Are most of you guys charging triple digit labor per hour 1 man shops? I mean one guy installing not including non billable hours spent by office, sales, etc.

What would you guys charge for helper and/or foreman/project manager when your company grows? I can see this high labor numbers working for smaller projects where labor still ends up around a few thousand dollars, but on a medium/large proposal with 300-500 hours how could any client possibly justify $75 000 in labor? It sounds ridiculous.

And also, what would you pay your labor in the form of payroll wage or salary? Even at a 400% gross mark up on labor you can afford to pay your guys in the $40 per hour region.

Is this all the information you used to back this up? if they have 300-500 hours into the AV....more than likely this would be a multi million dollar build. $75,000 is probably not out of line, or very low on a high end build. You write this like a consumer thinking that $75,000 is pure profit, and there is zero expenses in there.,

300-500 hours is not nearly a multi-million dollar build, unless you're talking about the house. We all know how much the house cost reflects the A/V & integration budget... However in a job like that there is tons of lackey work that no one can justify charging $150/hour.

I can see this kind of labor rate for system design, programming, maybe project management and rack/lighting panel building, but how about the guys pre-wiring, installing basic devices, hanging tvs, trimming etc. I don't have to explain it you as I'm sure you know but this is lackey work that easily comprises 35-50% of a job like this.

Of course the overhead doesn't change, but you have the ability to get 50% of the work done for cheap with labor. And don't say a 1 man shop has the ability to do it, because you could never make the time lines and keep the operations of the business going at the same time with 1 guy.

Our shop moved from electrical to lighting to lighting & AV so I never did experience the 1 man shop part of this business.

Anyways, I think it's fantastic some of you guys have very profitable rates. I am in western Canada and even some of the top shops out here are well into the double digits (us included).

You should know your competition better. Most of the Actual top shops in Western Canada are well into the triple digits.

We aren't triple digits yet but will be with work scheduled for 2013. We can't afford not to be. Gas and insurance among other "simple" expenses are stupid in Toronto. So is the cost of living for me and my employees. Happy cheery employees make happy customers - grumpy "this is just another job" employees send the wrong message to clients.

The question of helper labour rate is a good one. Should there be a junior tech/apprentice type discounted labour rate when these people (who need supervision and can't yet fly solo) go to a job? If so what do you guys charge? 50% of your full labour rate? 75%? The same rate regardless?

Very simple calculations to properly figure labor rates.  

[Link: nolo.com]

Less for helper, more for project manager, but this relative to a medium installer price.


Those numbers propose $150 to $250 per hour. Yes, that sounds ridiculous, so your example seems ridiculous to start with. I think you're exaggerating so much that it's hard to take your numbers seriously.

It's a fact that 200 hours of labor should cost 200 time the cost of one hour, but this seems to bother you because of the total number. Steel yourself, multiply, and don't discount the price per hour times the hours!

Do you discount your labor charge because there are more hours to bill for? Do you charge $250 per hour to do a two hour job, and $80 per hour for a 500 hour job? $40 per hour for s 2000 hour job? I've never heard of a sliding scale for A/V work of any type. Actually, I haven't heard of that for labor of any kind, just social service type things for people with low incomes.


You do understand that a 400% markup of $40 per hour results in $200 per hour, not $160, right?

Haha Ernie, thanks for being my calculator, I wrote that this morning just off the top of my head while sipping my espresso.

My point remains the same. You basically reiterated what I am asking you.

When making proposals I definitely do everything I think I can to get the job and still make our target net profit which is low double digits. If I know there are tasks I can have a $15/hour helper do like mentioned above I definitely massage the numbers to bring the overall total cost down.

My $75 000 comes from 500 hours by $150/hr which is a number from my ass as an example.

If I could charge $150 per hour I would not hesitate - do I think our quality of work and service justifies such a rate? Absolutely. My market? Not to my knowledge although, who knows?

And as far as helpers wage goes, what is the deal? Are you guys 1 man shops? If so what do you plan on charging your helper labor out at when you grow and need it? How about foreman/lead tech labor?

Brad

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No, not a one man shop.  I charge the same hourly rate whether you get a guy who's a wire monkey, or the best technician I have.  Why would I discount it?  

Does the Ford dealer give me a discount when they have a new mechanic change my brakes?  

Does the restaurant give me a break when the dishwasher is new or less skilled than the dishwasher who works on Tuesdays?  

You've referred to "lackey" work.  Understand, it's lackey work to you.  To the customer it's mind numbingly complicated.  Hence, the reason they called you in the first place.

Brain surgery is easy once you've done it about 1000 times.

We had a landscape company come in yesterday and cleared out ALL of the plantings around our entire house, and we will start fresh with new plantings and a new design. I probably could have done the same thing they did, except that it would take me weeks longer then their crew did, I would have been sore as hell, plus I HATE doing it. It was WELL worth the money spent to just have someone else come in and do it. I have no idea if his guys have been doing it for 1 week, or 10 years. All I know is I stayed clean, and cool, and my back is fine today.

If you have jobs that require 500 hours per project, than you're more than likely not doing it all yourself. At those sizes, you either own wire monkeys or you hire/sub them.
Read Paul's (SB Smarthomes) post as an example.

Some industry experts suggest to break even you must charge at least 5 times what you pay your laborers. so if a tech makes $20/hour you have to charge $100/hr for that time.

The company that I used to work for charged $125/hr per man on the job in New Jersey and $150 (or was it $175) per hour per man in Manhattan. (this was prior to 2008 and in Bergen County one of the 3 richest per capita income areas in the USA) We had a big crew and still were booked out about two weeks or so.

Programming Marantz Remotes (pronto) or URC was $200/hr, two hour minimum and we always sold the same "custom" system. Crestron was by quote.