yeh I could live on that pretty well, just think I like crofts point of charging more to grow his business, you in a way have a job for life at BG so are obviously happy to take that week in week out with no stress etc, nice position to be in
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Pricing
- Thread starter helpsy
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View the thread, titled "Pricing" which is posted in UK Plumbers Forums on UK Plumbers Forums.
Croft is spot on with his way of thinking, he want to grow his business and charges his customers accordingly.
I however have no aspirations to employ anyone or become any bigger than I currently am. Therefore I am happy for working what I am working for 🙂
R
Ray Stafford
Heres a thought.
Lets say a plumber sets up and establishes a rate of £40 per hour. In his 1st year, he struggles to fill his week, and money gets short, there are rows with the missus, and he wonders if he has done the right thing.
In the second year, his diary starts to fill up, but he has a bit of a mountain to climb, because he ran up some credit card debt paying for groceries in year one, so things still feel pretty tight.
In the third year, although things are much better, the the fear of going quiet still haunts him in the small hours when he can't sleep.
In the fourth year, he toys with putting his rates up, but he loses a couple of quotes, and hears of a bloke in the merchant whose working for £20 an hour, so he sticks where he is.
In the fifth year, things start to get tight for a different reason. He's got plenty of work, but the cost of living keeps on rising, and the missus tastes don't get any cheaper, and anyway, whats the point in being your own boss if you can't go on holiday when you fancy it? Except he can't afford it.
By the end of the sixth year, he suddenly realises that with an average of 4.5% inflation, he shoud be charging £50 per hour. He panics, and shoves the rate up. His regular customers howl at this, so he discounts them back down to £45, gets £50 from new customers, and so ends up averaging £47.50.
Now here's the mental arithmetic test. How much has he lost over the years by not increasing his rate by 4.5% per year?
The answer is a staggering and irrecoverable £55,000. Admittedly taxable, but still a very tidy pile of change, which he can never get back.
And before you tell me that customers are too price sensitive to stand 4.5% per year, answer me this:
Why is it that Aldi and Lidl between them have only 7% of the UK grocery market, and all the discount supermarkets combined have less than 10%, whilst the big 4 "middle priced" supermarkets have 75% market share between them?
Its because the overwhelming majority of people buy based on perception of value, not on price.
Lets say a plumber sets up and establishes a rate of £40 per hour. In his 1st year, he struggles to fill his week, and money gets short, there are rows with the missus, and he wonders if he has done the right thing.
In the second year, his diary starts to fill up, but he has a bit of a mountain to climb, because he ran up some credit card debt paying for groceries in year one, so things still feel pretty tight.
In the third year, although things are much better, the the fear of going quiet still haunts him in the small hours when he can't sleep.
In the fourth year, he toys with putting his rates up, but he loses a couple of quotes, and hears of a bloke in the merchant whose working for £20 an hour, so he sticks where he is.
In the fifth year, things start to get tight for a different reason. He's got plenty of work, but the cost of living keeps on rising, and the missus tastes don't get any cheaper, and anyway, whats the point in being your own boss if you can't go on holiday when you fancy it? Except he can't afford it.
By the end of the sixth year, he suddenly realises that with an average of 4.5% inflation, he shoud be charging £50 per hour. He panics, and shoves the rate up. His regular customers howl at this, so he discounts them back down to £45, gets £50 from new customers, and so ends up averaging £47.50.
Now here's the mental arithmetic test. How much has he lost over the years by not increasing his rate by 4.5% per year?
The answer is a staggering and irrecoverable £55,000. Admittedly taxable, but still a very tidy pile of change, which he can never get back.
And before you tell me that customers are too price sensitive to stand 4.5% per year, answer me this:
Why is it that Aldi and Lidl between them have only 7% of the UK grocery market, and all the discount supermarkets combined have less than 10%, whilst the big 4 "middle priced" supermarkets have 75% market share between them?
Its because the overwhelming majority of people buy based on perception of value, not on price.
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I
IDCHAPPY
You're telling me I'm too cheap at £25 ph?? 😉
Hardly any aldi or lidl supermarkets thats why
:angel_smile::angel_smile:I blame merchants for everything
R
Ray Stafford
Both brands have more than 600 UK stores - about the same number each as Morrisons, and slightly more each than Asda.
If you add in the other discounters like Iceland and Farmfoods, there are way more discount stores than any single supermarket except Tesco, who are probably a few hundred ahead, but only because of the proliferation of little tesco express stores.
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L
lame plumber
My perception on this is to do the following:
work out what all your fixed costs are and write em down, insurance, fuel, van costs be they hp,leasing or interest on a loan, capital repayments, tool purchases/replacements, stock build up for van - so you dont have to look a plonker and always pop off to the merchants ( customers don't worry so much about arts costs but do get peeved at you disappearing over the horizon!) There are so many things people tend to forget, ie cost of ppe each year, van servicing, bits n bobs they ignore etc etc.
Then sit down and look at how many hours a day you actually get to be working, not travelling to and from, but on the job. Take off time for lunch n tea if you take them, and take it off even if you dont!! Then youll start to see you only achieve 4 or 5 hours actually working, especially in my part of the world, low customer base/mile. Then take off week ends, holiday, sickness (allow for it, you will be ill) and you suddenly see the number of days available per year your working and the number of hours available per day. After that pick your salary, add on the fixed costs and divide that by the number of hours you see available to you. If you want £30k a year, I'd be very surprised if your hourly rate required is less than £52-55 pounds per hour!! If your figures are less I'd say you havent been honest with your costs and hours available.
There is out there a working formula on one of the sites for gas forms to help you do this, if you havent worked youer way through this sort of calculation once in a while your heading for a fall one day.
work out what all your fixed costs are and write em down, insurance, fuel, van costs be they hp,leasing or interest on a loan, capital repayments, tool purchases/replacements, stock build up for van - so you dont have to look a plonker and always pop off to the merchants ( customers don't worry so much about arts costs but do get peeved at you disappearing over the horizon!) There are so many things people tend to forget, ie cost of ppe each year, van servicing, bits n bobs they ignore etc etc.
Then sit down and look at how many hours a day you actually get to be working, not travelling to and from, but on the job. Take off time for lunch n tea if you take them, and take it off even if you dont!! Then youll start to see you only achieve 4 or 5 hours actually working, especially in my part of the world, low customer base/mile. Then take off week ends, holiday, sickness (allow for it, you will be ill) and you suddenly see the number of days available per year your working and the number of hours available per day. After that pick your salary, add on the fixed costs and divide that by the number of hours you see available to you. If you want £30k a year, I'd be very surprised if your hourly rate required is less than £52-55 pounds per hour!! If your figures are less I'd say you havent been honest with your costs and hours available.
There is out there a working formula on one of the sites for gas forms to help you do this, if you havent worked youer way through this sort of calculation once in a while your heading for a fall one day.
Their was something in the news few weeks back about how they are now damaging the big boys .
Morrisons and tescos have knocked back prices due to threat of these two
Morrisons and tescos have knocked back prices due to threat of these two
R
Ray Stafford
Nevertheless, more than 75% of people shop in a mid market shop, and less than 10% at a discounter. In fact, more people shop in Waitrose than shop in Aldi, and more shop at M&S food than shop in Lidl. So why not aim for the Waitrose and M&S clientele?
E
Ermintrude
Value? Did a job today . Gas escape in street during purge and relight house was capped as massive drop but no smell . The national grid gave our number as close. . £45 plus vat to come have a look , try and isolate and re establish. Went crawled under floor for 1 1/4 hours came out capped about 30m of compression fittings . Boiler on, ncs the shoddy install and £108 inc vat. Quoted £450plus to re pipe . About a bundle of 22 and two men for two hours . Customer was happy to pay to have job done properly. And by what is perceived as "good" engineers
Simple answer to that is the cust thinks if it has water coming out of the tap and gets hot then why pay extra. Aldi and lidl plumbers rule roost down here you try charge 1800 for boiler change and you be undercut left right center.
Notorious low paid area
L
lame plumber
there's always a mixture of rich and poor, you just need to target those you want to work for, I aim for a smaller market and it seems to work, it also means you pick up work from lower income folks who hear your a good tradesman. ie quick callout today to repair a split 15mm pipe on a recommendation , there less than 15 mins, £100, no complaints and very happy custard, plus picked up her boiler and rayburn for a service next month.
R
Ray Stafford
Guardian report on pay by region.
Plymouth and Portsmouth are much the same. The best I could find for 2013 was that average full time salary in Portsmouth beat Plymouth by just £600 per year. Bristol has us both beat.
L
lame plumber
well my bit of the SW is bloody awful, so much so that some parts of the town dont pay stamp duty on house sale upto £150k. So I have to fight an uphill battle to reach Pompey levels to start with
R
Ray Stafford
Even in Pompey Jon, as you know there is a big difference between landport and Southsea, or buckland and milton. I could literally throw a stone from my house - north and I would hit grotty council flats, south and I might break the window of a £million pound mansion.
L
lame plumber
same here, we just have Damien and a few others to live off, plus all those coming down fm London, but the bulk of folk are Jo average struggling to survive in harsh times.
J
julesverne
offer finance
If you have a really good van the depreciation on it alone will be a lot more than £3k per year..
£15k a year is pretty standard for a domestic plumbing/electrical business that employs staff and has 2 vans, to be honest it's quite realistic once you factor everything in properly. £8k depreciation on 2x vans each year, £800 insurance for the 2 vans, £600 for Checkatrade, £600 or so to provide clothing and PPE for 3 employees each year, £600 ish for employers and public liability, £600 a year just to trade as a sparky. We are already up to £11,200 before we look at Van servicing & MOTS, diesel etc. I don't think in my context £15k of running costs a year is silly tbh.
To any of you who think £250 a day is unobtainable, from the map that Ray linked to on the Guardian website (on this thread) I live in one of the poorest areas in the UK according to that. Like he said, it's about choosing your target market and focussing your advertising and business on that.
I regularly get estate agents etc phoning me up, in general I don't work for them. Likewise the emergency insurance companies that call you on 8pm on a Saturday night. They keep calling and keep baulking at my weekend rates.. It doesn't bother me because each customer I get is paying me £10k ish for a luxury bathroom. I would have to do 5 budget bathrooms to earn the same profit I do on one luxury bathroom.
There are stacks of good plumbers/gas fitters on here. To my mind, anyone who takes the time to come on here and network should be charging top money as it shows they are professional. Many of our competition aren't so let them charge the cheap prices.
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And you thought 14.00 per hour as a wage was too steep?..brum
Ah you employed a great architect then, all the windows on the south for maximum solar gain.
With my employers hat on, yes I do, certainly round my way. That figure may be affordable for larger companies but certainly not for smaller businesses. With 30% on top that is over £145 a day, assuming the guy never takes a day of sick. Add on roughly £50 per day in terms of running costs now. There is no way I am going to be out doing quotes into the late hours to earn £45 per day I am afraid. My rule is that the business needs to earn 2.5x what the employee does each day which makes £14 per hour unaffordable for my business model.
I do think that the wage argument is probably one for another thread though otherwise this is going to go off topic pretty quickly!
I didn't know it as I am new to the job centre plus website but we got 10 applications in the first day for plumbers. A lot of them were guys with 30 years + experience. There were some really good applications in there to be honest. We were advertising at £20,500 to £25,400 I think it was. £10-£12 per hour I believe. It seems that is the sweet spot around Lincoln. Now I am sure things are different in other counties but not here it seems.
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The problem with these reports is that the few represent the majority meaning a barrister cranks up ten labourers average.
Hi croft was not looking for a row nor neither trying to be cheeky but thought employee wage is cica 50% of day rate,If not it certainly used to be when I employed guys my reply was meant in good faith ..brum
R
Ray Stafford
Sorry Jim , but the figures are for
median, not mean. Specifically designed to avoid the problem you describe.
No offense taken! I often come across as appearing abrupt on here, it's not mean't - I'm just ex-military and call a spade a spade 🙂
R
Ray Stafford
i believe that the correct term is an "earth inverting horticultural implement"?
L
lame plumber
I had a man/men to operate any spades required if I happened to pop ashore when I was in the RN, made light work of any digging required. 🙂 Nowadays, I use a ground worker, costs more damn it!!!!
I'm in Plymouth and certainly not the cheapest but we get work. The last full pack we did was nearly twice what some are advertising in the local paper, 6 rads, boiler in a 2 bed mid terrace. ( average house not posh)
I usually ask at some point why they chose us, most of the time it is down to the way we approached the quote and have been told:
On time for appointment and polite
Took time to talk through the job (usually about an hour)
Detailed and clear quote with schedule of works.
Explained why I recommended the products
Insanely good looking
O.K so I made the last one up but people will pay more than you think, you just have to find the right clientele and show them a reason for paying a bit more.
You don't take your car into a main dealer and expect back street garage prices and like wise you wouldn't pay the back street garage main dealer prices. It's up to you to decide if your a back street garage or a main dealer, both get enough work to stay in business.
British Gas are usually busy (even in Plymouth) they ain't cheap!
I usually ask at some point why they chose us, most of the time it is down to the way we approached the quote and have been told:
On time for appointment and polite
Took time to talk through the job (usually about an hour)
Detailed and clear quote with schedule of works.
Explained why I recommended the products
Insanely good looking
O.K so I made the last one up but people will pay more than you think, you just have to find the right clientele and show them a reason for paying a bit more.
You don't take your car into a main dealer and expect back street garage prices and like wise you wouldn't pay the back street garage main dealer prices. It's up to you to decide if your a back street garage or a main dealer, both get enough work to stay in business.
British Gas are usually busy (even in Plymouth) they ain't cheap!
Some interesting posts.
Im forever being told I'm too expensive yet often hear of others charging more and doing very well
I try to stick to a rule of charging £35ph. I don't charge vat and think that's cheap.
My local garage charges me nearly £60 inc vat and they don't have to travel to get to me - I take my van to them!
Im forever being told I'm too expensive yet often hear of others charging more and doing very well
I try to stick to a rule of charging £35ph. I don't charge vat and think that's cheap.
My local garage charges me nearly £60 inc vat and they don't have to travel to get to me - I take my van to them!
P
Paulplumb
£50 per hour for gas work during the day, no reductions unless it's an install and I do a job price which often works out a bit less... £40 for water plumbing during the day.
Minimum one hours labour, plus travel time if its a way out.
It works, people pay it and they get a good quality job.
Pay peanuts, get monkeys. Never a truer phrase spoken!
edit// I charge a callout of £50 for weekdays 6pm-12pm, £60 after that, and gas and plumbing rates rise by £10 an hour.
Weekends, callout also goes up to £60 daytime and £70 after 6pm.
Minimum 1 hour labour for everything.
I make clear to people my rates pre callout and refer them to my website which has all prices down to the penny. I make people aware of the charges before I go out to them...they always are happy that some poor sod will come at midnight ona saturday...
I get quite a large amount of callouts, and as many will know they are often a PITA. So you earn the money at those times of night very often!
In fact I often swear Im going to stop doing them after particularly bad ones (like Landlord property with scummy tennants in ****sville, with a burst lead pipe buried in the wall, 2 am, and the tennants demanding they have the water back on before I go.. lol) .. but I'm a tight wad so I keep doing them when I can't duck them
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