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What a moron. For a bath remodel I priced up I just did a new estimate based on some changes the customer requested and realized that I didn’t account for over $1100. in materials in my first quote to them. They think that the bath is a reasonable 10K, and with adjustments for the mistake it looks more like 14K. I can tell you right now, they’re not expecting 4K increase based on the changes we discussed. Has this ever happened to anyone else. What’d you do. What a rookie mistake. Can’t believe it.
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had a friend start a house for a client and then found he forgot to add the price of the lot......once in and the contract was signed he had to eat it.
You don't seem to be to that point (contract signing) so if I were you I'd show them the mistake and assure them it was one. If they understand and agree...go forward. If they think you're pulling a fast one....back out and be more careful next time.
*Jim gave some good advise. As long as you havent signed anything there is still time. I would get in the habit of having someone else review my estimates at least in the beginning. If you did sign something then I would bring it to the homeowners attention. You could possibly work something out to get half or 3/4 of the oversight. People are more understanding than we often give them credit for. Good luck!
*BrianI had a similar experience several years ago. I got an anonymous phone call requesting a bid on a new roof for an old house that was for sale. I went and looked at it and gave a ball park figure. Well this anonymous caller turned out to be the son in law of one of my best and most demanding clients. They bought the house and the father in law called me. He wanted me to put a new roof on for his daughter as a house warming present. Well "dad" wants everything to be the very best and my original bid had been qualified as a serviceable roof. Needless to say my bid for "dad" went up 30%. Well son in law got miffed. I explained that it was all my mistake, I just hadn't done my job well enough and I hoped there were no hard feelings, I'd just step aside and let them get another contractor. Well "dad" is a smart businessman and he stepped in and asked me to please do the job, bill him, and keep his "son in law" uninformed. Things turned out great, everyone was happy.I guess what I'm saying is that after years of experience, I've learned how effective it is to take full responsibility for a mistake, even if it's only partly yours. People are shocked by this behavior, and I believe it earns you tremendous respect. My advice:Admit your mistake, apologize and give them the opportunity to use someone else. Terry
*I did that once: forgot to carry some numbers to the next spreadsheet. It was a $2,200 error, and I didn't find the mistake 'til after the job started. I was sick about my mistake, but I told the architect (my client) and we agreed to split the added cost, which I thought was very reasonable.I use a better estimating system now, and it'd be real tough to make that kind of error.
*Is this a job in progress with changes? Or just a bid? If in progress, you're stuck. If still in bid stage give them the new bid, explain it and go from there. Better to lose the job than lose the grand? Joe H
*Still in bid stage, Joe. Killer, b/c process has been so smooth to this point. They seemed to be on the edge at 10K, I think a change this size will probably kill it. Torture b/c I could use the project.
*I've definitely done that a few times over the years. Had to try to straighten out my own screwups as well as those made by others. Its just that my screwups were generally on trusses, not remodels. Generally, I try to pick up i part of the screwup with any changes. But not all of it. Sometimes months go by between quotes and when the customer actually goes for the job. In that case I generally add part of it again and attribute it to changes in material costs. I wouldn't call it a "rookie" mistake - We're all human.
*I was hoping so, but on this job we've picked the most cost-effective materials I feel comfortable using at this point. (Good point re: Yugos :). I think it is competitive, but I'm not sure they really have any sense of that. Some contractor "friend" of theirs told them 10K was just about right.
*Brian - I have no right to answer your question, not being in your business. However ...Explain what happened, total the bottom line, discount what you feel you can to adjust. Even if you lose the job you have your integrity, which is the most important aspect of any business.... and I can't believe some of what I just read here.Jeff
*Brian,Definitely fess up now, is there any chance you can work with them on selecting alternate materials and fixtures to bring the price down? Better to catch it now before you lose your ass. About the 14k, if you prepared a competitive estimate than it is what it is. They can't expect to get a caddy for the price of a Yugo (remember those cars?).
*Jeff,What did you read that astonishes you?
*I'd be curious as well.
*Certainly not just a rookie mistake. Bet there were many whose stomach felt like mine when your problem was read. No doubt many have done their share of work at $1.00 or $2.00 per hour (or less)because they needed the work or labor/material/overhead was missed. Only you will have final answer but, apologizing, explaining and perhaps losing the work may be better than kicking yourself every day you are there. Even if build at lower price and MAYBE get referrals, others will want similar work at similar price. I think sometimes contractors often hate to lose any work thus find themselves starting out in the "red" and mad as hell from the get go. Is certainly a most personal decision. Guess one has to ask "Am I a business or a social service agency?" Just some thoughts. Randy
*Brian,When I was estimating for a company, if it was a competitive bid, that was it. You either signed the contract for the price, or withdrew your bid, but if you did you probably wouldn't be bidding to that company anymore. Your situation is a little different though, you could just tell them upfront that you missed something and that you need to amend your quote. If that isn't acceptable to them, yourenot bound to them to do the work, but hard feelings may be had. If you can't afford to do the work for the original price, don't, especially if you have other jobs that you will make money on.Just be careful, I always worry about getting a rep. for things like this, usually if it isn't much I'll just suck it up and do it for free. Withdrawing your bids often could get you a bad rep.Cole
*I very much appreciate your input, everyone. I'm just about over the shock at this point. Nothing is signed, so I can -- an probably will -- go back and simply explain the mistake. I risk losing the job, but I really don't think they'll find anyone (short of a friend or relative) to do it for less. I just know I'd be bummed if I were in their shoes, and I'd probably lose a measure of faith in the person who was offering to do my work. Sad thing is, it wasn't even a math error or an error of ommission... just had the wrong cells selected on my spreadsheet. I have to weigh it carefully, b/c I could use the cash flow to cover some biz expenses. May have to offer to cover some of the error when all is said and done. Live and learn, I guess.Brian
*Brian,If you don't do this, give it a try.If your estimate reads anything like mine it goes left to right with Qty * Cost per Unit, = Materials + Equipment + Labor = Line Item Subtotal, with a division subtotal at the end of each division, grand total at the bottom. So what I am getting at is your math goes left to right and then down. Try adding a check line at the bottom of your sheet. With totals for material, equipment and labor which go top to bottom, then total those figures to the right. This total should equal your other total. If it does not, something is wrong.Good luck w/ your clients
*I was curious too. I think it's what BossHog said about hiding part of the error in material costs. Sounds pretty duplictous to me.But I'm more curious as to how an error of "over $1,100" on a $10K bid becomes $14K.The best course of action here is to fess up and offer a 50/50 split. Or negotiate some other compromise. Be ready to pull out the big guns of honesty & integrity (Hey, you admitted the error, didn't try to hide it and you're not trying to scalp them. Wouldn't they want someone they can trust to do their projuect?) Now, CLOSE the deal.
*Tell them the truth. As an architect I see this quite often. I always appreciate it when some one tells me they missed something verses trying to get it later in change orders or trying to hide it in the general conditions. If I believe that you made an honest mistake I try to convince the client to pay for it. They should not get something for free. One way to convince me and the client is to show me your numbers (subcontractor bids, material quotes, etc.). These numbers should match with your line item bid. On the missed item offer not to include any profit or overhead. Do not take the job if you will lose money and not stay in business. No one profits by a GC or sub that goes out of business in the middle of a project (a worse rep that walking away). The bottom line is be honorable. It has worked for me. I had a project that went wrong and part of the problem was mine. I told the client that I F* up and they agreed to pay for the correction. Of course I now owe them my first born but what the heck
*I'm pretty much in agreement with Rd. This is not the time to start playing the shell game.If you need the work, then show them the real numbers. Line-by-line. Just the facts, Ma'am. Fess up the error and play it straight. Try to sell the new number with no cut in your profit. Show your profit not as $XXXX for the job, but as an hourly figure instead. Whichever format favors you.If they back away, and again, if you really need the work...and if you can swing it...maybe offer to shave your profit a tad as a sign of good faith.Again, show them your proposed per-hour profit. If they still haggle, then I'd walk. You know how much profit you need to make to not just put food on the table, but to walk tall as well.
*No question about it... you have to explain your error before you start the job. Pure business, plain and simple. You don't want to be doing the job while trying to figure out how to cover you costs, or even worse, trying to figure out how to break it to them and negotiate what is right during or after the fact. I think you have to give yourself and your client a chance to renegotiate the deal. If they decline your services, you live another day and no real harm done. Much better than any other alternative I think. Follow your heart in this deal and it will work out fine.Good luck,- Gary
*Rich -Don't have any idea what "duplictous" means. But maybe what I said bears a bit more explaining. When I bid trusses, it's not as much of a make-or-break thing like it is for a small business. Like some have said here, reputation is important. If I screw up a bid, I most always live with it. The only exception would be if I found it before the lumberyard had sent the bid on to their customer. Most customers I deal with are repeat, long term customers who will be back for more. So it's not as important for every job to be profitable. That's why I said I'll edge things back closer to where they should be if there are changes. I don't see it as dishonest, since I stand by quotes. And I'm not trying to pad quotes just to make a fast buck - Just cover mistakes and charge them what they should've been charged anyway.
*What rookie mistake Brian? What's up dude! You 4get!Y U Do!!! Who don't make a mee steak! ha ha...get estimation template with checklist & use it.(avoids costly oversights)Withdraw and re submit your bid.Do nice work that your customers will enjoy for years. And get paid for it.................dude!!!In the spirit of fine home bldg., amen.Dan-O
*We all make mistakesbhut sometimes I would have been better off giving someone a handfull of money and never show up at the job, I would have lost less.YOu mention this would be at a loss, yet in another post mention you need the work to cover bussiness expences.If you are a rookie, dont get into the game of job three pays off job 1, it might never end.Before going independednt I worked for guy that was that way. Within 2 years it was job 4 or 5 paid for job 1. He lost everything, now he cant get decent subs to work for him and he blows through employees, and his reputation as one of the big custom hoem builders has become......dirtI agree with everyone else, go back and admit the mistake or even show them the mistake.Walk away if you need tobut here is another of what could happen.they might agree to the mistake say that this was all they were hoping to pay, the 10k, agree to the new contract at 14k, treat you nice. Bill comes due and the nitpick you down to 10k over "problems". Ive been there.
*Again, much obliged everyone. Now that I've had a night to sleep on it, talked with my family and read all these posts I've decided to fess up to the error, explain that as much as I'd like to do the work I cannot afford to eat the error, and live with the consequences. To Randy's earlier point, and Josh's too, I'm not in business to provide charity work as much as I love the work, and don't want to get into the cycle described above. Worth taking my lumps to have the time to keep looking for other projects. Couple is kind of kooky anyway... probabably a lot of headaches to endure for a paycut. Here's to life's little lessons.Thanks again all.
*BrianYou have my respect and I hope this comes out well for you. When I've made a business mistake I look at it as tuition expense, this makes it an easier pill to swallow. You'll do great. In time you'll look back on this and say "it worked out just the way it was supposed to". BTDT and can't believe where I'm at today.Terry
*There are a lot of things been said here, and the only thing I agree with was just briefly mentioned - your integrity is the most valuable thing you have. First off, you are talking about roughly a 10% error that you admit you made. No way I'd go back and ask the customer for that. You risk them thinking (AND saying to others) "first he said 10k, then, when we agreed to that, he upped it 10%, which bothered us but we went ahead anyway." Even if you are the most honest guy in the world, you give them the chance to question your integrity and lump you in with all the other "contractors" people tell stories about. Don't do it, it's a poor way to build a reputation.On top of all that, your pricing should be structured so that you make a lot more profit than that each job, just to cover instances like this. So 10% one way or the other shouldn't sink you, but that's a topic for another thread. Bite the bullet and do the job for what you said you'd do it for. "A man is only as good as his word" "A man's word is his bond" "Your word is the only thing you have to keep once you give it". Ignore these maxims at your peril. If you looked them in the eye and said "10k" then that's what you have to do it for, whether you signed anything or not. And take this as a lesson about giving casual quotes.
*I agree with Jim,casual quotes will kill you, if you stick to your word.Your word is a lot, and I learned a while ago not to give a casual quote unless everyone understands that it is just a ballpark, and I will ball park it high, but I try to avoid even ball park stuff.we constatnly here stories of the "contractor " who low balls a job and by the time they are done it is a high end job and those owners are bad mouthing everyoneeveryone id different and these might be people you can go back and show them your mistakealso as stated aboveexperience can be expensive tuitionbut your word is important
*Jim makes a great point. I have read this post all along but had not considered it in his manner. It reminded me of a water heater replacement I did a year or so ago. I bid it thinking it would take 3 hours. (conventional to powervent) It took 4. I priced it based on a conversation with the suppler at $500. After the job was complete, I am paid, customer happy I get the bill. $499.49! The counter guy screwed up. I was supposed to make about $180 on this job and wound up making $80.51. The supplier gave me everything at cost but $80 was it. In a conversation a few months later I told the customer of the incident and joke it was the best bargain I had given this year. He almost begged me to let him pay me the difference but I refused. I have done at least 3k in work there since and had 2 referals. Best $100 I ever lost. I realize that we are talking $100 vs $1000 but same principle. DanT