Are You Charging Enough?
How you Can Optimise Pricing for Higher Profits
Introduction
Pricing electrical services correctly is a balancing act—charge too little, and you risk running an unprofitable business; charge too much, and you might lose out on customers. With rising material costs, increased competition, and growing demand for energy-efficient solutions, UK electrical contractors must optimise their pricing strategies to ensure sustainable profitability.
In this post, we’ll explore how electrical contractors in the UK can fine-tune their pricing to maximise profits while remaining competitive in the market.
1. Understand Your True Costs Before Setting Prices
Why It Matters:
Many contractors undercharge because they fail to factor in all their costs, leading to lower margins or even losses.
What to Include in Your Pricing:
Labour Costs – Ensure you’re paying yourself and your team a fair and sustainable wage.
Material & Equipment Costs – Factor in fluctuations in material prices and wear-and-tear on tools.
Overheads – Include vehicle expenses, insurance, marketing, training, and admin costs.
Profit Margin – Add a percentage on top to ensure your business remains profitable.
2. Choose the Right Pricing Model for Your Business
Common Pricing Methods for UK Electrical Contractors:
-Hourly Rate – Charging by the hour works well for emergency call-outs or troubleshooting jobs. Best for: Reactive maintenance, troubleshooting, and fault-finding.
- Fixed Price Per Job – Offering a set price for standard installations (e.g., consumer unit replacements, EV charger installations) ensures clarity for customers.
Best for: Domestic rewires, fuse board replacements, and new installations.
-Day Rate Pricing – All though fixed price works is the preferred method for installations in some instances projects require as design- build or Adaptive design method both these methods can make pricing difficult and a day rate may be best suited.
- Value-Based Pricing – Pricing based on the benefits to the customer rather than just costs.
Best for: High-end installations, smart home setups, and energy-efficient solutions.
3. Avoid the ‘Race to the Bottom’ on Pricing
Why Competing on Price Alone Can Hurt Your Business
It attracts price-sensitive customers who may not value quality.
It reduces profit margins, making it harder to invest in training and tools.
It can lead to burnout by forcing you to take on excessive workloads to compensate and meet profit margins.
What to Do Instead:
Position yourself as a specialist – Offer expertise in specific areas like EV charger installations or smart home automation.
Highlight your value proposition – Promote your qualifications, accreditations (NICEIC, NAPIT), and customer service quality.
Target higher-value customers – Market to homeowners and businesses looking for premium, reliable service rather than bargain hunters.
4. Factor in the Cost of Compliance & Certification
Electrical contractors must comply with strict regulations, which should be factored into pricing:
Part P Compliance – If you work in domestic properties, you need to notify work and issue certificates.
BS 7671 (18th Edition Wiring Regulations) – Staying up to date with the latest regulations means ongoing training costs.
Insurance & Public Liability – Covering yourself against claims is essential but adds to your expenses.
Pricing Tip:
Make sure your rates reflect the cost of staying compliant while reassuring customers of your professionalism.
Tip: If you’re a member of a professional body like NICEIC, use their branding in your marketing to justify premium pricing.
5. Offer Tiered Pricing Options
Giving customers multiple pricing options can help them feel in control of their spending while allowing you to upsell premium services.
Example for a Consumer Unit Upgrade:
Basic Package (£600-£800): Standard split load load unit with MCB's and surge protection.
Standard Package (£900-£1,100): Higher quality unit with surge protection and RCBO's protecting each circuit.
Premium Package (£1,200+): Includes premium brand unit, Hot spot indicators and extended warranty.
Tip: Many homeowners will choose the mid-tier option when given three choices, increasing your overall job value.
6. Adjust Pricing for Peak Demand & Emergency Call-Outs
Electricians often get calls at inconvenient hours—make sure you’re compensated fairly for the added stress and effort.
Evening & Weekend Rates – Charge a higher rate for out-of-hours work.
Emergency Call-Out Fees – Have a set call-out fee for urgent work, plus an hourly rate.
Holiday & Peak Demand Pricing – Prices can be higher during winter when demand for electrical work rises.
Tip: Publish your emergency rates on your website so customers know what to expect.
7. Offer Discounts the Smart Way
Discounting can be useful, but it should be strategic to avoid devaluing your services.
When Discounts Work:
- Offering a discount for repeat customers or maintenance contracts.
- Providing small discounts for referrals or bundled services (e.g., adding security lighting with an EV charger installation).
-Running limited-time promotions to fill gaps in your schedule.
When Discounts Hurt Your Business:
- Giving automatic discounts to match a competitor’s price.
-Reducing rates too much for large projects without considering long-term costs.
Tip: Instead of offering discounts, provide added value—such as a free safety check or minor repairs included in the job price.
8. Regularly Review & Adjust Your Pricing
Electrical work is affected by fluctuating material costs, insurance rates, and economic conditions. Set a schedule to review and update your pricing to stay profitable.
How to Review Your Pricing Effectively:
- Check supplier price lists regularly for material cost increases.
-Track time spent on jobs to ensure you’re charging accurately.
-Compare your pricing with similar electricians in your area (but don’t undercut them).
-Test new pricing models on a few clients before rolling them out.
Tip: Let existing customers know in advance if prices are increasing and explain the added value they’ll receive.
Conclusion: Set Prices That Reflect Your True Value
By optimising your pricing strategy, UK electrical contractors can ensure sustainable profitability while maintaining competitive rates. The key is to:
-Know your costs and factor in overheads.
-Choose the right pricing model for different job types.
-Avoid competing on price alone—highlight your expertise and service quality.
-Offer tiered pricing and smart discounts to increase job value.
-Regularly review and adjust pricing to keep up with market changes.
What’s Next?
Take a look at your current pricing structure and see where you can make adjustments. Have you been charging enough for your time and expertise? Let us know your thoughts in the comments!
