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After leaving a meeting with some potential clients who came refered to me by my mother of all people I was feeling pretty confident that I had this job locked. The next day I went to my lumber yard to have them do the take off. When I told them the name of the clients he pulled out 3 bids given by different contractors for the same people in the last year. All different. 1 remodel & 2 new construction. I returned home, began working on a bid (new construction) and in 3 days had a firm figure. $85.00 x 2,056 sq/ft = $174,760.00. Not bad I thought. Then came the shock. Their absolute amazement at how much it was. “Why is it so expensive?”, “We can’t afford that!”. They insisted on in floor radiant heat, PLUS central air, a bonus room above the garage (960 sq/ft), wraparound concrete patio, raised panel oak cabinets, a master suite. I know my price was good, but do you know what bothers me the most? I’m actualy going back and shaving costs here and there to bring the price down $25,000.00. I think I’ve actually done it. I still have this gut feeling I’m not getting the job. Is this “servicing the customer” or is he taking me for a ride? I haven’t had a job I regret taking yet,but this might be the one. Does it sound like something I should steer clear of?
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Dan,
I'd stay away, very far away. Sound's to me like window shoppers or the want something for nothin' crowd.
Ed.
*dan... what am i missing...?they knew the costs back and forth if they had already waltzed 3 other contractors around....go back thru the archives and lookup "belt loops"..it's good for a laugh as you contemplate how to get them off the dime and get back in control...they got you by the belt loops right now and you gotta shake loose and grab 'em by the nose .... you gotta figger how to get them talking to each other and saying "this is the one".... guess what.. you cutting $25K out ain't gonna do it....or walk..b but hey , whadda i no ?
*I agree with Ed and Mike. They already know the pricing. These types of people are in a special category because they're "special." The only other possibility is that each of us have to remember that the public really has no clue on many remodeling costs, nor about the costs of operating a remodeling business.Either they're ignorant and just think all of the contractors they got bids from already are trying to rip them off, or their real cheapies. Take Ed and Mike's advice, unless you want to spend hour upon hour teaching them Remodeling Business Management 101, 102, 201 and 202. Betcha after they get their diploma but they still say to you: "Yea. But can't you still sharpen your pencil."Go figure!
*A couple of years ago we bid for a similar construction job. It was a new roof, inside out job- 250.000 Deutschmarks. Finicky clients, want this, want that...The customers said we could have the job for 210.000.They just did not have any more in the budget.We knew this would be working for little if no profit, but times were slow.Well, in the end these people put in a 40.000 marks kitchen by someone else. It was the money they saved on us.They were some smart customers.But over here the public is educated by the media to do just that: shop and don´t trust those contractors.And if you can press them, do.Nowadays I let a job like that slip by - and if I ask the guys that still do it - I´m always happy that I did.
*Sticker shock comes the first time. After that, it's a matter of the customer deciding that they either don't have the money to spend (but still want what they want) or hoping to find some GC who can magically give them the job for half the price.People have an amazing ability to rationalize their desires. But that doesn't change the laws of physics or the price for a job. Sometimes the answer is that they can't afford it, and you don't want to sell them a job that they can't (or won't) pay for at the end of the day. So the put the ball back in your court, and you should take a pass unless you're prepared to give them what they really want.SHG
*It's nice to hear this stuff from other builders. Some sort of moral support. I called them this morning and gave them my final price which was not $25k short of the original. I shaved all of the unneccesaries and told them this is what they can have for their budget. End of story. Now I will wait and see.
*Dan,I have walked away from these jobs before. It's tough to do but you're in business to make money. You're not in business to rescue people from their personalities. If you did get this job because of a large price cut they would think that anytime they want extra work done they can force you down on price. Not a good place to have to be in.
*When I run across people I think I'm going to have a hard time with I add in a 15% harassment charge. With these Guys, I'd be adding not subtracting.
*Hey Daniel,The title of this thread is important in my way of thinking: Don't you hate this? The reason I mention this is because it makes me think that your prospect is less than forthcoming on their budget. Or else they're very shrewd! So many costs are beyond your control that its crucial to know upfront what the customer can afford. It is what it is. People spend their money because they want what they want more than they want the money. Be careful not to cut yourself while shaving!The equation appears simple enough insofar as thevariables of cost/sq.ft. X # sq. ft. = total cost.Now, to make adjustments, the formula must stay in balance. If they cannot afford the proposed total cost then you can reduce either of the variables, right? Well, not exactly and that's where we lose it!My advice is to withdraw your current proposal. And begin again with the information at hand. That would be fair and you'll both commence a project under better terms. Good luck,Dan-O
*Dan:Attitude Check Time.From your post, and not hearing their side of the deal, it looks like they are just in a negotiation phase with you. Never take negotiations personal. Their job is to get the work they want at the cheapest price. Your job is to do the work they want at the highest price. In between there is a cost they can't go above and a price you can't go below. Hopefully in the negotiations those two will overlap.Remember this isn't a "take it or leave it" economy any more. As was pointed out consumers here are being taught not to take the first price and not to just assume whoever they hire is going to do a good job. Instead they are being taught to negotiate and to build quality control into the contract. Nothing wrong with that at all as long as you treat this as a business as has been discussed many times in this Forum.
*I guess the reason this got under my skin is because I had already given them a "deal" on the first proposal. Mostly because they were friends of my parents. I just felt like crap when they rejected my "deal". I have never lost a job yet to another competitor. Not sure why, I would like to think it's because I relly try to sell myself and the project rather than throw a price at them. Maybe it's a good thing this one is falling apart. Oh well, life goes on. Thank you all for letting me vent and your great responses.
*Add $25,000 to the price...You are being had!near the stream,aj
*If you haven't lost a job yet you are working too cheap. The goal is not to get every job. Just ones you can make money on. Archives are full of pricing/customer aquisition topics. A veritable graduate course in contracting. Call them back in a panic right away. Tell them you forgot to add in the roof. That's an easy 25K. Good luck.
*Dan, As said so well in previous posts, don't take it personal. Don't make it personal.I rarely "bid" work anymore. At the first meeting, I ask "What do you want to do and have you a budget in mind".Saves me hours of work.It also kills the "tire kickers".It also closes the deal faster.Thanks for the topic and the previous threads. Good thoughts.Luck
*Mike......Ya made me proud!.......well....me and the sales mentor Ron Magnole! As fate would have it......I just had to remind myself to "check the beltloops" last week....for a customer that became a big pain in the @#$ after the fact, yet still wanted me to bid two other smaller projects. As I had hoped.....the "going price" scared them away. I didn't even add in the "P-I-t-A" factor. Jeff
*FredB....who should do the checking? They are shopping.....and from the sounds of it...still planning/dreaming. Did they mention the other bids.....I'd guess not. Nothing's take it or leave it....that's why a bid should stand as presented....and can be lowered by lowering expectations/materials.....not quality or profit. The customer can then decide to take it or leave it. Jeff
*Dan:I think I know how you feel. We recently were stiffed by the son of a close friend. Despite knowing the rules it still is hard to not take it personal when a close relative or friend is involved. At least we know now that the guy doesn't feel the same way about us as we did him and we'll modify our attitude for the future.Jeff-From what you have posted you are definitely making a take it or leave it proposal. You are saying that is what you are going to charge for a given job. That's fine, just don't get upset when the customer gets other bids, and maybe accepts one of them. For my part there are two ways I hook up with someone on a given job; negotiation and bidding. Sometimes we negotiate the terms and conditions and sometimes it is a bidding process. Sometimes I'll run into someone who wants to be part of the deal but won't do either. Then they get struck off the list and on we go. That is their privilege as a business owner to run things the way they want. It is my privilege as the guy buying, and reselling, their services to spend the budget the way I want. If we can't get together; ok; there are other fish in the pond.
*Jim W ... I agree! I have put notes on my worksheets called "HF's" for headache factors. I remember charging a client a $250.00 HF (it should have been $1000).Could someone let me in on the PITA thing please? (Insert joke at my expence here _______ )
*Pain In The Ass.
*ahhhHHHhhhhhh ... I should have figured that out! (now I feel stupid!)
*Forget these guys.If your time and labor are worth $85/ft., then they should pay the price.They are trying to tell you one of two things(a)you make too much money,or (b)they don't have the money to do the work.Either way,you lose.
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After leaving a meeting with some potential clients who came refered to me by my mother of all people I was feeling pretty confident that I had this job locked. The next day I went to my lumber yard to have them do the take off. When I told them the name of the clients he pulled out 3 bids given by different contractors for the same people in the last year. All different. 1 remodel & 2 new construction. I returned home, began working on a bid (new construction) and in 3 days had a firm figure. $85.00 x 2,056 sq/ft = $174,760.00. Not bad I thought. Then came the shock. Their absolute amazement at how much it was. "Why is it so expensive?", "We can't afford that!". They insisted on in floor radiant heat, PLUS central air, a bonus room above the garage (960 sq/ft), wraparound concrete patio, raised panel oak cabinets, a master suite. I know my price was good, but do you know what bothers me the most? I'm actualy going back and shaving costs here and there to bring the price down $25,000.00. I think I've actually done it. I still have this gut feeling I'm not getting the job. Is this "servicing the customer" or is he taking me for a ride? I haven't had a job I regret taking yet,but this might be the one. Does it sound like something I should steer clear of?