I just priced a job to replace four 9/0 patio doors with Andersen Frenchwood doors. Aside from the removal and replacement, no other work will be done at this residence.
Normally, I require a deposit to cover all special order items as well as enough to cover getting to the next pay draw, or on a small job 50% of the price upon acceptance of the proposal and the balance on substantial completion. This way, I am not putting my own money out there. ( I have even advocated this to others in different threads).
But, this job has me a little puzzled since the doors are a disproportionately high amount (about 90% of the total cost of the job). I don’t want to get stuck with 4 custom Andersen doors, but I feel a little odd asking for 90% upfront. Also, asking for that high of an amount basically reveals the labor/profit for the job.
I know the potential clients, my wife works with one of them and I get a fair amount of work from the people in that office, so I don’t think I would get “stiffed” but what if something unexpected happens- say family emergency, and they can’t/won’t be able to pay for the doors? Then I am on the hook.
Ultimately, I am not going to risk this amount of my money on custom doors, but I am looking for options besides, “I’ll need 90% down when you sign the proposal.”
What say you?
You cannot convey tone in an email.
Replies
ask for 70% deposit. that way at least YOUR cost on the doors is covered and it doesn't expose your labour. On the other hand exposing your labour shouldn't be an issue. Auto repair, electronic shops etc all show their labour. Why shouldn't we? We should never be afraid to charge what we are worth and stand up to it.
I'm not afraid to charge what I am worth. I just prefer to work lump sum, keeps it simple.
Even if I exclude labor and profit, I am still at 82% hard costs, and of that figure, 95% is a non-returnable, special order door.
That still seems like a very high upfront payment.
You cannot convey tone in an email.
"That still seems like a very high upfront payment."
a real smart guy told me a coupla things years back.
one being "don't be afraid of the money" ...
and two being "don't argue with the numbers".
both seem to apply here.
ask for half down then have the job fall thru ...
then see if it still seems like alot down!
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
"What say you?"
I say don't run your business based on what others may think.
meaning ... the customers.
I'd work this one the same as any other.
and if that meant 90% down ... so be it.
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Jeff,
I always admire your posts for the way you cut to the chase.
It is a business and I have to run it like one. Just looking for options to ease the sticker shock.
Thanks.
You cannot convey tone in an email.
I think if the cost of the doors is 90% of the job, you are not charging enough markup on them.
Let's say the doors cost you nine grand and the labor is two grand.
Then the markup on doors brings them to fifteen grand and markup on labor makes it two grand.
So the job priced to them is seventeen grand.
9/17 is 52%
So a fifty percent deposit would work out just fine.
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Piffin,
I'll take your point for discussion.
I have calculated my hourly rate using "capacity based markup", Pilao,Proof, whatever you want to call it. But basically, my overhead gets covered by my hourly rate. So I am not marking up mtl's by 1.67. I am only adding 10% to material and labor costs (loaded rate).
Ordinarily this works out quite well, since the typical job is usually a lot more labor than material, and my exposure is limited in hard costs.
This prospect is just heavily weighted to the cost of the doors (about 15k)
Perhaps I should raise the price to account for the risk of higher priced materials, but I priced the labor on past experiences and I am comfortable with the numbers, I just don't like the high deposit. You cannot convey tone in an email.
What about disposal of the old doors, casing and trim, etc? If the doors make up 90% of the job cost, I gotta ask if you've taken everything into account.
I did 12 Anderson Frenchwood 9/0's a couple of years ago, and there was a lot more to it than simply removing and replacing the doors. Some of our problems were due to the basic construction of the house, but I spent more time fitting the new stucco mold than it took to actually install the doors. The interior casing was very wide with an elaborate profile that also took quite a while to install.
Unless you're using the ditch on a quiet country road, the dump fees can run up pretty quickly.
You might do what I did regarding purchasing the doors. I had the customer buy them directly (~$36K)and have them delivered to the home. I only billed for the demo, disposal, and installation.
Dave,
I'm not saying my numbers are bulletproof, in fact as people post, I look back and wonder if I didn't miss something else.
But I did make a spreadsheet with 21 individual tasks for each opening, including disposal. I have made the mistake before thinking that it will only take a few hours to remove and install a door/window.
That is the easy part.
It is all the prep work and the final trim that takes the time, plus these doors will require 2 guys to set each unit.
Right or wrong I will live with my labor #. I was looking for alternatives to the high initial deposit.
I will talk w/ the client on Mon. I like the idea of having them supply the doors -IF they are adverse to my payment terms.
ThanksYou cannot convey tone in an email.
If you're not marking them up. let customer pay for them up front. Those doors are a lot shorter than regular doors, hope you have filling in at the top figured in.
Edited 9/26/2008 7:42 pm ET by shellbuilder
shell,
I am marking them up. Just not by 1.67 since my labor rate captures my overhead.
I also know that the patio doors are shorter than conventional doors. Part of the reason we are using them is because the exterior is brick and the original opening was sized accordingly, not enough room for a traditional 6/8 door.
So no infill at the top.
You cannot convey tone in an email.
Shorter than what?
Andersen, like most all the majors, sells their patio doors at the (I'm using nominal numbers) "replacement" height of 80 inches, the "new construction standard" height of 83, and the "eight foot door" height, which none of the "majors" can agree on.
The short "replacement" height figure was arrived at many years ago, when so much of the business was written for doors used to replace the old aluminum framed glass sliders put in during the 50s and 60s. The short height made it easy to fit a door into an opening with only the panels having been removed, and maybe part of the top tracks sawn off.
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"A stripe is just as real as a dadgummed flower."
Gene Davis 1920-1985
Special order stuff PAID IN FULL! Thats it! Why are you worried about this? Its not like your going to spend the money on other things.
I agree with the others, your pricing seems low.
OK
the consensus is to have clients prepay all special orders up front (which I normally agree with) and apparently my pricing is too low. I purposely left out actual pricing since that wasn't my original intent and since it varies so much among different regions.
However, I would like to pursue the labor aspect in an effort to educate myself.
I would like feedback on the following scenario. Please give your labor (hours not $$) estimates for the following scope of work:
remove and replace one 9/0 x 6/8 patio door.
existing door is a 3-pane steel door, center panel is operable, sides are fixed.
Door unit is secured in a wood framed opening. There will be no modification to framing, brick/stucco, drywall/plaster etc.
construction is 2x6 framing with brick veneer. (again, the door fits in the opening)
access is normal/easy.
Install the door, insulate the jamb, install exterior casing/brickmould and install and paint the interior casing, adjust lockset etc.
Garden variety install- new Andersen door, you have a helper to get out the old and install the new.
You cannot convey tone in an email.
I don't see a line item for "everything turns to #### and half a day disappears."
Joe H
So, I thought I was the ONLY one that happened to! :)
When I bid my job, I figured it would take two of us two days per door. The size of the house, and the accessability of several of the doors made this a reasonable estimate. We had to use a fork lift to bring each door up a small hill from the garage to the front door and then we had to manhandle about half of them thru the house to their new home.Since we couldn't leave an opening open overnight - or over a weekend, we had to plan the work so a new door was in the opening before we knocked off for the day. On a couple of days, we actually set two doos. Most of the time, however, we spent the afternoon either prepping to remove the next couple of doors - or working on the casings.
no one else will take a swing,so here goes. 14 hours per door. 2.5 to remove,clean up jamb,3.0 install and adjust,1. to insulate and caulk,4.0 trim in and out,2.0 paint [this is a guess on paint inside trim] 1.5 clean up. plus on 9 doors i wouls somewhere want to get paid at least 5 hours for p.u and deliver,order etc.thats just labor,nothing else. so with your labor rate how far off of a 1k a door are you?
so i'm probably far enough off that it ought to get a rise out of someone.???
larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
ea door....2 men-1 day = 8 man days + 1 day for mobilization / demob...
so.... 2 men for 5 daysand a contingency number in the spreadsheetMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
well it looks like I am light on the hours. :(
I figured a second guy just to help me remove the old and set the new. So 2 maybe 3 days. The rest of the tasks will be done solo.
If I get the job, I'll keep track of the hours and see how I compare to the consensus here.
thanksYou cannot convey tone in an email.
vintage.. think back over your work history
on any job.... only one of three things can happen....
you will make money.... you will lose money... or you will break even
if you are not making money... you're better off not doing the job... it takes you out of availability to get profitable jobs
it's ok to work like an optimist.... but you always want to bid like a pessimist
another thing.... if you have enough labor figured into the job, then you can afford to really take your time to make it all as good as your ability allows ( notice i didn't say "perfect" )
you want your customers to look at those doors and trim and say..
........ "boy.. i like it ! "
anyways.... clock your time on this...
record everything you do that has to do with this job...loading the truck, dealing with the supplier, clean up........ etc
and cross train your helper.. so he can be trimming the next door while you're working on the firstMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
I happen to have a job coming up in a couple weeks doing just this very thing. I am figuring 2100 for labor and misc screws and caulk - no painting.
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I can only assume that is for one door?You cannot convey tone in an email.
well, I have to admit, you guys have been confusing me with that term, 'door'It is for one unit, which is three 3068 'doors' factory mulled.
I think the RO was about 9'8"
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
One other possibility would be to have the customer write the deposit check payable to the supplier.
That could give them some assurance that you are not taking the money to use on other jobs and you would have your #### covered.
I have offered this same proposal to clients in the past, but have only had one ever take me up on it. The rest figured the offer showed I was being honest and just wrote the check to me.
Terry
tle,
when I talked to my supplier to see what recourse I had returning the doors if something didn't work out, he offered the same thing.
I can't return the doors, but they would provide documentation of the order, or allow direct payment or anything else I could think of that would help bolster client confidence.
We'll see how it shakes out.
I also thought about an escrow account where we both agree to release the funds, but that seems like it is more hassle than is warranted on this size of job.
You cannot convey tone in an email.
I would guess if you are pricing things right that you would need only 50% of the total amount of that job to cover the cost of those doors.
Jim,
Reading your posts, I think you and I have a different strategy for how we capture overhead and profit. I don't want to digress into a conversation about overhead and markup methodology (at least not for this case).
I did post earlier in this thread, asking for labor hours to see if I am within the ballpark of other qualified contractors. Perhaps that will reveal a flaw in my pricing, or even my overall strategy for markup.
Care to hazard a guess with regard to the labor hours???
If you take the particulars out of this situation, what would you do if you had approx. 90% of the total project cost in materials?
Would you require that for the deposit? You cannot convey tone in an email.
The general consensus seems to be that you are not figuring enough labor and I agree. I'll take a quick stab at it-removal 1.5, install 5 (these are huge PIA doors), exterior trim & insulate 2, interior trim 2, disposal 1, CMA factor 2 =13.5 hrs x 2 men=27 billable hrs. per door. based on that # of doors I might round to about 25 hrs. per door ( dont need the CMA factor on EVERY door) Actually, my back hurts just thinking about those big doors, that might increase my figure also
oops, forgot paint, add 1.5 more hours per door at least
Edited 9/27/2008 7:44 am ET by LIVEONSAWDUST
"If you take the particulars out of this situation, what would you do if you had approx. 90% of the total project cost in materials?Would you require that for the deposit? "Okay, lets assume that you are correct and 90% of the job is special order doors. It becomes a very simple series of logical questions regarding who is responsible for the money when the order is placed. Answer the questions then analyze the risk vs reward at the end. Then, using that analysis, do what Warren Buffet would do.When you do that analysis, you will not be able to justify your idea to put yourself on the hook. So, I would walk into that sales meeting with two different proposals already prepared. One proposal would require the owners to put up 100% of the special order money + your normal amount of deposit to secure the job. The alternate proposal would exclude the materials and would only include a proposal for labor and other misc supplies. Business principles demand a rational approach to risk vs reward. It makes no sense to buy expensive materials at retail prices and sell them at the same retail prices. Its much better to see the business for what it really is and just concentrate on getting paid for the labor and assuming none of the risk of the materials, including warranting them. So, I stand by my statement that if I'm writing that contract, I'd ask for 50% of the total contract as security for the special order items. For that money, I would guarantee that they would receive their materials free of liens even if they canceled the contract before the delivery is made. Think about the guy at the order desk. Does he fear telling you that you have to pay for your special orders? What would he say if you refused to agree to his terms?
Jim,
Your right, I won't put myself on the hook for the doors. When we meet on Monday, I'll offer to let them pay the supplier directly for the doors, if they are uncomfortable with a high deposit, or I will offer the labor only.
You cannot convey tone in an email.
I'm also thinking in the 1 k range per door. Without knowing your labor rates, experience of you and your help , seeing the site it's kinda hard to be very exacting. Something you might consider for moving the doors, cut sections of schedule 40 3"or4" pipe to roll the doors thru the yard. I have aboaut 10 3' sections I keep around for moving heavy items. When I was still doing reidential we moved a 12' long 5' high bay unit to the back of the house using this. For disposal, if the old doors are in decent shape, see if there is a habitat for humanity restore in your area. They will come & pick them up. Or put them on craigs list, buyer picks them up. I tend to sell demolition ,aterials this way as it really reduces my dump fees and labor as no one has to get it to the dumpster, clean up the dumpster etc.
"this dog may be old but he ain't cold. And he still knows how to bury a bone."
Lattimore
http://www.rehmodeling.com
Rob,
The doors are not really worth salvaging, rotted jambs and several years of silicone caulk repairs don't make them to appealing.
I like the PVC idea . . .
now that I think about it, I got a 22' steel I beam in place and ready to lift using that technique.
You cannot convey tone in an email.
Sorry to jump in late....
Thank your lucky stars you don't work in the great state of Maryland where by law you are only allowed to collect 1/3 at contract signing. You can get creative after that but it's tricky.
sledge,
to be honest, I am not sure what Iowa law allows (my bad).
We had extensive flooding this summer and so people are especially wary of contractors who want money up front. Local TV station even had something on their website about not paying contractors until work is complete.
I usually don't encounter a problem with asking for deposits. This one is just a little different.
You cannot convey tone in an email.
When I ran a store, I learned that ordering special order items without a deposit will kill a business and dry up your capital quickly, but that it does not necessarily have to be a full payment deposit. Once they have money invested in the order, they are not going to walk and find another contractor or change their minds, 99% of the time.So a deposit up front of half what the door costs you would be sufficient to seal the deal, then the other half COD, with final payment when you finish the job.I don't know how your account with the yard works, but for me - I can special order at any of the three places I go to with no front deposit. But I've been doing business there for 20 years and never missed a payment when due. I asked one salesman on a very special unique one last summer, and his response was - "Your word is your deposit"So for me, I would have the job done, be paid, and have the money all siting in account for one to four weeks before I had to pay for it in most circumstances. The customer deposit to me is just to be sure they are committed to the job and to help my overall cash flow. Most of my customers are repeat and ongoing so I don't require deposits, knowing that they pay well too. So I only mess with deposits on big jobs or new customers while I get to know them.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
My lumber yard sends me a bill at the end of the month and requests payment on the 10th of the following month. When I first started with them, they made me sign off on the window order to acknowledge they were mine.
Now I just call them, tell them what I need and it will be delivered when I need it. I have even had special order material sit in their warehouse for 2 months because my schedule got changed. They never invoiced me until they delivered the cabinets. It is a really good company to do business with.
So, if it all goes right, I will have the doors installed and will have been paid at least two weeks before I ever get an invoice from the yard.
I like the approach of the 50% down and 50% COD, balance due at substantial completion.
Thanks
You cannot convey tone in an email.
so I don't think I would get "stiffed"
How many of us knew up front we were about to get the shaft?
I'd say you should ask for enough to cover yourself if things go bad. If you are stuck with the doors they would be worth something if sold in the paper or craigslist. Subtrack that from your cost. It won't be 90% of the cost, but should be enough to cover your lost time and hassle.
A perfect way to go broke is being too "nice." Nice guys get the shaft. Do what would be a win-win for both sides and stick to it.
On the remodel I'm on now I was too nice and gave in to a price cap rather than my normal T&M. The T&M rate doesn't have an extra fudge factor and as luck would have it I'll be donating 20 hours of time this coming week simply because an exterior wall I needed to open up from the outside is surounded with $70k of expensive plants and is full of bright white blown fiberglass rather than bats.
Good building
Beer was created so carpenters wouldn't rule the world.
Edited 9/27/2008 1:05 pm ET by IdahoDon
Edited 9/27/2008 1:07 pm ET by IdahoDon
"How many of us knew up front we were about to get the shaft?"LOL, usually that happens in the backside - I mean on the final payment.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
lol
Beer was created so carpenters wouldn't rule the world.
"How many of us knew up front we were about to get the shaft?"
LOL, usually that happens in the backside - I mean on the final payment.
I'da skipped wife one had I known.
Joe H
We never know beforehand or we wouldn't allow it.
I am thinking about modifying the payment terms. As Piffin pointed out, most people who have 50% invested aren't likely to walk away.
You cannot convey tone in an email.
"How many of us knew up front we were about to get the shaft?"
I love that line.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
There are ways to create credits to you at your lumberyard if customer is paying your account direct.