Boiler Quote

[SimonG]

Its all about how you sell the price. Im not cheap but get the work.

 

[rpm]

if you swim in the mud with the plankton, you will get eaten by a whale, get out of it and become a whale, just because others go cheap doesnt mean you have to, they wont be there in a year or two as they cant survive by being cheap, why try and compete.

Lame, there are teams of 3 knocking out 3 boilers a day all because the customers love low price`s, rubbish work I agree and mostly illegal but that is what the boys are up against.

 

[Linkyplumb]

I am the same as lame, wb25i going in on Thursday, replacing a wb240,
£2450 for me, one day mech timer etc.

 

[Linkyplumb]

But he doesn't have a mortgage to pay...

No but I do, and that is what I am charging, and the way things are going I will be mortgage free by time I am 40 lol

 

[lame plumber]

Lame, there are teams of 3 knocking out 3 boilers a day all because the customers love low price`s, rubbish work I agree and mostly illegal but that is what the boys are up against.

so its pointless trying to compete against them, move up an echelon, not everyone wants a boiler thrown on the wall, they have other priorities, which you can fulfil for them.

How else do you get rid of a mortgage early?

 

[jaydebruyne]

I'll know for next time - minimum £2200!!

 

[lame plumber]

if you look anything like your avatar, go buy a new set of braces, image is everything, you sell the boiler in the first 20 seconds of meeting most customers, much like getting through a job interview, you have either got the job or not by the time you sit down, the interview is just there to ensure you kick the others into touch.

 

[cr0ft]

We all think pricing is very sensitive but the truth is that changing your pricing in a service business will just attract different clients. Someone selling boiler swaps at £600 labour won't get the customers wanting the cheapest deal but will get the customer who is willing to pay a bit more for a quality job.

When your business' marketing doesn't match up to the pricing you are trying to pitch at that's where the problem lies. If you turn up and don't come across professional straight away forget trying to get £600+ for a boiler swap as you won't appeal to the customers who want to pay more really.

Imagine that you are paying yourself a wage of £12 per hour or £100 per day. On top of this you should be aiming to make a decent profit. We work on the business bringing in 3x the employees wages each day. This allows us to cover annual leave, sick days and also to save money for the next recession! It will be coming at some point that's for sure. Let's say this £200 after the wages each day is profit. This is assuming we charge out at £300 plus VAT a day, quite realistic for gas work here.

That's £1k per week of profit if we do a boiler swap a day. If I price at £100 less (so £200 per day) that's £500 per week of profit. The point I am trying to make is £200 for gas work here is bottom of the market pricing, £300 is top of the market. £100 difference doubles your profit. More than that in fact as this simple example doesn't account for all the costs of running a business, easily £20-£30 per day.

The maths is such that the £300 per day gas fitter can pay his wage for the week and take home the same profit as a £200 per day gas fitter by doing 26 ish hours a week of work. Worth thinking about if you don't want to work yourself into an early grave.

To those charging at the bottom end, my advice would be to take a good look at yourself, a critical look at how you come across in quotes and determine whether you could be more professional to attract the better paying customers - they are out there and you will all know the areas near you where they live.

I know this will be disagreed with, but we price a straight boiler swap at 2 man days of labour - i.e. £600 plus VAT. One lad does the powerflushing/fitting TRVs/room thermostat/programmer while the other fits the boiler. Obviously it can be done in less than a day with 2 but then you get the difficult jobs that take a long day. £200 plus VAT means you will struggle to scale your business when you are paying another tradesman. If you can get to £250 or £300 plus VAT for gas work (very achievable even in a 'poor' area like Lincoln) you bring in a huge amount of extra profit a day.

None of this is meant to be patronising and I'm sure many on here already know all of this but it took me 3 years to learn this hard lesson and learning it was the best thing I did for my business.

At the moment I suspect we are bang in the middle of the recession/boom/recession cycle. If you can't get a good rate now you are never going to. Do not undervalue yourself, you have spent large amount of your time and money getting your gas qualifications. Don't fit boilers for a lower hourly rate than a handyman would work for.

Keiran.

 

[Millsy 82]

Croft you say it took you 3 years to learn but before that 3 years did you have the reputation to allow the price.

The reason I ask is I have tried when I go to nicer areas bumping the price up a little but because I don't have the reputation built up behind me like a lot of who I am quoting against every time I price I lose to one of them.

 

[jaydebruyne]

We all think pricing is very sensitive but the truth is that changing your pricing in a service business will just attract different clients. Someone selling boiler swaps at £600 labour won't get the customers wanting the cheapest deal but will get the customer who is willing to pay a bit more for a quality job.

When your business' marketing doesn't match up to the pricing you are trying to pitch at that's where the problem lies. If you turn up and don't come across professional straight away forget trying to get £600+ for a boiler swap as you won't appeal to the customers who want to pay more really.

Imagine that you are paying yourself a wage of £12 per hour or £100 per day. On top of this you should be aiming to make a decent profit. We work on the business bringing in 3x the employees wages each day. This allows us to cover annual leave, sick days and also to save money for the next recession! It will be coming at some point that's for sure. Let's say this £200 after the wages each day is profit. This is assuming we charge out at £300 plus VAT a day, quite realistic for gas work here.

That's £1k per week of profit if we do a boiler swap a day. If I price at £100 less (so £200 per day) that's £500 per week of profit. The point I am trying to make is £200 for gas work here is bottom of the market pricing, £300 is top of the market. £100 difference doubles your profit. More than that in fact as this simple example doesn't account for all the costs of running a business, easily £20-£30 per day.

The maths is such that the £300 per day gas fitter can pay his wage for the week and take home the same profit as a £200 per day gas fitter by doing 26 ish hours a week of work. Worth thinking about if you don't want to work yourself into an early grave.

To those charging at the bottom end, my advice would be to take a good look at yourself, a critical look at how you come across in quotes and determine whether you could be more professional to attract the better paying customers - they are out there and you will all know the areas near you where they live.

I know this will be disagreed with, but we price a straight boiler swap at 2 man days of labour - i.e. £600 plus VAT. One lad does the powerflushing/fitting TRVs/room thermostat/programmer while the other fits the boiler. Obviously it can be done in less than a day with 2 but then you get the difficult jobs that take a long day. £200 plus VAT means you will struggle to scale your business when you are paying another tradesman. If you can get to £250 or £300 plus VAT for gas work (very achievable even in a 'poor' area like Lincoln) you bring in a huge amount of extra profit a day.

None of this is meant to be patronising and I'm sure many on here already know all of this but it took me 3 years to learn this hard lesson and learning it was the best thing I did for my business.

At the moment I suspect we are bang in the middle of the recession/boom/recession cycle. If you can't get a good rate now you are never going to. Do not undervalue yourself, you have spent large amount of your time and money getting your gas qualifications. Don't fit boilers for a lower hourly rate than a handyman would work for.

Keiran.

Cheers mate.. I absolutely agree. I will stick with this quote as its already been sent but will print your post and use it as a reminder for future quotes!! Very inspirational! Cheers

 

[lame plumber]

l said Keiran. I had an uncle in agricultural contracting, his prices were the highest in the area, but as he always said, he was in it for the long term, not to survive! so you need to earn more to buy the best kit to do the best job, and that has been my mantra from when I started in the heating world.

 

[cr0ft]

Croft you say it took you 3 years to learn but before that 3 years did you have the reputation to allow the price.

The reason I ask is I have tried when I go to nicer areas bumping the price up a little but because I don't have the reputation built up behind me like a lot of who I am quoting against every time I price I lose to one of them.

Perhaps not but I was charging £150 a day when I started actually. Could certainly have charged £250 from the off with no loss of profit.

 

[jaydebruyne]

Got the job, do it Saturday. Just in time for my summer hol the week after whoop!

 

[Millsy 82]

Perhaps not but I was charging £150 a day when I started actually. Could certainly have charged £250 from the off with no loss of profit.

I have found £220 a day works for me at the moment. Obviously it's not what I want to charge but it's enough whilst I build up my reputation.

Problem is down here you have some very reputable people charging less than £200 per day.

Eventually I will build my price up but I feel that I have to build my reputation first otherwise I will just price myself out of all the work.

 

[Linkyplumb]

Got the job, do it Saturday. Just in time for my summer hol the week after whoop!

I would of been adding a premium for Saturday work then,

 

[GQuigley67]

200 odd a day you might aswell be a subby

My day rate is 400 and that allows me to pay a labourer or if I can cope myself do it on my own.

And p.s I'm a new business without a reputation having only set up my limited company last year.

It's all about how you come across and your body language etc, how knowledgeable you are etc.

 

[Millsy 82]

Around me not even the big companies charge £400 a day and you wouldn't get it. And I could get £200 a day as a subby but they expect a lot more for the money.

 

[Masood]

Its all about how you sell the price. Im not cheap but get the work.

Absolutely. Take pride in your skills and place the correct value on them. The customers who appreciate quality will pay a premium. Those who don't are not worth pursuing. A decent pricing strategy is a good way of weeding out the dross.

 

[GQuigley67]

I have ambition for the future to not just be a one man band so if I don't charge enough the now I will fail

 

[oz-plumber]

Around me not even the big companies charge £400 a day and you wouldn't get it. And I could get £200 a day as a subby but they expect a lot more for the money.

You may know what they charge per day for a plumber, but you don't know what % they put on materials.

They have to be making money on something to cover overheads and, if they have office staff, cover their wages, as well as making profits for the business owners.

 

[Millsy 82]

You may know what they charge per day for a plumber, but you don't know what % they put on materials.

They have to be making money on something to cover overheads and, if they have office staff, cover their wages, as well as making profits for the business owners.

They must put more on materials than I do as well but they get them a lot cheaper but they are not that much more expensive than me in total and they are the biggest local company.

Some companies also work on a smaller percentage profit off each job and a higher turnover of jobs if they didn't no housing association would ever get work.

I know that is different to aiming for the higher end of the market but sometimes you have to get the work in to pay the bills. I know I would rather charge £220 a day and get work for 3 or 4 days a week than charge £400 and become a pro on my Xbox as I simply wouldn't get the work.

 

[cr0ft]

At £400 a day though you can afford to become a pro on your X-Box AND make the same profit as you do charging £220 a day working 1 day in 2. Life is short, and even those with no aspirations to be more than a one man band might as well use their skills to work 2 or 3 days a week earning good cash instead of 5 at once. Or do you love plumbing that much?? j/k.

 

[Millsy 82]

Around me you wouldn't get £400 a day off anyone, £300 a day and your playing with the well established companies who buy that much that they come out around the same as me maybe just a little higher.

I have tried it and pricing at £240 a day I went dead, dropped to £220 and I picked up again.

If there is a market there that can afford £400 a day plumbers then yes do it, I know around me majority of people are on low incomes most minimum wage, yes there are well off areas but the majority of the houses in these areas now are holiday homes so then your dealing with landlords, the well off areas are also targeted by not just myself but just about every other plumber in the county as everybody knows where they are.

 

[oz-plumber]

QUOTE=Millsy 82;878063]They must put more on materials than I do as well but they get them a lot cheaper but they are not that much more expensive than me in total and they are the biggest local company.

[/QUOTE]

Start shopping around more for prices on materials.
Just by that statement, I would hazard a guess, that they would be getting their materials at least 20% cheaper than you on most items.

I had a Rep come and see me from a heating supplier.
They offered me 30% off the list price in the book.

Long story short - noticed a discount list in their folder and saw some company's were getting 45% off list price.

So what that meant was that the company that was on 45% discount could put 30% on the cost of materials and sell the customers the materials at my buying price.

My price: 100 x .7 = 70. 70 x 1.3 = 91
Other company: 100 x .55 = 55. 55 x 1.3 = 71.5.

Basically the other company would have put a profit margin of 70% on the cost of materials to match your cost of materials + profit.

55 x 1.7 = 93.5

The other company could put 50% mark up on materials and still beat you by 10% on the cost of those materials.

That's how the game is played.

 

[Ted808]

No but I do, and that is what I am charging, and the way things are going I will be mortgage free by time I am 40 lol

Llllucky lllucky b...stard! Life of Brian