Pricing

[Dazzol2009]

Hi guys, would like your opinion on a hourly rate I can work my jobs to. I have been a sparky game in various areas for next part of twenty years, but have decided to narrow my range to domestic, I have recently joined Elecsa and passed my assessment with no problems, but am looking what pricing I should implement, In my recent employment I have been earning £13 to £15 an hour so do I go for £15 an hour or am I selling myself short baring in mind I am in the part p scheme should I push it up to £20, I would welcome your opinions.

 

[Octopus]

IMHO you need to work out all your business overheads first or you won't have a clue what to charge. When doing the maths remember you won't work 52 weeks a year, nor 40 hours every week.

 

[Midwest]

I'm about to go self-employed myself, and I found several threads on this forum about the same thing. I think the bottom line is you have to charge what is reasonable and cover the hidden costs you'll incur, i.e. your vehicle, equipment, office time (quotation/pricing) etc. I don't think £20 would cover that, but I'm no expert. Some sparks would advise you not to charge an hourly rate, but a price for each device installed. I've seen such price’s for example, socket £50, pendant & switch £100. But I guess you'll have to charge accordingly, so you'll get the work, so a fine line.

 

[durhamspark]

Work out how much you need to make in a year as a minimum. Add in all of your costs like insurances, tools, scheme membership, allow some for van repairs and mot etc. Personally I don't count fuel in this and build it into the hourly rate depending on the location/length of the job.

Then work out how many weeks or hours you think you will work in a year, allowing for needing time off the tools for admin/pricing etc.

Divide your total wages + costs by your hours worked and you have your figure to start with. You can then manipulate that figure depending on factors such as how much travel is involved, how much you want/need the job etc.

 

[imago]

It's just my personal approach, so it won't be to everyone's taste.

As already advised, work out how much everything to do with running the business costs for a year. Then add 15% to it for potential increases, and the little bits you forget. Then add to that what it costs you to live for a year. The final figure is what you must earn. Divide that by ten (ten working months), then divide that figure by 20 (working days per month) and see what that comes to as a 'must have' day rate. Once you have your base day rate adjust it up to a reasonable figure for a chargeable day rate to include a proffit for the company.

I do it that way for two main reasons.

Firstly a day rate can be charged as 1/4 1/2 or full day. Nothing takes less than 1/4 of a working day (2 to 2.5 hours if done on an hourly rate) by the time you include paperwork, collecting bits, restocking the van for bits used that way, travelling etc etc. So by using a day rate it simplifies pricing jobs.

Secondly it allows me to monitor my personal and business costs. So if I find that my 'must have' day rate is £500:00 then I need to cut something back/out. The end of day massage and manicure for example.

It's a bit of a ball ache to get the figures together the first time, but after that it's a big help. It also allows you to adjust rates according to the job or work. I know for example that a CU change is day rate plus parts, but if I get a couple of weeks work I know how much I can drop my rate by to get the work without making a loss.

I'm not saying it's the right way, or the best way, but it works for me.