Pricing Electrical Work So You Keep the Money

The three parts of a price

Direct cost is labor hours at what you actually pay including payroll burden, plus materials with a real markup, plus permit fees and rental. Overhead is your business cost per hour from Going Out on Your Own. Profit is a chosen percentage on top of both.

Profit left as a leftover becomes zero the first month something goes wrong. Put it in the number.

Hourly against flat rate

Hourly is honest and it punishes experience, because the faster you get the less you earn for the same result. It also makes the customer watch the clock instead of the work.

Flat rate prices the job, not the hour. It takes real data on how long things take in your market and it needs a clear scope. Most successful service shops price flat and keep hourly for diagnostic and unknown work.

Quoting the unknown

Old houses hide things. The honest way to handle it is to state assumptions in the quote. This price assumes the existing circuit is 12 gauge copper, that the attic is accessible, and that no wall opening is required. If those are wrong here is the hourly rate and here is how we will tell you before we proceed.

That paragraph prevents most disputes in residential work, because the surprise was named before it happened.

Change orders

Any change to scope gets written down, priced and approved before the work happens, even on a small job, even by text message with a yes back. Verbal changes are the single largest source of unpaid work in this trade.

Charging fairly for a change order is not aggressive. Doing the work and then arguing about it at invoice time is what damages the relationship.

What to charge in Los Angeles

Service rates in this county commonly run somewhere between 125 and 220 dollars an hour, with a minimum for a service call and a higher rate after hours. Flat rate pricing on common jobs is the norm at the larger residential shops.

Being the cheapest is a strategy with no end to it. There is always somebody willing to work for less, and they are usually working without a license or without insurance.