# Rates and pricing



## chicken steve (Mar 22, 2011)

Well there's quite a few ways to do this , i'm sure others will chime in....so welcome to ET & stick around Bryan 

:vs_cool:
~CS~


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## bryskie (Mar 18, 2018)

Thanks Steve,Im waiting here on Hot Standby!! LOL!!


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## HackWork (Oct 2, 2009)

It's going to be hard to figure out your pricing at your stage in the game. You don't have a full company yet and aren't working full time. So you don't know your overhead and you don't know how many hours you are going to work per year. 

There are many, many threads in this forum that will help you learn how to set you prices. Using other contractor's prices to set your own is not a good idea. But at this stage you may have to go by that to get an idea. After that, you can continually watch your numbers.

For now, someone in your area giving you an idea of a reasonable hourly rate to start might be best. $100/hr isn't too bad to start. But please, don't get stuck in the mindset that you need to keep your rate at a certain point because other contractors are charging that. You need to set the stage yourself and not worry about competition because you will sell your work before the customers get other prices. That's your goal.


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## active1 (Dec 29, 2009)

We asked the same question "how much should I charge" from other EC's including start-ups and struggling, I tell them the same thing. Find an accountant that has a background of construction and service calls. To meet with an accountant for about a hour maybe a few times to discuss this is priceless.

The accountant:
Knows accounting and tax rules
Knows the exact tax rates from all the different gov departments
Has seen monthly financials from many other companies in your market
Can provide a baseline for unknown costs
Can tell you if a cost is within a normal range.
Should be able to calculate how much you charge and how much you'll make.

Sure lots of people don't need one. You could read a pile of books. Read internet forums. Take night classes. Actually it's a good idea regardless. The problem is a startup has no past cost and sale numbers to base off of. Plus most tend to be over optimistic with not including costs, unrealistic efficiency like billing 40 hours a week from day 1, and unrealistic growth. 

Kinda like taking an amp reading of a home. With experience you know what's normal. You could also estimate it in your head, or calculate it almost close to the actual. With the more details you know the more exact it is. But the numbers would be meaningless to the untrained. Going on the net asking how many amps should read on my service conductors with no other details is just another shot in the dark.

I like working with even numbers, $100 / hr IMO sounds like a uncalculated guess to even some customers.


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## Coach529 (Sep 20, 2016)

Too many variables for me to throw in an opinion.

What is your break even point? (Wage+overhead)


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## bryskie (Mar 18, 2018)

Thanks for your good advise guys.I talked to my account this week and she suggested that I join the chamber of commerce in my area and connect with other entrepreneurs


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## telsa (May 22, 2015)

You can virtually take it to the bank that your idea of the going rate will be LOW.

1) No existing EC is going to level with you.

2) No existing GC is going to level with you.

There are NO END OF THREADS on this point... right here at ET.

Start by reading them.

Don't get tricky, just scroll backwards through time.

And up they will come.

From time to time fellas will even list all of the outlays// costs that MUST be incurred to stay in the game.

Noobies always miss half of them.

You can start with your vehicle... then tote up your basic overheads: phone, rent, etc.

You can assume that you can only bill HALF of your business hours 40X50weeks =2,000 hours per year ... times HALF = 1,000 billable hours.

These are those hours where you're actually standing there with your tools on with materials ready to work.

The other 1,000 hours were spent driving, paperwork, marketing, estimating, -- away the time goes. 

Try not wasting your time shopping for materials...unless you can pass on the bill...

Some guys can spend 400 hours a year shopping, sitting at the Supply House counter. Heh.

That's a tough way to make a buck.

&&&

As a noob... for heaven's sake, don't work under a small-time General Contractor.

That's the road-to-ruin.

It'll look like the opening sequence in "Conan the Barbarian."

Feel like it, too. It's just that you won't end up buffed like Arnold.


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## macmikeman (Jan 23, 2007)

telsa said:


> You can virtually take it to the bank that your idea of the going rate will be LOW.
> 
> 1) No existing EC is going to level with you.
> 
> ...


1000 billable hours is an average fair estimating number for a Service Company electrician in a year. A solid construction effort is going to be closer or way higher billable than 2,000 hours, however collectable vs billable is an issue with construction electrical that eats away at profits. The service only is an art form that is hard to maintain for some of us full time , even with all the terrific money saving advice hackworks lays on us constantly. Or with his good solid advise on website and that SEO mystery stuffs that I ignore since I don't even keep a website. If you have determination like your uncle macmikeman, no amount of adversity will stop you or slow you down, and you will find your niche in this business. Good luck to you and read the following book found on Amazon for under twenty buck: How much should I Charge? Read it twice.


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## Southeast Power (Jan 18, 2009)

bryskie said:


> Hello all, I am just starting up my own company. I live in a small rural community in Ontario. I have been working in this field for many years; and am just getting my own company up and running to fill in the gaps when there is a lull in union jobs.
> What I am wondering if whether my pricing is on point as follows:
> $75-100 per device
> $100/hr.
> ...


If you are just doing a little contracting while waiting on a call, you might be able to get by working for wages just to get out of the chute and have some cash flow and build some confidence. 
This is your $100 market.
This means pretty much bottom feeding just like must of us had to do getting started.
If you get to the next plateau, you are going to realize what you are doing isn't enough and that you might have picked up some debt mistaking cash flow for profit. It sucks being broke and then having a check in your hand for a grand or two with all of your bills due. 
The next level requires a dose of reality.
There is a sticky about determining your costs. It is extensive but one of the best reads on the forum. Much thanks to Flyboy for putting that together.

I'm not convinced hourly billing is survivable. 
Note Hacks comment about the 1000 hour billing cap. This is reality and you have to plan for that. If you need $100 per hour based on that understanding, you are going to have to bill out $200 to just pay your bills and get a paycheck.
Problem. The company needs to make money so that you can have some working capital. You have to build that working capital to buffer your cash flow.

You are not going to be able to pull up in someone's driveway, hop out of your unmarked pickup truck and demand $200 + per hour in most markets.

You have to have a flat rate plan. There are a few out there. You have to do it.
It's going to be a matter of sink or swim so, don't get into the per hour thing unless you are working employees and exactly know your costs. And. That can get sketchy too.

The working owner has two jobs. Field and office. Both are important to success.

This can turn into a book but, know that there are several of us here doing this everyday. So, ask questions, contribute back what you can, when you can.


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## Helmut (May 7, 2014)

bryskie said:


> Hello all, I am just starting up my own company. I live in a small rural community in Ontario. I have been working in this field for many years; and am just getting my own company up and running to fill in the gaps when there is a lull in union jobs.
> What I am wondering if whether my pricing is on point as follows:
> $75-100 per device
> $100/hr.
> ...



You need to be more specific, otherwise any info you request is worthless.

I can only assume that the Union work you are doing is mostly commercial construction, and you wish to enter the residential construction/residential service market?

If so, these are 2 different animals.


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## John M. (Oct 29, 2016)

I'm $45/hour. If you live too close to me you won't have any business.


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## electricalwiz (Mar 12, 2011)

John M. said:


> I'm $45/hour. If you live too close to me you won't have any business.


You are contractor charging $45 an hour?
And you have no work?
Where at in PA


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## John M. (Oct 29, 2016)

No, I meant that if you charge $100/hour you wont have any customers since i am $45/hour. Yes, I have too much work.


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## flyboy (Jun 13, 2011)

Please move this to the "Business Lounge (Private)" section.


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## Helmut (May 7, 2014)

John M. said:


> No, I meant that if you charge $100/hour you wont have any customers since i am $45/hour.


Really?




John M. said:


> Yes, I have too much work.


Then raise your rates.


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## Helmut (May 7, 2014)

flyboy said:


> Please move this to the "Business Lounge (Private)" section.


I don't think the OP has enough posts to participate in that area.


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## flyboy (Jun 13, 2011)

Helmut said:


> I don't think the OP has enough posts to participate in that area.


Ah, I didn't think of that. How many post does it take? Should it be the same number of posts for both sections?


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## Helmut (May 7, 2014)

flyboy said:


> Ah, I didn't think of that. How many post does it take? Should it be the same number of posts for both sections?


I really don't know, I thought 10 to post pics, and 50 to post in private sections, but like I said, I don't know for sure.


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## MechanicalDVR (Dec 29, 2007)

Welcome aboard @bryskie!

Not familiar with your area but if you can get $100/hr consistently with no hesitation I'd up it a little.


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## MechanicalDVR (Dec 29, 2007)

John M. said:


> I'm $45/hour. If you live too close to me you won't have any business.


Why such a low rate?

Do you not have any overhead at all?

Sounds like you are shooting yourself in the foot!


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## flyboy (Jun 13, 2011)

MechanicalDVR said:


> Welcome aboard @bryskie!
> 
> Not familiar with your area but if you can get $100/hr consistently with no hesitation I'd up it a little.


His "area" has nothing to do with what he charges. His breakeven and his desired profit are what dictate pricing. Nothing else, my brother.


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## Helmut (May 7, 2014)

How can anyone tell the OP what he should charge, and whether his guesstimate is within reason, without knowing what part of this industry he decided to establish himself in, and if they understand who their customer is?

When does that get factored in?


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## MechanicalDVR (Dec 29, 2007)

flyboy said:


> His "area" has nothing to do with what he charges. His breakeven and his desired profit are what dictate pricing. Nothing else, my brother.


I fully understand the cost of over head and doing business but if he is just looking to stay busy during slow union times and not leave the union and go out 100% on his own $100 an hour is a good price.


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## LuckyLuke (Jun 1, 2015)

Plan where you want to be in 10 years and price accordingly. Your overhead builds up quickly so if you price things based on now with little overhead you will not last or if you do there will be little to no growth. Stick the extra cash in a another account, let it build and never touch it without good reason. When you need a shop, new van, tools, employee training etc then it's there for you. I started off based on my current needs and I regret it. When expenses came up it was tough to raise my rates for regular customers. 

But what do I know, I am not rich or retired young!


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## flyboy (Jun 13, 2011)

MechanicalDVR said:


> I fully understand the cost of over head and doing business but if he is just looking to stay busy during slow union times and not leave the union and go out 100% on his own $100 an hour is a good price.


If thats the case, then this thread should be entitled *"Moonlighting while in the union"* and moved to the *"Union Topics"* section. 

This is the *"business/Marketing"* section. In my view, only accepted accounting business practices for those who truly want to take the leap and accept the risk of being in business should be discussed in this section. 

Nothing against those brothers and sisters in the union that moonlight/get started part time. Hell, that's how I got started, but let's teach them how to do it right. There is no reason they shouldn't price themselves properly. It's good for them, they deserve it and it's good for the industry. 

Pricing too low drives the pricing down for everybody and hurts *all* of us. Isn't the biggest complaint about non-union contractors is that they don't pay enough? How do expect them to pay enough when they have compete against low balling moonlighters? 

Are you getting the vicious cycle here brother?


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## MechanicalDVR (Dec 29, 2007)

flyboy said:


> If thats the case, then this thread should be entitled *"Moonlighting while in the union"* and moved to the *"Union Topics"* section.
> 
> This is the *"business/Marketing"* section. In my view, only accepted accounting business practices for those who truly want to take the leap and accept the risk of being in business should be discussed in this section.
> 
> ...


You're right, I was just looking at what he asked from a different perspective.


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## sbrn33 (Mar 15, 2007)

MechanicalDVR said:


> I fully understand the cost of over head and doing business but if he is just looking to stay busy during slow union times and not leave the union and go out 100% on his own $100 an hour is a good price.


He probably has no real overhead as he is stealing half his materials and scabbing off unemployment. No insurance and no real liability.


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## MechanicalDVR (Dec 29, 2007)

sbrn33 said:


> He probably has no real overhead as he is stealing half his materials and scabbing off unemployment. No insurance and no real liability.


Well.....I wasn't gonna go there but sometimes what isn't said actually says more than what is.


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## flyboy (Jun 13, 2011)

MechanicalDVR said:


> You're right, I was just looking at what he asked from a different perspective.


I know where your coming from. Your hearts in the rights place.


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## flyboy (Jun 13, 2011)

sbrn33 said:


> He probably has no real overhead as he is stealing half his materials and scabbing off unemployment. No insurance and no real liability.





MechanicalDVR said:


> Well.....I wasn't gonna go there but sometimes what isn't said actually says more than what is.


...and sometimes just *doesn't* need to be said. :smile:

Just saying...:biggrin:


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## MechanicalDVR (Dec 29, 2007)

flyboy said:


> ...and sometimes just *doesn't* need to be said. :smile:
> 
> Just saying...:biggrin:


Well as you said before many of us have started out well in the union doing our own thing on the side.

I went in with my BIL when he first got his own NJ license and then things progressed from there.

Overhead or not we always had insurance and business expenses but rest assured we were never the lowest price anyone ever got.


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## MechanicalDVR (Dec 29, 2007)

flyboy said:


> I know where your coming from. Your hearts in the rights place.


I just hate to see a brother working at HDepot when he is laid off rather than doing what he is trained to really do to eat.


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## telsa (May 22, 2015)

Salting Big Orange.

Now that's a hoot. :devil3:


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## WorksOutOfaVan (Jun 20, 2017)

Helmut said:


> Really?
> 
> 
> 
> ...




Ditto this. If you have too much work you might as well earn more per week. 


Sent from my iPhone using Tapatalk


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## LibertyRising (Jan 2, 2018)

I don’t know why any self respecting electrician would charge around half the going rate for his industry. Maybe he knows he does crap work and has to compensate?

Is he kidding himself thinking that he’s going to get all the good jobs? My experience is that there is far more work out there than there are good electricians. 

Do your industry a favor and up your prices, because the customers who see your prices vs the rest won’t respect you for it. They will take advantage of you, or just assume you are cheap.

Did you want to be taken advantage of and thought of as cheap? 

As for the OP, good luck. Take it slow. Concentrate on building quality relationships with the right people. Don’t over analyze the pricing. Just learn your cost to do business. Have a profit goal. Set sales goals, and don’t fret if you don’t hit them all. Learn where you make money and where you don’t. DONT be afraid to turn down work that you know to be hard to turn profit on, or have reservations about whether or not the customer will pay. Don’t trust Indians. Pay your taxes. Hire a accounting firm ASAP to make sure you are started off on the right foot. Avoid getting involved with jobs where the customers are looking for the lowest bidder. Some jackass will come and make it impossible to make profit. Again, build relationships. 

I started my business exactly 1 year ago. Last year was partially part time, and about 4 months full time. This year, since January I’ve done 80k in sales with 40% net profit. My salary is nothing to brag about, but on advise of my accountant I take home quarterly draws. I set my salary up anticipating a bit of turbulence in my business to start with, I only wanted a regular personal income while my business absorbed the ups and downs. By the grace of God it’s been nothing but ups.

Build those relationships. 90% of my jobs I’m the only electrician called to bid. 100% paying customers. I drive an unmarked van and spend $0 in advertising.


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## Switched (Dec 23, 2012)

LibertyRising said:


> *Don’t trust Indians*. P


WTF... Asshole... I am Indian... Well, truth be told I am supposed to say "We prefer to be called Native Americans...."

BTW... I make a killing on those who are of Indian descent. When you walk into a customer with prejudging who they are and what they will do/say, it will ultimately affect the outcome. 

When you project your feelings, and you do, onto a sales call, it can kill that call. Instead of making a blanket statement of a billion or more people, learn their culture and they will respect you and do business with you for it. 

Most of your post was good though, some great points, especially about not being super concerned about loosing, as that is part of the learning process.


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## LibertyRising (Jan 2, 2018)

Switched said:


> WTF... Asshole... I am Indian... Well, truth be told I am supposed to say "We prefer to be called Native Americans...."
> 
> BTW... I make a killing on those who are of Indian descent. When you walk into a customer with prejudging who they are and what they will do/say, it will ultimately affect the outcome.
> 
> ...


I’m part American Indian as well.  it was a joke


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## macmikeman (Jan 23, 2007)

LibertyRising said:


> I’m part American Indian as well.  it was a joke


I'm part Canadian Indian. 
Whoop Whoop!


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## Navyguy (Mar 15, 2010)

The OP is from Ontario, so before he can do anything, he needs to register with the Electrical Contractor Registration Agency (ECRA). Before he can do that he needs to be a Master Electrician or has to employ one.

Minimum Requirements for Ontario

$2,000,000 in Liability Insurance;
Reside in Ontario;
Be a Master Electrician or employ one;
Have an active / registered Workplace Safety and Insurance Board (WSIB) account and be able to generate clearance certificates; and
Have an account with the Canada Revenue Agency (CRA) which creates a GST/HST number.

Basic fee for the above is:

$2500 per year for insurance;
WSIB account is free, but the payment is based on salary so there is a minimum of $1000 payment per year I think;
GST/HST is free, but you likely will need an accountant to navigate the process at about $2000 per year;
$395 per year for Licensed Electrical Contractor (LEC); and
$80 per year for Master Electrician (ME) License.

So you have a minimum of $6000 a year in expenses and you have not even got a customer or lifted a screwdriver yet; you are still sitting at your desk.

This is the problem with the “part-time” gig here in Ontario… if full-time you are looking at billing out 1000 hours, the first $6 per hour is the to cover the right to do electrical work.

So do the math on the amount of hours you think you will work… as these costs do not change if you have 1 man or 100 men working (except for WSIB). So lets say that you will work part-time at 250 hours per year (which is about 6 weeks a year) so the first $24 per hour is to cover your basic costs to make it legal for you to do electrical work.

Cheers
John


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## Whocares05050 (May 14, 2018)

John M. said:


> No, I meant that if you charge $100/hour you wont have any customers since i am $45/hour. Yes, I have too much work.



Like others have said, how do you survive at such a low rate?


I always charge customers $75 per man per hour on most time and material jobs, and residential service calls customers get a $75 service call for me coming out, and then I have set prices for each and everything that is bad like switches, outlets, GFI's, etc. 



I am so busy that working 7 days a week is not enough and our customers are complaining we can't get to them fast enough....


$45 an hour? we would be out of business...


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## lighterup (Jun 14, 2013)

I don't know what other EC's charge per hour in my area
and am not really concerned with it.

I did recently go to a home to give an estimate . It was
for a 240 volt hot tub.

I figured my price using my hourly rate , service call fee
materials with a 20% retail mark up.

I presented what I believe was a very fair and 
competitive number for the job.

The owner's eyes bulged and almost came out 
of his eye sockets. He* claimed* that another
EC had already come and gave him an estimate
that was much lower than mine.

The number the owner claimed was given was 
lower than my materials (with my mark up).

The owner asked me what my hourly rate was.
I do not go down that road when I'm bidding 
"turn key". 

He (owner) claimed the other EC said his rate 
was *$35.00* per hour.:glasses:

I asked the owner who the other EC was and he 
went and got the guys biz card.

No license number on the card , never heard of 
him , not a registered EC in our county , phone number
had the north western PA area code.

I pointed these out to the owner. He didn't care...
he (like so many others) just want the lowest number
they can find and this is why it's so difficult for a
guy like me to compete.


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## paulengr (Oct 8, 2017)

My company charges roughly $125/hour at the low end up to $300/hour tops. We do precision balancing, alignments, vibration analysis, ultrasound, IR inspections, MCSA, MCA, troubleshooting drives, starters, motors any size/voltage. We also turn down business because we’re too busy. We don’t charge for fuel, truck, welder, travel, etc.

Break even for an experienced electrician with just wages, taxes, etc. typical “construction” benefits in the South (almost none) fully costed us $35/hour. Foreman or license or benefits quickly goes up. So $40/in the cut throat part of the business makes sense as a rate. Unlicensed under the table rates obviously could get to $35/hour but you lose some things.

Eldeco out of Texas for instance does big jobs. They charged a company I worked for 32-35/hour on an industrial job. The stupid purchasing people paid up front and didn’t have any safety requirements. Eldeco stopped at the Rio Grande or Home Depot on their way to the job site to pick up a crew. You better be fluent in Spanish and have all your immunizations up to date if you use them. And your transformer will come from Howard, built by the same crews, delivered by a guy with an “international” drivers license along with a Matricular Consolate card that does not have to follow the 12 hour rule. I can’t make this stuff up!



Sent from my iPhone using Tapatalk


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## active1 (Dec 29, 2009)

@*lighterup*

Sometimes HO's get prices they like, but are not sold on the service provider.
They may have noticed the out of state phone number & license plates.
Perhaps the other contractor had a converted work truck like an old conversion van.
Or the out of state contractor looked like they were living out of their truck.
Maybe the other contractor was rough around the edges, said some things to make his experience questionable, or didn't seem trustworthy.
They could have asked for 100% up front, never to return.

There had to be a reason why the 1st guy wasn't hired on the spot.

Then comes you. Professional truck, appearance, demenior. Seems competent, understands what needs to be done, and has a verifiable established business with good reviews.

He wants the Cadillac with the Sabb price. Their both cars, right.
Even though Sabb is long out of business.


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