In All my years in biz i never heard this, Now in the past year i have heard it 4 times,
I give a BID to do a job, do it, and tell the people im done.
They say good give us a breakdown with your time and materials to inspect.
Now i told them its a BID price not Tand M, they wanted a bid before i started.
Is this something there teaching people to get out of paying??.
I just told them it was a bid it does not matter what the time was unless you think i should charge you more if i ran over.
Replies
Sorry to add 2 may have turned it into insurance but i was never told that, It may be the insurance CO wanted a breakdown but the people did not want me to know it was insurance.
Do you have a signed contract for the fixed price?
If it's an insurance deal, the adjuster is probably giving them a lower number than you did. See if the adjuster will send you a breakdown from their software, then show them what they left out.
If i know its insurance i tell the people have your adjuster look at it first. Most were smaller jobs no signed contract, Yes i know thats the right thing to do, but there mostly vacation homes with no one around. Most of the time im trying to save the house from further damage.
I just priced an insurance roof ( portion only damaged by falling tree)My price was $7700 (8800 with some other painting etc) and the adjustor took five weeks to get back to the owner and tell him he ould have five grand!Gotta dig the yokel's phone number back out now
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
If the work is being paid from insurance proceeds, and the house is mortgaged, then the insurance company will issue the check to the homeowner and the bank -- both names will be on the check.And each bank has rules for how and when such payouts can go to the homeowner or contractor. In the case of small amounts of money, the HO can just sign a statement that the work is done. But in most cases, the bank will want to inspect the house to be sure that the work is complete.And for the bank to know if the work is complete, they need to know what work was done.
Politics is the antithesis of problem solving.
I've never seen that one before. every case I've handled the ins check went direct to HO or to HO and me.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Was this a "one time" thing, or is it more common? Did you have a signed contract or was it all verbal?
I've never had that happen, but if it did, I would probably ask the customer why they waited to ask for that info. If they have a good reason (insurance?), I would probably work with them. Otherwise, I would decline to provide the breakdown and point out that they signed a contract to pay $X for Y amount of work - and that you will take steps to enforce that agreement if it becomes necessary.
I would do this calmly, but firmly, and be ready to follow through. Yes, you might lose a customer, but so you want this one anyway?
It's funny. Why is it OK to ask a contractor for a "breakdown" when noone would dream of asking a grocery store for a "breakdown" when you buy a gallon of milk? Or getting a tooth filled, buying a car etc. etc.
I don't have a pat answer for that.
I had this come up recently, in a discussion with a room addition client. He said my bid was the only one that didn't provide a breakdown (yet it was the one he picked) and he wanted to know why.
I told him I didn't operate that way, because if I did, I would have to charge him for every contingency not specifically spelled out in the blueprints (I am known for "absorbing" a lot of contingencies - I generally plug about 15% into my bids for this, and generally always use every penny). And as I pointed out, the actual cost breakdown of each facet is not known until the project is completed.
That was with a client who had already signed a contract.
To me it doesn't bode well for them to be asking that. But perhaps you could use it as a springboard to get them to talk about their motivation in asking. Since they are not in the building industry, those numbers likely wouldn't be meaningful to them anyway. Maybe ask for their projected breakdown, and tell them you'll discuss any major discrepancies once you've had a chance to review it.
View Image "...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
Edited 2/6/2009 12:45 pm by Huck
You know, it is a double standard at time. I have had general contractors ask me for a breakdown on my cabinet and carpentry bids. Basically gave them the same answer as you do. Pi$$ed a few of them off.
A few of them I did do it for. Mainly because I had worked for them in the past and I trusted them. On the other hand, one did take my breakdownand had someone else do it for less. That's another story.
On the other hand, one did take my breakdownand had someone else do it for less. That's another story.
Unfortunately, an all too common one. I would think that a bid would be free, a breakdown should be charged for - and this is one big reason why.
Here's another problem. I did that once on an extra - gave a breakdown. So client wants to save money by buying materials himself. OK, he's a cheapskate, so I agree. Well, he buys the materials, then takes off for a week's vacation without picking them up. So to avoid the job grinding to a halt for a week, I have to pick them up. Then I find he under-ordered a few things (in spite of the detailed list I gave him - i.e., he ordered 30 pieces of bullnose tile, when I wrote 30 lineal feet). So he saved a few bucks, which came directly out of my pocket.View Image "...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
If one gives a detailed bid you just know its going straight to the nephew or family friend sometimes .
It's a process of neogotiation.. get you to cave on something and then another"layer" of paperwork hits and they lower you again.. It's called tiger teaming.
In case you weren't aware the insurance companies have lost trillions of dollars with the market fall and they are doing what they can to delay payments..
This game you can't win.. the best you can hope for at this point is to collect a portion of what's owed you..
You might try this.. write a detailed report stating everything you did and everything you discovered that would have added to the cost of the project. I do mean everything.. do it all in long hand (sloppy writing actaully is your friend) then at the bottom write the words second demand for payment.. and add a interest charge for delay of payment. (9% seems like a number)
Now here comes the tricky part. find the meanest lawyer in town with the best reputation and write on the invoice cc Pit bull lawyers inc.. (or whatever the name of the firm is).
It's tricky because that implies that you have already hired the law firm and you haven't.. You can claim that your intention was to contact them but as soon as you do they get a chunk of the settlement..
You're dancing on thin ice here but the insurance company is also dancing.. it's just that they have good lawyers they already pay..
Being a nice guy does not pay here.. You need to be a pit bull. But good pit bulls aren't cheap.. basically you are trying to bluff and hope they don't call your bluff.
I have had that happen but did not know there was a word for it....Tiger teaming... Good advice
We don't bid much of anything. Everything is shown as a breakdown. It seems to help if they see all the little numbers that make up that big number. We use the CSI 16-category format.
GC I used to sub to was successful using his own 10-category or so breakdown. Don't separate out labor, just things like "windows...$x. Siding....$x."
Seriously bobby?
if this is for work you hav already completed--and you don't have a signed proposal- you are probably screwed.
However---- if this is for prospective work--- here is what I do.
I explain right up front-- usually over the phone before I ever see the property that my price is typically at least 40% above what the insurance company wants to pay--so if the customer needs the work done for the insurance companies check--- I am not the contractor for them.
I write a detailed proposal specifying everything I am going to do and the materials i will use------and ONE lump sum.
If the customer wants me to break things down--" sorry, but our policy is not to break things out like that"
If the customer says the insurance comapny wants the info---tell the customer to have the insurance company contact YOU
when the insurance company calls- your policy is to STILL refuse to break out item costs.
If the adjuster wants to check how many squares--- I tell him, If he wants to know how much ice gaurd- I tell him-- if he wants to know how many layers of tear-off- i tell him-- BUT I NEVER BREAK DOWN COSTS!
Invariably-- the adjuster is going to ask--" but why is YOUR price higher than the one my book tells me I am allowed to pay" YOU respond-"because I don't work for YOU, I work for the homeowner---- and this is what I charge for my services"
Best wishes
BTW- hail storm here in 2007-- i hated it at the time- but now I am VERY GOOD at this conversation
if it helps--remember---- insurance adjustors are not well paid- you probably make 3 times what the adjustor makes---and that upsets them
but YOU are the one climbing the ladders and sweating like a pig in the sun---so never give in.
Good advice in that post.
Another answer for why are you more or why are you longer etc is something like "....because I do it right and don't cut any corners, just like I would do it for my own house...."
Have a good day
Cliffy
I was paid. I think what went on was i gave my bid, They turned it into insurance, collected then tried to come back and nit pick ME for some extra bucks.
OH don't answer in that case.. you won't gain anything..
I've had it asked.
I tell them that's fine, but it'll take me more time and I'll have to charge for the time to do so. I explain ... the truth ... that I don't estimate that way. I base my estimates on previous work that was similar to their job. I don't use spread sheets and break everything down to the exact inch of lumber and nail or screw.
I also mention what's been said. If I have to go item by item, I can assure them that it'll be a higher number than the original, as now I'm going to be held account to the exact inch of lumber and exact number of nails and screws, and I'm going to make darn sure that I'm not caught short. Everything will be rounded up. Not much ... but each part and piece will be accounted for and rounded up, in my favor, to make sure I'm not caught short on any one item.
And all those little "round up's" will definitely add up.
Then ... if they still want the break down, I'll do so if they pay, and I'll then work Time and Materials Plus. And that's not going to save me time or them money. But I will work that way if need be.
On a set bid, I'm gambling. If I "guess high" I make more, if I "guess low" I make less ... and in all honesty ... it's almost always a float. High on some numbers and low on others. But I will gladly work T and M+ because there's no risk to me.
If it's an insurance job ... I tell them my break down doesn't matter. Here's my price to do X,Y and Z. What is the agent "offering" ... tell me the budget ... and I'll let you know what I can do for that amount. But I don't let insurance agents set my prices, decide how I do the install or have a say in my final fit and finish.
Their job is to save the insurance company money ... sometimes pennies at a time ...
and my job is to build nice stuff!
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
From another perspective,
When I take my car to be worked on?
I get an estimate, which by the way is NOT a bid, but rather an estimate of the costs.
But when I get my bill?
Every item is listed as a line.
And yet?
How many people do you see haggling with the guy at the service desk. And the rates? Are in excess of what I've ever charged, and probably in excess of what most of you charge.
So my question is?
If you have a rough idea of how many hours it's gonna take, and what materials you need. Has anyone had any luck with presenting it the same way as the Dealerships do?
It'll take roughly X hours at $XX per hour and the material will cost $yy. And THAT is MY Price?
Seems to me that the itemized bill the service department kinda takes the wind out of the sails of most people's arguments.
That's exactly how we work.
Seems to me that,
That way you have to assign overhead and profit to man hours
but
It would take the wind out of the sales of some of the "Shrewd haggler homeowners"
automotive is different because they have rate books standardized. If the book says a job takes 1.25 hours, that is the charge, even if it took the guy three hours to do it.I bill T&M but I quit sharing my estimate breakdown most of the time because of an incident or two on ajob6-7 years ago.The HO brough in an interior design team who thought they knew something about controling budget etc. They got a copy of my breakdown from the HO and proceded to tell him of several items he did not need. ( they thought they were freeing up money to be spent on fabrics etc with them) they were totally ignorant that when they tell me the HO does not want this or that, that something ELSE still had to be done that still cost money.I didn't find out what was going on until the final payment of seventeen grand was due and the owner wanted to know why he was over budget.Then there was the thing of the ceiling that had to be repainted seven times to get just the right colour tone, and the ....you get the idea.I got my money and the house got published in a book, but I refuse to work with that ID team ever since.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
>If the book says a job takes 1.25 hours, that is the charge, even if it took the guy three hours to do it.<
or if it took them 15 minutes. Still the 1.25 hour charge
Not all shops use the book time method.
My garage uses actual time spent and they are usually under book time.
I have!!! Had a pair of jobs done on a pick up truck that both involved removing some of the same items to get at the bad stuff - like removing the serpentine accessory belt. They charged me the "Book" flat rate for each job. I screamed like a scorned woman. So bad it embarrassed my wife, who usually performs this function. They agreed & we negotiated a reasonable cost for the job.Now, I will say that we have been going to that dealer for years & they want to keep a good customer. They get us every 3000 miles for a service. Every time we go in for svc. we go over the bill line by line & they 'splain everything to me. I've found more than one error. None of them what I would call malicious. They always save my bad parts for the post repair discussion. (Except for spark plugs.) Amazingly, the woman we always use as the write up artist has learned a lot about how some things work from me. And - she has ALWAYS been fair and reasonable w/ us, as has the service manager & the dealership owner, who we have met. OTOH, we do our best to be fair & reasonable w/ them & not nit pick.ANyone in the ATLANTA, GA area want a reference to an outstanding Ford/Chrysler/Jeep dealer - Go to Akins in Winder. See Stan Cardiges for sales & Cindy Greenway fore service. Use my name.Don Reinhard
The Glass Masterworks
"If it scratches, I etch it!"
"Has anyone had any luck with presenting it the same way as the Dealerships do?"That's an apples to oranges comparison. Garages use books with nominal time estimates to perfrom every imaginable test and repair operation. In CA, they're required by law to clearly post their hourly shop rates. They're also required to notify you if the estimate will be exceeded due to additional work. Your bill will equal the time estimate(s) from the book times the posted rate.A couple of years ago, while talking to a HO, he started pushing to find out my hourly rates - in a sort of joking, sort of serious, way. After a few minutes of bobbing and weaving, I pointed to the Lexus in his driveway and asked if he took it to the dealer for service and repair. When he said that he did, I told him that my hourly rate was significantly lower than theirs - and that I make house calls. - lol
Why didn't you just tell him straight out what your hourly rate is? Seems to me that's why the auto repair shops can charge what they do, because it's out in the open.
Sure they could pay 40/hr and take their Lexus to the guy working under the tree out behind his house. But they'd rather pay double that rate and take it to a fully equiped shop that will be in business next year.
Reasonable customers look around and realize that if they want professional services they have to pay professional rates. Why are building contractors much different?
I guess I didn't pay close enough attention at first. I thought he had submitted a bid, when they asked for the breakdown, didn't realize he had completed the job. Unless "submit an intemized cost breakdown" was part of the contract, they can't require it.
At any rate, you said "Why didn't you just tell him straight out what your hourly rate is? Seems to me that's why the auto repair shops can charge what they do, because it's out in the open."
Here in Bakersfield, you can't do this, because people here are unable to distinguish between a contractor's hourly rate, and his take-home pay. Furthermore, it is commonly believed that when someone hires a contractor, they have authority to monitor - and place limits on - his income from their job. I know, because I've run into this repeatedly in 20 years of doing business here.
Reasonable customers look around and realize that if they want professional services they have to pay professional rates.
Man, I'd love to have one of those customers, just once before I die!View Image "...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
"Here in Bakersfield, you can't do this, because people here are unable to distinguish between a contractor's hourly rate, and his take-home pay. Furthermore, it is commonly believed that when someone hires a contractor, they have authority to monitor - and place limits on - his income from their job. I know, because I've run into this repeatedly in 20 years of doing business here."
Yeah, I know it's not a common practice to discuss your hourly rate. But I think that's part of the problem. People are so used to seeing what auto shops charge, they expect to pay 65, 75, 85/hr...more...so they don't really batt an eye, they compare service, professionalism, quality of job performed.
Then those same customers need some carpentry done, they ask what your hourly rate is, they get sticker shock when you tell them becuse we have kept the numbers hidden for so many years.
It seems like lots of contractors consider "educating the customer" about building practices as a normal course of business. Why don't we see educating them about "cost of doing business" the same way? If more contractors did, we could all operate more openly, and people would learn to trust us more, instead of lump us in with the shysters.
Almost seems like a responsibility to the profession, to me.
It seems like lots of contractors consider "educating the customer" about building practices as a normal course of business. Why don't we see educating them about "cost of doing business" the same way? If more contractors did, we could all operate more openly, and people would learn to trust us more, instead of lump us in with the shysters. Almost seems like a responsibility to the profession, to me.
The biggest problem there is that how can you educate consumers on a subject, when most contractors don't understand it? What is it, something like 90% of all contractors don't last two years - often largely because of poor money management, underbidding, not figuring and planning for overhead costs, etc.
---------
edited to add: not saying I disagree, just frustrated that my fellow "contractors" here are also my - and their own - biggest enemy, in trying to charge legitimate rates.
View Image "...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
Edited 2/7/2009 3:52 pm by Huck
Amen Jim
LGardenStructure.com~Build for the Art of it! Decks Blog
Reasonable customers look around and realize that if they want professional services they have to pay professional rates. Why are building contractors much different?
Reasonable customers are a rare breed.
It seems that many customers do not view tradesmen in general as "professionals", but something less, and cheaper. Kinda sad, because anyone that is really good at what they do has a great deal of experience behind the skills. Hacks are a dime a dozen.
Auto shops charge what the market will bear... there is no race to the bottom (lowering of prices) just to "get the work". If you want your vehicle fixed by "factory trained" techs, then you will pay their rate. Mechanics (union, even) in my area make around $27 an hour while the shop charges you $110... at book time.
Construction people always seem to offer "deals" when it gets slow, so people wait... and expect it. Little do those customers realize that corners are going to be cut somewhere to squeeze out a profit.
I would only disclose my rates if I were bidding on a T&M basis. Since most customers seem to feel that T&M is a license to steal, they're usually the ones who want a fixed price for the job. Therefore, I give them a price and won't get into the bases for the number.I've had more than one conversation with customers who don't get the idea that hourly rate does not equal take home pay. Sometimes, they grasp the idea of overhead (insurance, taxes, vehicles, tools, etc), but they sometimes don't. I've found it very effective to tell them to go to their bosses and find out what their employer uses for an internal and external billing rate for them. They're usually shocked when they discover that the company billing rate(s) are 2x - 3x their hourly pay. Well, I'll be darned, that office building, furniture, computers, phones, cafeteria, paid vacation, paid holidays, medical and dental insurance, etc ain't free after all!! - lol Welcome to the real world.
Yeah sure... it is called time and materials.
They give an estimate... they charge you more and that's ok.
LGardenStructure.com~Build for the Art of it! Decks Blog
Bobbys ,
You've got to find some better clients !!
Some of these i had a bad feeling about but im pimping myself out here lately due to economic concerns.;]
Bobby,
I dealt with 2 customers yesterday
one of them-- the situation is very similar to the one you describe in that an insurance company is involved cutomer contacted me---almost 2 years ago with damage arising from a hail storm.-- I did a minor repair for him to attend to the immediate problem--- but I told him at that time there was simply no way I could replace his roof for at least a year.
( the customer,BTW originally contacted me because he had read several FHB articles I had written-- as a business tool I recommend that highly! :>) We are finally replacing his roof this year--and doing some structural repairs to eaves etc.----set the spprox. schedule yesterday--- he asked me if I could talk to his insurance company because the amount they were paying HIM was less than the amount we are charging.
I explained that I would be happy to talk to the adjustor------ I would answer virtually any question anyone has--- but the end result of the conversation with the adjustor is-- that my price is STILL going to be exactly what it is right now. customer has ZERO problem with that-- heck he has waited almost 2 years for me--and he has collected money from the insurance company almost 2 years ago.......
Never give in.
stephen
Just my opinion, but those that ask for this are looking to negotiate the price down, and rather than just jawboning you on the lump sum price, want to "line-item" you.
They find it easier, and it makes them feel like they are serious and honest people, just looking for a few errors in math or estimating.
In the end, they just want a way to beat you down.
Look, no one ever says, if given a detailed workup after asking for it, "Oh, OK, let's do it. Thanks for the breakdown."
But wait! On the other hand, if they were in fact sloppy, as many homeowners can be, in defining for you the scope of work on which to bid, they may want the detail in order to see what it is they really want.
In that case, you'll end up redefining the whole job with them, bit by bit, deleting things, changing specs to go with lower priced elements, and more, all in the name of price reduction.
View Image
"A stripe is just as real as a dadgummed flower."
Gene Davis 1920-1985
On the other hand, back to the grocery store analogy. You don't need to show the client every ingredient and the profit structure behind every product. All they want to know is the cost of each product in their cart. If there are three jars of peanut butter on the shelf at different prices, and you give them a little bit of understanding about WHY one jar costs more than another, then they just might go for one of the more expensive ones. Or they may choose the cheapest one. It's their decision.
You are right, no one ever says "thanks for the breakdown, let's do it." But they DO ask how they can get the roofing line down, or why is the plumber's line so high, or why are lighting fixtures listed as an allowance. You can look at it as beating the contractor down, or you can look at it as a chance to educate the client so they can make an informed decision.
Sure, you don't have the chance for a home run the way you do with a bid price. But how often do you really hit a home run, vs. how often do you barely break even, or worse, with a bid? The more complex the project is, the harder it is to bid accurately. T+M is one way to ensure a consistent, small profit on (almost) every job.
Mike - Could you please explain the "CSI 16 line method" (or something like that)you mentioned earlier?
There is something I am doing wrong in my t+m approach - something that keeps coming up job to job. I'd like to find a better approach.
jim... here's the CSI categories:
CSI is Construction Standards Institute. They developed a 16 category breakdown of costs that is used by RS Means, AIA (American Institute of Architects), Sweets and others in the industry.
It is offered as an alternative cost category system, along with MacNail's 30 letter cost codes (which are more popular with remodelers etc).
Solution
GENERAL CONDITIONS Div 1SITE PREPARATION Div 2 (includes demolition)CONCRETE Div 3MASONRY Div 4IRONWORK Div 5WOOD & PLASTIC Div 6 (includes framing, trim, etc)THERMAL/MOISTURE Div 7 (includes roofing, insulation, etc)WINDOW & DOOR Div 8FINISHES Div 9 (includes wallboard, tile, painting, etc)SPECIALTIES Div 10EQUIPMENT Div 11FURNISHINGS Div 12SPECIAL CONSTRUCTION Div 13CONVEYING SYSTEMS Div 14MECHANICAL Div 15 (includes plumbing and HVAC)ELECTRICAL Div 16
we use a 25 category breakdown:
01.LOT & SITEWORK02.PLANS-PERMITS-SURVEY03.DEMOLITION04.EARTHWORK & EXCAV.05.FOUNDATION06.METAL PRODUCTS07.STRUCTURAL-FRAMING08.WINDOWS & DOORS09.ROOFING & GUTTERS10.HVAC SYSTEMS11.PLUMBING12.LIGHTING-ELECTRICAL13.SIDING & EXT. TRIM14.INSULATION15.MASONRY16.DRYWALL17.BATH & CLOSET ITEMS18.FINISH CARPENTRY19.CABINETS & COUNTERS20.PAINTING & STAINING21.FINAL FLOORING22.APPLIANCES23.PAVING & LANDSCAPING24.PUNCH OUT & WARRANTY25.SPECIAL ITEMSMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Jim, maybe this will help:
http://www.constructionnotebook.com/ipin2/CSIDivisions.asp
It's properly called "Masterformat CSI 16" I think. Some of the categories aren't quite intuitive. For example, div. 7 "Moisture & Thermal" combines insulation and roofing. Carpentry falls mostly under div. 6.
We have an estimating spreadsheet that uses these categories, with 10-20 line items for each division. The totals for each division are summarized at the top of our spreadsheet.
There is a newer, expanded version too but I don't have any experience with it.
Just my .02 here. I was taking 3 bids for 7000 feet of roadway for a subdivision in town. I asked for breakdowns of all items in the bid to compare the various items like fill, pipe, structures, stone, ect. It was done to remove the possibility of the contractor coming back with extras.
Extras charges are a very real problem these days.
FWIW we took the high bib because we were comfortable with the company and they had all of the needed items in the bid. Others left out or short charged the job to look better. It's all in the details.
That's interesting. I don't break my bids down into cost, but I do specify exactly what's included. More than once I've been told "I wish I had gone with your bid, it would have cost less in the end, because the other guy charged extra for stuff you had included in your bid". To which I generally reply "thanks for nothing!" =)View Image "...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
huck
if it was me- I wouldn't use that "thanks for nothing" reply.Reason is------- several of my very best projects over the years have been as a result of referalls from people like that. People I originally gave a proposal to-- but who chose someone else-- usually cheaper- and then lived to regret it.One in particular--- I remember it very well- the eventual customer told me that his neighbor insisted, DEMANDED that he use me--- that the neighbor had got a proposal from me but went with someone else to his immediate and stron regret so- even a NO sale----- is STILL, perhaps an excellent referall in the future
Best wishes,
stephen
huckif it was me- I wouldn't use that "thanks for nothing" reply.
Sorry, I should have clarified - that was figuratively speaking. My point being that, at a time when I could have really used the work, "you were right" benefitted me a lot less than income would have. yes, I did get some work from one of those with buyer's remorse over choosing low bidder.View Image "...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
Huck Have you thought about putting a couple of the 2nd guessers in your presentation book as a form of testimonial? I would think 3 or 4 of those would be powerful.
presentation book...portfolio...
I can see I'm missing a good sales tool here. I've been assuming my website would be all the portfolio I'd need, but I'm finding out there are still people who don't do the internet thing much. Got to work on putting a hardcopy of my digital portfolio together!View Image "...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
On a road project would not everything be written out first?????
Not in the least. You have a plan approved by the town and final say is the project is built to the plan. Sounds simple enough. However, if the builder forgets to "add in" granite curb or leaves out cisterns and landscaping he's free and clear from the bid price. All he falls back on is "I didn't include that in my bid". As such the owner and the builder are in a contract dispute or extras battle. Both are a loosing fight on all fronts. Some people like this fight. My position is that it delays the project and leaves yourself wide open to a legal battle where only the LAWYERS make money.
Cover your a$$ up front as best you can. If the people are that tight with a buck, perhaps your better off working elsewhere. If your not able to be honest with your rate then perhaps you loose more work than you get. It all boils down to how open you want to be.
Don't forget... A 2.8m job has allot more to go wrong than a 60k addition. With so many horror stories and fly by nite contractors around you MUST separate yourself from the others if you want to succeeded.
if the builder forgets to "add in" granite curb or leaves out cisterns and landscaping he's free and clear from the bid price.
I don't get it. If its on the blueprints, he can't just "forget", with impunity. And if its not on the blueprints, then why would he include it?
Each contractor should submit a bid stating clearly what he will include for the price. If he's working off a set of blueprints, they become part of the contract. Anything requested in addition to whats on the plans is on a spec sheet accompanying the plans. Or is spelled out specifically on the contract.
A breakdown of the cost per item is really moot. The final price, and a specific explanation of what it includes, is all that's needed to compare bids and make sure everyone is bidding the same thing, apples to apples, as it were.
Cost breakdown has nothing to do with it.View Image "...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
At that point it becomes a line item in the contract stating "the project will conform to the plan dated and signed XXXXXXXXX". Until then your attempting to get a number that the project is going to cost.
Trust me, I had guys putting foolish low ball numbers on items that were components of the plan. Drilled wells for fire cisterns were one such item. I know for fact that fire cisterns are worth around 2.25 per gallon. Forget to include a well drilling budget of 5K X 3 wells average each (still light) and you just made your numbers look 15K on one item alone better. The biggest problem is failing to get the fill calculations right.
Edited 2/7/2009 9:57 pm ET by RobWes
Pains me to even think about jumping so many hoops for "Potential" clientele.
Slave labor I say... Just not right...even in a recession. Part of what is causing this downturn is outsourcing to other countries where slaves are just part of business. We can't compete. I am starting to believe that "Free Trade" = "Slave Labor Legalization", it's all good if it happens in another country.
What gives them the right to demand we do hours and sometimes days of work on spec without pay just in the hopes of getting the job.
As I told one renowned Toronto designer in the early days, before I learned tact (as if I did)," Slaves must be housed, clothed and fed--Maam, you don't do any of that for me, so in good conscience and for my kids, I can't justify working for you for free."
Pour that time into marketing rather than toil for no benefit and you may have more in the bank.
Every time someone asks me for a price breakdown I calmly explain that we have done the figuring up front... it is so much a foot for what you seek. I don't have a clue what the materials will run vs labor, I just know that this price gives me what I need to stay in business.
One thing I just won't play is the help the estimator plan their job game. 5 jobs I estimated last year...got none. I tell them all the same thing when they call. I'll do a quick ballpark if you have designs--but I am not spending more than 15 minutes on it without a retainer.
I can help an estimator do their job... but will not do it for free. I used to assume they were dealing in good faith... but know better now.
L
GardenStructure.com~Build for the Art of it! Decks Blog
Excellent post. I know bidding for free is part of this business, but I really think its widely abused. I'll put a serious bid together if I feel the client really wants me to do the work, but just needs a definite price. But I resent when they want a firm bid on a vague description of a project.View Image "...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
That is the trouble Neil-- We never know if they even read the big breakdown or understood enough of the specifications to notice if one left things out or was even bidding on something entirely different than what we did.
It is an exercise in frustration most of the time.
Maybe if we put more emphasis on salesmanship and less on the competitive bid aspect we will win more often.
If I could wave a magic wand and make a real change I would prevent any contractor from lobbing a bid in through email or by fax and force them to go and speak to the potential client. Work through the bids and discover with the client what the differences are.
I'd love to teach each client why choosing the low bid, ie. the guy who floundered in the estimate process is the wrong guy to do the job. If he couldn't estimate properly.. how on earth will he build anything properly. Estimating is part of planning a successful job.
LGardenStructure.com~Build for the Art of it! Decks Blog
Like I said in an earlier post to Jim Blodgett - my fellow contractors are my (and their own) worst enemy, because so many don't know how to bid. Which I have to assume is one big reason why so many go out of business. If the attrition rate is 90% in two years (not sure of the exact number, but it has to be something close to that), then unless I'm bidding against contractors in business for more than 2 years, I'll probably be higher than 90% of them - just to stay in business.
How do I explain that to a potential client?
I've always tended to be thorough in my bids. And I've made it a habit of factoring in for unknown contingencies, so that I don't have to run to the h.o. every time some unforeseen obstacle arises. The price I give will likely be the price to do the job, unless something really big arises, or they make intentional changes.
But more times than I care to recall, I've lost the job for being high bidder - then the h.o. tells me later they paid as much or more as my bid, because the stuff I included was charged as an extra - and they didn't get the quality they would have gotten with me. For which I say Thanks for nothing.
One job I bid, the h.o. went with a much lower price. Then he tells me later that the winning bidder came crying to him because his low bid wasn't even enough to cover materials! So he paid more - ended up costing him what I had bid it at. But he didn't get the quality, because the contractor went on a cocaine binge in the middle of his job, and left his lead carpenter to finish the job by himself.
Another job I bid - the client was acting cagey, wanted a bid but had no blueprints. We talked "ballpark" pricing, and he kept after me for a firm bid. I said Look, without blueprints, no way. So he says Call the architect - which I do, only to find out he isn't paying for actual blueprints, just a sketch of where the walls will go (comm'l T.I. job). All the subs have to provide their own plans. So I revise my estimate up accordingly, and the client dumps me because my price is too high, says he has two other estimates both lower than me.
Later, I find out that the contractor he went with (who was not one of the two who were supposedly lower than me) bid it at - you guessed it, exactly what I had told him it would likely cost.
Another bid, for a "friend" (I thought). Wanted a small addition, but had no ideas how to proceed, other than a rough idea of what he wanted. So I met with him several times, to iron out a design. Then worked up a materials list, got a price from the lumber yard, put that with my labor and markup, and gave him a bid. Never hear back, so I finally call. Oh yeah, he says, I found a guy who's not an actual contractor, but is a superintendant, and can do it on weekends, for less than you. Drive by, and there's my design, exactly as I had discussed with the h.o.
I could go on and on.View Image "...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
huck..... after the initial meeting.... 90% of the time i get paid to prepare the Proposalif there is ANY design work... i get paid for that.... BEFORE i prepare the Proposalusually if there is design... my design includes preparation of ProposalAND there is a stipulation in the desing contact that , due to liability, we are the only ones who can build from the design.. they can only se the design for conceptual purposes if we don't get the jobonce we have sold them the paid proposal... we close more than 90% of the dealsand since we know rigt off the bat if they will pay us for a proposal or not, we waste very little timeMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Mike - could you tell me a little more about how this is done? I'm running into this more often lately - 'I want a bid price on a vague description of a project I'm thinking of doing.' Love to know how to handle that initial meeting, to get paid for design and proposal preparation. View Image "...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
well.... for instance..... i got a call from a guy with a colonial in the historic district...so... i brought my camera... my portfolio... and a set of drawings of a work-in-progresswe talked about his needs... looked over the property did the small-world bit... you know 6 degrees of separationwhen we left.. i knew that he needed a couple things..
an asbestos siding removal plana set of plans for the historic district commisssiona proposal to redesign and rebuild his garageand a proposal to reside three sides of his housethe way i left it is that HE will find out the requirements from the historic commission.. and based on what he tells me... i will prepare a design contract and a proposal... and it will be for a fixed fee
i await his fax with the particularsMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
huck... do you remember Sonny Lykos ?
he was another proponent of getting paid for Proposals..here is another examplei went to meet with a guy who had gotten my name from his childhood friend , who also does all my heatinghe had his own preliminary drawings i brought my portfolio.... my camera.... and the same set of work-in-progressthe portfolio works as a prop to engage them in what they like... what they need... it demonstrates that we have a certain level of proficiency tat they are not going to get from the average contractoranyways.. we hit it off... and i gave them a price for doing thier design and a Proposalas i was leaving , they mentioned that they were supposed to meet with another builder.. and didn't know what to do about it i suggested that in fairness to the other builder they should postpone the meeting until we had the plans doneMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Mike,
When you go to a meeting with pictures of work in progress -- do you print them out or burn a disc and bring your lap top to display them on ?
I've started bringing mine to the last couple of proposals and it's gone fine.
Thanks , Walter
no... the laptop is too limiting... and i never knpw what is going to pop up but my 3-ring binder of "JOB PHOTOS" goes back to 1979... we always find something in common thereMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Mike,
That makes sense -- don't want them to get wind of this zoo I bet ??!!
Mike, when Jim Allen was with us, and maybe he is lurking still while not posting, he shared with us what he was charging for a typical "design package" remodel, like a room addition and a facelift.
Whether you sold a design package for your "dormer addition" job or not, what would your price be for a client for a design package for a scope similar to that?
And what would that design package be? How would it be described to the potential client, in order that they could be comfortable enough about its value to pony up with the bucks?
View Image
"A stripe is just as real as a dadgummed flower."
Gene Davis 1920-1985
Blue is back! 116349.1
View Image "...craftsmanship is first & foremost an expression of the human spirit." - P. Korn
bakersfieldremodel.com
Edited 2/8/2009 11:23 am by Huck
gene... i tend to under price my design work.... i'd have to look up the dormer jobbut i'd guess it was either $500 or $1000just yesterday i quoted $500 for a pole barn design & Proposalif i get the historic district job i'd imagine ( subject to seeing the requirements )that that package would run say $3000that RFH Ranch , if i recall... was $3000one i'm working on now.... waiting for the architect to deliver the prints since September... if i had the design contract for it, i would have charged $5000.... that would be the as-builts and a major addition on each end of a gambrelMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Mike,
business wise------ If I could go back in time 20 years the very first thing I would change---- is that I would have started taking pictures of every project. I swear-- it never really occured to me to do so---untill maybe 4 or 5 years ago
AND-- dummy that I am- I STILL rarely take pictures-- I even BOUGHT a digital camera to do so----- I just never do it---stupid,stupid,stupid the only saving grace is that i can often stand in the customers yard and point to 2-3-4 roofs that we have done within a block or so----- OR the prospect has already seen the roof of the person they got my name as a referall from........
coulda,woulda,shoulda
stephen
I charge $3500 for an addition design package. That includes about $400 for an engineer to do a soil test and design and stamp the foundation plans and verify my structural plans (joist and header sizes).
I just had a client today try to get me to do some "sketches" or give some ideas. I just flat out refused and explained that it takes far too much time to effectively figure a layout and elevation plan out. Its not something that can be done easily if the end product will be good. I told him that for me to begin the process, I'd have to measure his entire house (as built) and start the drawing process with that and I'm not about to embark on anything that involved without a signed contract.
He understood it perfectly and verified that once we agreed on the $3500, it was not refundable in any amount....even if he didn't like the design or could afford to build it.
I did then explain the process: preliminarie, re-draws, final details, construction drawings etc.
So, how do I compare to the other "bidders"? Well, one contractor has already came back with "sketches" but he went away and hasn't shown up again for two weeks with his promised "proposal". I explained the problem with his style..."set the price first, then do the drawings". I showed them how that puts them in an adversarial position with the builder...who would design the addition as cheap as possible if he already had a signed agreement.
I also explained why all "estimates" come in higher if there isn't a clear cut set of plans. I explained that without the plans, all the estimates will normally be padded by $10,000 to cover the unknowns....maybe more. I showed them how they would save $6,500 by using me to draw the plans for "only" $3,500.
Now, they are seriously considering this. They have to talk over the real budget....not the other's guys budget. He promised them everything...including meeting their budget. I told them it's not possible.
We'll see how it plays out. At this point...I really just want the design package and hope to design them something nice.
"How do I explain that to a potential client?"
Just tell them. It's not a lack of professionalism to mention that many "Cheap" contractors are just running around from bid to bid collecting checks before they go bust or move to another country. (truth)
It shouldn't be a secret that people are putting in bids for less than reputable contractors are spending on materials.
They will never finish the potential job if there isn't profit in the job. If they don't make money they can't just finish your job out of the goodness of their hearts.
They often will however leave things out of the quote--and you as a competetive contractor should be sticking strictly to the specifications provided by the potential client or architectural plans. If there is no door schedule or doors or windows are missing.. that's what you quote--because that is what everyone else will be as well. If shingles are not specified... use the cheapest legal option or leave them out. If joist sizes are not specified it is minimum by code. Cheap cheap cheap. Only after you get the job do you offer an upgrade or inclusion of the various items...and put 20% extra on the item to help profit. Get change orders signed and carry on with life.
It may be gamesmanship, and the upstanding way to deal with it is use our skill to cover every eventuality, but while this low bid mentality and stick it to your neighbor attitude is prevelant-- you need to stay in business. If there are only 3 reasonable clients to deal with in your little town and they are all dealing with cheaper contractors... that's what you need to do.
I was never successful at selling renovations - I went straight to the highest of the high end... then the regular people couldn't afford what I was offering. I couldn't leave things out even in the free trade recession here in Canada, so I sold 1 set of tools and 1 vehicle and laid off everyone but myself and my partner and we damned near starved-I was ill for a few months with a lung infection and couldn't work as well.
After a short stint in commercial construction I started designing my own projects that competitors could emulate at their peril.
I moved into a business where lump sum bid is the standard, and where I could set my own specifications--because we do the design typically.
That Bakersfield area sounds like a nightmare-- Glendale would fit you better.
Or Maybe you should move in 50 miles down the road from Jim ;o). He gets lots of jobs being transparent in his area-I know we used to get lots of leads near there.
"Doing battle with the environment is futile-extrication is your best strategy" - Sun Tsu
L
GardenStructure.com~Build for the Art of it! Decks Blog
Huck-- I've broken this up because it is two subjects.
Repeat after me. "No matter how much of a great designer I am I will not do Design Work for free".
You are good at design--so you need to get paid for it. I don't care if it is $20/hour... if it is to be valued, it needs to be charged for.
If you do a design on spec... you will never again give it to a customer for free.
here's the story:
MY OWN UNCLE, went low bid on me after I spent a week redesigning his kitchen and creating plans for an addition. (He is a lawyer--so his ethics are naturally impaired).
Did he offer a dime in compensation for the time? No
Did he use the plans and hire a cheaper contractor? Yes
Did the addition turn out Great? Yes
Did he pay the other contractor more than my bid for the same job? Yes
Do I wish I had that time back? You bet... I have a big pile of travertine for my master shower that 1 week would rework that washroom and give me a happier wife.
LGardenStructure.com~Build for the Art of it! Decks Blog
One lady kept asking me for a breakdown, I think because the work was on a rental of hers and she thought she could write off one or the other category, probably materials. This was never accompanied by any unwillingness to pay, or criticism of the price, so I accomodated her.
Brian
Generally i've found that people that want the breakdown plan to break you down. They'll go throught the list and before you know it, "oh, we can paint. We'll hang the towel bars. Does it really cost $x for x?"
I agree with others here, "this is my price for the work you asked me to do."
Family.....They're always there when they need you.
I went through this, on a smaller scale, just yesterday.
In my case, it's easy; my business model does not depend on parts mark-up to make my profit. So, I already had a good idea of the parts costs, and had figures for my time ready. Time, plus a minor allowance for those nuts and bolts you're likely to need anyway, and you're done.
I'll even let the guy put the materials on his credit card, using my account at the parts house.
Beyond that, I tell them to go pound sand. I'm quite blunt about it: my expenses, etc., are none of their concern .... here is my price, forget about any 'discount.' I quoted a fair price at the start, and I'm not going to waver from it. If anything, I will be inspired to find cause to raise the price. If they claim "Joe can do it for less," I tell them to hire Joe - with my blessing.
This same guy went on to promise future work 'if I gave him a good deal,' claimed to be able to steer some realtors to me, etc. Again, I was quite plain .... I'm not running a charity, I have a business to run, and I'm not interested in future opportunities to lose money. I don't work for free, and I expect prompt payment; I don't waste my time doing free house inspections (the quote being used for negotiations by the realtor), or waiting for the 'deal to close' before getting paid.
My general sentiment is: if I never hear from this guy again, it will be too soon! Some of my best customers are only my customers because they spent years fighting shoddy work and unreliable results from using street-corner handy hobos. Now they use me, and their stuff works. Imagine that.
Yet, I remain polite .... firm, yet civil. This is because some of these "Donald Trump wanna-bes" are following instructions they found in some 'consumer interest' seminar. I almost feel sorry for them; price shopping, etc., will only result in their chasing away the good guys, and running prices up.
NOW ... you speak as though the work has already been completed. That's a bit different.
You gave them and "out the door" price, and you're done. You're presenting the bill, and they want it detailed. Here's your detail :Agreed work was completed, now you owe me the agreed price." They want to argue, etc ... too bad. It matters not that your materals were either cheap or dear. It's not their concern. Nor is it really their concern whether the job took five minutes or five days. They agreed up front to your flat price.
Here's where it's critical that you have all your papers in order. That is, you have all the necessary licenses, etc. This is because some of these skunks deliberately seek out unlicensed workers, just so they can avoid paying you. Be prepared to sue, lien, do whatever you must to make your point, and get paid.
That was probaly an issue in the background last night ... this guy seemd to assume that I was either a handy hobo, or some fool doing side jobs with the boss's truck. Again, I was quite plain: I am a LICENSED CONTRACTOR. That's I, ME, MOI. Not the boss, the company, etc. Aparrently he has been playing games for so long he couldn't recognize a straight shooter when he met one!
"This same guy went on to promise future work 'if I gave him a good deal,"Don't you love that? I sometimes get "I have many friends and you will never have to look for work again, if you give me a good price." Started telling certain customers that I have been promised everything up to the keys of the Taj Mahal but my price will be the same.
Edited 2/8/2009 1:11 pm ET by hmj