Subscriber Discussion

Am I Under Pricing Myself On This Access Control Job?

UI
Undisclosed Integrator #1
Nov 30, 2016

I am terrible with pricing, and I am constantly underpricing myself.

Would you say that the below is a honest price. (yes, I read the markup guide, but just trying to be sure).

Install two  two door expanders for an existing access control system, including running cables in an attic for 200ft, bringing them down using wiremold (30ft ceilings), one is a double maglock door another just tapping into an existing roll up door. The last door is a regular surface mount strike. Each access control expander costs us about $600 (not including readers which are another $150 each). This includes wiring, material and all labor. For a total price of about $5,500.

 

Im also looking at charging about $300 to replace an existing bad maglock.

 

Thank you

 

 

(1)
Avatar
Brian Karas
Nov 30, 2016
IPVM

From what you have posted it looks like your costs are:

(2) 2 Door Expanders @ $600/ea

(4) Readers @ $150

You say those prices include wiring, material and labor, making your cost $1,800. You are charging $5,500, giving you a 67% margin. That seems pretty healthy. Are there additional costs beyond the $1,800 listed above?

Avatar
Brian Rhodes
Nov 30, 2016
IPVMU Certified

I am terrible with pricing, and I am constantly underpricing myself.

You should consider pricing yourself in a 'tiered' format, ie: Good/Better/Best options.

If you are concerned about the customer thinking you're out of line or is taking advantage of you, offer a 'bare bones' scope of work that is strictly what the customer has asked for (ie: the 'Good') proposal, and then adjust pricing upward with higher quality hardware/installation methods as optional proposals.

For example, your 'Good' proposal includes wiremold, but the 'Best' proposal includes you fishing the cables inside the wall to the header.

The 'Good' price includes a generic surface strike, the 'Better' price includes the premium brand strike backed by a lifetime warranty, the 'Best' option includes a latch monitor and your install labor to connect it.

Using this approach helps define the scope of work, gives your customer points to negotiate on, and helps you understand what reasonable pricing looks like for your work.

(1)
Avatar
Ross Vander Klok
Dec 01, 2016
IPVMU Certified

Great suggestion Brian! This is exactly how I do all my internal capital acquisition requests and 95% of the time we land at better or best.

Avatar
Armando Perez
Nov 30, 2016
Hoosier Security and Security Owners Group • IPVMU Certified

I think his SALE price includes wire, but I wouldnt assume his listed COSTS include it.

panels: $600x2 = $1200

readers:$150X4= $600

strike = $160?

Do the panels come with power supplies and batteries? if not $50+

cable = $75 rough cost

labor? How long are you planning on this taking you? What do you pay your technicians? Add 30% for the actual loaded cost per hour. Lets pull a number out of thin air and say 2 guys 2 days and pay them $22/hour. 32 hours X $22 X1.3 = roughly $900

There are alot of assumptions here... and Im sure missing expenses.

1200 + 600 + 160 +50 +75 +900 = $2985 projected cost.

If you are charging $5500, then (5500-2985)/5500 = 46% margin on the whole thing.

Im not the guy to ask if this is reasonable, because I think the entire industry is undercharging.

Alternative that some people will say is impossible:

Hardware cost: $2085 * 1.85 = $3857 @ 46% margin on parts

Labor cost 32 hours X $120 = $3840 @ 77% margin on labor

total sale: $7697 @ 61% margin

I think this is unreasonable, but mostly because it should not take 2 guys 2 days to do this, but the margins themselves are not unattainable.

DO NOT TRY TO JUMP INTO THIS TYPE OF PRICING IMMEDIATELY, IT WILL KILL YOUR BUSINESS IF YOU TRY TO RAISE YOUR PRICES BY 40% PLUS IN ONE SHOT. TO DO THIS YOU ALSO HAVE TO PROVIDE MASSIVE VALUE AND SERVICE TO BOTH THE CLIENT AND THE EMPLOYEES. BUT THE FACT REMAINS, YOU DONT KNOW HOW MUCH IS TOO MUCH UNTIL YOU LOSE A JOB. Raise your prices in small increments in a measured way one job at a time until you reach a point of pushback, then back off a bit.

I'll go put my flame suit on now.

(6)
(5)
MM
Michael Miller
Nov 30, 2016

Depending on the lock hardware I find the average per door installed price to be between $2000-$3000. So if you are doing 3 doors you would be between $6000 and $9000.

(6)
(2)
Avatar
Tyler Blake
Nov 30, 2016
BCI Integrated Solutions

$2000-3500 is our pricing I always ball park. I really thin most jobs end up around the 2600-3200 range though.

(3)
UI
Undisclosed Integrator #2
Dec 01, 2016

Finding an actual labor cost is so much fun. I've been struggling with it for years now. My techs labor has to pay for me, my office manager, vehicles, insurance, etc. We do a fair number of labor only jobs, so I try not to let product cloud that cost. Add in pay and health insurance, and for my integration techs (others have a separate cost center) I need about $50/hour at 80% utilization to break even. I charge anywhere from $75/hr (usually only that low on multi day Time and Material jobs) to $125/hr, so that number seems pretty good to me. That said, I too have issues with under quoting. I've been bumping prices up lately, but that's dropped my quote acceptance rate from 80-90% to 50%.

Avatar
Armando Perez
Dec 01, 2016
Hoosier Security and Security Owners Group • IPVMU Certified

lets talk...

UI
Undisclosed Integrator #3
Dec 01, 2016

At our company, we bid a single door at ~ $2600. So, depending on the level your work and service is at, I wouldn't say you're price is too low.

UI
Undisclosed Integrator #1
Dec 01, 2016

Thank you to everyone who gave input. You made me feel more comfortable with my pricing. Locally by us in town, the going rate per door is $1,500 and if going more then one $1,200. So locally I have to go cheap. But this one was farther away so I wanted to try to have a larger profit on it.

I submitted my pricing, and an hour later, they wrote back that they accept it.

Thank you

(2)
Avatar
Armando Perez
Dec 01, 2016
Hoosier Security and Security Owners Group • IPVMU Certified

CONGRATS!

New discussion

Ask questions and get answers to your physical security questions from IPVM team members and fellow subscribers.

Newest discussions