How do we calculate our prices? – A question that we have been asked repeatedly over the last couple of years, more so during the current economic state.
If an electrician only costs x per hour and the cost of material is y, how do we get to our price?
Firstly, what/who is our quote being compared with? Is it being compared to that of a competing company within the same ranks, or with that of a one-man-band/sole trader? Is it perhaps a feeling, or your perception, as the cost is beyond your intended budget?
Keeping in mind that Bugs & Sparks strictly and regularly monitors our costing and compares them to that of other reputable companies, it’s also important to comprehend the difference in the expense base of a company such as Bugs & Sparks and a sole trader.
In the interest of transparency, our directors have shared a list of items that we, as a company, need to consider when working out costing and putting a quote together.
Below is a list of the main items that need to be considered when calculating costs for a company like ours, in comparison to that of a “bakkie tradesman”:
- Bugs & Sparks is VAT registered – this automatically inflates the pricing by 15 % when compared to companies that are not(yet) VAT registered.
- Labor cost for all of our tradesmen as well as all other administrative support staff who ensure that bookings, invoicing and COC’s are sent out timeously.
- Currently, the labour law dictates that every employee is entitled to 15 days paid leave, 10 days paid sick leave and 12 paid public holidays per year, which equates to one and a half months of labour expenses without being able to generate an income, and this year, 2021, we have another added public holiday on the 1st of November.
- Because we employ qualified Tradesmen, by law we have to register them with the respective bargaining councils and pay them the prescribed wages, provident fund, holiday fund, and leave bonuses.
- Office space is used as a base for all employees to work from as well as where clients can come should they need to.
- Online as well as face-to-face marketing; we need to market the business to ensure that clients can find our services.
- We provide company vehicles to our operational teams and staff to ensure that they get to your property on time and safely. These vehicles further incur petrol and maintenance expenses.
- Vehicle insurance as well as all the other necessary trading insurances to ensure that neither we or our clients are exposed to any damages.
- Training costs to ensure that all our staff has the necessary and relevant qualifications to perform their duties.
- General tools and various other consumable supplies.
- Stock/material that is specifically needed for electrical/plumbing/gas/electric fence repairs and/or pest control treatments at your property.
- The various software systems that we have in place to ensure that we keep a track record of your property, include communications, inspections reports ( with photos that are date stamped), compliance certificates, and more.
- And of course, the dreaded monthly electricity, rates, and taxes as well as levies for our office space.
There are many more expenses that we incur, however, we believe that readers will get the gist of the costs we need to consider when formulating your quotations from the above list.
If you ever need to raise any discrepancies regarding your Bugs & Sparks quote, please contact our Operations Director, and please don’t forget to mention your property address as a reference.
Operations Director: Melodie Botha
Tel: 087 700 4673 (Office)