We use the Proposal to quote electronics costs for our customers. The proposal is drafted from the notes taken from the original interview with the customer. The intended use of the boat is defined during the 1 to 2 hour interview. The intended use of the boat determines the electronic equipment that is selected for the boat. For example, a day sailor will not get the same electronics as a boat that is going to circumnavigate.

A proposal is drafted and emailed to the customer with a request to please review and contact us so that we can discuss in detail all of the available options. It is also during this conversation that our quoting and billing policies are explained to the customer. The proposal is a fluid document and changes are almost always going to occur. The changes are then made to the proposal and the revision is sent to the customer.

Elements of the proposal

There are 3 elements of the proposal. They are Proposal Detail, Proposal Summary, and Outside Labor costs. The sections below describe these 3 elements and why they are required.

The Proposal Detail

This element is one difference that sets us apart from other electronics companies. The amount of time required to draft this element in the proposal is significant and probably the main reason other companies do not have this element in their proposals. Customers’ knowledge levels of marine electronics vary significantly and the proposal detail helps the customer to see the capabilities of the electronics that will be installed. We divide the total package into sections and show the cost of each section so that the customer can decide which section they want or don’t want. For example, if the customer decides not to put a SSB radio on the boat, we can easily delete that section from the proposal and the customer can easily see the new cost of the package by deleting it from the proposal summary page. The proposal detail page also lists where the electronics will be installed and how each section integrates into the other sections that make up the entire package. We use the proposal detail to develop the data drawings and the power source documents that will be used to perform the installation.

The Proposal Summary

The Proposal Summary lists all of the sections from the detailed proposal on one page so that the customer can see the total costs of the installation.

Outside Labor Costs

The outside labor costs are listed here so that the customer can see the true cost of the installation by adding the outside labor costs to the total that is listed on the proposal summary page.

How we charge for electronics

Our objective is to complete the job under budget. Our invoice to the customer will list all of the costs associated with completing the installation. These costs are the parts required to perform the installation, any outside labor charges, sales tax, freight, and the actual labor hours that it took to complete the job. We usually reach our objective by using the billing policies listed below.

Parts required

We list all of the parts required to complete the installation on the invoice. This is usually a line-by-line transfer from the Proposal detail section of the proposal to the invoice with minor changes. If a part is listed on the proposal, and it is not required to complete the installation, it is not billed. The parts cost listed on the proposal will be the parts cost charged on the invoice even if the cost of the part increased since the writing of the proposal.

Labor Hours

The way that we bill labor hours is another difference that sets us apart from other electronics companies. We do not charge the hours listed on the proposal. We charge the actual labor hours that it takes to complete the installation. We consider this a much fairer policy than holding to the number of hours listed on the proposal. The proposal is broken into sections with the labor hours listed on each section so the customer can pick and choose the options they want so they can customize their package. However when the systems are installed on the boat, they are essentially installed at the same time. This usually results in a savings in labor cost to the customer.

In the rare event of an overage of Labor Hours, we limit the amount of overage to a minimal percentage of the proposed labor hours amount.

Outside Labor

We are a Marine electronics company and we rely on the expertise of outside labor to perform work that we feel is outside our mainstream business. This results in a better quality product and allows us to focus on our work. One exception to this rule is that we cut the electronics panels ourselves because an outside carpenter does not always match our degree of accuracy.

We will provide copies of the invoices paid to outside labor and collect payment for the same amount. We do not believe it is fair to “Mark–up” outside labor and subcontractor invoices. This mark-up policy is common in Ft. Lauderdale and we refuse to adopt this policy because it falsely inflates the cost of having the boat here. We will manage the outside labor and we will charge only the time it takes to mange the job for the customer at our normal hourly rate. Usually this is ½ or 1 hour that is added to the labor hour’s section of the invoice. Because we do not have as much control over outside labor charges that we must bill our customers, we will typically quote a larger cost for outside labor than what the actual bill is expected to be. However, the customer is always billed the actual amount of the subcontractor invoice.

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