Price and contractors

[wroughtn_harv]

I'm a contractor. All the time I have to figure out a price and then I have to justify it to first myself and then to the client.

I'll be the first to admit that most of the time I'm not the cheapest, sometimes by a long shot. The price isn't something to get mad about as far as I am concerned. If the client can't or won't choose me because of the price I don't get my feelings hurt nor do I get mad. I understand that sometimes we can't or won't afford something and have to go a different way. It happens to me all the time. In fact today I'm changing out my water pump on my duramax diesel. The dealer says it's a grand and I've bought the new pump and a special tool for under three hundred. I'll do it myself.

When you get your quotes please keep in mind that most contractors aren't out to get rich off of one client. There are reasons we came up with that price. One of the interesting things about pricing is you usually find the longer a contractor has been in business the higher his price. Things might not be as simple as they look, especially over time.

Another thing to always do is look at old work, the older the better. Talk to old clients and see how they feel about the contractor. Look at details, they're important.

I just had a client go another way on a job that I really wanted. It was a challenging and would be a great project to add to my collection of great projects. I was too high, way too high. The client apologized for not being able to afford me. I explained to him that he didn't need to apologize. Heck, my wife says she can't afford me.

We're in this thing all together. The client can't afford to pay me what I need to do the job. I can't afford to build what I build for the same price as the guys who got the job will build for their price. There's no shame in here for anyone.

Always keep in mind that we're in this all together. There are reasons for price fluctutions between contractors, usually very good reasons. It isn't personal and we shouldn't make it that way.

 

[jayste]

Harvey, all very good points and well presented. I'm sure some of those who went with someone else might be calling you to "make it right". As we all know going with the cheapest isn't always the right way. Like you said, sometimes it's budget, sometimes it's a lack of what it takes to get it done and I guess sometimes it's a difference of what's expected as far as details. Another point to make is that as contractors or service type folks you have to get over the mind set of those who are afraid that you're going to "get to them" like others have in the past. Dang their hides. I commend you for your attitude in all of it.:thumbsup:

 

[MossRoad]

Morning Harv.

Mostly, I agree with you. It is a business transaction and we shouldn't take it personally. However... I am pretty sure many folks have had just plain horrible experiences with contractor price quotes and hard sells. When the contractor starts insulting your intelligence trying to soak you with a quote it is really really really hard not to let it become personal. :laughing:

Case in point... many years ago my dad had a company put all new cabinet and drawer fronts on his kitchen cabinetry. They did something like 30 fronts and it was something like $1700.00. It was beautiful work and really made the kitchen look updated from its original 1950's appearance. I knew something about cabinetry at the time and the price was great.

Soooo.... I called them to my house. I have a one door closet that the previous owner divided into cabinets and put 4 plywood doors onto it. All I wanted was for the company to quote me on putting 4 nicer cabinet doors onto it to kind of match the existing cabinet doors in that room. The guy comes in, measures the doors and cabinet and goes out to his truck for 20-30 minutes.

While he was in his truck my elderly dog collapsed on the floor. I was on the phone with the emergency animal hospital and he comes back in and tells my wife something like $1100.00 for 4 doors. I get off the phone with the Vet, she comes over and tells me the price. I told him they had just done 30 doors in my father's house for $1700.00. He says that if I wait another week the price will go up $200.00 and the week after that it will go up $500.00. Resiting the urge to punch him in the mouth, I told him to get the #%@#^@#!!! out of my house because my dog was dying and I had to take it to the vet. He tries to hand me his card! :confused2:

Anyhow.... that was a dozen years ago and we still have the plywood doors. :laughing:

As you said, we are all in this together... at least most of us are.

 

[warhammer]

The contractor was probably trying to recover from doing your Dad's job for too little money. ;o}

Morning Harv.

Mostly, I agree with you. It is a business transaction and we shouldn't take it personally. However... I am pretty sure many folks have had just plain horrible experiences with contractor price quotes and hard sells. When the contractor starts insulting your intelligence trying to soak you with a quote it is really really really hard not to let it become personal. :laughing:

Case in point... many years ago my dad had a company put all new cabinet and drawer fronts on his kitchen cabinetry. They did something like 30 fronts and it was something like $1700.00. It was beautiful work and really made the kitchen look updated from its original 1950's appearance. I knew something about cabinetry at the time and the price was great.

Soooo.... I called them to my house. I have a one door closet that the previous owner divided into cabinets and put 4 plywood doors onto it. All I wanted was for the company to quote me on putting 4 nicer cabinet doors onto it to kind of match the existing cabinet doors in that room. The guy comes in, measures the doors and cabinet and goes out to his truck for 20-30 minutes.

While he was in his truck my elderly dog collapsed on the floor. I was on the phone with the emergency animal hospital and he comes back in and tells my wife something like $1100.00 for 4 doors. I get off the phone with the Vet, she comes over and tells me the price. I told him they had just done 30 doors in my father's house for $1700.00. He says that if I wait another week the price will go up $200.00 and the week after that it will go up $500.00. Resiting the urge to punch him in the mouth, I told him to get the #%@#^@#!!! out of my house because my dog was dying and I had to take it to the vet. He tries to hand me his card! :confused2:

Anyhow.... that was a dozen years ago and we still have the plywood doors. :laughing:

As you said, we are all in this together... at least most of us are.

 

[300UGUY]

I'm a contractor. All the time I have to figure out a price and then I have to justify it to first myself and then to the client.

I'll be the first to admit that most of the time I'm not the cheapest, sometimes by a long shot. The price isn't something to get mad about as far as I am concerned. If the client can't or won't choose me because of the price I don't get my feelings hurt nor do I get mad. I understand that sometimes we can't or won't afford something and have to go a different way. It happens to me all the time. In fact today I'm changing out my water pump on my duramax diesel. The dealer says it's a grand and I've bought the new pump and a special tool for under three hundred. I'll do it myself.

When you get your quotes please keep in mind that most contractors aren't out to get rich off of one client. There are reasons we came up with that price. One of the interesting things about pricing is you usually find the longer a contractor has been in business the higher his price. Things might not be as simple as they look, especially over time.

Another thing to always do is look at old work, the older the better. Talk to old clients and see how they feel about the contractor. Look at details, they're important.

I just had a client go another way on a job that I really wanted. It was a challenging and would be a great project to add to my collection of great projects. I was too high, way too high. The client apologized for not being able to afford me. I explained to him that he didn't need to apologize. Heck, my wife says she can't afford me.

We're in this thing all together. The client can't afford to pay me what I need to do the job. I can't afford to build what I build for the same price as the guys who got the job will build for their price. There's no shame in here for anyone.

Always keep in mind that we're in this all together. There are reasons for price fluctutions between contractors, usually very good reasons. It isn't personal and we shouldn't make it that way.

I disagree to a point. I work part time for a friend of mine who is a contractor. We work with other contractors. Their apparent goal is to get as much out of each clent as possible. I am just a helper, but I notice that the the $$$ are whatever they think they can get. It is all about money for most of these folks. The only "relationship" they want is with the customers wallet.

 

[/pine]

I have to figure out a price and then I have to justify it to first myself and then to the client...

new work should be no problem to come up with a price...materials + labor + 10%-15% profit...fairly cut and dried... from the onset through the final walk-through...there is really no reason for large spreads between bids unless someone is padding the estimate or gouging on the profit margin...it's not rocket science...

see Walkers Estimator The Building Estimator's Reference Book

remodeling or old work involves a certain amount of "discovery" and until the demo is done there are some possible intangibles...

 

[RadarTech]

As a technology consultant I see it time and time again..

Customer decides to go with cheaper material, cheaper labor, or a combination.. A little while later or in some cases a couple years later and a new staff member is there it is redone for much more than the original estimate.

J

 

[EddieWalker]

I'm a contractor and I can totally understand to the issue of what to charge, how much is fair and when is it not worthwhile for me.

I need to make a living and each job is unique, so the priceing is always going to be based on what I know about that job, and how much time I "guess" that it will take me with everything I know that needs to be done.

I have an amount in my head that I plan to make for every full, 8 hour day that I plan to put into the job, and an hourly wage if it's that type of bid. That "guess" is what I put down on my bid. I'm pretty good at getting it right. If I'm done sooner, I tend to add little freebies to the job, but still charge the agreed upon price. The same is true if it takes longer even though there are not surprises or changes, I charge the agreed upon price.

Some people ask me to charge less for a variety of reasons, but I explain to them that I'm booked up for 3 to 4 months already and that they are all paying the same amount. It would be foolish for me to work for less when others who are wanting to pay me my normal rate are waiting so long for me to get to them. The worse were the ex inlaws. But as a business, they had to understand that any day I work, I make a certain amount and any day that I don't work, I don't make anything. Time off means no income. Vacation means no income. I have bills and I need to make money like everyone else.

Rarely do I lose a job for being too expensive. One that I did lose last winter was for a barn conversion. They wanted bathrooms, kithen area and a large meeting room. I was confortable with my bid and gave it to them. They said it was too much and that they didn't have that amount. Then they hired a guy who told me that his bid was just for the bathroom part of it and he was half what I had bid. I ran into him a few months later and he told me that he was now double what I had bid and it was a total mess with changes that the owners kept making. THe rest was also being done, but just barely and not very nicely.

I can't say how it would have turned out if I had done it because of all the issues the owners were creating. I'm glad that I didn't get that job and I feel sorry for the guy who did get it. He's not very happy and told me that he wished he didn't get it either. He's tied down to that mess now and can't take on any other clients. His business will probably dissapear because he got in over his head and into a job that wasn't properly planned out.

I was more expensive, but my planning was detailed. In the end, I think they would have saved money, had a nicer building and not have near the stress that they are going through today.

Eddie

 

[capt jack]

The first line on my website states it pretty clearly.....................................
GOOD IS NEVER CHEAP, CHEAP IS NEVER GOOD.
Jack

 

[MossRoad]

Ever hear of the FAST/GOOD/CHEAP triangle? It applies to all projects. You can pick any two! :laughing:

Fast and good won't be cheap.
Good and cheap won't be fast.
Cheap and fast won't be good.

:thumbsup: