Might keep an eye on this client. Could also be asking because he is trying to figure out what to offer as cash to your service tech to do future work after hours.
Some people are just cheap, and always looking for a way to save a buck.

I run into this on occasion.
People with net worths in the tens/hundreds of millions asking me "so how much would you charge me to do this on the side".
My response is to tell them my rates for my own work, they are more then two of the companies I sub for. "I am licensed, bonded, insured etc, that is what I charge my own clients".
Usually shuts them right up.

I have been asked how much I would charge for cash or a side job and I usually tell them it's more risky to carry cash than a check. Then, I tell them I would have to fire myself for violating company policyc.

They knew I work for myself, too- I don't understand how they could ask me to do something under the table when they should realize that any kind of side job doesn't come with the same protections for the customer and technically, it might void the warranty since, especially if it's an employee, the item(s) don't come from an authorized reseller.

Your client is either an idiot or an a$$hole.

Some people have only ever worked for an hourly or salaried wage. If they work for a salary most are able to divide by the hours they work to come up with an hourly rate for what they do. There are idiots that don’t understand the difference between billing rate and wage rate. I have actually had low end prospects ask my labor rate and then come out and say “I don’t make that much and I’m a …”. They are completely oblivious to the fact that what I bill is not what I make after expenses AND more importantly what they do for a living has no correlation to what I charge.

Since you say your client is in business I’m betting he is just an a$$hole. He knows full well that you bill more then you pay your tech, if not the business closes. Like sirroundsound said he may be trying to figure out how much you pay your techs so he can go around you and hire them on the side. I would use what SoundSD said and then take Rob Grabon’s advice and ask if there was a problem. If he has a problem with the rate DON”T try to further justify your rates. He already knows what goes into a billing rate. If he is happy with the service then tell him that’s what if costs to provide that level service. If he wants to shop around for someone else cheaper that is fine. The only way you lose is if you agree to charge him less than your normal rate.

People don't want to think that a laborer makes good money until they pay less and are burned by their own cheapness.

What people need to understand is the wage burden, not look at the hourly rate charged.

I am down with the angle of figuring out for sure what he is even asking. We are all assuming a passive aggressive slam on the insall rates but that might not be it. You never know. A simple phone call could probably defuse this.

I have not seen every word, but.
The real question is why he asked...
Did Installer make comment about what he is paid vs what you charge?
Did someone else come along with a cheaper quote?
Is he thinking of starting his own company, and maybe stealing your workers?

I think that the impetus of the question is what counts here.

Maybe he IS thinking of getting into the business. Offer to be his advisor, for a hefty fee and make him sign a waiver of responsibility for when he decides that it was a really bad idea to get into something he knows nothing about.

Q- How do you make a small fortune in the AV industry?
A- Start with a large one.

"We just charge enough to keep the business going and be here in the future to continue supporting our customers."

You: "Your a business man, what do you think our Labor margin should be?"

Them: "50%"

You: "SOLD! Here's a CO in the amount of X"

Worked for a steel fabrication company years ago that charged $65.00 per hour for my time. I was making $10.00 an hour, but I also had great insurance, paid vacation, paid sick days, paid holidays, provided tools, uniforms, etc, etc.

Company apparently needed to charge more, as they eventually went bankrupt.



My response to this kind of question has always been:

We charge enough to ensure that the company will remain in business so we can continue to support systems we've installed.


There is no need to respond with ANY details. A generic answer such as this should be sufficient, and should not ruffle any feathers.

That reply begs the client to ask why you don't pay him as much as you collect, since you have not addressed that at all. And wasn't that the question he was asking?

This also doesn't answer his question.

it is easy enough to answer that the wage paid to an employee is only a small fraction of what it costs to have an employee.

His question doesnt deserve a definitive answer. Period. Its none of his business. The best response is "why do you ask?" with "competitive rates to keep us in business to continue to service our customers" thrown in if needed. Done. Not open for further discussion.

"Would you prefer that I charge as much as the highest rate in town? OK, I will.".