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Imagine you’ve traveled to a distant land, with customs very different from our own. This land is home to both peasants and kings and many exotic animals roam the plains. After the long journey you and your party are weary and hungry so you decide to visit one of this land’s many eateries. You’ve read in the guide books that entrepreneurs here can be unscrupulous and will frequently take advantage of tourists, but if you find just the right restaurant you will be treated well and enjoy wonderful food. Eating is considered a somewhat delicate matter here, so all restaurants windows are blackened and the host greets you in a private lobby. “How much can I expect to pay for dinner for four?” you inquire. The host responds “Sir, every meal is unique and pricing will vary widely with the dishes you select and the level of service you desire.” You ponder this for a moment. Because you have heard that meals for kings may cost many thousands of dollars you are wary of making a mistake. “Perhaps we can see a menu?” you ask. “Sir, I’m afraid it is more complicated than that. We offer a custom service not fast food. Our pricing structure is very complicated and we can’t afford to spend the time to calculate your bill without some reassurance that you will eat here. If you’d like to give us your credit card as a deposit I’d be happy to show you in, otherwise there are many other restaurants in town.” You look at your map and see that the next restaurant is a five mile walk—there is no other transportation available. Your wife gives you that look. You hand him your credit card and are seated. The menu is printed in the language of this land so you aren’t too sure what to order but the pictures look nice and the waiter nods approvingly. After an hour the waiter returns and hands you the bill—the custom is to pay for each course as it arrives. You are stunned to see a total of nearly $1000 but the bill is not itemized. The manager is summoned. “I’m afraid this is a little more than I had planned to spend,” you explain. “We are very hungry though, and the other restaurants are so far away. Maybe we can make some different selections that aren’t as expensive. Could you provide us with a menu that includes prices?” The manager looks offended. “Sir, as I explained earlier, we provide a service–not pre-packaged, processed food. We can’t include prices because it depends in part on what wild game will be available, how long it takes to trap, and many other factors. You are free to make other selections but I’m afraid we will have to add a surcharge to cover our additional costs and I can’t guarantee you will end up saving money. I don’t quite understand the problem, either you can afford to eat here or not.” You decide to pay the bill and try to enjoy the meal. As you are leaving, you overhear the manager talking with the waiter. “These tourists bring lots money, we couldn’t stay in business without them. We just have to educate them about how we do business here.”
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Shoulda hired an architect. Above all, a good architect is a good communicator. They listen, advise, and write very detailed menus from which contractors can give prices. The better the preplanning, the better the meal, and the more predictable the price.
*Sorry--not meant to be a description of personal experience. I'm trying to give some insight about how customers see some of the things I've seen discussed here. Specifically, there is another discussion here about "Line item estimates". The general consensus seems to be that the customer is out of line for wanting to better understand what he is paying for. I'm suggesting that there are plenty of good reasons why you might want a breakdown of the costs. When you go by a television I'm sure you don't ask for an itemization of the parts and labor required to build it. Why? Because it's a commodity and there is plenty of competition. You are reasonably sure that the price is fair because everyone is selling them for roughly the same price. Contracting is different--it's impossible to price things without doing a fair amount of work so the customer is relying on the contractor to be fair and has no way to determine if he has been. You guys must realize that the industry has a pretty bad reputation so customers start out a little leary.
*Yeah, I think you made a good point. All I'm saying is, if you can't clearly define what you want in the first place, and try to get pricing info from a contractor, you are skipping a very important step - the design process. Nowdays everyone with a computer and a CAD program advertises their business as "Design/Build", or "Home Designer". Architects have training. And good ones have a rare artistic gift. Contractors often start out as tradesmen, often as not because of their lack of interest in schooling, paperwork, and sitdown activities like designing a building.I understand why some folks might want to see line item pricing. But I think you can also understand why some business people are hesitant to give them.
*Hi gja,What industry are you talking about? Home builders,remodelers, large corporations, small independent contractors. Being we're in FHB's forum, there are many and diverse participants.What's with the "bad reputation" line? Where did that come from? And I disagree with that assertion. If you want your home worked on its going to cost an appreciable sum of money. More than a television and a dinner combined. When you spend money on a bona fide home improvement it is a capital improvement to real property. Maybe you're talking about service work that a firm may provide. Such as repairs and replacements of items around the home. For instance, the repair of a broken window or the replacement of a hot water heater. And you would be able to specify the parts and the work performed (hourly rate).You don't get to micro manage me. Or my help. And that's it in a nutshell. You do need to make decisions and be responsible for making them during the process of the work. But that has been reviewed and agreed upon in the design and planning phase. And is said so, in the lump sum contract.Forget the imagined scenarios. They don't equate.Sure you can develop a model for line item pricing.Some people already make that a part of their business. Hooray for them. Me, I keep the level of quality excellent. That's for materials and workmanship. And the pricing and payment schedule's simple. Imagine that!Dan-O
*gia, wrong comparison, since most of our “meals” are at least $5000 and most are well over $10,000, and doesn't include house building, just remodeling and major repairs.I’d compare us to having a car custom built. After some “specs” are furnished by the customer during the 1st meeting:1. It must be “designed.”2. The preliminary design is presented to the customer who then, based upon something substantive they can now see, is modified by their desires and new considerations that preliminary design represents.3. More designing.4. Approval by customer.5. Meetings with the various “vendors” who will be providing the various “parts” of thisnew car and possibly the assembly of those parts.6. Finally a reasonably accurate total price is give to the customer.7. The customers approves and the project is scheduledOR8. The customer decides the cost is too much.“Thank you anyway for your time.” (if you even get that).Sorry, there is only one reason why a client would ask for a breakdown of both labor and material, (is overhead break down next?) as opposed to just one price per room. It is to then have additional information from which to be in a better position to “negotiate” a final price.I once told a client who pulled that on my after stating what the job should really cost him: “Mr. Smith. You are a brilliant businessman. I will pay you $100,000 annually if you will only be my estimator/salesman. I’ll even give you 50% of all net profits. I never knew that you had such a grasp on the nuances and operating expenses of my industry. In fact, the $100,000 may not be enough! Are you at least available part time for even just those projects similar to your own?”Would you take your tax paperwork to 3 different CPAs and ask each to tell you would your tax liability would be, and not expect to pay any of them for their “work”?In the legal profession, a brief” is described as "A document containing all facts and points of law pertinent to a specific case." That takes a lot of Time. Is that not the same as a Proposal. Is an attorney expected for his/her time, plus his/her staff’s time to be spent “acquiring” and otherwise “preparing” a brief/Proposal for free?Finally, have we not, as business people in this industry, been fools for the last two hundred years? Is our industry not antiquated relative to it’s sales/design/estimating processes and the value of it’s Time?You’re putting me on, right?
*You can argue with me all you want about it, but the reality is I think this is how many customers perceive the construction business. When I say that, I guess I'm mostly addressing the remodeling business. You guys already know how you perceive things--I'm just trying to give you the other side. Now don't get me wrong--I value your profession and I'm not trying to call anyone a crook. I believe you provide a valuable service and deserve to be compensated fairly for it. But if we all agree that in order to come to a price you have to spend significant amounts of time and we all agree that you should be compensated for that time, then why is it so hard to understand why a customer would want to understand what he is paying for? For a customer, it is cost prohibitive to pay several different contractors the significant amount of money it costs to do an estimate so they want some visibility into the process. Not every customer is out to try to rip you off--honestly.
*Sorry, gja, but they are.Let's go back to your original model, flawed, but with a different angle.I'm hungry. Rather than to rely on a guide book, I ask around. I like Italian. Who's the best? Who will give me the best service?Rather than to sit down and order, I walk around the other guests and ask them for their opinion. What did they like? How much did they spend? How many times have they been here?Would they eat here again?Get the picture.I'm doing my homework, and finding out if I wish to engage this Chef and know ahead of time if I can afford his sevices.Tough way to get a meal, but hey, it's gonna cost me $30,000.00 and the chef will be in my hair for the next 6 weeks!Find the businessman you wish to do business with, state your desires and your budget.And don't ask what the carrots cost......
*My mistake. There I went thinking like a customer again. Boy, we are stubborn. And a little slow. You keep educating us about how you do business and eventually we'll get it. Now, I'm not interested in knowing how much the carrots cost. But I might be interested in knowing that the beef tenderloin is $45 and the pasta with red sauce is $12.99.
*gja: You sure did trigger something here. Unfortunately Mark's response: "Sorry, gja, but they are." when you said: " Not every customer is out to try to rip you off--honestly." shows an all too common attitude. Also unfortunately that attitude is not limited to the construction industry.At the same time the fact is that Some Customers are in fact trying to rip off the business. Just as Some Businesses are trying to rip off the customers. Gee, look at last night's news. The Baptist Church of all businesses was ripping off its' customers/investors.The secret for businesses, if there is one, is to not let the actions of a few sour your attitude, or the way you treat your customers. Ed's post about treating others the way you would like to be treated is right on point here.To me this topic is a cry from a customer for better information and a more cooperative attitude from businesses. If a person is really in business it seems to me they should read this post with an eye to better understanding the customer's feelings and attitudes rather than defensively arguing the details. After all, remember the customer was exactly like many construction customers; they didn't even know the right questions to ask.So, to me, the right answers from the restaurant could have been either: "What we do is so complicated you need to hire someone to help you tell us exactly what you want cooked and how"; or, "What we do is so complicated we can understand how you would be confused. So, let us help you figure out what range of what we do would fit your appetite and budget. We won't do that for free. But we'll just roll it into the total bill, or you can pay for that up front. OK?"
*By the way, I'd like to know how many of you when you need a new car walk into the car dealership and announce "I've got 25k in my pocket and I need a new car. What do you got?" And you all pay sticker, right? No? Are you trying to rip off the car dealer?
*Let's be fair here......By the time you sit down, you've decided to pay the freight. You've made the decision to either go to Choke & Puke and spend an average of 5.99.....orYou've decided to go to that other place you heard about and spend an average of 59.99.You tell me whyAnd then tell me why someone would invest a little time to ask about place to eat, have realistic expectations of what the cost and the outcome will be, yet fail to do the same when seeking a Contractor?Silly, ain't it?
*gia, you just stated: "You can argue with me all you want about it, but the reality is I think this is how many customers perceive the construction business." What does that mean, we're money grubbers?Let me ask you the same queston I ask clients occasinally:"Do you know of any remodelers who are getting, or have already gotten, rich? In my 31 years, I've not met one! I would be glad to show my overhead line by line to any client. But they wil pay me for every minute I spend with them. I have only two things to sell:1. Time2. ExpertiseI refuse to give either away. I use the word "Time" with a capital "T" because too many of us forget that Time is actually "Life" my life. I only have so much of it.I will not argue my comments with you since each of us as contractors and each of us as consumers determine the "value" of what we sell and what we buy. I am just one of some who happen to place a high value on my Time, regardless if it's spent explaining a line by line overhead or P & L statement to a client or remodeling his/her home. Time expended still comes out of the same "bank" of which I have a limited amount. See, I can't save it. I can't recaputer it. I can't stretch it. I can only spend it, so I judiciously saviour my Time. If others want to place a much lower value upon my Time as though it's use is their "entitlement" as "they" deem necessary, that's their right. However, it is not my "right" or a "mandate", to agree.Apparently my own cleints, as well as those of my son, who owns a larger remodeling company, must agree. We both charge for Proposals as well as design work, have not advertised since 1991, and yet still can't handle the work we get.Perhaps, it's because our comittment to our cleints is completely the opposite of those of which you've posted. Maybe there should be a different "category" for some of my peers who service their cleints as my son and I do. Wait, there already is. It's called being a true "professional". Most of the regulars of this forum are in that category. They frequent this forum to learn more about how to better serve their clients and mentor others while also becoming successful in their respective businesses.There are undoubtedly two side of each coin. That vast world we call "the public" has just as much sleaze as my industry. IMO, even a higher ratio. I once asked an old retired contractor why he thought our industry had so many bad contractors. His reply was that the "public" ran most of the good ones out of business. I've since learned how true his comment was.The public needs to learn that they have to walk the talk. They cannot get the professionalism they want and talk about unless they are willing to pay for it. Black men are often caught raping, stealing, murdering, etc. yet, I still don't "lump" all black males into one category. For that reason I'm not adverse to leaving a black serviceman in my home alone. I judge people one at a time. It's a new theory, perhaps. Try it! And if you want something that has value. Pay for it - as we do.
*I think FredB has taken my post the way I meant it. As an invitation to look at your business from the other way around and to get you thinking about ways you can improve the customer experience which I believe is in your best interest. Anyone who inferred that I don't want to pay for the services of professionals or think that all contractors are money grubbing thieves just isn't listening. What I am saying is that shining a little light into the process determining price (not cost) might just inpsire a little trust in your customers and might do something to reduce that "sticker shock" I'm sure you are all aware of. I'd like to propose two suggestions:1) Never, ever, ever, negotiate your price. That just makes people feel like they are getting ripped off if they pay the first price.2) Make your estimates written and detailed. If you rub your chin, look at the sky, and say "I figure that'll be $5000" that doesn't make me feel like you are really estimating the job. It makes me feel like you are sizing me up, what kind of bind I'm in, and determining what I'll spend.Any other suggestions?
*gia, I do as you suggested. In fact. apparently I must be servicing my clients in a manner they desire, otherwise I''d have an advertising line in my budget, and would be constantly trying to obtain men projects.So, trust in my by my clients, and those recommended to my must be a foregone conclusion.Some contractors increase their overhead to cover their Time spend on preparing a Proposal for those people who do "not" hire them. In effect, clients who do hire these contractor in effects, pay their fair (?) share for those who did not. Therefore, by charging each clients for my preparation for the Proposal I think that my way is more ethical. Each pays for costs generated by their own request for consultative services.Understand that those "professional services" you and I speak of, in most of the public's perception, is only in the "production" aspect. compare that "production" aspect to the attorney assumed to only being "professional" while representing his client in actual "court." What about those professional "services" Time spend in the preparation for his/her client's case.? The general public has, for decades, received a free ride for those "behind the scenes" Time spent - in our industry. But, it's changing. Perhaps, when we start, en mass, receiving our due, our existing 85% failure rate within the first 5 years will start receding, and partly due the realization of our true costs to operated, and specifically with regards to our "Time" allocation, or as attorneys and doctors call it - justifiably "billable" hours. I think you and I are finally coming to at least some agreement. Isn't the ability to communicate intellegently terrific?
*I don't think I ever suggested that you shouldn't charge for proposals, or overhead, or tools, or any of your other expenses. I think you should charge for them. I just don't see what's wrong with being up front about it and telling your customer that you are and how much. And then don't back off. Look, if your business has no room for improvement then obviously, just keep doing things the way you are. But I suspect there are a few of you out there who would like to improve your relationships with your customers.
*There's seems to be two issues here. Contractor integrity and customer integrity. Most of us out there do a good honest days work and get paid a good days pay. However, there are a few who bid low and vague and charge extra for every non-specified thing. Its these individuals who get the rest of us painted with that broad brush. As a customer you can remedy this situation by asking questions and getting an apples to apples quote.If good contractor knows what he is bidding on he will give you what you want. When you buy a car, you don't ask the salesman, Hey, I want to buy a car... expecting to get a Honda and the salesman expecting you want a Lamborghini. Its called dialogue people.Conversely, the contractor is counting on the integrity of the client. If a client asked me is that the cheapest I can get it done it for? I say no, and hand them the yellow pages. If I as a contractor don't feel comfortable about the client, I don't take the job. Remember its a leap of faith on both parties.
*Good points Ken, but with all due respect to the customer's problem, they don't really know the nuts and bolts of a lot of aspects of our industry.Here's an example of a couple of them:1. I just lost a job to a long time client who recently got remarried. My price to paint the exterior of his house was about $450 more than the "winner". The husband wanted me to do the job, but lost to his wife's "price" perception that they were considering apples to apples. I asked to see my competitor's Proposal and she declined.While doing some other repairs there the painter had already started on the job. I noticed he used a $1.29 caulk and Sherwin Williams A100 paint. The owner's wife made a point that "he" was going to use Sherwin Williams paid "too". I wanted until the job was done, and assumed since it was about 2 weeks later, that he had gotten paid. I asked she if she knew what A100 represented. She didn't. I produced a brochure about Sherwin Williams "Super Paint" (what I budgeted for) , and another from the Internet about the importance of using the best quality sealants (caulks). I went on to state that I often get jobs to solve window leaks and find the previous repairman caulked directly over dirt as opposed to cleaning the existing substrate with alcohol first. I left, stating that she got a job not only worth exactly what she paint for, but actually got less of a job than what she paid for. Incidentally, "her" painter also caulked over dirt. So much for the naive statement: "Just caulk it."2. My obsession to never use finger jointed trim - just clear one piece wood. That's what I mean about the public "trusting" us to at least explain those things to them, the reasons why we do what we do. And that's why it's called "consultative selling."What do they know about the difference between a cheap latex caulk, a latex with silicone, pure silicone, urethane, latex urethane, and the variations, PLUS, their proper applications?However, when the buying public places more value upon price, we can talk until we're blue in the face and it makes no difference. The bottom line is that it's the public's right to chose price over other aspects. That's why, in this case, the owner, and his wife begrudgingly, paid me for my Proposal for that paint job. So I viewed that Proposal and the Time to view and estimate it was like a 2.5 hour small job. I won. She lost, as did her husband. I know that woman all too well. I have an older sister who is exactly the same.Since we are not psychologists, we cannot determine what our potential clients place value upon. But we can charge a fee (and get paid for it) for providing them with the information they need to make a decision. Whether the decision(s) they make are good or bad is moot. It's none of our business. It's their house and their money. What is our business, is our business, and getting paid for not only "production" work, but for the preparatory work which is based upon our hard earned expertise and again, Time.Actually I lied in my earlier post. I'd never give a client a breakdown of my operating expenses. That's my business and Constructoin Solutions is not listed on the stock exchange. If I get that desparate for money I'll go work for someone else.One one thing. No client ever did my a "favor" by hiring me. Too many people thank that's exactly what they are doing. And I never did them a "favor" by working for them. It is a simple transaction: And exchange of services for renumeration. No favors are involved.
*Sonny, I'd like to add to your statement about value. Value is in the eye of the beholder. The wife you mentioned equated price to her value. You equate value to mean good workmanship. I had a client one time turn down a S100,000 addition to his home, so he could by a $90,000 dollar Jaguar. The addition would have brought about a 90 percent return on his expense if he sold his home. The Jag would have depreciated 25 percent as he left the dealer's lot. To him value meant driving a status symbol, not monetary gain. Go figure!
*Ken, your'e right. That's why some people will drop $10K on a commercial refrigerator and commercial range during their kitchen remodeling, or $60K on cabinets, or $15M for a house - status, not because they are needed.Some of us do the same, but in much smaller dollar amounts and for other items. $80 for "gym" shoes? $60 for a designer shirt? Hey, that's people!Like you said - Go figure. We're wierd.For my uniform, I use white, short sleeve shirts with button down collars and kaiki pants. I want to look professional. I buy them both at Wal-Mart for $12 each, but for my shoes I go to Rockport and drop $125 a pair. Very comfortable. Again, go figure.
*gja, going back to your car dealership analogy, if I walked into a car dealership and said " I have $25000 and I want to buy a car ", I suspect that at least one salesman would step up and show me the models in my price range. I might be drooling over the Lincoln Navigator but the money in my pocket is gonna get me a Ford Escape. As far as paying sticker price goes, any negotiating is only going to go as far as what his competitors would sell for. Why ? Because they don't have to go lower. And why should they ? Because the customer doesn't think the vehicle is worth it ? Ain't gonna happen. Anyways, we as builders and contractors are lucky if a potential client already has a budget in mind ( $25000 in my pocket )It means they have at least been thinking constructively about their project. Maybe they've been doing some research and are starting to educate themselves about the process. At the very least a budget is a positive starting point. My job and that of the designer and other professionals throughout the process is to work with the client and give them a product that both they and myself can be proud of. If that means they have to have a $1.50/ft stock crown moulding instead of a $18.00/ft built-up crown with dentils in a stain grade oak then so be it. That's just choosing the options they can afford.I have no problem with being open and honest with a client but not to the point of giving them ammunition to use to RE-negotiate a price they've already agreed to. I won't say that all clients would do this but many do. ( and I'm speaking from personal experience ) There are expenses that I have that are, frankly, none of the client's business but they all go into the complete package that I'm selling. And I offer more than alot of builders in my area ( insurance is a big one ).BTW, a car dealership analogy ? Now there's an industry with a shady rep !Scott
*S.D. it's interesting to know, I found out from two clients who own dealerships, that their mark up on all parts is - ready for this - 400%. That's standard here, there, everywhere. And customers are still flocking to them for service. Why, because they the owners of dealerships have a monopoly on car dealerships. Guess what that does for them? Yep, they make a profit.Here's the difference. Car dealerships trained the public in how they, the dealerships, "sell" their products and services.In our case, the public trained "us", contractors, in how we will "sell" our products and services.Car dealerships "sell" the prices of their products and services. Far too many contractors "buy" the prices that the public is willing to pay, even though the public has no idea of our costs in making what we sell. "Gee, that seems high." Upon what basis do they make such a statement? As long as we (the majority of contractors) keep "buying" their prices, we all keep losing.I've mentioned before that about 3 years ago I paid $146 to a dearership for an electronic disgostic charge for my Dodge minivan that had a computer problem. And I took "my " problem to him. It was another roughly $250 for the computer replacement IN ADDITION to that diagnostic charge. It wasn't credited toward the $250 either. Why? Because it was a separate "purchase" by me and a completely different "service" that was being rendered that carried it's own cost. Smart business.An electronic diagnostic. Same as a Proposal. Time, expertise and "Mr. Smith. We found your problem. That will be $146.00." "If you want us to fix it, it's another $250." vs. "What! Are you nuts. You want $150 just to "estimate'" remodeling my kitchen."Training!
*Sonny, 400% ? HOLY CRAP !!!!I wonder how many car buyers would even think to question a dealer on their mark up, overhead costs, etc. And how many dealers would provide that info freely ? Yeah, right. Interesting take on the dealerships training the public about how they sell their product. The auto sales industry seems so shrouded in mystery and unknowns that, perhaps, the public is afraid to ask. But how many homeowners have tackled finishing their own basement in the interest of saving some money ? Or building their own deck ? Surely, if they can do it then construction must be a no-brainer, right ? An addition for a new family room ? Just a slightly larger version of that basement rec room. I swear that's the way some clients think. My own father was one of them until I gutted his kitchen for a new one and uncovered a whole host of "creative framing techniques" that needed to be addressed. The challenge is to educate the public to choose the right contractor for the job, not necessarily the cheapest. And that's where I get hung up. Like I said, I have no problem being open and honest if it will help to shine some light on what my clients are actually buying as compared to what some of my competition are offering. But some of the actual numbers are none of their business. I think this thread ties in somewhat with Steve Merrette's regarding how clients perceive us as builders. It's all in the value they place on the quality of the job ( and the quality of the contractor !)ScottP.S. - I've been lurking around this site for the past year or so and have taken alot of great advice from you and others here so I'd like to say thanks. This place is a gold mine.
*So what I'm hearing is that contractors don't want to reveal their costs, expenses, etc. to potential clients because that would give them "ammunition". In other words you don't trust us. Yet, you expect us to reveal our financial situation to you and trust that you won't take advantage. Isn't that giving you "ammunition" to sell me the most that I can afford instead of what I might really need? Going back to the car dealership analogy--shouldn't the starting point of the transaction really be a description of what I need, not how much money I have in my pocket? "I have 3 kids and a dog so I need something with a lot of space." "Fine, we have this Cadillac SUV at 65k all the way down to this minivan at 22k. Which do you think you might be interested in?" Most of us as consumers know that if you tell a salesman how much money you have, you won't have any of it left at the end of the transaction. So, why should it be different with contractors? I asked whether any of you pay sticker price for a new car. I know that nearly no one does and that car manufacturers and dealerships price their models expecting the price to be negotiated down. And they have all sorts of clever profit hiding schemes so that the consumer walks out the door thinking they paid one dollar of the dealer's invoice so they must be very smart, indeed. Did the dealer only make one dollar in profit? No way. We negotiate prices on cars because that's customary in the industry and you'd be a fool not too. I think there must be a perception with the general public that the construction industry is the same way. After all, no one pays "sticker" for a house, right? I wish car dealerships didn't negotiate prices for cars, and in fact, I'd rather never have to negotiate price on anything. I feel like I need a shower when I leave a car dealership and am never really sure I didn't get suckered. I often feel that way when hiring contractors. It's not that I think they are dishonest or that I begrudge them a profit. I am just never really sure if I paid a fair price.
*"I am just never really sure if I paid a fair price". I'd guess that, like your car analogy, with contractors, you can shop around. You can go look at Ford F150's at three or more dealerships, and then decide if the best price, based on the same model, is a "fair price" based on what you value; level of service, perception of integrity, after sales service, etc. In other words, your own perception of the "value" of that buying experience. I'm not sure that looking at the dealerships P/L statements will help you with this decision. And given the same design, as pointed out earlier, you can gather even more information to put together bids from different contractors. Who has the best reputation, the best respect, the best approach to your specific needs, based on that design? Who is going to do the best job, with the best techniques, using the materials you selected? You can only judge these by interviewing the contractors, ensuring they understand the design and your own wishes for it, and then going forward or not. My P and L statement won't tell you if you're getting a "fair" price; only you can determine that from my previous work, and whether I can convince you that I'll meet those expectations on your job. Does that make sense?
*All is not the same.A little of trackWhen I bought my truck, told the salesman what I wanted. He asked what I wanted to pay. I said $200-$300 over invoice (then mentally kicked myself)he came back and said. Order it $100 over invoice, off the lot $200 over invoice, if we get it from another dealer $600 over invoice, because of the (forget the correct term) payback from the manufacturer). Very different buying experience. First time I ever heard a salesman mention the payback (all manufacturer don't do that)
*You better "shop around" for a contractor. When buying a car don't you ask people you know who they bought their car from? To me you better tell what your budget is. Do you want to spend money on quality or quanity? My husband needs to know the customer also. Personality, needs, wants etc. When he talks with a customer he takes SOOOOOOOO many things into consideration when discussing the project with the homeowners. It is NOT a cut and dry deal. This is someones home. IF you have a million to spend then you can look at extras right? If you have $20,000 to spend on the project then you have to budget. That may mean cheaper cabinets, cheaper faucet.You know what cracks me up is that it isn't as easy as some may think. I would like you to place a bid on a kitchen remodel. Now I am going to be the customer and tell you I want to update things. Now tell me how much? Not as easy as that is it? What kind of cabinets do you want, faucets, flooring, windows, appliances, oh gosh there are too many variables. Does it really matter how the bid is written? Does it bother me if you write everything word for word? No it doesn't , but Lars does write down eveything when bidding. To me though I don't need it. I pay for what I get. If I know that the contractor is going to do an honest, quaility job then I pay the man/woman. Yes I did this even before I married Lars. I believe I may for what I get. If I get the best I expect to pay for the best. Tamara
*I thought we'd already established that it really isn't very feasible to shop around because of the costs involved with accurately pricing a job. And I'm not even sure it's all that useful if it were feasible. Price isn't everything, but it is an important part of any job. I'm not interested in paying the lowest price but I do want to understand what I'm paying for and where the value is. How do you do that without getting into some details? I don't want to know your P&L. I don't want to know your cost. When I go to a restaurant I get a menu and an itemized bill. I decide if the lobster is worth the price. I check the bill for errors. I don't try to negotiate a better price for that bottle of wine I saw at Total Beverage for 1/3 the price.
*This isn't like buying a car. A car is a standardized item, albeit with several options available, but something that was predesigned and constructed in quantity with standardized methods to a standard quality. The closest comparable construction equivalent is tract housing built on flat lots. Renovation and custom housing are very different situations.gja, if the client was up to speed on what it is that lives inside the wall surfaces, what jobs these components perform, and what regulations and requirements are associated with each of these components, the discussion you are looking for could be possible. If the customer was aware of the pros and cons of different types of materials, the techniques required to correctly install various components and materials and sources of supply for them and the specialized labour required to install them, your discussion could again be possible.Problem is, they aren't. For instance, to a customer, opening up a room involves just knocking out a wall. To a contractor, it involves replacing the structural support provided by that wall, reworking the electrical system and plumbing contained in that wall, acquiring and installing the correct materials in the correct sequence with the correct technique to the appropriate standard and making the job match existing surfaces all with minimum disruption to the lives of the client.If you want to understand the details, it is up to you to research. The contractor spends enough time to examine the situation and develop a price for you. Don't expect him or her to also educate you on all you need to know to understand, particularly when you want to use that information to reduce the price you pay for the job. Know your budget, know what you want, find a good contractor through referral and believe them when they say you can't lay wood floors for forty cents a square foot.The fact that the customer has the a perception doesn't make it the correct one.
*Well, this has been a fascinating thread (which is unusual around here lately). Even more fascinating is how many of you have taken this personally.Except for Fred, most of you want to spend your time arguing, blaming, excusing and rationalizing why you are right and the customer is wrong. Of course, that was never the point of the analogy. The point is that the customer has a perspective that differs from the contractor, and it behooves the contractor to understand, whether or not he agrees, that the customer has a different viewpoint. And the customer's viewpoint, even though he may well be wrong as so many of you have argued so strenuously, is not unreasonable, larcenous or malevolent.Again by way of analogy, Gia makes the point that when we are the customers, whether buying meals, cars or TV's, our expectations suddenly shift. Sure, it's easy to distinguish remodelling from selling a car, or even (ahem) a legal brief, but to the extent that the analogy adds insight and understanding, it helps the contractor to better achieve his and the customer's goal. One of the most true and important statements was made by Sonny; This is not a matter of favors, but a simple business transaction. That is a two way street. Unless you want to hear all about the customer's lousy day earning the money he uses to pay you, don't tell him your problems. Most of you make this sound like a Mexican stand off. It doesn't have to be. SHG
*Just the thoughts of a lurker here. This sounds a lot like "Builders are from Mars, Homeowners are from Venus". The best things either group can do is to try to understand the others point of view, even if the other isn't trying to understand yours. This discussion seems to have stirred some thought and raised a few hackles. The best thing to take from this is that one perspective is not right or wrong. But its not the only perspective. Understanding the homeowners perspective is the best tool for dealing with them. Not as a weapon or carrot but a means of communication. Some here think that an uneducated homeowner means a bad customer, but it is an opportunity to educate if you learn to speak the language. Coped corners, straight grain molding, or attic ventilation may not mean anything but durable, long lasting, or low maintenance might translate better. Kick this around or kick it out cause its only the opinion of a lurker.Lefty
*I guess I don't see posters on this thread as offensive or taking this issue too personally. Instead, I try to see people from differing viewpoints attempt to state their position. I'd also guess the analogies aren't helping...but what the heck, I'll try again. GJA, if you'd like an itemized breakdown for all things that go into a job, you probably wouldn't get it from me...just as you wouldn't in the resteraunt analogy; I certainly will provide you with a fairly detailed bill, just as they will which will include adding a window, moving a wall, etc...but it certainly won't detail out every overhead expense or nail or board that I bought for your job, or the overhead and profit to manage it. Neither will your resteraunt bill; it won't have the cooks salary, nor the cost the resteraunt paid for that lobster, and all the sundries that went into making that lobster. I'd guess that most of us here proably do bid work where, for a certain sum, you get X finished product, and I'd further guess if you want to watch or manage those costs further that a Time and Materials bid/contract might be more to your liking. So my question is, what would you like to see?
*Well, I have to say, I'm exasperated. First of all, thank you FHGLaw for understanding my intentions and accurately summarizing. There are some of you, and you know who you are, who seem to have a pretty low opinion of me--your customer. I have lurked here for many months now trying to understand your business concerns and perspective so that I could become a better, more educated consumer. I thought you might be interested to know what it's like on the other side. But you are all so busy explaining why I'm wrong you aren't listening to what I'm saying, or trying to think of how you might improve your businesses. The fact that Home Depot has become a $115 Billion company should tell you something. We are intimidated by your processes, don't understand why you are so expensive, and would just as well try to figure out how to do it for ourselves so we aren't at your mercy. What can you do to fix that? And I'm not suggesting that the answer is to lower your prices.Many of you seem to think I am asking for your cost information or that I want to know what you spent for each and every nail. Let me say it again: I don't. Or that I want you to do things for free. Wrong again. Or that I want to get information out of you so I can use it in negotiating. Sigh. I won't bother again. Jason, read the discussion about Line Item Breakdowns. This client was simply asking for a room by room breakdown to help them in their budgeting. As I recall the entire job was 18k and they were trying to figure out what they might cut out of the project to fit it in their budget. The general consensus around here seemed to be that that was out of line. "Your price is 18k. That's it. I'm selling the entire job." There were many who suspected the client was going to then use this information to negotiate the price downward. And you want us to lay all our money out on the table and just trust you.
*I will go read that discussion. However, I don't have a low opinion of you, my customer, I'm obviously just not doing a good job at understanding what kind of information you'd like us to provide. That's why I asked what you'd like to see. And again, I must apologize; I thought my analogy to the resteraunt of "move wall, add window, etc." and the associated cost was exactly what you were looking for. So please, let me ask again...What would you like to see and discuss? That's the part I'm not understanding.
*Jason, I didn't mean to direct that at you specifically. That is what I'm interested in seeing--estimates that are broken down by feature. For instance, in a kitchen remodel it might be something like 1) demo 2) rough framing 3) drywall 4) electrical 5) cabinet install 6) counter installation 7) plumbing 8) trim work etc. Ideally, it would be broken down by labor and materials. I don't care about know each and every item--just the total dollar figure for materials. That way, if I'm trying to figure out how to reduce my overall project cost I know what to look at. Did I pick some design features that are very labor intensive? Or is it that imported ivory really adds up in a staircase? Maybe I'll have to leave out those skylights. Note that I don't mention that if labor is really high then I know to try to get you to reduce your labor rate. Hey, put a line for profit in there too. Make it a percentage of the job and don't adjust it. Profit is okay--I even like for you to make a profit. Put your overhead in there too. If that seems like a lot of money to me I might ask about it. Explain why you have it and what it covers. Don't adjust it. Make sure all the numbers add up. Seems pretty simple.
*Finally, gja has listed is concerns. I for one cannot break down each of the categories listed unless I added a portion of each of the following to each category. The following is printed on the estimating form that I designed. I'll explain where not obvious.At the Top:1. Initial material & equip. to site (like to a kitchen)2. Return material & equip to truck (when finished)3. Total Daily set up (Calculated @ 1/4 hr./day) 40 hour job means this total is 1-1/4 hrs.4. Obtain material (for a bathroom job, figure about 6-8) hrs going to suppliers - not delivered. Then below that I list each operation in order of work to be done. For example:1 Content protection - safety procedures2. Disconnect vanity and tub plumbing3. Remove vanity/top/bathtub4. Carry out to truck.5. Remove tub walls to studs.6. Place in trash can and roll out to truck.7. Meet electrician and review work he is to do. Go back at the end of the day to check his work.8. Ditto for plumber.9. Etc.At the bottom oif the sheet, the folowing is listed :Sub-Total1. Dump charges2. Time to drive and unload at dump x ( ) trips3. Supervision of employee and/or subs4. Pick up special equip at shop - return5. Daily clean up 1/4 hr daily6. Daily set-up @1/4 hr. daily7. Final use clean up. Immediate use by owner.8. Client needs (Start at 9 AM (?). A client who likes to talk (?). An engineer as a client (?) Trim miters that look great is insufficient since they use a micrometer. Floor out of level by 1/8" in 12' is not acceptable by this type of cleint. This item allows extra time in the estimate. For some people, a 4 hour phase must take 5 hours, or more.9.Contingency TotalTo the above, add extra time if pets or kids will be around. Add extra time if the project is in a condo, especially if it's in the 11th floor and there is only one "Service" elevator and it seems to constantly being used by other service people.OK, do I "appropriate" a fraction of each of the above to Demo, Electrical, Plumbing, Cabinet installation, Trim work, etc. How? Furthermore, do it really and to take 8 hours to do a 4 hour estimate. And remember, 99% of the public whould scream as though we are raping them if we mention that we charge for Proposals. Sure, do all of the above and they might be gratious enough to award me the project. How do I get paid for those 8 hours estimating, and remember, if I'm going to do that estimating and sales call it must be done evenings or Saturdays so I can work 40 hours per week to make a living - a living - not rich. In fact should I not get tiame and a half for the sales and estimating time spent since it's nights and week ends?I charge a minimum of $75 per hour. I am sincere if you would like me to fax you a copy of my Overhead and How I arrived at that charged rate. Perhaps that will also give you the contractors perspective. OK so I'm being sarcastic, but I think you get my point.The above is typica for most contractors. Fortunately for me, since I charge for the above, I do them during the day. As we used to say when I was much younger in Chicago, I now get paid like regular white folks.I did only one T & M job and never after that one. The woman watched everything we did and made sure to tell me to deduct the 15 minutes break my employees took each AM and PM, although I pay them for that.Now, my jobs are "Just do it and bill me when it's done" because my clients are mainly repeats or referrals. Or I'll give them a fixed price or a minimum such as $3200 to $3800 and the contract will state what's included, and what's not. Those contracts are for those projects that are literally impossible to calculate. My only other option is to use a very large contingency, which I feel is not fair to the client if things go really fast. No, I do not reduce teh price when finished in the above cases. The extra money makes up for those I lose my rear end on, like one this week. It was double the hours I estimated. Fortunately it was only a 10 hour job. So no lost sleep.Does the above partially help?
*That's actually not the kind of detail I'm interested in as a consumer. I'm not asking you to explain your business to me and why it costs so much to do things. I'm saying that as a consumer I'd like to better understand the costs of MY project. If you say your business must take in $75/billable hour in order to operate, fine--I trust you. That gives me a way to compare you to your competitors. Hmm, Joe's contracting over there only charges $65/hour--why is that? We all know that cheaper isn't always better so you can explain to me why your particular company is worth the extra $10/hour. Competition is a good thing but it doesn't work without having a way to compare products and services. And that's my beef. With all the mystery shrouded around how a job is priced I can't determine if I'm comparing apples to apples, or apples to watermelons. It's not just you, it's the entire industry. For example, I'm interested in re-siding my home with Hardie plank siding. At least I might be interested--if I had a clue about how much it's going to cost me. No way to determine as far as I can tell unless I call in a professional to do a custom quote. I can't find even ballpark prices on the web. I realize every job is different but you can't tell me it's impossible to ballpark that so I don't waste somebody's time or my money unnecessarily. So, maybe I'll put that job off for a while.
*gja,You're in la la land. Remodeling itself is a process of concurrent activity. And many activities and trades work simultaneously. It isn't compartmentalized and undertaken as such. You don't delineate tasks because the the work is dynamic (ever changing). A melding of diciplines. I don't want you as a customer. And I steer clear of your niggling types as well. Go take a nap in a Home Depot why doncha! Lemme suggest the one in Paramus, N.J. You sound like a "sue" zee que. I hope anyone that bids work to you whacks the $#i+ outa you. There.Don't take it personally, its business.
*gfa, therein lies the problem - comparing apples to apples. It's impossible to make a definitive comparison because the "product" we build, is not mass produced in a factory. And what remodelers do in not "just" the end result - it's The Process, and everything that happens within The Process.What good is done if the end result looks good - for now, but the roof leaks 2 years later due to improper flashing, or the front door jamb rots out at the bottom because it wasn't sealed properly and back primed. What good is done if it looks good, but in remodeling the bathroom there is what seems like an inch of dust throughout the entire house. I can go on and on.If's said it before many times. What we build is a prototype never built before or never remodeled before. You are not buying a mass produced commodity.Money? What money? That's the last thing to be concerned with other than the general amount for budgeting purposes - not the exact amount.. For that $25,000 exactly what are you going to get. How is what you are going to get installed. Will .99 caulk be used or $5 urethane around the door and windows. Will the plumber leave nice looking sweat fittings, which is an indication of the rest of his work, or will the extra solder just be left as it slides down each pipe. Will the electrician actually twist the wires together before applying a wire nut, or will he just align the wire parallel together and stick them into that wire nut and then twist the nut? Will the carpenter put 2x6 backing in the shower wall to accept the screws for the 36” grab bar, of with those screws just go into an ineffective anchor thru the ceramic tile and into the drywall. Will the casing be glued and nailed from the top and sides at the miters, or just face nailed? Do you want all of the above to be explained to you in the contract? If so figure on adding about 50 pages more to it. And remember those 99% of the buying public that will scram about paying for that Proposal? Is the contractor expected to do provide the above additional info for free. Yep, to those 99%. What good is done if the filet is delicious (the result), but the restaurant is filthy, the waiter inattentive, the coffee tastes like it's been siting in the pot for a half hour.See, so even if each of two different contractors list every single item exactly the same that is to go into your remodel project, and the price of one is $3000 higher, is that comparing apples to apples? Yes it is if you are comparing "commodities". But you're not comparing "commodities", or are you . If so, then hire the cheapest guy and deserve what you get.When I was explaining the above to one client a couple of years ago, he interrupted me saying "Blah, blah, blah. They all do THAT!" I am her to say that he got what he deserved. He bought a commodity, and the funny thing is that he was also treated as a "commodity" by his contractor.So, you are not just buying an addition, a bath or kitchen remodel or a whole house decorating. you are also buying, and paying for - an “experience.” Whether buying a car, a nice dinner out, a terrific looking wardrobe or a special on TV - we buy experiences.Now, put a price on that. Sincerely, I’d like to know how one does that. Then I’ll become a better salesperson and consultant to my clients. I know how to sell experiences. But, like I asked. How does one put a price on them. Experiences and the nuances I mentioned above is that $5000 difference between an exactly $25,000 and a $30,000 project.My clients don’t hire me for what I do for them. They hire me for “how” I do what I do for them, and “what” I use. Here’s an example. Ten years ago, I replaced the bottom sections of rotten door jambs wit the same material but double;e primed the back, all edges and bottoms before installing it. Later I switched to pressure treated wood the I fabricated into exterior jambs. Later I switched to KDAT jambs I talked a local marine lumber company to make for me. I bought the blade for their shaper. later and now, I use plastic jambs, same for brick molding.I constantly look for better says to solve clients “long term” problems. I don’t look for the profit I can make in each job. I look for the profit I can make by servicing my clients in a manner that is superior to my competitors, who incidentally , are only looking for the profit per job, or what they made TODAY. I’m a businessman. They are tradesmen, so they think as tradesmen.BTW, I'll get some James Hardie plank siding for you. Have you gone to their web site yet for info about it?
*gja,I'm always amazed by how much research people do when they buy a: refridgerator. t.v., computer, car, etc. They get buyers guides, go online, ask all their friends, shop 10 different stores, ask a million questions. By the time they are ready to buy the item they know enough about it to sell it themselves.There is a wealth of information available on home improvements. Why don't people educate themselves when they enter into a 50k home improvement project at least as much as they do when they buy a $1500.00 computer.Rich
*Been hiring contractors for years for everything from repairs to major addition projects. (We're on house #4.) I can understand gja's frustration, and also (as a self-employed person) see it from the contractor's side. A few ideas...One GC we worked with charged a flat price for a bid and rough drawings. That was in 1992 and I think he charged $250 back then. If you decided to accept his bid, he deducted $250 from the bid price. Marketing ploy? Possibly. But he got paid for bids on the jobs he didn't get, he didn't waste time on people who weren't serious, and he left the customer a way to feel they were getting value out of the deal. We used him for two major addition projects over 6 years. (Much to my sorrow his 50 year old knees gave out and he's fixing computers now.)Regarding bid detail, I can tell you what I want to see. Something like this:For the following, a price if already spec'd by the client, or an allowance if not:CabinetryFlooringAppliancesLight Fixtures(And similar things that I can easily change before the job is begun.)For things like the following, a price, based on the drawings, that is not negotiable:PlumbingElectricalFramingConcreteDrywallPermitsEtc.An allowance for the things I'm in charge of myself, to keep the bottom line number realistic:TilePaintLandscapeEtc.And labor, not negotiable, but please let me know what it is about you that sets you apart from others. Tell me how some contractors do it and how you do it and why. Not every detail, but a few so I have an idea of how much care you'll give my job. Tell me that labor covers employees, overhead and profit. (Some clients won't think about that.)Lastly, when we're talking, ask me questions to qualify me. I may or may not be a client you want to work with. Do I plan to live there during a major project? Are there small children or elderly people who need peace and quiet before 7 a.m. or after 7 p.m.? Will anyone be home during working hours? Will I restrict my animals? Am I willing to make gofor runs during the day? Have I contracted for a remodel/addition in the past? (ie. - do I know what I'm getting myself into?) Have I already made funding arrangements? These can be part of a normal conversation, not presented as an inquisition, and would be helpful for both parties to consider up front.We have had great experiences working with contractors on projects we could not otherwise have afforded by doing the grunt work ourselves. This was laid out ahead, and we were given drop-dead timelines. Site cleanup - every night. If site was not cleaned the next morning we would pay $60/hour to have it done. (We never missed it!) Demolition - completion date subject to charges if not met. And so on. I have gone downtown to pull permits, met inspectors for early evening inspections, taken delivery of trusses when no other work was being done that day, etc. Not all clients will be good candidates for this, but some will. If they are, it leaves the contractor free to do what he/she loves and is so good at.I'm looking for a contractor for a kitchen remodel right now. I've been actively looking for several months. It's more of a challenge than you might imagine. My advice to those looking for jobs is simple: return phone calls! You would be amazed how hard it is just to get a phone call returned. My policy - three tries and you're out. Does that seem fair?
*Sga,What's your line of work? I'm sure I can come up with a clever analogy to make a similar point. Unless you are a government worker.I think your post is a bit patronizing in that you are somehow enlightening those of us that practice this craft. Really it is self serving. Why would you presume that we are not intelligent see our customer's point of view. If you were in this business, maybe you would have learned as we have that the vast majority of our customers do not know how to go about spending money on there homes. Look around you and you will see that the world is full of low budget, shoddy workmanship. This is not due entirely to the fact that there are no qualified craftsman. It because by and large this is what the market demands, ie. price.Here's an analogy for you. All you can eat buffets are really popular. I've went to a few. I don't like the aftertaste of last weeks crab in my lo mein.Shitty restaurants don't stay in business long, but it doesn't matter because the product ends up in the sewer the next day.I'm always shocked when potential clients don't have any clue as to building costs. Yet they know how much a steak dinner goes for. A sixth grader could figure out square foot costs at different quality levels by reading the sunday paper. But most people don't want use their brains themselves to their own detriment.That's why we as contractors have to spoon feed it to the general public.
*gia what you fail to see is that you are buying a finished product. I am a businessman, what it cost me to create the finished product should not matter to you. If I am a smart businessman and search out suppliers that will provide me better pricing for materials, should I sell my product for less that everyone else. If i keep my overhead to a minimum, and run a lean job with very little waste, should you pay less. If i provide you with a line item estimate that shows my profit margin to be 30% will others show only 10%, but both jobs are the same price, who are you going to choose to do you job.I understand that homeowners what to know what they are spending there money on. I will always tell somone the cabinets will cost, or the flooring etc. Do you think that if a contractor uses $1000.00 or $4000.00 cabinets(same amount of cabinets) that his profit and overhead should remain the same. People always have bigger dreams than pockets if they are given a labor and material break down. They start to subtract backwards. The cheaper the materials and the smaller the job, the higher my overhead % goes. The key for homeowners is so simple:Seek out refered contractorCheck their referancesFind someone that handles work similiar to you project(high end, or simple kitchen)TrustBe open and honest with your intentions(Im looking for the best price, or quality, or im bidding with several people)Budget, let me know, because I also charge for my time(estimates), am I will be the first on to tell you, that it isnt going to happen and save you the cost and let down from a high bid. Im not getting rich from doing estimates, and I dont what to waste my time anymore than I want to waste your money.David
*Tommy you hit the nail on the head, do most people believe that real estate prices are based on some ubscure number. They are based on desirability, availability, and Cost to construct. It not that hard to figure out.It always gets me when some tells me that houses are selling for $120 per foot, and they can't understand how tearing of the side of there house and adding 400 sq foot bedroom and bathroom(second most expensive room in a house) is going to cost $95 a foot.David
*"Do you think that if a contractor uses $1000.00 or $4000.00 cabinets(same amount of cabinets) that his profit and overhead should remain the same." If anything, I'd expect it to cost more to install cheaper products. They are never machined as well or constructed to install as easily, and it's more likely you will have to go back to the manufacturer for missing or mismatched parts."The cheaper the materials and the smaller the job, the higher my overhead goes." As a consumer, this is exactly what I would expect."The key for homeowners is so simple" Simple, yes. Easy, no. You might be surprised at how hard it is to find anyone who will recommend their contractor. There are a lot of knuckleheads out there tarnishing the image of the profession. That probably accounts for much of the mistrust contractors get from consumers, making it that much harder for the "good guys". And the "good guys" are out there, I know. I think contractors who post to this board are probably among the cream of the crop.
*David - Yes, that must be frustrating. I didn't know people thought remodeling should cost less than new construction. That makes no sense - custom work is always more expensive than mass production. No economy of scale, high learning curve on every step of the project, etc.
*LisaYou are exactly right the cheaper the material the longer to install generally.I really dont get frustrated anymore, I learned at a young age 25, that its just a job. It not worth losing you health, wife, kids etc. Dont get me wrong I take my job very seriously, people twice my age trust me with there biggest investment. At 25 after being in business for only 3 years(doing small baths etc.) I landed a $450,000 addition(more than my first 3 year combined). Half way thru the job after dealing with one of the worlds most difficult person, and taking it out on my loved ones, not being able to sleep, etc., I had a talk with a very brilliant man. He said " At the end off the day, if YOU KNOW that you have done a job that you can be proud of then stand tall, go home and kiss your wife, and get some sleep. If you stand up to customers when you know you are right, they will respect you. If they dont you dont need them. From that point on I had a whole new attitude towards business, its not personal, its a job. We have since returned to do many other jobs for that same home owner. I think the point that a boy becomes a man is when he realizes how intelligent his father really is.David
*David, I really like that quote at the end of your post.Mike
*gja, you really have gotten a few backs up here! With the exception of one person, I don't believe anyone here means any animosity toward you. We do, however, tend to be rather defensive when asked about our "costs and expenses" (your words in post 23). The reason being is that we know what is inevitably coming next - "How can you charge that much ?!?!" , "I'll bet I can buy lumber cheaper at Home Depot." , or the dreaded, "But you're just a carpenter !" (again, personal experience on these). Lisa Long seems to be pretty experienced at hiring contractors and her suggestions were good, but, trust me, she is definitely a rarity in this business. You did eventually tell us what you actually wanted to see and, to a certain extent, I think you might get that info. Keep in mind though that it depends greatly on your individual project whether a contractor will be able to break down a quote that much. Your Hardi-Plank siding job, for instance, should be a relatively straight forward quote, but a large, multi-stage remodel is an entirely different animal, even though they may be done by the same contractor. In that case, Jim Blodgett gave you the advice any experienced contractor would : hire an architect or designer. Don't skip that process. A good one should be able to take all your random ideas, your clipped photos from home design magazines, and your big item wish list and turn it into something tangible to me. Namely a detailed set of working drawings on which to give you a detailed quote. I know I'm beating this car thing to death but it always amazes me how people will happily sign a cheque to a dealership or mechanic for repairs to their $15000 ride to work at $60 or $70 per hour but complain bitterly over $35hr to repair or alter their $300000, $400000, $500000 home.Apologies if I came across as adversarial. Was'nt my intention.Scott
*gja - I like this thread - I think it's always good to try to see things from other perspectives. But one thing you said bothers me:> Never, ever, ever, negotiate your price. That just makes people feel like they are getting ripped off if they pay the first price.Some people do business that way, some don't. I think you're trying to lump both groups together. I personally don't negotiate. I tell people the truth, and try to make sure they understand what they're getting. And I don't try to gouge people. That's the way I prefer to do business - A fair price up front. The way I explain my reasoning is this: Suppose I bid a job to you, and you negotiate until I knock off 5% to get the job. Next time I bid a job, I'll add in that 5%, and maybe a little more to make up for that last time. Maybe you know I added something, but am not sure how much. So you negotiate again, and I knock off 5% again. But maybe I added 10% to the bid, and make out pretty well this time. You'll never really know how much I padded it. Pretty soon I get a reputation for knocking 5% off my bids, and everyone expects that. So I just add 5 to 10% to every job to leave some "wiggle room". Seems to me that it's a vicious cycle to get into. On the other hand, I know people who won't buy something unless the price is negotiated. A friend of mine did something like that at a flea market once - there was a tool he liked and saw that it was priced at $3.00. He offered the guy $2 for it, and the guy turned him down. So he offered $2.50 and was again turned down. So my friend said: "If you'd asked $4 for the thing, I'd have paid $3 for it" But he wouldn't buy the thing since it was marked at $3.00, and walked away. Neither way is wrong - they're just different.
*To all, This has been a very interesting thread. A couple of questions I'd like to pose. Do you price your job by the income/status of your client and do you do a little extra on job if there is a possibiltiy of further work? On the first question, my other half used to sell tv programs around the world. She would charge more to say the U.S. than say Australia for the same program. Her rationale was this is what the market could bear in each region and each would be able to recoup cost through ad sales. Is it a matter of ethics or smart business when you price your job?
*Our work is priced on the cost of the job. Not on the customers ability to pay. What does factor in is the customers personality, will they be difficult, will a interior designer be used, can the make timely decesions, and there overall repect shown to my company thru the planning stages. If a client is open and honest with me, i will do my best to provide them with work at MY best possible price. Most of this is based on a gut feeling that most contractor develop. Extra are extra, if you give anything away people feel they are being over charged and will push for more and more. High end job(regardless of persons net worth) are typical higher due to the increased work, in selection of materials and hand holding. Where low end jobs are for the most part simple. There isnt any rule, every job is different.David
*This thread has really been a great example of the disconnect between some contractors and the general public. It seems at this point that there hasn't been a lot of progress penetrating that wall.Now I admit I'm taking gja's posts on their face and not as a troll or someone just rattling people's cages for the rattling. So, I'm left a bit puzzled by the responses.First of all their seems to be a hangup on gja"s reference to "cost" and wanting to know what those are. It was said couple times that gja's cost is actually the same as the contractor's price, not his cost. This is an important distinction that apparently hasn't been grasped by everyone. So, what gja wants is enough cost information to help make the trade-offs the customer has every right to decide. That does not mean knowing the contractor's Cost. It means knowing the contractor's Price.Further that the more gja tries to help everyone understand what gja is trying to say, the more things get bogged down. One side is insisting on talking their own language while gja apparently hasn't the foggiest idea what that language is. So, how is that solved? The suggestion is that gja spend a lot of time learning the language and the details of construction. My suggestion is that the contractor learn how to explain things so the ignorant can understand.Mind you ignorance does not equal dumb. It just means lack of knowledge. That makes a great opportunity for the true businessperson.The construction industry by and large is one of the few remaining that seems to take pains to hide its' innards from the general public. My personal experience is that those who go outside that to communicate with and educate the customer are almost always successful.Look for the idea, don't nitpick the details and true communication and education begins.
*Fred you are right we have all heard the phrase assume it makes an ass out of u and me.We never assume anything. I educate my clients, so THEY can make rational decisions.We always add to our estimates a list of items that are disportional to the job. IE items that are overall expensive/laborious and a list of items that are cheap/poor quality. With this come alternative material that they can look at to increase quality/or decrease price. This way at a glance a client can say well I had no idea mahogany trim was so expensive and i thought pergo was the perfect flooring.Doing this adds a great deal of trust and shows a contractors commitment to the customer
*I think the restaurant analogy that started this thread has really confused the issue. It was a poor choice because it implies that the customer has little to say in what he/she are served and no influence on what the final cost will be. It also implies that there is a standard menu from which items can be chosen and that contractors both run up costs and are deliberately concealing total price.While I'm sure this wasn't intentional, it started the discussion on the wrong road.When I do a project for someone, the first meeting is spent getting a feel for the client and their wants and needs. Establishing the budget is of primary importance, not so I can run the job up to meet it, but so I can scale back customer expectations on how far their money will go. People invariably have no idea how expensive construction is and often their budget won't even pay for the materials for their wish list.Once their expectations are scaled back to something they can afford, I am happy to run through the costs of various options and willingly work with them to get the most bang for their buck. It is a relationship where both parties have input and influence, very much unlike the restaurant scenario gja describes.On the other hand, I am hired for my 'expertise' and am not willing to hand over control of the project to an uninformed customer who really doesn't understand the ramifications of the choices they might make in order to save a bit of money. Nor am I willing to educate them on my nickel. To expect me to do so shows very little respect for my integrity and the value of my time.A good relationship comes from everyone doing their part - for the customer, that means either learning about what is going to happen or paying someone to advise them. Asking someone for a complete breakdown of all costs is well beyond what the customer needs, and is offensive if it is expected with the intent of negotiating down the price.
*Very well said DickDavid
*Some kind of double-posting problem occuring
*Ken, I can't speak for any one else,but in my case I am more likely to raise my usual price based on a customers likelyhood of being a pain in the ass----the customers percieved ability to pay has a lot less to do with it.On the other hand some people are so pleasant to deal with and so clearly trying to to the right thing that I will bend over backwards to accomodate them---not by discounting the price but with other considerations
*During a major purchase, it’s only natural for each of us to bring to that purchasing decision, our biases, perceptions and anxieties. We have them and so do our clients.I see it this way. Box “A” contains the client’s biases, perceptions and biases about us. Box “C” contains our own about them. However, while we both have made major purchases, our clients for the most part, hove never or very rarely “purchased” a major construction project. So for that reason only, it’s our responsibility to create box “C” where we take those biases, perceptions and anxieties of both of ours, and “lead” the discussion to remove what’s in that “C” box - from both perspectives.We have the major experiences as they do, but we have the construction “knowledge” that they don’t. Box “C” offers we as the owner the opportunity to explain, educate, and alleviate. Usually that works, but only if there is a common goal of fairness in exchange of what each “partner” is willing to bring to the table.Ahhhh. But there is the big question. The various interpretations of the word “fair.”Arrrgh!
*It's as simple as this.The guy who makes the most money could very well have the best price for the highest quality of work.
*This afternoon I read an interesting article about dreams and this authors contention that contradicts current theory about dreams. He has broken down thousands of dreams into coded elements such as characters, emotions, settings and types of interactions. He goes on to state that most dreams are about or include aggression, and how more aggressive societies members include more aggression in their dreams. Americans are under almost constant stress via our life styles and it's getting worse.Anyway, I got to thinking about this thread and how we are “initially” viewed by clients and vice versa. Could this basic emotion - aggression - be used unconsciously as an automatic defense mechanism to protect from the unknown - me, and what my presence represents, and our industry's image? I’ve decided that the next 5-10 new sales calls will be done an a manner different from my normal initial conversations. As a test, I will instead immediately use body language and certain words and phraes to placate any “potential” aggressive mental attitude that may exist due to the natural fear of the unknown - again, me. These will be concerted, practiced, and intentional greetings and subsequent initial discussions as opposed to my normal, automatic sales presentation.It’s experimentation time. Words - each one elicits an entire world of thoughts. No wonder language was the greatest invention of humanity.
*Folks,To add a thought to this great thread.......name another industry whose practitioners can charge their clients $100,000.00 or for that matter $1,000,000.00 and the client is left with an asset worth the $100,000.00 or $1,000,000.00. Excepting situations where the client insists on installing a $100,000.00 kitchen in a $100,000.00 house aren't our services in effect free? I remember another builder and myself driving past a house he had built the previous year. He told the story about how difficult the client had been regarding money during the process and then the client sold the house about a year later at a substantial profit. Now if it is truly a question of "us" (contractors) vs. "them" (consumers) shouldn't the client have sold the house to another fellow "civilian" at a price that was equal to what he would have liked the builder to charge (i.e. less than he had to pay)? That way he could have insured that another innocent consumer didn't get ripped off by the big bad builder who charges a (beware evil word coming up, send the kids and liberals to bed or the other room) PROFIT! Noooooo! When selling they all of sudden flip their moral compass and are "entitled" to the highest price the market will bear. I marvel at how fast and seamlessly a liberal can flip from Communism to Capitalism. His beliefs and ethics depend solely on which direction the bucks are flowing.Thomas
*Well, I've certainly enjoyed this discussion. Thanks to all who tried to take something postive from my posts, which is most definitely the way they were intended. After all, I have nothing to gain from anyone here (monetarily, I mean). Dan-O and friends, what can I say? I think the feeling is pretty mutual.
*Thomas, another conservative, eh.I have a brother who, when buying something, claims it's only worth $10, yet when selling it, it's value has mysteriously increased to $15 - on only in one day.Capitalism at it's best - your example.Gja, in my 31 years in as a remodeler, I feel I can assure you what while some people ask for breakdowns for a legitimate reason such as budgeting decisions, more than 80% or more, do so simply to have more information to "negotiate." I laugh at myself about that "negotiate" thing because the national industry for net profit is only about 5%. Soooooo, what's to negotiate? That huge bundle of money the public thinks we're really getting?Perhaps in a drepression I might consider taking that Time to consider a breakdown request, but why so if I don't have to? And in answering that question to yourself, remember that 99% of the public I alluded to earlier who feel raped if asked to pay for a Proposal.Now since we are salesmen 1st, doesn't it make sense to use our Time selling to our greatest advantage? That means selectiviity in time spent during the initial sales call - and going with the averages. Sure, we sometimes make a mistake by "judging" a client wrong, but that goes the opposite way also. But for the average client, since we're in "their'" homes, and usually on a evening or Saturday at "their" convenience, I'll judiciously guard my Time and go with first impressions and the averages. I can spend 40 hours per week selling, but to what result if I'm not managing, working or drawing up a Proposal. Where's the income? Telephone qualifying and ditto during the 1st meeting provides me with the results I want, and get maximum ROT - Return On Time.To me it's a no brainer.Want to save money and/or get the info for budgeting, maybe. Hire a Construction Manager.
*gja-It doesn't seem that I had the typical reaction to your initial post, but I just couldn't stop laughing. You quite colorfully captured the common customer perceptions and even if I don't change a thing about the way I do business, it's still good to know what people are thinking.And by the way, I shop for a used truck by going to my dealer and telling him generally what I want and the range of what I will spend for it. A full-sized two wheel drive pickup costing between 6 and 10k. He will find something for me and I've never been disappointed. But I do trust him.
*gja.... by the time we come to a proposal, our clients know what they are getting, they've usually talked to someone who has done business with us before...since 90% of the time we develop the plans for the project thru meetings with the customer.. they get input and dialogue..they may or may not raise issues which you have outlined above.... but if it's fixed fee bid work, they will not get an answer from me that involves breaking down labor and materials.. or pulling out overhead & profit...they will get different PRICES for different solutions.. but since our proposal is prepared as part of a design proposal.. they will be paying for the time to develop those prices...if we had gone thru this process with you and you were still not satisfied with our answers, we would not be signing a contract with you.. because we would not have established the proper relationship / partnership in order to proceed... when we sign a contract.. it is to agree that we will provide the work and the customer will provide the compensation....some remodel bids can run to more than 100 hours in preparation (with no design work...plans by others )most of our 4 to 6 month jobs require 40 hours to spec and price....so .. if you and i can't communicate better than you are indicating above.. then we would not get involved...if the job is T&M... we will agree on the terms and then proceed.. and you will get the benefit of our time and experience to develop as many "what ifs" as you feel the need for...but after the initial meeting ...we will be getting compensated..because we're worth it.. and your money will be well spent...if you don't think so... you will have the opportunity of voting with your checkbook