I just finished installing speakers for a contractor who owns and leases a commercial building, my first job for him, based on a time-and-materials estimate. I finished an hour short of the eleven estimated. But when billing, I realized I’d given him the “each” price of speakers as a “pair” price. If I bill him as estimated, he’ll pay $400 less than I did for the speakers. My profit on the speakers would normally be $ 600. My reputation is more important than a $1000 error, but should I at least raise the issue with him? Or eat it and remember to read my own estimate next time?
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My first take is to discuss it with the other guy first.
When I screw up, the first person that hears it is the other person involved. I find in being honest and straightforward, better results occur than when games are played.
I'll bet that he'll offer to split it with you.
There's nothing wrong with "raising the issue" with him.
As a minimum, I'd show him the numbers and at least try to recoup your cost for the speakers.
You may not make any money on materials, but at least you have your time.
Live and learn!
After re-reading your post...Was this a hard number contract where you used the "T&M estimate" as your hard number, or was the number you gave him in fact just an estimate?
an honest mistake calls for an honest resolution.
U have to decide how much the loos is in the grand scheme of things...
If t and m....say we have a problem...I screwed up....and show him the receipts.
Offer to provide all the materials at cost with no mark up assuming he's willing to pay for all the stuff..and cover my mistake...which is giving him a better deal than he I added right in the first place....
Or...if I could eat the loss and consider it advertising....I'd bill what I told him....eat the loss....but let him know I screwed up and charged the pair at the rate of one.
Again...going with the idea I could afford the loss......even if he said he'd pay the dif..I'd decline....tell him I'm sticking to my numbers.....but hope that he'll remember this and have me back as his audio guy.
Like my old sales boss used to say.....never give them something without getting something in return. Make this loss work for you in the end....make it known that U are giving him a one time deal.
Slip in in....Here's the final bill...don't expect the next one to be so cheap..I screwed up..blah blah blah....I'd love to work with U again....but I'll add better....
all would depend on the contract...and how much the hit hurts...depending on the contract....might be his decision anyways.....
Jeff
Buck Construction Pittsburgh,PA
Fine Carpentery.....While U Waite
Yes yor reputation is the most important thing you have if you want to have long term customers. As such ,explain your mistake to the customer ,show him the bills to prove cost and ask politely if he will cover your costs so that you will at least not loose money on the job. If your customer is honest you may even manage to work out something to even make a bit on the deal(even if not your usual fee). If he wants to shaft you, well the error is yours, take the loss, learn from it, keep your reputation, and that type of customer you don't want anyway on a long term bussiness relationship.
Philip
Another argument in favor of fixed price agreements? Other than that I wouldn't comment without reading the agreement.
Tom
If you came to me right away (don't wait) and said:
"WAHD I made a mistake.
When I put together the estimate for your office building job, I counted the speakers a singles instead of pairs.
Since it is a honest mistake, I would appreciate it if you would work with me on this just so I dont lose my @ss. I know I will forfiet my profit on this job, but I don't want to go in the hole. The difference in the cost of the speakers is XXX."
I would say:
"Fax me the invoice showing what you paid for the speakers"
What I would do is pay you the deficit left after all of your profit from this job was applied to the mistake.
Remember, this is your mistake.
You have the right to make money on a job and you have the right to lose money on a job.
WAHD
EDIT - I just looked at the date on this, where the hell have I been?
So what happened?
Edited 5/13/2003 9:22:21 AM ET by WAHD
Yes, eat it. It's business.
raising the issue with the contractor in the context of "I made an error, I understand that this is outside of our original agreement, but I'd like to talk with you about a compromise" is a non-aggressive way to approaching it.
The compromise position of requestion him to pay your costs on the speakers is a reasonable one. It would not hurt to include the observation that you did finish the job an hour earlier than planned. Sure, you lose out on the extra you would have made on the materials, but at least you have your costs covered.
If the contractor is taking a hard line on $400 about an honest mistake, you may reconsider the value of working with him in the future.
I always figure I got an extra day of labor which reduces my final Pay, but if I screw it up. It motivates me to get it right next time. I don't have to work that extra free day too often.
Sometimes I work more days, If I got nothing better to do , and i take it a little slower. I'm not one to be in to much of a hurry. the point is the job is only worth so much. Why beat yourself up to get it done ahead of your cost, if your not that busy anyway. But I can do it if i have too.
I am a sole proprietor and its easier for me to say that. I don't have any pay checks to hand out. But for a guy like me you either have to be really busy or really slow ( and not worried about it ) to make any money. Anything in between Your overhead increases dramatically. Of ourse you have to be ok with makeing less money.
It's an orginizational thing.
Hey man, show me your costs and I'd cover it. Business is business, but so is being a decent human being. Collect all the good Karma you can.
Ditch