How many folks that do what you do are in your area? I have lived in the same area for almost 40 years but was once again really shocked at just how many contractors there are in my area. Something like over a thousand! Wow. Now it is a large Metro area (Tampa) but still thats alot of competiton.
I really don’t feel like I am competing against the rest of them as many are friends but when you lose a job because the client found someone to “do it a bit cheaper” it hits home.
Just wondering how competitive your areas are?
I imagine some of you probably face the same things while others in smaller regions do not but then the possible client base is smaller. And I suppose if you are one of two guys in the area and lose the job to the other guy, its hurts all the same.
Replies
Eastern Central Fla- Brevard Co. very competitive over here, my advantage is I answer my phone and return calls. Its the number one complaint I hear about other guys.
I dont know how many jobs I lose to other guys, I lose alot to customers who didnt realize how much it was gonna cost. They usually call back months down the road.
rpait,
Hey! We hear the same things! We got an addition job last year just becuase we were the only one of five folks the client called who called her back!
Mike
Being a remodeler, I can tell you that the "competition" is real sizable here in the Toledo, Ohio area. With Ford laying off and closing the plant in my suburb, you can bet the weekend builders will slip into the weekly job hunt. Add to that the firemen, teachers, and those just starting out and you would surely feel overwhelmed. With a slowing economy reginally, I am not overwhelmed as I was the past 15 years.
Mike, you seem to be dwelling on the down side. You need a good Fest to tune you up.
A great place for Information, Comraderie, and a sucker punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
Hi calvin,
Yeah, I'm not trying to dwell but it seems we just can't catch a break. Lost a few nice jobs ($50-75k) to other guys over $5-7k. Those hurt as it just seems like folks don't want quality, they want low price. The couple jobs we did win last year by going low, we barely made money on. The customers are thrilled but when I run the end numbers, we should have made more.
I'm always just trying to see what all the variables are around the business and go from there. Don't want to close the doors so am always looking for alternatives.
And yes, I do need a good Fest! Have never been to one but after hanging out here for something like 7 years I should go to one. Just need one a little closer to me than those I've read about.
Maybe we need a Floirda one?
Mike
Well Mike , check out my flip thread in the business section. Im borrowing one post from you .
Tim
Tim,
Borrow all you want, I enjoy the publicity! :)
But seriously, I read your thread and you have some very good points. I have passed it along to my biz partner to read as well. I have to re-read it to answer some questions I have.
I just wonder how it all would work in say Florida where there are so many new homes to buy (and they're still building) and wouldn't a person be able to buy new for what they might spend on something refurbished? But maybe you answered that in your post hence my need to re-read.
Mike
Oak river mike,
WHEREVER you go----you will find people remarking how brutally competitive it is-------AND if you look carefully you will see a number of contractors quietly flourishing.
my neighbor is a case in point-- landscape contractor. quite expensive---actually runs 2 divisions--- lawn service / maintenance and Installations. My oldest son works for him in the summer in the lawn service division---and another friend labors in the installation division.--------- my son tells me that pretty much EVERYONE they work for is connected to one of 3 sources--A) a certain private school we are alumni of, B) a local chain of italian restaraunts, C) a local beer distributor.
basically-my neighbor has tapped into a specific community( primarily that private school network)------not every alumni hires him---but enough prefer to do business with fellow graduates----THAT'S what's important to THEM- the community they are a part of---NOT the $$$$----- BTW, - he services the heck out of them---and most of his current employees are graduates as well. He outcompetes other , lower cost crews who are using semi/legals and illegals.
i met another contractor last year---doing much the same remodeling homes in an upscale local community. He probably has keys to half the houses in that village--people wait 6 months, 9 months WHATEVER--untill he can fit them in. he never advertises----customers just pass him along neighbor to neighbor.
both these guys have a certain ability to schmooze-that I lack----but they have WORKED at tapping into a network of people who afford their services.
take it for what it's worth---it's a lifetime commitment---it can be done--if you tap into the right community-and function as part of it.
BTW------- looked at a project last night. showed the prospect my FHB articles--which would be my version of Jeffs' portfolio.--- explain the project to the prospect.
Prospect is interested--- ASKS me" would you say you are priced at about the market rate with other contractors?"----( actually, I couldn't believe she would ACTUALLY ask that- THAT way)--- I just looked her right in the I and said--- I have no idea----I put absolutely ZERO effort into competing with other peoples prices------" she said------" you don't do any market analysis?"---- I replied " NOPE--- I look at a project and determine what I need to do the job properly---- I could not possibly care less what somebody else would charge"
"you're hired" was her immediate response.
I am batting .615 with this so far this year.
good luck, stephen
Hazlett,
I replied " NOPE--- I look at a project and determine what I need to do the job properly---- I could not possibly care less what somebody else would charge"
Your statement is right on. Within the last year (I'm a neophyte in the biz), I have really started to look at my time and my costs of doing business. I am far from perfecting my system and I have a lot of Q's but. . .
I just finished a proposal for a window replacement and had really defined the tasks +time= money to determine the job cost. I remarked to my wife that when you know the numbers, you develop a confidence in your price because the numbers don't lie and you can't negotiate.
Your statement was just a reinforcement.
Thanks
"...it just seems like folks don't want quality, they want low price."
It's the American way. Thanks to companies like Wal Mart and their alliance with the Chinese government, the standard of standards has dropped considerably.
My sister recently redesigned her living room and added all new furniture, pictures, drapes, displays etc. When I went over there last week she told me how she did the whole room for under $3K. I looked at it and said, "wow, I love the Asian theme!" She asked if I was confused because it actually was Mediterranean. I picked up a picture frame and read "China". Then the tag on the love seat I read "China", the lamps were "China"...drapes and corner statues I also found the tags and read aloud: "C-H-I-N-A"
Oh, and they live in a $350K house...
LOL< There is ahouse here on the market for about seven million - not selling, so they hired some IDs to spend a couple hundred thousand to make it look betterHas the same cheap china look and the same reason why
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Mike,
You lost by $5 to 7K because you couldn't quantify your quaility to any degree.
I mean I understand quality when I see it. Others will too but when they are afraid (as I've explained elsewhere) they revert back to second grade math. Every single contractor assures them their quailty is superior, now we know they can't all be but without a way to measure it, it's ignored.
Quality is one of those things that sweeten the pot and get you referals. It's not something that will make the sale..
I'm pretty sure I just gained a 50K basment remodel and their other estimate was closer to $35K.It'll be my largest job to date - a little daunting... But I sold them with the reasoning that I wanted to be upfront with them from the getgo - not come in with a smaller number that allowed no flexibility and would probably result in change orders causing the costs to expand.That, and also the realization that estimates and quote are never apples to apples - I didn't even see the other guy's quote - couldn't care less and I came in there with my number and my points and they responded by saying they were probably going to go with me.Not a sure thing - but 96% sure as I'm going today to look at additional work they'd like to address on top of the basement at the same time- that'll be my opportunity to offer up the contract to sign and get a scheduling deposit.Keep your fingers crossed for me...Julian
Im surprized how many guys do contracting, Its not the guys been doing it a long time its the guys starting out or the moonlighters that lowball, Or surfers just wanting to pick up some cash between surfing, Funny when i lived back east my dad and maybe 3 other contractors were in the town of the same size, Now for the same amount of people theres a hundred contractors????
Much like Big Cal ... here in the land of x-steel mills ... everyone is a contractor!
even the firemen he mentioned, as they work shifts ... and the teachers all summer long.
I try to focus on a market where savinbg a buck isn't their first thot. Then ... I tend to price myself so high there's no confusion between me and every other guy with a pick up. I'm not making my first million yet by any stretch of the imagination ...
but I do find myself competing more with bigger/established high end companies vs an off duty cop. And even then ... half the time I don't see how the bigger place with tons more overhead can afford to do it for what I was quoting.
Here's a quick Q for ya ... do U present a photo portfolio when U do your sales presentation?
I'm told all the time ... and I mean like 8 outta 10 times ... that I was the only one to show pics.
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Jeff,
I know what you mean as my family and wife's family are from your area. Fact is I just don't know how we can market any better.
I'm on the local Building Board, have lived here forever, do show pics and give references, member of the local builders association...all the stuff you would think would win folks over. Heck, many of my references come from the church I have gone to for 30 years but in the end, prices still is the determining factor and so many guys are hungry around here, they'll work for a song to get a job. Case in point, some guy just built a new home for someone who called us for $70 sq ft. (We quoted $85) How can he do that? Stolen materials? Illegal labor? Shoddy work? I don't want to debate those facts but the reality is we lost the job to him no matter what.
And I don't know how we can market to a specific group as we'll work for anyone. I'm not sure how I can adevretise to build something for a specific person when a piece of vacant land is just that, vacant land. The owner calls and we quote a price. I understand what you are saying but not sure how I can apply it.
But thanks Jeff as your input is always appreciated.
Mike
remember ...
my line of thinking is based purely in the world of remodeling.
no "home building" what so ever.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
It sounds as tho by default you are doing your marketing via your church social network. that source is leading price shoppers to you and that means you need a wider social network or another method of marketingor a wealthier church group, LOL
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
" present a photo portfolio when U do your sales presentation?I'm told all the time ... and I mean like 8 outta 10 times ... that I was the only one to show pics. "That is amazing to me!
Just like the guys that don't shopw up for estimate or other appointments or answer the phone messages from potential clients...The photo portfolio I even did that when I was only a lowly roofer...
One thing that set me apart back then was a a clearly defined set of specs on a contract proposal instead of just a napkin type "I will re-rof your house for $X "
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
It is brutally competive where I live, which is north of San Francisco.
On the other end of the spectrum, I tried to make an appointment to see the orthopedic surgeon I use, and he is booked two months out.
My wife has a church friend, Wants a bathroom added upstairs, there no plumbing even up there, She had one bid 35 grand, one bid 30 grand and one bid 5 grand, So shes going with the 5 grand bid, I dont even think that would cover half the plumber, Im glad they did not ask me but i smell trouble already and then it will be about the bad contractors
WOW
Just a quick response to some previous posts on this topic....Some of us "fireman" are more liscensed and insured a.k.a. "legit" than some of the other jerks that we compete here.....Not that I'm sensitive about that....LOL
Mike,
I've lived and worked where you are now. Matter of fact, I started framing for the family business when Northdale was one little Pulte tract and there was no golf course.
Anyway, I'm sure I've said this before. Tampa is like no market I've seen since. There are few words to describe just how "Competitive", or maybe "cut throat" is a better term, the area is. Probably worse than most here have ever seen.
Wish I could offer some worthwhile advice, but I can't. I watched my dad try to move from new construction to remodeling work and he never could get it sorted out.
Good luck.