Have you ever found yourself wondering how much an electrician charges per day? What about per hour?
Read on to find out how much your local electrician in Harlow charges and how that figure is calculated
We've all done it at one point or another, got a tradesman in to quote only to spit your coffee halfway across the room when you see the final figure.
"THERE MUST BE A MISTAKE!"
"Can I have a breakdown?"
"What's your day rate?"
Well, Let's unpack some of these questions.
Can I have a breakdown?
In short, no.
Whilst some businesses may be happy to provide a fully itemised quote and others will provide a materials and labour cost, at Full Circuit Solutions we believe that you are purchasing the final product and it’s in this sense that we will provide you with a single cost for your entire project.
Assuming you are a normal, level-headed human being, we would be happy to bet money that when you eat out at a restaurant you wouldn't ask how much the steak was bought for, nor would you ask what the restaurant pays the chef. If you were buying a new car, I doubt very highly ford would tell you the materials and labour costs to build the vehicle and I can 100% guarantee that apple don't publish how much they pay children in sweatshops to put together their tech.
We work on the same principle. When you approach full circuit solutions for a quotation for your project, you have a visualisation of what you want, or you have a problem that needs solving. The cost that we provide you with is the figure we have calculated it will cost to deliver your project or solve your problem on time, efficiently and all with great service.
What's your day rate?
The first thing to understand here is the difference between an employee and a business.
A statement we hear all too often is "my mates a spark and he only charges £200 a day."
In the southeast, the average day rate for an electrician providing labour to a business (sub-contracting) is £220.
What that means is the business must charge £220 + the business overheads + profit = business day rate.
Let's break down some of our business overheads at full circuit solutions to give you a realistic figure of what you should expect to pay per day when employing an electrician. We won’t list every item extensively, but we will break it down into sections.
A business overhead is a regular cost incurred to the business. Usually these are monthly costs, but in some cases can be a yearly payment like competent person schemes which is our registration to the NICEIC.
Under these headings, you will find cost such as regular printer ink, paper renewal and other general office supplies. Subscriptions to Microsoft 365, website hosting and job management software. All of these things and more are essential in the day to day running of a business and as such must be accounted for.
Total for month: £280
A small office as well as a lockup for tools, plant and stock is essential for any growing or thriving business.
Total for month: £600
This can be a huge expense to a business. Over the last few years, we give fuel cards to all our employees or subcontractors that work for us. After looking through the monthly costs we estimate that each employee will spend between £65 - £80 per week on fuel. The lease of a van is £320 per month and then there is tax, servicing, yearly brakes and tires, and business fleet insurance!
Total per month per van: £1,160
General business costs
Under this heading we account for things like accountants’ fees which cost over £300 per month, public liability insurance, uniforms, replacement tools to account for general wear and tear, Electrical registration to the NICEIC
Total for month: £550
Another large business expense is non-revenue generating members of staff (admin). At Full Circuit Solutions, at the time of writing this blog, we currently employee 1 part time admin staff member.
Total cost for month: £800
And finally - Marketing
How many times have you found a tradesman via checkatrade or another similar website? What about those of you that still like to use the local parish magazines. How about google? As a business, all these listings come at a cost. In 2022, we calculated that 55% of our business was new business. Those that find us for the first time through one of our marketing avenues. To keep a business running and to keep people employed it is paramount that there is new business being found regularly. And to ensure that happens, we advertise.
Monthly cost of advertising: £1000
From what we have highlighted above, our monthly overheads incurred in the business before any revenue generating staff have been paid is £4390. Multiply that across a year and we have yearly overheads of £52,680. If you divide the monthly overheads by the average amount of working days in a month you have a daily over head of £219.50
At Full Circuit Solutions we have 2 on-the-tools revenue generating staff which means that the daily overheads can be split in two for the purpose of working out a final figure below
The P word
To some people the P word is like swearing. Others completely understand the necessity of the P word to ensure a business thrives and survives through good times and bad.
So, what is the P word?
If a business doesn’t make profit, it can only be two things. Its either haemorrhaging money on its way to bankruptcy or it’s a charity.
This is what we think about profit:
“Profit is necessary for any business to thrive because it enables the company to cover expenses, such as equipment. It allows for investment in specialised tools and technology to enhance efficiency and deliver quality services. Profitability ensures financial stability, enabling the business to weather fluctuations in the industry and maintain operations. Additionally, profit rewards the business owners for their risk-taking and provides a foundation for business growth and expansion.”
At Full Circuit Solutions, we aim to work between a 10-20% profit margin to enable us to provide a fantastic service which our customers appreciate and reward our staff with yearly bonuses as a thank you for helping to provide that great service to our customers.
That’s about all of the elements needed to work out a day rate. So lets put that all together
Profit @ 20% £65.90
Total figure per day: £395.40+vat
A word from the owner
"In todays fast world; fast cars, fast food, fast fashion there is also fast business.
Fast business refers to that rate in which businesses are created and dissolved. 20% of new businesses fail within the first year and 60% of business don’t make it past 3 years. One of the main reasons that new businesses fail so quickly is that they fail to understand the real costs around running a business and because of that, they tend not to charge enough to survive.
It is my passion to provide a fantastic service to each and every one of my customers and when we fail on that statement, I take it personally.
Full Circuit Solutions is here to stay. We may not be the cheapest, but we are a far cry from being the most expensive. The pricing structure I created for this business is what will allow me to serve my local community in the best way possible whilst also ensuring the longevity of our growing team."
- Mitchell O’Brien