A client recently asked me how I work out my pricing for completing Electrical Installation Condition Reports. From experience was my initial answer but I was asked for more detail about my pricing and the quoted price. The client was making sure she was not being over charged, making sure that I was experienced and that I knew what I was talking about.
The lady had the right idea and I am surprised more clients do not ask the same questions. Electricians are like any other trade or profession. There are good ones who are experienced and complete their work to a good standard and there are bad ones who do not care about their responsibilities, only want to earn money and produce low quality work. Without asking questions how can you make informed decisions?
Since answering the questions that were put to me I have considered how important the answers are to other potential clients or people just gathering information. My conclusion was to post a blog on my website, so the answers can be read and thought about at leisure. This way clients can make an informed decision in their own time.
How do you work out your companiesâ€™ prices?
While experience is my initial response it also does not give the client any other information to draw on. When I say from experience I am drawing on my knowledge from several key areas.
My experience for how long the electrical certificate will take to complete and the work involved to complete the certificate correctly. This also includes the years of studying, training and working to build up my experience. No two electrical installations are the same so to complete an electrical inspection and to list the findings correctly you need a very broad knowledge of not only the current regulations but also previous standards, so clients can have the report explained to them in detail upon completion.
My knowledge of the current market. This includes how competitive the market is and the prices that other companies and electricians are currently offering. This can be hard even with experience as there are so many factors that can influence the final decision. There are companies that offer cheap certificates which from experience produce electrical reports of a low quality with miss leading observations. Then there are overpriced companies where even I struggle to work out how they can justify their prices. Between the two is a good place to be. That way the electrical reports are completed to a good standard and the time spent completing the electrical inspection corresponds to the amount being charged to the client. This way you have not under-priced to the extent that you are losing money compared to general electrical works that could be completed elsewhere and you have also not priced yourself out of potentially gaining another client.
My companies over heads and how much it costs to offer the services that we do. This includes travel time to and from the job, company transport, insurance, vehicle depreciation, advertising, staff to monitor the phone, reply to emails, type up certificates so they are always legible and easy to read, my time as the Qualified Supervisor completing the final sign off for all certificates, company insurance, the companies book keeper…. Having a successful and well-managed company is not straight forward or easy.
Having said all this there is no exact science to working out fixed prices for jobs. There will be times when jobs are completed more smoothly than expected and jobs that entail more work than expected. This is where experience counts as to be successful with out loosing money or over charging clients as a company we need to be as accurate as possible and in the middle of the two.
Honesty is by far the best policy as it makes business a lot more straight forward and it only strengthens the company. From a good reputation, satisfied customers and word of mouth recommendations.