The joys of bidding work

[Dougster]

There are several good points to consider in this thread. And several divergent opinions on those points.
Potential Customer size up - Initial body language, time, place, circumstance
Negotiating Skills
Legal tender
Your bottom line
Closing the sale
Final impressions
I am pretty interested in the potential size up, how to WIN the customer, and how to make that final impression POSITIVE in reflecting on me and my business. So far we seem to be stuck on bottom line and legal tender. Too bad. -Mike Z.

Well said Mike. Too much focus on the "should he have or shouldn't he have" and not enough focus on all the other business dynamics. But given the high level of interest on this "LC" case, most of it quite useful and serious, I still say we should have a "Business Issues" forum here on TBN.

I will only add that I wish folks would curtail commenting solely on their successful, 30-year, long-established businesses that have long since been running on repeat business, reputation and cruise control, etc... and talk a little bit about starting and growing a new business wherein every potential customer and dollar counts bigtime and wards off bankruptcy for one more day! I dare say that the discussion here might have been very different if the folks here weren't mostly all ancient, successful business veterans.

Dougster

 

[Farmwithjunk]

I dare say that the discussion here might have been very different if the folks here weren't mostly all ancient, successful business veterans.

Dougster

ANCIENT! Well I aughtta...... ()

My approach to running a business hasn't changed one bit through the years. In fact, I see it as MORE IMORTANT for an upstart business to operate on a rock solid base than a well established one that can withstand a hit every now and then. There's a subtle difference between taking a risk and gambling with your future.

 

[Dougster]

ANCIENT! Well I aughtta...... ()

I knew that would spark a quick response or two! But please... let's not forget that I am ancient too... just brand new to the tractor & backhoe business. I can tell you that it ain't nearly so easy getting started as you might remember it. I have never done anything so tough... and financially risky... in my entire life (other than getting married... and that turned out to be a disaster!).

I'm just wondering if "LC" is another 20-30-40 year veteran... or if his business is relatively new as well. I'm telling you... it makes a difference.

Dougster

 

[LoneCowboy]

Relatively new
Although I've had a side business for many years, always been very small. I've had this business about 4 years, but really last year decided to expand it and make it full time, and invest (I hope) the money in growing it.
My accountant is not happy.
I am though, except in the last week or so which has been less than optimum to say the least.

I do agree, we need a Business Issues forum.

and i'm not ancient. I'm not, I'm not, I'm not. I do seem to remember hard physical labor being a whole lot easier 10+ years ago though.

 

[Dougster]

Relatively new
Although I've had a side business for many years, always been very small. I've had this business about 4 years, but really last year decided to expand it and make it full time, and invest (I hope) the money in growing it.
My accountant is not happy.
I am though, except in the last week or so which has been less than optimum to say the least.
I do agree, we need a Business Issues forum.
and i'm not ancient. I'm not, I'm not, I'm not. I do seem to remember hard physical labor being a whole lot easier 10+ years ago though.

My "business", such as it is, was also intended to be a part-time gig until I got good at it and built up a reputation, contacts, etc... but that all changed when I was laid-off last September. At that point, the business plan switched from part-time to full-time... or as least as much time as circumstances allowed. I have come a long way, but I am not even close to being "profitable" however one might choose to define it.

The bottom line for me is that I would have had no choice but to take that job we've all been talking about... perhaps at $400 and that same day... or perhaps for a different amount some other day. One way or another, however, I would have done that work. That would have been far too much money for me to have left on the table. My girlfriend would have shot me dead... and with clear justification. The only work I turn down right now is the work that involves too much physical, legal or liability risk... period.

I don't have 29 years left with which to build a successful 30-year old successful, ongoing business... so I'll never know how I would have treated that potential work at that point... but for now, show me the money!

Dougster

 

[AlanB]

Just a fwiw Doug,

One of the best things I got told early on when I was going steadily broke as the owner of a woodworking cabinet shop, by my longtime mentor when we were talking about jobs etc.

You can go to bed broke and hungry, or if you take that job you will go to bed tired and broke and hungry.

You don't have to work hard to go to bed broke and hungry.

Trust me when I say I have been there, and taken that job that your gut tells you not too. And so far, my gut was right more then wrong.

 

[LoneCowboy]

Just a fwiw Doug,

One of the best things I got told early on when I was going steadily broke as the owner of a woodworking cabinet shop, by my longtime mentor when we were talking about jobs etc.

You can go to bed broke and hungry, or if you take that job you will go to bed tired and broke and hungry.

You don't have to work hard to go to bed broke and hungry.

Trust me when I say I have been there, and taken that job that your gut tells you not too. And so far, my gut was right more then wrong.

yeppers, learned that a long time ago on the "worst bid job ever"

In college, doing handyman type stuff with a friend. Fences, decks, painting, whatever it took. We made decent money and worked hard, had some fun.
so, this friend of my mother's says "how about bidding to paint my house"
We go and look at it, in downtown denver, it's an old Victorian home (late 1800's), lots of intricate trim and of course it's 2.5 stories high with about 8 feet between the houses. (i'm the detail guy, my friend is the height guy)

Talk further with the lady, we bid it at $300 plus materials. (paint at cost, we don't even up the materials cost). (late 1980's) and it's 3 colors
We figured it should take us a week. Now obviously, even for 1980's that's way underbid, even for two college kids.
So, 5 full days in, we've painted all the detail work and I'm working the main color (which is darker). it starts to rain.
it rains for 3 days.
We finally get back to the job. Not only has it washed off all the main color i was working on, but it's washed it onto the trim. I have to repaint both.

It took us 3 full weeks to finish that. We made about a $1 an hour (plus a bazillion trips in the truck), the lady says as she pays us "do you want to do some more work"
NO!!!!!!!!!!!!!

so, I never underbid jobs anymore, just to get work.

 

[Dougster]

Just a fwiw Doug, One of the best things I got told early on when I was going steadily broke as the owner of a woodworking cabinet shop, by my longtime mentor when we were talking about jobs etc. You can go to bed broke and hungry, or if you take that job you will go to bed tired and broke and hungry. You don't have to work hard to go to bed broke and hungry. Trust me when I say I have been there, and taken that job that your gut tells you not too. And so far, my gut was right more then wrong.

It's clearly a great quote... no question. But let me ask you this: If you don't take the job, how do you end up concluding that your gut was right? Not just playing a word game here... honest! I'd really like to know.

I have quoted lots of jobs and lost them... apparently I was too expensive compared to the undocumented, unlicensed, uninsured, no-overhead competition. I have refused to quote some jobs... 99.9% due to excessive risk. But I have never turned down a low or moderate-risk job that was offered to me on the spot at anything approaching a reasonable price. I have also offered to do some small jobs for free in order to prove my value to a potential client for their bigger projects. In my view, that's the price I've got to pay to break into a highly competitive market. Am I really that wrong about this?

Dougster

 

[Dougster]

so, I never underbid jobs anymore, just to get work.

It's funny Brian... but in my old career, that was the ONLY way to get some initial work from a brand new client. Perhaps that's my problem: Bringing too much of the marketing practices of my old career into this new one.

Dougster

 

[AlanB]

The part of the line that said I have taken them, is how you know.

Unfortunately, this is one of the parts of business that you hear, you read, heck, you even see it when your freinds do it,,,,

Then when it comes along, you get looking at the payments you have to make etc. and you go ahead and take that job.............

Then you gain,,, uhhhmmm experience, yeah, that's what I like to call it when I lose money

My experience, has been that very seldom do they work out better then expected. Unfortunately, it is just my experience, yours may be very different.

All the ones we have done "cheap" etc. to get more work on, seem to go to crud.. Did the front landscape of a gated community Cheap (read cost and we paid for the labor) for the one year contract on mowing the common areas. The the HOA president changed,, and they renegged on the contract, and he gave it to his cousin, son, whatever it was...........

Yes, I could sue them, take them to court, etc. etc. probably win, but you need to weigh those things out real carefully and see "what" you will gain, and what it will cost you to gain it.

My suggestion is to break into the very competitive market by knowing what you want to do...

(sounds like you do, just make sure it is defined real precisely in your mind)

Knowing what it will cost you to do it. (this is always tougher then it sounds to quantify)

Network like crazy to get the word out. Most folks won't do this part, but conciously tell one person a day about what you are doing and what services you are offering.

Set an appointment with some of the small landscapers, cold call them and see if you can work with them where there is a synergy between the two of you and the equipment and work that you are doing.

Look around for problems that you can offer the solution too, then approach the folks with the problem, and offer your solution.

Be prepared for tons of rejection. I forget the show, but the Macy guy who is in that movie "wild Hogs" did a movie about a door to door salesman and what it was like, and the amount of rejection that you face. If you get a chance, I beleive it was called door to door.

Anyway, wish you the best. Learn tire repair