Charge rates

[Andrew_van_Zyl]

Like many of you I'm sure, I see clients and friends preparing for annual holidays while I survey my dismal bank balance. I've been busy, worked hard, am tired but I have very little to show for it. My expenses are minimal, I have a 10-year-old vehicle. I do most of the work myself, sometimes with the help of a casual.

What am I doing wrong? I charge R850 for a call out including first hour. My clients are a mix of residential and commercial. I have 5-star reviews.

What does the industry charge?

[skatingsparks]

Yup, I'm with you on this. We have churned out masses of work this year.

I swear if I had done the amount and type of work we have done here this year but in the UK - I'd be driving a Porsche. Not here though.

I sat down a few weeks back to figure it out.

All my money is going on lots of little bit of B.S.. Lots of littles add up.
Bargaining council, workman's comp, insurance (gone up again on a vehicle that's worth less), ECA etc etc....

None of the above things I have paid for have I received anything from ����

I look at quotes now and cringe - it is undeniably ludicrous what I charge but not making money like I used to.

Few weeks back quoted on a 3 phase socket - came in at over R12000 - for a socket.
IP rated socket, 6mm 4 core ECC SWA, scaffold to site, earth leakage, breaker, pretty much a day on site (scaffold from office to site and back). Made next to nothing after ALL expenses.

To have a small functioning compliant business is ludicrously expensive.

So check ALL your expenses - that'll tell you where your moneys going.

[Andrew_van_Zyl]

Yip, as you say it's the little stuff. I was shocked to see what we spend on bank fees, lunches and refreshments etc. And, as you say, things like ECA does very little for one.

After a very introspective weekend I am going to fully understand my costs, evaluate them, set profit goals (a holiday away), and use that as a basis to arrive at what I should be charging. This way it can be defended. And you know your breakeven point that you CANNOT charge less than, or else you are paying the customer to do the job.

I think we often think that charging a client what we do is a lot but, in reality, a packet of groceries is R1000. We HAVE to pass our legitimate costs onto the client in order to stay in business.

I'd love to hear what other successful businesses do.

[Derlyn]

For me it's quite simple.

Spend less than you earn.

I buy 3 to 4 bags of groceries for R1000. A grand for 1 bag, I will not pay.

Your charges are not going to determine whether you make it or not. Your callout fee is already more than mine, but I'm ok.

Don't try and increase your charges to accomodate your lifestyle. Recipe for disaster.
Rather adapt your lifestyle to suite your income.

I keep it simple. I work on a 4 call out day. 2 before and 2 after lunch. Everything above that is time off and results in most of my working weeks being 4 days. I suppose it also depends on where you are. I spend very little time travelling as anywhere in the greater East London area is reachable in 20 minutes. It's also easier to build a reliable client base in smaller centres. Word of mouth travels fast here in our valley.

Anyway, for me, as I said, I spend less than I earn. Has always worked for me.

Good luck !

[GCE]

Unfortunately the electrical industry has changed and what used to work and be sustainable is no longer so
The construction industry has not recovered since Covid for various reasons , online shopping , remote working etc both meaning that less shopping center space and office space are needed
We used to get numerous calls for the odd light fitting replacement , socket outlet not working , pool pump tripped etc - We no longer get those calls as we are perceived as expensive due to increasing NBCEI rates .
What has happened is that the handyman is now carrying out that work at a lower rate as he does not have the forced rates and bonuses

With the idea that the whole country should pay the same rate to the various categories and certain areas having increases at 2% above CPI has made it worse - We have regular contracted clients that have refused to accept any increase in rates above CPI since Covid/2020 which has effectively eaten into profit margins , with lack of work in the industry you get forced into accepting the rates with the hope that the industry improves and then you can renegotiate at strength

Main contractors are delaying payments causing cash flow issues which in turn can lead to higher costs and legal fees - We are being queried by SARS on a couple of cases we have running , the courts have a back log and clients know that which means you can delay a case by 4 years

NBCEI passes the agreement onto non parties as it claims to have ECA and Unions as greater than 50% representing contractors registered with NBCEI - The way I bump heads with various so called contractors I honestly find it difficult to believe that more than 70% of people running around carrying out electrical contracting work actually belong to council - That would then put the Parties at only representing 40% of electrical contractors.

We starting to go the same way as motor industry where the big players that employ less and less due to automation ended up closing the " jobbing engineering shops" which has left a gap in the market and people complaining that there is a shortage of skills

The small builders are employing there own " semi Skilled electricians " to carry out the small works and alterations , which I have experienced first hand when they could not connect up a fan controller - What made it worse is that it was actually an insurance claim the originated from a burst geyser destroying ceilings , TV in the bedrooms and passage way
All the downlighters and socket outlets where replaced by the builders guys including the fan that they could not get working.

NBCEI and parties are making it more regulated and thereby forcing more illegal contractors.
In this area we have a so called contractor that employs nobody writing out +/- 250 COC a month for new connections - The news I am getting is that he signs off for +/- 10 so called contractors doing townhouse complexes - DOL is aware and doing nothing , NBCEI is aware and doing nothing while the legitimate contractor losses the work - AIA's have condemned 6 of the units and submitted paperwork to DOL 3 years ago

Go figure