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Electrician invoice example for Sales

as an electrician how are you supposed to  price jobs like what methods do you use do you   like just add a little bit of margin  figure out how much things cost do   you charge an hourly rate do you charge  by the square foot let's break into it   now before we get started we offer continuing  education yes we're approved in a whole   bunch of different states you can go to  electricianu.com click on the little bar   on the right go to continuing education and  we have a bunch of different states we have   more states that we're adding so if you don't see  your state soon enough i promise we will have it   we're spending all of 2022 pretty much trying to  make sure that we're in as many states as possible   but it's dope you just get to watch videos of me  doing this then we have ground just says the earth and you get credit for it so check the  link out below hope to see you in class. what's going on everybody i'm dustin selzer with  electricianu and uh this whole topic I get tons   of people uh over the years that that email me and  they're like i'm going on my own i don't know how   to price things or i'm trying to do side work and  i shouldn't be but i'm trying to figure out how to   charge stuff i've had apprentices that used to  work for me figure out like you know same thing   what do i even charge to do any of this stuff  so let's break into it a little bit so there's   a couple of different methodologies that you can  go by and there's so many different segments of   our trade that there's a bunch of different ways  that people come up with pricing and i've worked   for several different companies every single  one of them works a little bit differently   because each one of them does a different type of  work so while one pricing method may work for a   small service company a large service company is  going to be very different or a new construction   company that specializes in commercial is going  to do something way differently than anybody   doing anything in service but especially for  somebody that's doing you know like uh track homes   or multi-family stuff or doing remodels or you  know there's just a lot of things to consider so   the way that i'm going to split this up is i'm  going to talk about five different methods i'm   not really going to go specifically like if you're  doing new construction these are your methods and   if you're doing you know service these are  your methods i'm just going to kind of talk   about all of them so the first one to think  about is something called time and material   usually time and material is going to be a  method that you're going to use if you're   running into a situation where you don't  really know how long something's gonna take   and it could potentially be a price or it could  be it get extrapolated out to be a crazier price   because you just don't know what you're getting  into so time and material i will usually use for   work where there's a lot of troubleshooting a  lot of unknowns probably some sort of remodel   environment where it's like look this could be a  certain thing but once we open all of this stuff   up it could be this and so the best way for  me to give you kind of accurate spending is to   just go time and material so i'll tell you what  my hourly wage is say it's 150 an hour and uh all   the materials i buy i'm gonna turn in receipts  from you i'm gonna add margin because that's my   policy as a company it's a way to ensure profit  by saying you know like we spent three thousand   dollars of material so i'm going to add 30 or  i'm going to add 50 or 100 whatever you want your   margin to be so the time it takes me to go procure  all these materials and to try to order things and   especially now with all the shortages that we're  dealing with like you could spend a considerable   amount of time and your time is worth money so  you shouldn't just be giving time away for free   you're actually doing work you're going and  driving around it's costing you gas that's   costing you you know like insurance it's costing  you time hours that you should be getting paid   and that you could otherwise be getting paid  out on a job site swinging hammers you know   if you're actually going out and doing  work so time and material is basically just   this is the amount of time that i think it's  going to take but i don't really know so what i   would rather do is just pick an hourly wage and  i'll say that you know maybe every eight hours   every day every like week whatever the time is i'm  gonna let you know that i've spent this much time   at my hourly wage so you can kind of keep track of  it as i'm going and these are the materials that   i've spent with my markup on them that is time and  material and a lot of people use time and material   but most people are not doing time and material  all the time again it's usually just environments   where it's kind of just a moving target and the  price could change quite a bit the second method   is called cost plus so cost plus is not something  just in the trades but cost plus is i'm going to   figure out the totality of what i think this is  going to cost to do this job and i'm going to add   a certain percentage to that for the margin for  the profit that i would like to make on top of   the cost so less often you're going to use this in  an unknown environment a lot of times people will   price this off of a known set of hours or a known  task that they have in front of them a lot of   new construction jobs are done this way they don't  really call it cost plus but it is figuring out   it's going to take me x amount of crews to do this  over x amount of hours it's going to cost you know   y materials so i'm going to come up with z profit  that i want to add to the end of what i think   this is going to cost me the next method that  a lot of people use when doing new construction   specifically is to do square foot pricing so  i don't personally use this method but i do   use it to kind of check my numbers because i know  other people do use this method so when i'm going   and doing a bid on a job the the cost in the  area that that the jobs you're getting versus   the jobs you're losing you'll be able to monitor  this over time but based off of other bids that   you might have been privy to that you see what  you know other jobs are being done you can kind   of over time get the idea of in your area what uh  residential homes are going for per square foot so   for a large scale custom home it could  be ten dollars a square foot with   expensive materials going on um it could be in  commercial that it's twenty dollars a square foot   cost per square foot if you had like a fifteen  hundred square foot house and you were charging   ten dollars a square foot that would be fifteen  thousand dollars to wire that house and you could   break that up into separate draws so a lot of  people when they first start out they'll do   like i want half up front and half when the  job's finished or some other people might go   into thirds they might say like i want a third  up front i want a third when i finish my rough   in and get a roughin inspection passed and then  i won another third at the completion of the job   so there's a whole bunch of different ways that  you can do it not everybody does it the same way   and it needs to be that way so a lot of people  think well oh my god you're charging 125 an hour   you're an electrician this company over here is  charging 92 dollars an hour and it's like yeah   but they're probably adding 100 markup on their  materials you know so like nobody prices the same   do you have to figure out what your pricing is and  really we can talk about this in a different video   but you need to figure out what it costs for you  to be in business because you don't want to just   be hemorrhaging money and not making enough to pay  all of your bills so you need to know what does it   actually cost me an hour to be in business what is  you know all of the the uniform cleaning and the   overhead the payments on my company vehicles the  insurance on my vehicles the people's salaries the   wages everything that you spend um on your company  you need to add all of that up and figure out you   know over a year what does it actually cost me and  then how do i break that into an hourly wage how   do i break that down to monthly how do i break it  down to weekly you know daily hourly and you need   to figure out what your actual cost is to be able  to come up with your hourly wage but just know   lots of people have different pricing and for a  workplace to be competitive it needs to be that   way if everybody's charging the same price you see  that a lot in like vet clinics veterinary offices   it's super competitive and everybody has to charge  a certain amount or else you will not get work   it's not the case with construction there's so  much construction going on and people are in such   demand right now that you can get away charging  whatever you want and whenever somebody says yes   i mean you price it to what people say yes to  right so a lot of times you might um price things   higher than because you don't want the job that  is something that i've done a lot i have uh i've   always been the cheap guy right and when i first  started out i was like i want every job i want to   make sure that i'm getting all these customers  and then you're breaking your back and you're   barely making any profit and you should be  charging more to kind of stave off some of   that work so then i've raised my prices uh too  much i've gotten to the point where it's like   all right i'm just gonna double triple everything  you know let's see what happens and you still get   yes's in the door but you find a lot more people  start to just say no and go elsewhere so there's   a kind of a middle point when you're figuring  out your wage and what you should charge is   what am i getting what's my worth how many people  want me to be working and you raise your prices to   a certain point where uh about you know half  the calls that you're getting people are are   good with your pricing and the other half people  aren't good with it that's kind of the sweet spot   it seems because then you're able to pick the  kind of work you want to do rather than having   to just do everything that comes in the door and i  would rather work less and make more per job just   so that i'm like at ease and i'm not tearing  my mind apart trying to do all of this work   so that's just my methodology but a small company  could probably get away with that whereas a large   company probably can't a large company needs to  be a lot more solid with the prices that they're   charging and they need to be universal across the  board they have margins that they have to figure   out and market share actually means a lot to them  so they can get away charging less to get more   volume of work to keep more people working whereas  a small company doesn't really have that much   overhead to charge so they can charge more per  hour and do less work so there's a little bit of   of trying to figure out kind of like where you're  at on the spectrum of all of that the next thing   that i've noticed people do price wise is they  charge by the task and this is what i actually   started doing when i started doing my own side  work illegally don't do side work we'll do another   video coming up you shouldn't be doing cyborg  but we all do side work so skipping over that   at that point when i was doing illegal side work  i was charging by the tasks so if i had sconces   that somebody wanted home i would charge a certain  dollar amount i would charge like 60 bucks to hang   all light and then if i had to get a taller  ladder and it was like 12 feet or 14 feet or   something like that and i had to figure in the  the cost of like what it's going to cost them to   go buy a ladder and do it or rent a ladder and do  it themselves versus the extra time it's going to   take me to have this big ladder and have to move  all of their stuff around or if it's a 16-foot   a-frame ladder and you have to have two people  to get that thing off your truck and come in and   you know there's a lot of things that you figure  out these specific tasks would actually cost   you a certain amount of money so you can just  charge by the task so some people will charge   a hundred dollars to hang a chandelier they might  charge two hundred dollars to uh hang a ceiling   fan and then if it's a ceiling fed with an eight  foot rod that's got a programmable remote and it's   got you know 60 inch blades they might charge  something different but they can figure out   by the task what each thing is uh is able  to be charged so replacing a receptacle   that has less than 50 feet of wire coming off of  something you know like that could be a certain   price or if it's over 50 feet to up to 200  feet because you're figuring out how much   material is it gonna cost to to do this and  then how much money extra do i want to just   make on this for it to be worth my time to do it  so uh that's one thing it's just by the task that   people charge then the last one to talk about  is an estimating program or estimating software   there's a lot of companies out there that use  estimating software most of the time you have   to pay to use them and then there's some kind of  hybrid software out there that's like scheduling   and fleet maintenance stuff service titan is one  field pulse is another one a house call pros one   where they do a whole bunch of things but part  of the the software is that it allows you to   build invoices and send invoices and take payment  and all of that stuff so a lot of times they'll   have like line items inside of them where you  can pre-program your pricing for certain tasks   and things like that you can have an hourly wage  you can do a lot of these things within software   usually larger companies are using software  because they want to be as accurate as possible   they want to have margin that's very specific  on very specific things you can program in the   amount of time you think it it takes to replace  one receptacle and you can add to that the cost   of a receptacle and you can have all these values  already figured out in a software so that you can   hire somebody to just come in that you know may  have been an electrician in the past some master   electricians will just go to work for some of  these larger companies and they will just do   estimating for this company so they will open up  a computer they've been in the field they know how   long things take they know what materials cost and  things like that so they're really really good at   figuring out what job costing is all about so they  will use estimating programs i don't recommend   anybody go out there and spend a whole crapload  of money getting an estimating software i think   microsoft excel or google sheets slides sheets  docks sheets that's the one uh works just fine for   most people until you start hiring and you need to  be a little bit more precise you find that you're   like losing money in places and you need to start  kind of tightening things up that's where i would   say start getting some estimating software but  usually that's for the larger companies now so   we've hit the five different kind of methodologies  in how people bid one other thing well two other   things there's two things to consider when you're  pricing things out i think it's a good idea if   you're doing service work not necessarily new  construction but service work you're going to   be going out to a job you're probably going  to get paid immediately right then and there   and leave and you don't mess with that customer  again until you know they call again in the future   but i think for a service company it's  really important to charge a trip charge   you can give away you know free estimates if you  want to you don't have to some companies call   or some customers will call and be  like this company over here charges   99 to come and do a service call or just to do an  estimate it's like well they can do that i mean   if they have lots of work and they're getting  tons of work and they got a great reputation   people will pay a hundred dollars to have somebody  come out and do an estimate you know and that   usually gets applied to the job if they accept the  job that's okay that's not wrong to do it's just   the way that they do things some people like to  give away free estimates and they put that right   immediately in advertisement or on their  you know their website free estimates   and that works too that gets a lot of people  in the door but they might have a higher   hourly wage or something like that  a lot of service companies though   they will charge a trip charge so every trip that  i have to take out to your job and do something   i'm going to charge a flat rate trip charge that  covers any kind of gas it covers any kind of time   uh that has been taken to to drive out to a spot  because even doing estimates it takes time and it   takes gas you got the insurance you got all of  these other things that you're not collecting   any money to go out and do this estimate and the  customer might say no and go hire somebody else   so it's understandable to charge a trip charge  for every single trip because a lot of the jobs   you will get a lot of the jobs you won't get some  of the jobs you have to take multiple trips for   and some of them that you don't and so kind of  overall it ends up balancing out to be profitable   to do that so usually what i do is i charge a  50 trip charge i charge 150 or 200 an hour kind   of depends on the situation and what it is that's  just pricing for me by myself no overhead no big   company that's just what i want to make so for  me it's automatically 200 for me to show up at   your door and a lot of people don't want to pay  that but so many people want to pay that that i   need to charge more because it's just too much  i can't handle the volume by myself and i don't   want to have to go hire a bunch of people so if i  just raise my rates and go with a higher price i'm   still going to have a wait list of people but i  get to pick the jobs that i want and i get to make   more money just staying small and doing things  like i'm doing them so that is the trip charge   the other thing to consider is the minimums so if  you you know if you're looking through all these   different options that we just talked about trying  to figure out what you want your pricing to be   i would think for a second what is the minimum  amount of money that's worth my time to show up   at a job to do something for me i don't get out  of bed to go i don't care if it's to reset a gfci   i don't care if it's you know i'm just literally  like taking a broken switch out of the wall and   putting a new one in for me to come to your house  and spend my lifetime that i don't get back ever   again to work to do any amount of work for you  at all whatsoever it's a minimum of two hundred   dollars for me to show up 200 dollars it's like  all right cool that basically bought me groceries   for the week you know like it that's worth my  time some people's threshold for that is way   lower some people are like dude for 50 bucks like  i need 50 bucks today so 50 bucks is is what you   think your minimum is but i think really having  looking at things from that side of the lens   is really important and one last note make  sure what you're charging you're actually worth   so in all of this where i'm like oh yeah you can  add material margin over here and you can add all   this and make all of this if you know 100 that  you're not as good as other companies at doing   whatever the thing is that you're trying  to do like maybe you're best at a small new   construction but you're trying to dip your foot in  the commercial service world you should not charge   what other big companies that only specialize  in commercial service do you shouldn't be more   expensive than them you can be i mean you're  just going to be found out that you're not   very good at something so i would kind of try to  keep that in perspective like what do i actually   think that i'm worth and then as you're getting  more experience raising your prices makes sense   it's always it's always easier to to come down  from your pricing it's always uh really hard to   go up from a price that you've already given to  somebody so don't ever like undercut yourself   don't ever charge too little to where it's not  worth your time and you're you know wasting all   this money anybody that's like oh i got six houses  that i want you to wire and if you give me a good   price on this one they're never gonna call you  again they're gonna get that price out of you   for that first one and when you're done they're  going to go to the next person they're going to go   to some other electrician and they're going to  have that same conversation and they're going   to get them to undercut the pricing and they're  going to do that again most of the times they   don't have all these jobs or they might have all  these jobs but they know in the back of their mind   they're probably like way off and they're not even  going to do them they're just telling you that to   get a cheap price don't lower your prices if you  don't have to i understand when you're very first   starting out when you are very very very first  starting out you kind of can't be picky right   phones you need the phones to ring you need jobs  you need to do that that makes sense once you get   six months under your belt a year under your belt  of running a company and get figuring all this   stuff out you get busier and you've kind of got  a pipeline of work for the next couple of months   that's when you need to really start having  a serious thought about your pricing and   making sure that you're you're okay you're  comfortable with the customer hanging up   on you because they don't like your pricing you  need to be able to stand firmly by your pricing   feel like yes i am worth what i'm charging or i  have enough work coming in that i don't give a   [ __ ] if this person says no because i've got  10 other bids coming in that i got to finish   this week doesn't matter that's the sweet spot  that's that spot that you want to be in because   we're in this to be profitable we're not in  this to do favors for people i don't care that   your breaker's tripping you know if you're  a sweet old lady and your breakers trip and   you're out in the middle of the wilderness  or something like that like yeah i mean not   i'm guilty of like just trying to help people  out from time to time especially elderly there's   a soft spot in my heart that i i just care  because a lot of people don't i don't know   but other than those situations where i feel in  my heart or you know they've done a favor for me   or something like that other than i don't give a  [ __ ] like i'm in this to make money everything   i do needs to make money and it needs to make more  money than it costs because yes i'm trying to make   a profit on every single job not trying to break  even trying to grow and put money in the bank in   savings that's why i took the risk to go out on  my own and make my own business out of this rather   than just getting an hourly wage for 25 bucks  an hour 30 bucks an hour to be a journeyman at   somebody else's company that risk is worth the  reward of making sure that you are making money   that you're saving you get extra money at the end  of it so uh enough blabbing at you sorry i hope   that provided enough value for any of you guys  thinking about pricing and how to do all of that   um let me know if you have any questions comments  if i missed anything if there's different ways   you do stuff please leave them in the comments  below love you crazy people see you next one. 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