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Posted By Topic: What are we all charging?

sausages
Oct 30 2019 19:18

Hi Guys.

Ive recently gone self-employed and was wondering what we are all charging? I was talking to a builder - friend the other day and we were having this discussion and he let slip that some of the plumbers he knew were charging $80-85 an hour!!! PLUMBERS!!! WATER...NOT MAINS VOLTAGES!!!

It made me think that maybe I was too cheap given the dangers involved with the job.
I guess since this forum is anonymous you might throw some numbers my way....

Cheers guys.
   

greensleeve
Oct 30 2019 21:08

Supply and demand, bugger all plumbers around. I charge $70-75 Auckland. Van charge on top. Switch boards replacements differ.

If you are just starting out I tended to focus more on building a reputation than pricing. Worked out well. Doesn't take long to build a good reputation and get repeat business.

Something to think about, I had a plumber fix a toilet on a renno I was working on, called that morning, turned up around lunch time, he charged a call out fee for during the day. Found that interesting. I guess it makes sense as he had to move his existing clients around to do that job. I haven't tried it but food for thought.
   

AlecK
Oct 31 2019 09:41

MasterElectricians do a survey each year, and provide results to their members; split by area type of work, and including both pay & charge-out rates.

The membership costs may seem high; but there's lots of support like that available to members.
   

PaleAle
Oct 31 2019 15:10

I charge 80+ gst. Vehicle and materials on top obviously. Don't compare yourself to other trades. Charge a price that you think is fair and profitable but doesn't take the piss.
   

PaleAle
Oct 31 2019 15:29

And for my customers that pay on time they get a guarantee that i'll pick up the phone when they ring and i'll certainly go back for any issues they might have. Back yourself with the price you charge but make sure the service reflects the price.
   

bakinthegame
Oct 31 2019 16:13

$85 p/h + $25 call out charge.

Thinking of putting it up to $90 next year.

Most companies have a minimum charge of $120-$150+GST for small jobs.

Basically you’ve got to charge a rate that’s going to not only make you get by but enough to invest more money into the business & your employees to get the best team you possibly can.

If clients want cheap then they are not good clients that are going to help you build a healthy business so you don’t need them & they usually turn out to be more hassle than their worth.

I try to focus on clients who want the best workmanship & service & who don’t mind paying a little extra for it.

Realistically if you want a healthy business you need to charge your hourly rate, materials with a markup & a profit margin in top otherwise you may find your working hard but not really getting anywhere besides a decent working wage.



   

bakinthegame
Oct 31 2019 16:16

I’ve been asking around over the last year or so &
$85 seems pretty standard as far as I can tell
   

sausages
Oct 31 2019 18:46

Thanks for the advice guys.

FYI information when I was only 6 months into my apprenticeship back in the UK my boss used to charge me out at 60 Pounds an hour... ($120 an hour)....
When I saw the very nice BMW he was driving around in it made sense....
   

PaleAle
Oct 31 2019 18:58

Hopefully in the next couple of years we'll be near the 100 mark
   

bakinthegame
Oct 31 2019 21:46

So what if he has a nice BMW.

He runs a business, finds work, takes risks, employs other people & has to deal with all stress & other unpaid work that comes with the job, is probably available most hours of the day to deal with any issues, sacrifices family life....the list goes on

Why shouldn’t he have a nice BMW!??

Some people just don’t get it.

Do you know if that BMW had a hefty loan to go with it or maybe he had made a smart investment somewhere else.

People who work hard so you can have a simple 9-5 without little stress & work given to you on a plate
DESERVE to have nice things.


   

SteveH
Oct 31 2019 22:06

Suggest that this thread stop now,before some crusher from the commerce commission starts to threaten participants with collusion on price fixing.

Doesn't matter what anyone else charges, work out what your costs are, what you want as a margin and charge that, if you get the job great, you make a profit.
   

rarrar
Oct 31 2019 22:07

i'll back plumbers charging more, shit job, lots of physical work in difficult tight places, etc
   

toyoto
Nov 01 2019 11:22

85 plus gst. Minimum charge 140 plus gst
I'm in Northern auckland
   

Ristov
Nov 03 2019 12:48

Plumbers are $100+ easy. We aren't at that level yet, but not far off.
   

Satobsat
Nov 05 2019 13:54

Rarrar "i'll back plumbers charging more, shit job, lots of physical work in difficult tight places, etc"

Not been in the roof of a 50's villa carrying out a rewire and upgrade for a while then?

   

rarrar
Nov 06 2019 06:47

yip, do all my rewires solo too, but i don't have to take on the work, i just think the physical attributes and filth one has to deal with is worth more.we have to drill holes for wires through where we want, they have to get to places their pipes must go etc....

   

AlecK
Nov 06 2019 08:27

Being pedantic, where do you find a "50's villa"?
The villa style ran from 1870s through to around turn of (20th) century; after which bungalows predominated. By the 1950s we were into another style altogether- state houses at one end of the spectrum and flasher houses to similar designs at the other. I doubt there were any villas built in the 1950's - they were decidedly unfashionable by then.

True I've been in some filthy villa ceilings, including my own (1876). But Rarar's point is valid; both trades have their downsides.

A chargeout rate that's adequate to cover downtime, prep time, holiday time, and overheads is one thing - and on average over many years plumbers have remained a bit ahead of electricians - for no real rre4ason other than many electricians seem to want to buy work on price.
The other half of the issue is charging for materials, and again over many years plumbers seem to have remembered that they need to make a profit, and not just pass on their trade discounts directly to their customers as so many sparkies seem to do.



   

SymonS
Nov 06 2019 21:59

Comparing/Aligning your chargeout to others is stupid !!

Your chargeout should be based on your overhead costs, i.e. rent, rates, insurances, vehicles etc, your compliance costs, tax obligations etc, and how much annual income you expect to make.

But then if you've done a decent business plan you should already know this.

Picking a number out of thin air, based on what others may be charging, is a rookie mistake, and recipe for going broke !!
   

DibbyD
Nov 09 2019 07:48

Totally disagree SymonS
Your business plan may call for $95+ph, 40hrs per week with 200% markup to cover startup costs and build stock initially.
Then you’ll wonder why no ones calling or accepting quotes
Rates must be based on the market, and the business plan built around them, (even below market rate if your just starting and need to build a customer base) You can regulate income via hours worked.
   

evanh
Nov 09 2019 14:28

Symon/Dibby,
Thank you both. It's helped something gel for me. I remember a recent-ish doco about the Concorde aircraft, where they told how the early attempts to price the flights competitively were a complete failure due to the operating costs of the Concorde fleet being so high.

Later, after some repeated questions to their regular customers, they discovered that their market was unique and offered a service that their customers were more than happy to pay through the nose for. Concorde flights became the most profitable commercial route ever. That all vanished, though, once the massive increase in security and boarding times ruined its speed advantage.

Lesson is: If you're one of many, it's easy, make sure you're priced competitively. There is of course some leeway for quality of work.

If you're unique, however, there is likely a lot more leeway.

One immediate measure, without any research, is the demand of your services. If you are getting too busy then maybe it's time to hike the price. And vis versa.

   

SymonS
Nov 09 2019 22:20

DibbyD. If I wasnt charging more that $95 an hour, i wouldnt bother getting out of bed.

One of the biggest problems our trade faces is the ease at which average joe cowboy can set themselves up in business, offering below par service at bargain basement prices, which customers are more than happy to pay !!

All that serves to do is force Tradesmen, who are worth far more than that, pitch themselves at the bottom of the market to compete with the bottom feeders !

Until quality tradesmen are prepared to take the punt and rate themselves by charging what theyre worth, instead of what the cheap arsed customer is prepared to pay, the majority of you will continue to work for peanuts, and run the daily risk of going broke.

Take your lessons from the plumbers !! Find one of them who'll work for the peanuts many of you, equally qualified and registered tradesmen, are prepared to work for !!

"Market Driven' my arse !! The market is driven by cheap cowboys, and you lot just stand by and let it happen !
   

BCee1
Nov 10 2019 01:21

The company I work for gets a hard time for being on the top end of charging from the one man bands. But here's the thing. We have a huge customer list. And all on that list are repeat customers. It comes down to service. At two o'clock in the morning when you need us we are there. And every now and then if someone has a gripe and they go off to someone else its surprising how often in three months they'll be back!
   

DibbyD
Nov 10 2019 07:41

SymonS, there are about 5000 less plumbers than sparkies in NZ, with a similar amount of work on the table for both trades.

Lower availability = higher market demand = higher rates of pay

Fundamental economic principles, the market doesn't care for ideology.

Yes you may be able to find a niche for yourself or charge at the top of the field,

But the bulk of the work is between 75-85 ph for Residential, and lower for Commercial with marginal markup on common items.

note: This is in Auckland - not sure where you're based sorry.


   

SteveH
Nov 10 2019 08:18

"But the bulk of the work is between 75-85 ph for Residential, and lower for Commercial with marginal markup on common items."

On that basis, sounds like you would be better off working for wages for someone else, saving the grief of finding work, carrying stock, insurance, chasing payment for work completed, eating the bill for the work done for(hopefully odd) beggar that stiffs you and doesn't pay, not having to deal with IRD, and risking your house if it all goes horribly pear shaped.

Not to mention, four weeks paid leave, plus sick leave, plus maternity leave
   

DibbyD
Nov 10 2019 09:20

Totally steveH, thats why most stay as wage earners.
Only problem is that there is a ceiling for earnings.
As a business owner you have the possibility of growth and earning great money off the tools managing staff/selling/maintaing relationships. added bonus of having a profitable business to sell come retirement time (all going to plan)
Risk v. Reward i guess, i choose risk (i dont want to be tying cable to catwire when im 60)
   

SteveH
Nov 10 2019 12:23

If you want to move to Christchurch Dibby, have I got a business for you :) Plenty of growth potential, only employing me, my wife and son at present. Very low cost of sales, almost zero bad debtors and based on repeat work from customers, some of whom go back 10 years.
   

Andrew
Nov 13 2019 11:14

I think SymonS is right that you first need to work out how much it will cost to run your business, how much money you want to make, and how many hours you want to work. That determines your first cut at what your rate will be.

You then need an idea of market rates to determine whether you'll realistically get at least the amount of work you want, and perhaps adjust how you market your services to get the amount of work you want. That may lead to a change in both how much you charge and how many hours you work, which in turn may or may not lead to deciding running your own business is not for you.
   

Andrew
Nov 13 2019 12:04

And on the plumbers vs electricians question, it's different strokes for different folks, but plumbing is quite literally a shit job - it's not just water that flows in the pipes. It still involves crawling around in roof spaces, under floors, and in awkward unsanitary spaces, so I'd be happy to admit plumbing is not for me.