I've had these sorts of things happen to me in the past, and I'm sure I will in the future.  I've gotta admit, on more than one occasion, I've taken it upon myself to call the competing company and say..."Dude, WTF are you doing?"  

I politley explain that they're doing themselves a disservice by charging such a low hourly rate....That there's no way they can survive, and by charging more per hour, they'll actually be able to do the installations correctly, and build their client base by word of mouth because of the quality of their work.  

On one occasion, the guy completely blew me off.  he was about 24-25 years old. 6 months later he found himself in my office applying for a job that he didn't get, because he obviously doesn't listen.  

On another occasion, the guy took my advice and is doing well.  I run into him now and again at a local disty, we talk shop, and I consider him a pretty good technician and his company has a decent reputation. (he sold a screen at cost on a job that I still won the installation, but they bought the screen from him)  

If I were you, I'd call the guy, ask him to get a beer. Come at the situation as an industry veteran who actually wants to help him, help himself.

Sometimes they just don't know.  

Being a seasoned veteran, you do know, and you can clearly explain to him all of his trials and tribulations, before they even happen to him.  If he takes your advice, you've built a relationship with a person who will be forever indebted to you, and you never know where that might lead 5-10 years down the road.  

If he doesn't take your advice, you can at least say that you tried because he'll be out of business soon.  

It's simply a mindset that needs to be changed.  

I don't think Brenden would mind me saying that he suffered from the same mindset.  He wasn't charging that low, but it was still too low.  Once he changed his mindset, charged the clients what he felt he was worth, he's thriving and his reputation is growing because he can afford ot do good work, he doesn't have to cut corners.   

Two words- Mom's basement.

Or, those low-ball outfits could be a front for a money laundering operation.

See something, say something.

I find it interesting here how you all think that no company that charges $35 an hour can stay in business.

Do you all believe that Best Buy is losing money on every install?

You do realize that $35/hour * 8 hrs/day * 5 days/wk * 50 wks/year (yeah 50, allowing for vacation) works out to 70K per year. Assuming that 80% of time is billable, still allows for 70K * 80% = 56K.

A drill, basic hand tools, some screws and a variety of wall anchors, a very small amount of knowledge, knowing how to advertise at Craigslist, and a working car, allows someone to collect a 56K income, and you don't understand how these people can do it at this price?

According to the 2010 Census 56K would put someone in the 60th percentile. In other words, they would be making more than 60% of the population. In most states there are no licensing requirements. And you still don't know why these people are around? This is a good salary for someone with little training, and this business has a low barrier to entry.

My guess is that most in the industry don't expect to make over $100K/yr, and would be happy with such a salary. I think many of the CI's here are very good, but are you that naïve to believe that all CI's do a great job? This is the challenge for consumers, they have no way to weed out the trunk slammers from the professionals.

Things like CEDIA certification might mean something, but it looks to this consumer like CEDIA is happy to supply certification to the likes of Best Buy and others, so they can show their logo, and talk a good talk, and in doing so have weakened CEDIA's brand.

I can connect with your plight. I'm an engineer, and regularly run into people that lack basic engineering skills selling their consulting services. I've worked hard, first in high school, later in college to get a bachelors, and then a masters. But anyone can call themselves an engineer.

You've chosen a profession with no licensing requirements, so you are only as good as you can prove to your customers.

I believe they are at least $100 an hour last time I checked. They just simply have a very set way of doing it and I'm sure most installs take a little more than the hours allotted.


This is all fine and well but you did not factor in all the things that come along with any legal business (Even if you are running it out of your moms basement). Liability insurance and employer payroll tax (not sure about sole proprietorships) are just some of the things you have to pay for additionally. Also, there would be no way you could be 80% efficient with your time if you were responsible for the accounting, sales, estimating, and ordering of material. So you are more likely to work 10 hours a day for an 6.4 (20% of 8 hours) hour billable day. A LOT of estimates would be required to fill a years worth of work! Especially that type of work....


Unfortunately this is very true....

Wow. Congrats. You're an engineer. You certainly don't know much about business or accounting. That 56k isn't all going to any one employee. What is the actual burdened labor cost? You're forgetting about taxes, various types of insurance, medical, vehicle maintenance, rent, utilities just to name some items off the top of my head.

That 56k you mention is now down to around 20 to 25k at best.

Your profile shows San Jose, CA. Would you be able to live here on 25k?

I agree that you are only as good as you can prove to your clients, but no licensing requirements? Try again. You're not legal in California and many other states.

....drewski beat me to the punch... ;-)

Back when I was doing side jobs 10 years ago I was charging $50 per hour. On the side...

There is no way that someone charging $35 an hour is your competition! Are you sure they have programming @ $35 an hour as a line item? Or is this one of those they put down 2 hours of programming at $280 and you think it's going to take 8?

Unfortunately, the only thing you have a shot at controlling is the equipment pricing. Most mfg'ers have pricing controls and if this "company" is below that, then contact the rep.

According to your website, I'm guessing Elan because this person would even dumber if they charged $35 for Crestron, Savant, or AMX. Drop them! There aren't too far off from Savant pricing and Savant is coming out with a remote that is in the same price point as the HR2, ER2 or whatever it's called.

BINGO!!!!

Probably a little too long for it to truly be comedic timing but still makes me laugh.

What's worse than a job with an engineer on it? Two engineers!

We have a job going with that scenrio and guess how it's going? And throw one of the most highly sought after designers in the country. Designer is out of LA, engineers are out of Connecticut, Lighting designer is north of San Fran, and the architect is out of NYC. What could go wrong?


Disregard the politcal tone.

BCF, you're also assuming that the $35 an hour company is working 8 hours a day installing tvs. With set up, clean up, drive time, and a the other little things to be done, how many installs do think he can do in a day and bill for.

i want to know what control system company. pm me if you have time

There is no "company" that can bill $35.00/hr that actually has employees (ergo, workers' comp, actually paying for mileage, trucks, etc.). They are all doing it on the side or it's a guy that just started (sole proprietor) and doesn't know that $35.00/hr doesn't equal $70K. It's impossible to bill for 100% of the hours in a week. This guy will be working for the cable company in 4-6 months or raise his rate to $60-$100 like everyone else that stays in business.

I have seen cheapo labor guy then bill programming for $125.00/hr. This separation of rates lures the unsuspecting in. Recently, I saw a competitor's estimate for 6 hours of programming at this rate for a basic remote with an AppleTV, cable box, single-zone receiver and a Blu-Ray player. The client was happy with $50.00/hr for the labor not knowing that the guy was billing him $750.00 for an hour of programming.

Damn, 10+ years ago when I did side work I charged $50+ an hour..  There's no way anyone is in "business" charging that..
It's hard enough charging $100-$125 an hour with all the bs and lost time we deal with.

That's what you are not getting....he is talking about the trunk slammer crowd, who would not carry everything that a business or you usually do. He was referencing someone that only has a few tools, a car and installs to do, so take all those expenses away and that is what you get.

6 hours @ $750/hr? Please tell me there's a typo there somewhere!