MIHI price issue

[madwoody]

Hi there I'm new to this board and i'm after a bit of advice. My problem is the pricing of jobs. I've just ventured out on my own with my partner and i'm finding 80-90% of my prices seem to be getting undercut by other firms. I've currently only priced splits using MIHI which I find to be a nice and reliable unit but is the price of these units hampering my chances of getting the jobs. My supplier has given me a decent discount on list prices
but it seems I have to price a job just to obtain a wage and often not enough to cover my overheads. Does anyone think I should price using a different brand taking into account the reliabilty issue (i.e not LG) and if so which one? Any feedback would be greatly appreciated.

[Abe]

Give me an indication of your prices and I will tell you if its about correct.

Itemise as follows

Price of unit, Do you use List price or what percentage do you mark up trade price

Labour

Materials
Other


Also size of unot and type, ie: wall mount or cassettte

[frank]

Or if you don't want to tell what you are quoting then let us know the % you are adding for overheads + profit

[madwoody]

I usually take 10% off the list price of all units I buy whether it be cassette or wall mout. With labour i allow £200 per man for a 8hr day this is done to cover my expenses of things such as my van etc. All other equipment i.e Electrics, pipe, insulation etc I work out at list price + 15% this allows me some cover for possible troubles I may encounter on installation and possible warranty call outs.
Hope this is sufficient. Cheers. John

[SteveDixey]

Hi there I'm new to this board and i'm after a bit of advice. My problem is the pricing of jobs. I've just ventured out on my own with my partner and i'm finding 80-90% of my prices seem to be getting undercut by other firms.

From ACR Today on sample of 500 companies...
"One third of ACR contractors are struggling to break even, with 8% in danger of financial ruin. Almost a quarter have reported a loss for the year, and is their second year of making a loss. The good companies make 62% margins on average....."

Trouble is, splits are getting easier to install, seem to be quite reliable and so you end up with competing with a lot of people to install what is becoming a mass produced commodity product.

Splits are being installed by plumbers, electricans (as a replacement for heating say) and anyone who can drill a couple of holes, make some pipe joints, and can wire it up to a electrical supply.

Personally, I despair at this country's fixation on price, seemingly at the expense of anything else. I got tired of the "How much and how quickly .." questions when I ran a business, and then the constant interference with my family life as I tried to juggle quality, price and supply times, only to be undercut by a part-timer working on the side and breaking the rules.

Low margin but high unit sales or higher profit on lower unit sales of more technically involved products? Look for a more profitable business at the high tech end with less competition?

Steve

[freezy]

In this country the AC market is really competitive now. People still live in the past, 15 years ago there was a lot of money to make but times are changing.

Every day I hear of another person who is setting up a business.

Steve Dixey is right...everybody is at it!

I priced a job recently and the main contractor put £300 profit on it as he was doing it for a friend and we were still undercut.

[Mickvee]

I tried installs for a bit and found the hassle of quoting, outlay on the unit, installing, then getting paid, and small profits was not worth it. I do better doing repairs on botched installs and repairs, but my main business is commercial refrigeration repair, which is less hassle and better margins.

[KayPoh]

We guys in Singapore also face similar situation as you guys in UK.