Professional Documents
Culture Documents
Administration
Travel time
Tendering
Tea and other breaks
These all add up and unless you have a detailed diary a rule of thumb
is that they can be around 25% of your time (1840* 0.25= 460hrs)
which gives you 1380 chargeable hours for the year (1840hrs- 460hrs
=1380hrs).
So if you want a $80,000 salary you need to charge $57.97 per Hour
to recover your salary ($80,000/ 1380= 57.97)but wait there is
more this is the base rate what about taxes, super, work comp? To
be safe you would add another 20% minimum to the $57.97 to give
you a $69.56 rate ($57.97X 1.20= $69.56).
$21.73).
Labour Rate
Overhead Rate
Profit Margin
Total Charge out rate
$ 69.56
$ 21.73
$ 9.12
$100.41
You should always compare your charge out rate to the industry
averages. You need to know if the rate is competitive. The
recommended service rate for a Licensed Trade person is
$106. Dont forget to charge for after hours work at the
appropriate rates.
You need to know if the rate is competitive. Just because you have a
charge out rate does not mean that it will be profitable and win business.
What does it mean if my rate is lower than the average?
A lower than average rate offers opportunity to win business
Because you are lower does not mean it is better to stay low. Charging
too little is as bad as charging too much as it may undermine consumer
confidence in you business. Is he a cowboy? Will the job be cheap and
nasty or
Are you a smarter and a better electrician?
Ask- are the costs low because I have not taken in something? Or is it
because I run a very tight ship, smarter and control my costs?
What does it mean if my rate is too high?
Am I being too unrealistic in my rates?
Have I got control of by business costs?
Am I comparing my price with a low baller and should I match him?
Does my work command a premium due to reputation?
Can I justify value add i.e. loyalty discount?
SUMMARY