Many small electrical and plumbing businesses in South Africa believe they are making money because work is coming in, vans are busy, and phones keep ringing. Yet at the end of the month very little remains.
This is not because owners are bad at their trade. It is because the real cost of running a technician business is often badly underestimated.
Labour Costs: The Foundation Expense
In South Africa, electrical and plumbing wages are influenced by industry bargaining councils and sector guidelines, which exist to protect both workers and employers. Even at minimum or entry level compliant rates, labour is the single largest cost in a technician business.
Example: One Electrical Team
A typical team might consist of one qualified electrician and one electrical apprentice. Typical monthly wage costs are:
- Qualified Electrician: R18 000 to R22 000
- Apprentice: R7 000 to R9 000
- Total Labour Cost: Approximately R25 000 to R31 000
This is before overtime, bonuses, or productivity incentives. Labour alone already consumes a large portion of revenue.
Vehicle Costs: The Bakkie Is Not Free
A technician without a vehicle does not generate income. Even an entry level work vehicle such as a Nissan NP200 costs much more than just the finance payment. Real monthly vehicle costs include:
- Vehicle finance: R6 500
- Fuel: R4 000 to R6 000
- Insurance: R1 200 to R1 800
- Maintenance and tyres: R800 to R1 200
Total monthly vehicle cost is approximately R12 500 to R15 500. Many small businesses only think about the finance payment and ignore the full running costs.
Admin Is a Direct Cost
Once a business runs more than one team, admin becomes unavoidable. An admin staff member handles calls, job booking, client communication, invoicing, follow ups, and supplier queries. Typical monthly cost for admin is R8 000 to R12 000.
Without admin, the owner absorbs the work, growth stalls, and burnout follows.
Insurance, Compliance and Hidden Costs
These costs are rarely factored into job pricing but are unavoidable. Common monthly business costs include:
- Business insurance for public liability and tools: R1 500 to R3 000
- Workman’s compensation
- Accounting and compliance
- Cell phones and data
- PPE and tool replacement
These costs quietly add thousands per month.
Putting It All Together: One Team Real Numbers
Conservative monthly cost for one team:
- Labour (electrician and apprentice): R28 000
- Vehicle (all in): R14 000
- Admin contribution: R10 000
- Insurance and overheads: R4 000
Total monthly cost: Approximately R56 000
This is before profit, tax, or owner salary.
The Community Pricing Trap
Many small contractors price work as fair, affordable, or community based. The problem is that costs are commercial while pricing is emotional. When jobs are priced too low, margins disappear. Volume increases stress rather than profit, and owners work longer hours just to stand still. Good intentions do not pay insurance premiums.
Why Owners Feel Busy but Not Profitable
Most owners are shocked when they see the numbers laid out. They are working full days on site, doing admin at night, managing staff stress, and carrying financial risk, yet margins remain thin. This is not failure. It is a lack of visibility.
Where PMC Fits Into This Reality
PMC does not magically reduce costs. It prevents hidden costs from eating margins by:
- Reducing admin time
- Preventing missed invoices
- Improving job visibility
- Helping owners price work properly
- Showing real performance per team
PMC helps businesses see whether a team is actually profitable and not just busy.
Final Truth: Most Contractors Learn This Late
You do not go broke because you are expensive, not busy, or not skilled. You go broke because you do not see the true cost of each team. Once you see it, decisions change. That is when businesses start surviving and growing properly.