I've been working in the A/V & IT world for over 10 years. The past few years I've been doing some "side work" after hours and weekends under an LLC I formed. My day job has gone from local work with a national event or two per year, to more and more national events and requires lots of time on the road (weeks per project). I'm approaching 30 and while the money is good, this is not the lifestyle I'm looking to live.

I don't want to look back with regrets and wish I made a change. I'm a hustler and work ethic is strong. I don't have too much pride to do what it takes to make ends meet. I'm going to transition to self employment.

I'm in the NYC metro area and a little unclear on setting my rates. I don't want to undervalue myself but also don't want to price myself out any jobs.

I've been charging either $65 or $75/hr to clients I've been working directly for depending on the work. I've had a few people approach me about my rates for sub contract work, mostly cabling I think. They said most guys for the jobs they have are in the $35-45/hr range but to also give a day rate.

For now I'll be working out of my personal pickup truck and carry liability insurance for the LLC that costs me around $800/yr. What's the best way to calculate my rates? Do you charge the same rate to all clients or vary based on type of work or client?

Take a class from this guy.

http://www.ffbizcoach.com/

It will help you tremendously...

Yes, courses will help.

The key word that the people you are talking to, is "guys". This is one guy working on a job for a wage by the hour or some other unit.

You are wanting to start a business, this means that you need to charge more because when you need to hire a "guy" to do the work at $35 to $45 per hour, you need to make some money for yourself to cover your own wages, overhead, and other expenses as well as payroll taxes.

The OLD rule of thumb used to be "your employees must earn the same for the company as they do in wages", so $35-$45 per hour would mean you get $70-$90 per hour for your business. At the start you may be the only worker, but once you need help your customers won't want to pay more if you bid on the job based on only yourself. That will be a losing proposition.

Take the course, there may also be some similar courses at CEDIA.

If you're not charging $110-125+ then, a. you won't make it, or b. you're hang and bang / Craigslist type of person and I can't advice you any further.

If you've been in the IT world for 10 years then you know that they charge for every minute of their time and their billable rates are typically 2-3 times the typical AV integrator due to low margins and the perceived value that they add. This field is slowly creeping toward that business model.

If you intend to do everything correctly (insurance, taxes, licensing, workers comp, overhead, etc etc), you'd go out of business quickly at your intended <100 per hour rates.

I won't throw out some arbitrary number for you as that is meaningless not knowing your intended demographic, business model and competition but I will say it should be closer to 200/hour possibly more.

Thanks... This is exactly the info I'm looking for.

Hey Adam, Certainly if you are in the NJ area and you take a look at all of your expenses at $65 to $75/ hour/man at the end of the year you will not be making money.

There are quite a few ways to determine exactly where you need to be one of which was mentioned above. There have been articles in the "trade news" as well.

Lets just say that 10 years ago Harvey Electronics was charging $125/hr/man for NJ and $175/hr/man in NYC. I sold a lot of that labor for them.

Most guys in NJ area who I perceive as successful are at around $125/hr/man these days.

When you say NYC Metro area, where exactly? Some good advice. I am at $120/hr in CT. I do venture into NYC from time to time (as little as humanly possible) and that rate goes up significantly as it is a much more expensive place to work, but more so it is a much more pain in the a$$ place to work.

I'm in Northern NJ. Couldn't agree more about NYC...

Thanks Tim. I've been able to get away charging $75/hr since it's all been extra income in addition to full time work. I will be adjusting my rates for sure. I don't want to contribute to driving the value of the industry down.

$35/45 an hour is employee pay. Are they giving you company shirts and business cards and paying you even when business is slow? If not then Minimum $95 an hour. $125-150 is probably more in line with NYC.

Explain to those who question it..."for $125 an hour it gets done correctly on time." And "the other guy charges $45 an hour but i work three times as fast".

I bill @ $100/hr for my services as a one man show. Licensed, bonded, insured etc. No trunk slamming.

Unbelievably there are legitimate, above board companies that undercut me by 25% and run on the "make money on equipment + volume business model" to be profitable. In southern California, where the cost of living and doing business rivals areas like NYC.

I have also picked up some clients from the ashes of my former employer, they are all surprised that I am more expensive then they were.

When asked about my labor rates being higher then my competitors, I just (kinda smugly) say "because I am worth it". When returning clients from my old employer ask about it I ask them "and where are they now"?

Kinda surprises me how well that works. I don't get every job, I don't want every job. I want the ones that I can turn a profit on and are less likely to be a giant nightmare.

My business model is based on another one man show that I used to do satellite work for well over a decade ago. He books a handful of large projects a year, does incredibly detailed, magazine worthy work, runs lean and mean and manages his finances well. No advertising, all word of mouth/referrals based on his exceptional work.
If he has some dead time between projects, he goes fishing.

After over a decade doing high end work, I have seen too many guys fall into the trap. Book a couple of big projects, decide they are the new king of the industry. Go rent a showroom, finance a bunch of vehicles, hire a staff. They usually do pretty well for a little while, then things get slow and they have a $50,000+ a month albatross hanging around their neck that they have to feed.
They rise, they fall and they are gone.

Im in rural central Texas were it is cheap to live. I have NO problem charging minimum $75 per hour for manual labor cheapest rate and $125 for more technical. Its up to YOU to make sure your customers know you are worth it. Are you? Its a choice only you and your work can make.

if you are charging those rates you stated on the east coast you are simply ripping yourself off. If your goal is to be known as the cheapest, keep struggling. If your goal is to be the best, then work for it and CHARGE FOR IT. Why anyone wants to race to the bottom is beyond my comprehension level. Ive never understood that train of thought.

The rates he was charging was side work, not as a registered/insured/licensed business. That is common. I'd bet there are more than a fair share of folks on this site that started the same way. In many instances, they do not realize they are charging too little, or undermining what anyone else charges. Typically it is double, triple, quadruple or even more than what their current hourly rate is at their primary job. The OP of this thread posted because he was not sure where his rates should be once he goes with a legitimately registered business. I give him credit for reaching out, and doing research rather than jumping in feet first and sinking straight to the bottom.