What to charge?

[Andrew_van_Zyl]

Gents,
I have a client in Athol Johannesburg that needs a total domestic rewire and replacement of Heineman CB's and VIR wire to bring the installation to spec.
I can cost the job on my expenses + profit + materials but how do the experienced guys cost this kind of job?

[Derlyn]

Materials and markup.
Services.
Travelling
Add 25% contingency.
Quote.

Might not be everyones method, but has always worked for me.

Keep it simple.

[Derlyn]

@ Andrew

Just to add to the above.
The above method is what I use.
It might not suite anyone else.
It has always worked for me as a one man band .
As far as I can, I do not get involved with big contracts and do not work in industry factories etc. ( I have my reasons)
I also do not invoice attorneys, estate agents or anyone who is in the business of selling and tranferring real estate. I am known to all of them in my city and the only time I am ever approached by any of them is when they are desperate and are willing to pay cash for my services.

I concentrate on the domestic side of things and my work 99% of the time is for private clients.

Just thought I'd mention the above.
Quoting methods will differ depending on your circumstances.

The method I mentioned in the post above has always worked for this toppie and has always taken care of my needs. Take note ... needs ... not wants.

Good luck.

[Thys LOW Elektries]

Unfortunately, we live in the real world otherwise quoting for a job would have been easy:
You ask the client what he thinks the work and material are worth, and he tells you, you accept the offer and do the work.
Both parties then walk away happy and satisfied. But in the real world, the owner wants you to buy 50000 rand of material and only pay for a fraction of it and if you charge more than 40 rand an hour you overcharge.
Just my 5 cents worth of opinion Have a blessed day

[Dylboy]

I struggle with pricing, If I do a per day price I am then out of price and "unreasonable"

I tend to quote on gut feel and I would say is 60% successful.

My new way I am trying go implement is to say this is the price (material, mark up, all costs etc ) and then let the client decide... Often I am getting them because the other sparks don't respond or the don't gel with them.

Anyway quoting is tough, as we quote on the surface of what we can see and guestimate the work involved, until you start you see all the crap that is wrong. It's really hard.

When I started I was taught hourly rate, yet if I do that a simple adding of a socket outlet would be 20K as generally everything is wrong if we dig deep enough.

What I see a lot of is champagne taste with beer money... Oh and "safety first but that is expensive so is there a way around it"....

Sent from my CPH2197 using Tapatalk

[Andrew_van_Zyl]

Thanks Derlyn. Agree - keep it simple. Something I hadn't thought about is contingency. Thanks for the input!

[Andrew_van_Zyl]

I struggle with pricing, If I do a per day price I am then out of price and "unreasonable"

I tend to quote on gut feel and I would say is 60% successful.

My new way I am trying go implement is to say this is the price (material, mark up, all costs etc ) and then let the client decide... Often I am getting them because the other sparks don't respond or the don't gel with them.

Anyway quoting is tough, as we quote on the surface of what we can see and guestimate the work involved, until you start you see all the crap that is wrong. It's really hard.

When I started I was taught hourly rate, yet if I do that a simple adding of a socket outlet would be 20K as generally everything is wrong if we dig deep enough.

What I see a lot of is champagne taste with beer money... Oh and "safety first but that is expensive so is there a way around it"....

Sent from my CPH2197 using Tapatalk

Thanks Dylboy. Appreciate the input

[Andrew_van_Zyl]

Thanks everyone for the input. As a new spark it's been difficult to get going.

Here's my take on arriving at a price:

1) Know your breakeven point. List all business expenses - vehicle HP, insurance, cellphone, petrol, services, tyres, licensing, depreciation, replacement tools, employee wages, your own salary - that looong list of stuff that must be paid even if you don't do one job. Divide this by 21 days to arrive at daily breakeven point. Divide this by 6 hours (or more depending) and you have hourly breakeven point. Mine is around R400. This is the absolute LOWEST amount to work for.

2) Because we are in business to make a profit and because we want to be around in a years' time, I double my breakeven. In this example R800.

3) Because things sometimes go tits up, add a 25% contingency (thanks Derlyn). Refund this to the client if all goes well and he/she is a nice human being - it will delight them. Keep it if you'e not offered coffee.

4) Materials - I'm blessed with 3 suppliers near me but add 15 to 20% markup for your time, bank fees, fetching the stuff and taking the risk of getting it to site. If the client supplies then the clock will tick while he goes off to get the correct stuff.

5) I've also started adding the cost of lunches for my staff and I - we have to eat and it costs money.

I've been fortunate enough to get this to work most of the time. Your competitive advantage is:
- your cost base (my bakkie is paid for - I can easily out quote someone driving a new R600k double cab)
- the profit you wish to take
- how many people you employ and if you do the work yourself
- your reputation and rapport with the client

I'm sure there's more to this than meets the eye.

This model naturally gets crazy when you employ teams but at my stage in life I don't need (additional) grey hairs.

Be safe
Andrew

[Derlyn]

@ Andrew.

I've mentioned this before on this forum.
People like "free" things so I offer a COC for the quoted work "for free"
You of course know why "free" is in inverted comma's. Nothing is free. It's all mind games.

Even although your quote might be more than the next man, the fact that you offer a "free" coc could swing it in your favour. Often happens to me.

Oh, another tip, always ask your client what their budget is for the proposed project.
Their answer will indicate how much time you should spend on the quote or whether you should quote at all.

[Thys LOW Elektries]

The cost of a COC is maybe R5.00 the client pays for your time so working the "free" coc into your work is just simple maths or ignoring the cost of the 20 yellow pages you have to buy