripping people off.

The guy I used to work for used to get absolutely loads of work, have 2 of us working for him full time (he was only 22-24 yrs old at the time), but he wouldn't charge any profit on our labour or materials because he saw it as stealing (he used to charge the apprentice out at £50 per day and then give him £50 cash!!?) He's now bankrupted his company, is working as an electrician/labourer for builders he knows, has no vehicle, is not registered and declares no earnings and every week is a battle to keep his house from getting repo'd, but at least his conscience is intact....Its F'ing madness.

My point is: You run a business to make a profit. Not just a salary.