i have a very good customer of mine that wants me to do some tile work and hard wood floors sometimes i think that steady customers are a double edge sword in that its nice to have the repeat buisness but i always feel like i dont charge them enough.
any way there are two floors that are 13×13 that they want pre finished bruce 3/4 hard wood all new base board ,new casing on three archways and two windows.
also approx 75 sq. ft. of ceramic tile in a bathroom with cement board and bullnose installed for base
i am thinking i will have seven or eight days total and charging them $2000.00 for labor total labor and material is around $4500.00
just looking for some feed back i have been in this buisness for 30 years and i am a one man show……………thanks
nicko
Replies
i am in western pa if that helps
nicko.... i did the math....tell me where i went wrong
$2000 / 8 days = $250 /day
$250 / 8 hours = $31.50 /hour ...
are u kidding me ?
you're a skilled craftsman... get it up to $45 ....$50
Mike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Edited 9/18/2009 9:22 pm ET by MikeSmith
Hopefully you know how much you have to make each day to cover your cost of living, the cost of doing business, and a little profit. $2000 for 7 days is a bit less than $300/day. Seems a little light.
Materials at cost plus overhead, which includes ALL materials (knife blades, nails-glue for the wood floor, the tube of caulk, putty for the nail holes, paint brushes, paint thinner for clean-up, etc). Also allowance for damaged goods, warranty issues, etc. In otherwords, don't sell yourdelf short.
"Put your creed in your deed." Emerson
"When asked if you can do something, tell'em "Why certainly I can", then get busy and find a way to do it." T. Roosevelt
A job with 56 man-hours (8 days) and $2500 in material... and WITHOUT any significant project management requirements such as design work, drafting, permitting, etc.... would run between $6000 and $7000 plus tax.
As far as I can tell, my plumber would charge more than $8000 for the same thing.
If you're charging $2000 for 8 days of labor, that's about $35/hour, which is barely getting by in most places.
that's about $35/hour, which is barely getting by in most places.
Let's clarify before the sharks arrive. $35/hr including overhead and profit would net the average cat about $20/hr pre-tax. copper p0rn
repeat business is not a good thing if you can never make your rate.
after 30 years in business I think you would be entitled to a decent salary
or at least, a decent calculator
Me, I saw the term archways, envisioned custom radia, stain and finish matching, delays to finish, ergo delays to final billing, assumed risk gives cash flow problems, (you ordered the wrong radius....), and heaven forbid custom knife charges.
Flooring folks seem to have lately transmogrified in my world as installers of flooring. That means they don't lift nor reset toilets, only promise to do their best with baseboard, and in some cases won't even install underlay. Undercutting jambs has to be insisted on, as 95% of my encounters produce a "duh" when you ask them if they undercut jambs, and I really don't know if their installers-often times uninsured subcontractors- even know what a coped corner is (and believe me they can trash a whack of baseboard if their world only encompasses mitred corners) And if the base and trim is stain grade, well there's finishing costs.
What to charge?
Ask to see the quote, match it - heck even beat it by 3 or 5% (provided yer equiped and capable of doing it, and then quote the rest at time and materials. The devil is in the details, and the installers ain't gonna be concerned about walls, trim, archways etc, after all they are likely "flooring installers"
I think in the military they call it colateral damage, and typically theflooring folks got their contract written so it don't cover repairs. Do you want to foot the costs for their damages?I wouldn't. and if your clients query that, just say that if they take of the baseboard wrong, and end up ripping off the paper of the drywall, how could you be expected to quote on stuff which may or may not occur.
The bugger of it all is that I know there are really competent and experienced flooring installers out there. None of these floooring FU's and colateral damage is likely to happen to them, but the odds are in this recession, these were the fellas laid off as being too expensive.
Eric- hope this helps gel yer perspective
looking at refinishing baseboards in a 2500 sq ft home with radiised corners which just had all the stained baseboard trashed (specifically radiused corners) by tile setters and hardwood installers, (whose pounding disturbed glass shelves, which fell and broke cut into trim and new floor etc etc.........
Your labour rate seems quite low for 8 days of work. I realize this is a repeat customer, but if I got a quote from someone to do 8 days of work for 2K.... I think I would be wondering if the guy is any good. I would think you could easily raise it.
I wish you lived near me. I'd take your 4500 and mark it up 67% and make a nice living selling you.
Oh wait...a repeat customer? I better double your bid.
Nah...I'm okay with a 40% GPM.
wow it seems i dont charge enough thank for all of your input i am a very skilled contractor. like i said i have been doing this for thirty years, 20 of those years i had a partner and 10 years i have been working by my self.i am a very skilled and capable craftsman that pays attention to all the small details. my buisness card says (quality work for those that know the difference) because we all know that some people dont . i have been to many homes where people got work done from other contractors and they stand there and show me how nice it is ,and i could almost throw up.
i dont advertise i work for repeat cusomers almost exclusivly and some referals.after a while you become almost freinds with some of your customers. i think it must be a mental thing because i can go look at a job and measure it, go home figure my material,type up my proposal then i sit on it for a week or two struggling with what to charge them. i am afraid to over charge people ,you would think after thirty years this would not be a problem
its not like i am hurting for work infact the opposite is true but that said it does not take alot of work to keep a one man show busy. thanks for listening to my rant of sorts...................nicko
"i think it must be a mental thing because i can go look at a job and measure it, go home figure my material,type up my proposal then i sit on it for a week or two struggling with what to charge them. i am afraid to over charge people"Typical tradesman.
>>its not like i am hurting for work infact the opposite is true
A few of the subs I use and a few of the small GCs I know say the same thing.... always really busy, always scrambling around trying to get caught up. Those folks (and you) probably need to raise your prices a little (or more). You may lose a job or two, but you may not and you will definitely make more. Tell you what, take your $4500 bid, add $500 and go in with a price of $5000. I seriously doubt you'll lose the job. In six months, if you're still fully busy, add another 10% to all your bids.
As far as I can tell, the only jobs I lose on price are the ones that aren't even close... I bid $40,000 and they were hoping to do it for $15,000... stuff like that. Never lost one where I bid $40,000 and they wanted $36,000.
nicko.... one of the things i had to overcome was getting rid of the notion that
'I WOULDN'T PAY WHAT I HAVE TO CHARGE"
but I'm not the one who wants the work done.... you have skills that a newbie doesn;t have...
those skills are worth money in the marketplaceMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
they stand there and show me how nice it is ,and i could almost throw up.
I know that feeling."Put your creed in your deed." Emerson
"When asked if you can do something, tell'em "Why certainly I can", then get busy and find a way to do it." T. Roosevelt
Nicko,
I don't think your pricing is that far off for a one man show.
It's not always about the profits and big monies. To me it is if I can continue to live the life I have now, put a little away for later, do quality work that makes me happy and make the customer happy.
HEY EVERYONE! LIFE IS NOT ABOUT MONEY! ITS ABOUT LIVING!
OK I will shut up for now.
If you have the equipment and skills and experience to handle these kinds of jobs, you are probably not charging enough. But your hourly rate has to be determined as a function of your expenses...plus a reasonable profit margin which is in line with what other contractors operating at the same level as you charge.
From the sound of it, you fall into the upper bracket of small independents. Don't try to charge the $75-$120/hour that a big builder does; they have equipment and resources (and expenses) you don't. Neither should you worry about charging more than the $15-20/hour some guy working out of the trunk of his car will ask for. People like that can rarely provide the same quality of work or professionalism that you can (and when they can, they don't stay at $15-20 per hour very long).
The other advice I would give you is to work on a T&M basis only. No fixed-price quotes or per-SF rates. Charge a reasonable hourly rate as explained above, plus a small (5%-15%) mark-up on the materials...and charge for every hour you spend working for the man. Yes, that includes your runs to the yard to pick up his materials, the time it takes you to estimate the job, and everything else.
This protects both you and the client.
Dinosaur
How now, Mighty Sauron, that thou art not brought
low by this? For thine evil pales before that which
foolish men call Justice....
there r a couple problems with T & M...one is you have to tell your customer what your hourly rate is going to be.... if it's out of line with other local tradesmen.... you will get a lot of resistance
2d.... every day you have to reconfirm in your customer's mind that they have made a good decision... are you working efficiently.... are you taking too many breaks ...
if you decide to charge $50... and you figure your job based on that... you can give them a lump sum contract and never mention what your rate is
you can generally make a higher profit on lump sum than you can on T&MMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
I shudder thinking about all that explaining. And...goodness gracious if I make a ten hour mistake.
I rarely do a job anymore that makes sense as fixed price. I am just finishing a ~$60K fixed price remodel that has 10 change orders at this point. 4 of them are to reconcile out allowances for finishes, the other 6 are changes and additions made by the owner. It takes a lot of time to write all those c/o docs and get them executed, but in this case the owner is someone who needs to know what things cost before committing.
Simultaneously doing a larger remodel on a cost plus fixed fee contract. The changes have been fast and furious, and I would probably be at 10 change orders already just a month into the job with three months to go. The hard part, if any, is selling the fee, but it is justified, I can explain it to you or anyone else in terms of how many months your job will take and what I need to bill to stay in existence, and you will agree.
Bottom line, I don't like the time that change orders take and I don't like pulling one out every time the owner changes the job. Maybe it's a personality thing.
Change orders are sales person jobs. They write them and make the money for writing them. Since you are wearing both hats, you essentially are saying that you don't like the sales hat portion of your job. I don't blame you...it's more fun building stuff.
Jim, for quite a while I was a PM at a desk, no tools other than a computer. I wrote a lot of c/o in those days but it was often a contentious process with the owner wondering why we kept dunning them. I have no problem doing it in my current situation even though I have all the hats, but I don't like it as a dynamic on my jobs. Reconciling allowances, yes, but writing up lots of small changes, no.
I've been told that a fixed fee needs a greater overhead markup for just the reasons you have explained. For a complicated, hand holding residential remodel, a fixed fee ends up with a lot more office work than some sort of cost plus arrangement. Doesn't apply to a straightforward type of job.John
What I find with a fixed fee is that we can proceed with the job using the "we work, you pay" model. The owner is not concerned that when direct costs increase our profit increases, which is essentially a conflict of interest. When setting the fee I try to pin down how much time the job will take, in months. Then I endeavor to bring the job in on that schedule. If I do, all overhead is covered and a profit is made. There is definitely a lot of office and PM time in these jobs, and you need to set a fee that covers that time. I end up doing "design completion" on pretty much every job.
A risk with this arrangement is that the job morphs into more than was agreed. Current job is morphing from a kitchen remodel into a kitchen + two baths. Owner knows I will address that if I need to.
...a couple problems with T & M...one is you have to tell your customer what your hourly rate is going to be.... if it's out of line with other local tradesmen.... you will get a lot of resistance....
Very true, but I think most tradesmen beyond the working-outta-the-trunk stage have a fairly good handle on what most others in their area are charging. Resistance comes when a business starts breaking out of one category and trying to nudge or shoulder its way upwards into the next. That happened to me when I kicked my rates up scale a few years ago. I didn't lose any existing clients...but I had a harder time selling new ones for a year or two. (By now, the regional rate scale itself has moved up, so, time to reassess again....)
2d.... every day you have to reconfirm in your customer's mind that they have made a good decision... are you working efficiently.... are you taking too many breaks ...
Every day a good tradesman will be confirming in his own mind that he's working efficiently and not taking too many breaks. If he's not--for whatever reason on any given day--the remedy is not to cut his rate, but to adjust the number of billable hours for that day to be in line with what is expected of professionals charging that rate doing that kind of work.
I think if one works to union contract standards, more or less, the break question shouldn't be a problem: No pay for lunch break; two 15-minute paid coffee breaks per 8-hour day. If something goes wrong and the crew winds up taking a head-scratcher break, that needs to be clocked off the time sheet and if the HO is standing there, it should be done so he can see it done.
Finally, all time sheets and materials invoices should be stapled to the office copy of the final bill, so that if there is ever a question about any day's billing or material line-item, it can be settled by referring to the notes made on the day in question.
if you decide to charge $50... and you figure your job based on that... you can give them a lump sum contract and never mention what your rate is
you can generally make a higher profit on lump sum than you can on T&M
This is true...but it also requires the bidder to cover his a$$ and that CYA factor will kick the bid number up higher than an estimate based on T&M billing. So you risk losing jobs because the bid is high. (Or you risk losing money to keep the bid low.) I explain this to those HOs who 'just gotta know' the final price before they say OK to a proposal:
'Sir, if you are willing to share the risk with me, you will be compensated by sharing the profit with me, too. I don't know exactly how much this will cost me to build, but I have a pretty good idea--within 15%. I'll do an estimate for you on that basis, and if you accept it, you'll know within that tolerance--change orders additional, of course--what it's going to cost you.
'If you don't, and insist on a fixed price, I have to make sure I won't lose money on the deal so I will do my estimate, add all of that 15% slop factor, and then add another 50% to cover things I can't predict. If things go well, I'd make 50% pure extra profit; if they don't, I'd still make the same profit I would have charging you by the hour. In that scenario, I can't lose but you can.
'Worse, on a fixed-price contract I'd be working against the clock, and also against my materials costs...so I'd be pushing myself and my crew to work as fast as possible and use the cheapest materials we can.
'Your decision, sir....'
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
Edited 9/21/2009 12:21 pm ET by Dinosaur
"If something goes wrong and the crew winds up taking a head-scratcher break, that needs to be clocked off the time sheet and if the HO is standing there, it should be done so he can see it done."Huh? So, are you saying that you only get paid hourly when you are working but don't get paid while you are thinking? That's another big reason to NOT use T & M!
No, I mean if we stand around like a buncha dummies smoking and arguing for 15 minutes about how to do something, the HO shouldn't pay for it.
You know that in 95% of problems, the answer is obvious to a competent pro immediately and that time spent looking for another answer is time wishing for a miracle that ain't gonna happen: 'Oh, crud--there's two inches of batshït all over everything in this attic and I'm supposed to foam it...?'
I'm supposed to be thinking all the time. If I'm not, I'm not worth the hourly rate I charge no matter how many nice tools I own.
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
I do agree that you shouldn't ever smoke on someone else's time but i don't agree that you shouldn't discuss alternate methods for achieving a goal. Maybe I'm misunderstanding the scene. Maybe we discuss things differently with owners. I never let the gang jump into my conversations. It was always one on one and if I needed to bring a mechanic into the conversation, I do so and have a specific discussion with him and then we part company immediately and he goes back to work. So...no more jawboning while on the clock eh?
Maybe we discuss things differently with owners. I never let the gang jump into my conversations.
No, we agree on that wholeheartedly. I don't often have the HO on site so its usually a phone call either right then or that evening if the answer can wait. When he is at the site, I present problems and options one-on-one, keep my guys out of it, and of course that time is billable.
What I was talking about was being responsible enough to clock-out for mistakes and extra breaks where no real problem-solving is going on but everybody is whining about what they already know they're gonna have to do next. Like scrape 2" of bat-shït out of an attic, LOL.
I also adjust the billable hours when mistakes are made.
Example: I tell a helper to cut 10 lengths of felt 20 feet long...and he cuts 20 lengths 10 feet long. At the end of the day, I mark on his time-sheet -0.5 hrs billable and credit 0.5 roll of felt. Helper still gets paid for the half hour (he's my responsibility; I hired him), but the owner doesn't get billed. (If he does that sort of thing too often, he stops getting paid at all, of course.)
Finally, I adjust the billable hours when (for whatever reason) the crew are not performing up to the standards the HO has a right to expect for the hourly rate he's paying. For instance, last job, I had to do that because my old TS didn't have the balls to do what needed doing in a reasonable amount of time. I took off two of the three hours it took me to do an hour's worth of cuts, and bought a new saw the next day. And made sure the HO knew about it.
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
>>No, I mean if we stand around like a buncha dummies smoking and arguing for 15 minutes about how to do something, the HO shouldn't pay for it.
Rarely happens on my crew--and no one smokes on work time--but we do charge problem solving time as work time. Pretty much every thing I do is a custom pain in the ####, and there's no way I can give away the time it takes to figure out the things people ask us to accomplish. We are pros and we can get what you want done as well or better than anyone else, but we do take the time to figure out how best to do it, and it is paid time.
Once or twice a customer has asked if they should be charged for time when a mistake was made. Me: "Do you want to buy all 40 hours of my work this week, or do you only want to buy the best and most productive hours? I have a rate for each option". Pretty much ends that conversation.
I've chased the how much do I charge question around a few times...what
brought my head around was when I figured my overhead...now I can look any customer in the eye and say with confidence...that's how much for this job.I had an interesting experience with my truck this weekend...my country mechanic charges 50 bucks an hour. For a tranny problem I had he figured 4 hours but he didn't fix it so I went to a tranny specialist- 83 bucks an hour but they fixed it the same afternoon in 2 hours. I took a lot out of that lesson...I'm a specialist-an interior renovation and older home specialist and that is one of the reasons my
hourly rate is 70 bucks an hour.my 2 centssilver
i don't know how many times i spend alot of fime typing up a very detailed proposal for some one and when you hand it to them you see there eyes go right down to the bottom to look at the price without even reading what they are getting.
if some one can buy a product at sears for 300 dollors and go to walmart and get that exact same product for 250 dollors then they are saving 50 dollors for the exact same product.
alot of people have that same mentality about remodeling jobs they think they are getting the same job for less money.
i never could understand why people dont mind spending thity thousand dollors for a new car that depriciates as soon as they drive it off the lot but it kills them to spend that money inside there house where there neghbors cant see it.
where there neghbors cant see it.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
calvin
i got in a bit of a hurry at the end . i had to look at your post a couple of times then it hit me .lol
It's short on spelling, long in insight.
Nicely done.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
"don't know how many times i spend alot of fime typing up a very detailed proposal for some one and when you hand it to them you see there eyes go right down to the bottom to look at the price without even reading what they are getting"Never, ever, ever, discuss price without first establishing value. We don't put our price on the bottom till we go over every line. We explain exactly what we are going to do and during the course of that explanation, we answer questions. Sometimes it takes 30 minutes to get to the price. Sometimes it's only ten. We only do roofs. When I was general contracting, I'd bring two documents: the scope and specifications and the contract with the price. I always went over the scope first. Second, we went over the contract. Third, we talked about the price and payment schedule. Do yourself a big favor and bury those numbers, somehow, some way.
Jim, I love ya, man, but I don't like what I think I just heard you saying.
We're talking about a contract between the builder and the HO. Both people are parties to that contract. Either party hiding anything from the other is unethical to say the least, and very possibly a stupid way to lose in court later.
The HO isn't a partner in my business...but we are 'partners' in the project in the sense that without both of us, the project doesn't exist. I treat him like that, and expect the same thing in return.
If I don't get it...I don't work for him. (And if I don't give him that respect, he'd be an idiot to hire me.)
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
You are mis-reading or mis-interpreting the post. I hide the numbers until I establish the value. Then, when the numbers are discussed, it is within context....and not just another bottom line.
You are mis-reading or mis-interpreting the post.
I'm glad to hear that. I think of you as one of the good guys, even if ya do like vinyl siding....
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
Yes, I do love vinyl siding and other fake products too like hardi, azek etc. Of course, if I have enough money, I buy wood.
David, I agree with everything you said except about charging for mistakes.
Somebody goofs in a way that costs the HO money he shouldn't have to spend, I eat it. The 'somebody' is usually me, of course; but even when it's not, I hired the guy so it's my problem.
Sure, there's a tolerance for small stuff. If someone cuts a piece of 2x4 framing stock short and can't use it, well, dammit, that's life and we'll probably use it somewhere else later. Hell, we're talking about two bucks or less.
But if he cuts a 2x10x16 piece of cedar too short, that's a different story. About $75 worth of story. I can't in good conscience charge the HO for that piece of wood or for the time it takes someone (me) to go and pick up a replacement.
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
you've got a funny idea about T&M..
the thing about t&m is the owner assumes the risk in return for a lower rate
with fixed price the GC owns everything.. including the mistakes
with T&M the owner pays for the mistakes.. or what's the sense ?Mike Hussein Smith Rhode Island : Design / Build / Repair / Restore
the thing about t&m is the owner assumes the risk in return for a lower rate
True, he assumes risk; but not all of it. The way I look at it is that he shares the risk with me. He risks getting smacked with a higher bill than he wants; I risk not making as much as I might have if I sold him a pig in a poke (fixed price deal).
However I can't in good conscience expect him to pay me to screw up.
Like I said, Mike, there's tolerance for small stuff and problems that aren't our fault are of course billable for all the time it takes us to solve them, including the head scratching. But if a builder really sticks his feet in it all by himself, he's responsible for making good, no matter what the basis for payment is.
How to stick yer feet in it real good:
Half a million worth of screw-up....
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
Well, here's my take on T&M. It's from my blog, if anyone's interested: http://mdremodel.blogspot.com/2009/06/what-does-time-and-materials-mean.html
What does "Time and Materials" mean?
In general, for most of the work I do, I work for either a fixed price or on a "time and materials" basis.
With a fixed price, a client shows me the job, and I tell him or her exactly what I will charge to do the work. Simple. No risk to anyone but me.
Sometimes, however, I just can't give a fixed price. If I'm digging into something that I have no way of knowing what I'll find when I open it up, or if the scope of work is general, I may need to work on a "time and materials" basis.
What this means is that I charge the client for every hour I spend on the job, and for all of the materials, subcontractors and any other job expenses that apply (trash removal, for example). To those charges, I add a markup, or fee, which is generally a percentage of the total costs.
You'd think "time and materials" would work out great for the contractor, right? Well, in one way, it does. There is little risk to me, since I haven't given a fixed price. At this point, the risk is on the client. Perfectly fair, and certainly understandable, but here's the rub.
Clients are usually a happy campers when they know, to the penny, what their project is going to cost. When they don't know, anxiety can set in. You can guess who the anxiety gets taken out on, can't you?
Now, you should know that I do my best to estimate what the work will cost. I've been at it for a long while now, and have a good sense of what things will take. I'm going to share that expertise with you, and I'm generally pretty good, but here's a nugget of truth.......I DON'T HAVE X-RAY VISION, AND I'M NOT CARNAC THE MAGNIFICENT!
So, despite the fact that I consider myself honest and ethical, despite the fact that I'll tell you verbally and in writing that things could end up costing more.....a lot more, despite your assurances of "I understand", despite all of that, I will....when I present you that invoice that is twice what I thought it MIGHT cost, when I see the look in your eyes that says "How could you?!"....I will feel awful. I will feel like a thief. I will feel like I have let you down.
I hate that feeling.
I don't know if most contractors feel this way, but I know that a lot of us do. So, the next time you and your trusty contractor happen to be talking about what the best way to go about things might be, consider the above. It might make sense to pay your contractor by the hour for just long enough to discover what the true extent of the work is going to be, and to then have him or her give you a fixed price to complete the work.
You'll be happy because you know what things are going to cost, and your contractor will be happy because he knows he has given you an accurate cost; one that will let him make some money and not feel like a grifter at the end of the day. Win-win.
"So, despite the fact that I consider myself honest and ethical, despite the fact that I'll tell you verbally and in writing that things could end up costing more.....a lot more, despite your assurances of "I understand", despite all of that, I will....when I present you that invoice that is twice what I thought it MIGHT cost, when I see the look in your eyes that says "How could you?!"....I will feel awful. I will feel like a thief. I will feel like I have let you down.I hate that feeling."Just curious.How do you feel when you have given a fixed price and it cost twice as much as you thought? Out of the "2 feelings" I prefer one over the other.Excellent post by the way.roger
Roger,
How do I feel in that instance? Pretty sh1tty! So, yeah, if I'm comparing the two feelings, I'll let the HO get the sad face every time. That said, I really don't like working T&M.
Psychologically I get burned out always accounting for every nickel or mis-cut piece of whatever, and anticipating the inevitable "What's taking so long?!" from the HO.
I've burned myself a few times on fixed price, but that doesn't happen all that often any more (one of the advantages of aging......more experience!). Anyway, different strokes and all that. It's just what I prefer.
Mike
Edited 9/24/2009 2:40 pm ET by Mike8964
That's an excellent post, Mike. I think you've echoed how a lot of us feel.
I'm feeling bad right now about a job estimated at 9 thou that went to 14 through a combination of change orders (about 3 grand worth of hidden rot) and lousy weather. Bad enough that I gave the HO a credit for the part of the overage that exceeded 115% of the estimate (about 1200), which is in line with my printed terms. I can afford it; and it's cheap goodwill, the way I look at it.
They're still in shock, tho.
Although I trust these people completely, I probably should have asked for more dough as the job progressed so the final check wouldn't have to be such a whopper.
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
You are not working T & M. You are doing cost plus, not to exceed.
Help me out a bit here, Jim. You've got a lot more business experience that I do. I understand vaguely that there's a difference between cost+ and T&M, but apparently I'm not that clear on how you make the distinction.
Here's how I bill a job:
I charge for the estimate; same hourly rate as all other skilled work I do. The estimate comprises the scope of work and materials required broken down and listed as line-items on the estimate, and drawings as needed for me to do that. The estimate is the contract; it comes with terms printed on it that state unequivocally in bold face type that the estimate is not a fixed-price quote, and that the client will be billed for hours actually worked and materials actually used. The terms also state that under reasonably forseeable conditions the actual bill could be higher than the estimate, and that it probably will be. We recommend that the client regard the estimate total as the minimum cost to accomplish his project.
The terms are very clear about the fact the estimate total is not guaranteed, only the hourly rates and materials mark-up are. Labour is charged at a stated cost per hour with different rates for skilled tradesmen, apprentices, and helpers. Materials and subcontracts are charged at my gross cost plus a stated percentage.
However, the terms also state that as a courtesy to the client, if, during the process of the job, we see that the actual bill will exceed 15% over the estimate, we will inform the client of this and await his instructions before proceeding.
If I don't do that last bit, I feel I have an ethical obligation to keep the total (not including change orders, of course) to no more than 115% of the original estimate total.
Under those terms, what would you call the billing method I use?
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
I don't know about me knowing more about business than you. I think I'd be the last guy that I would take biz advice from.But anyways, your contract language wasn't the issue. It was this statement that you made in an earlier post: "Bad enough that I gave the HO a credit for the part of the overage that exceeded 115% of the estimate (about 1200), which is in line with my printed terms."If you are crediting anything over $1200, then that would be considered a "Cost Plus, Not To Exceed" contract. Again, if you are going to assume some of that risk, the rates should be changed to reflect that. I cannot understand why you would never like to make 200, 300, or 400 0r more per hour. Are you that set in life that you can't use a few extra bucks to help you through the lean times?
If you are crediting anything over $1200, then that would be considered a "Cost Plus, Not To Exceed" contract. Again, if you are going to assume some of that risk, the rates should be changed to reflect that.
Jim,
On that job, the estimate totaled about 9 thousand. The final bill came to over $14k.
Of the final bill, three thousand was attributable to change orders: hidden rot we couldn't see when estimating; $500 worth of Victorian gingerbread Mrs. HO decided to add on; new screens and moulding Mr. HO wanted for the verandah; etc.
What's left is about $2000 over; or 22%. I know where most of that came from: piss-poor weather caused us to work slow; lots of days we couldn't do more than 4 or 5 hours; crud like that. I know the weather isn't my fault; but it ain't his fault either. And when he agrees to go for T&M, he agrees to share the risk that things won't go as planned, not assume all of it. So that means I gotta share it, too. Fair is fair.
So I gave him a $1200 rebate to cut the overage down to 15% above my estimate. Remember, I charged him for the estimate (about $400, IIRC). He oughta get something for that money besides a fancy looking PDF.
Besides, twelve hundred bucks on a $14,000 job comes out to 8.5%. In effect, I'm not giving him any more discount than a lumberyard gives me. And he spent a heck of a lot more with me this year than I did at my yard (close to 30 grand total).
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
You are rationalizing. When he agrees to T and M he ACCEPTS the risk. It's not shared risk. That 8.5% is a huge chunk. I'd hate to give that up every time a job went south unless I knew I' get some that gave me an ADDITIONAL 8.5% sometimes to balance things out. I don't like the business model but that doesn't mean it doesn't work for you. Obviously it does.
What's your net profit margin on your "average" job?If we gave 8.5% back, that would make most jobs break even at best, if not turn in to a loser.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
I would be hard pressed to tell you my actual net profit margin because I work out of my home and use my 'personal' tools and truck. I'm not incorporated, either, so I don't get to do all the depreciation calcs and standing overhead jazz. I only do this half the year so it's not worth filing two sets of tax returns.
But I guess you could say I 'own' 100% of what I bill, less materials and sub expenses, so it's hard for me to lose actual cash money unless somebody just plain doesn't pay. Even then, I generally won't buy materials or hire labour until I've got a deposit to cover those costs.
At worst, I could wind up working a few hours for zero dollars an hour--it's never happened, tho--at best, I net before tax my full hourly rate for me and 50% of that for the guys I hire. Plus my 5% markup on materials. Of course, if I average that hourly rate across all the hours in the season that I'm not billing, it comes out to a helluva lot less per hour. But that's show biz, ain't it?
On this job, the $1200 bucks is not a problem. I consider it a good investment in customer relations. And I also bought the guy a bottle of Glenlivit and his wife a bottle of a good pouilly fuissée.
True, 1200 clams is about 8.5% of that particular job, but the HO did a lot of other stuff with me (undiscounted) earlier this year so it really doesn't amount to a hill of beans.
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
Dinosaur,
Don't get me wrong. I feel awful about charging clients the actual cost of the work sometimes.......but I still charge them full boat. I mean, it sucks that termites ate half the front wall of their house, or whatever, but it sucks for THEM, not me.
I just own the company they hire to make it right again. It's not my hobby, it's how I make my living, and I try to make that living as good as I can. I'm not cheating anyone, but I'm not Mother Theresa either!
Keeping everyone apprised of how things are going though, makes good sense. Nobody likes surprises.
Mike
I mean, it sucks that termites ate half the front wall of their house, or whatever,
That's a change order; things like that don't count in that calculation.
I gave that guy a credit because I felt I screwed the pooch a bit on the estimate. I didn't figure on enough prep time, and that's where most of the overage beyond the change orders came from.
Believe me, I'm not Mother Theresa either. But if I goof, I own up to it. I find it buys me back more in the long run than I give up in the short.
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
Dinosaur,
That's my point! It's no secret you or I are going to screw the pooch on a T&M estimate. If I thought I could give an accurate estimate, I wouldn't be doing T&M! THAT'S why I feel bad and why I say that no matter how many times and ways I tell the HO that it could cost ALOT more, it ALWAYS surprises the HO and alost always makes me feel like sh1t.
Believe me, I try to be fair too. I don't take any joy in seeing a HO spend thousands of dollars to fix something to a point where it looks like no one did anything (like rot repair, for example). On the other hand, it's THEIR house and THEIR risk as HO's. It really does suck, but it's really not MY problem.
My mechanic, nice guy that he truly is, doesn't cut me a break just because he feels bad about my truck breaking down, so I suck it up, pay the man, and get on with living.
Mike
That's my point! It's no secret you or I are going to screw the pooch on a T&M estimate.
Ummm, no. Not really. Not when I'm charging by the hour to do the estimate. And not after putting in the years that entitle me to charge what I do by the hour.
Understand: I'm not talking about things I can't see when I'm estimating, like extensive rot under the shingles or floor tiles or rotten sheathing and framing behind undamaged siding. Those are change-order items; the kind of unpleasant surprises the HO has to be willing to deal with on his nickle. They are part of any remod or repair project.
I'm also not talking about hitting the final dollar figure right on the nose. Nobody can do that. At least nobody I know. Not for any job more complex than changing a light fixture.
But after 15+ years of doing this, I do expect myself to be able to get within 15%...and if I don't, I promise to let the HO decide how he wants to proceed once that fact becomes evident.
Remember--I've explained to the HO that if he wants a fixed price quote--they all do, to start with--it'll probably cost him more because I have to add enough 'slop factor' to ensure I don't take a loss--which is usually close to 100%. If he agrees to go for T&M, I can give him a good idea of the cost, and he'll only get billed for the time it actually takes...not for time I was afraid it might take in a worst-case scenario.
If I thought I could give an accurate estimate, I wouldn't be doing T&M!
The way you give an accurate estimate is to keep records of your screwups over an extended period of time, during which you will have done the same types of jobs multiple times. Now you've got a database you can consult to find out how much time it has historically taken you to do x number of square feet of roof, floor, siding, paint, whatever. With that information, and making an educated survey of the specifics pertaining to the job you're estimating, you should be able to adjust your historical average to meet the special needs of that job, and come up with a number that's close.
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
I can't fault your logic regarding how you arrive at an estimated price for whatever sort of work you plan to do on a T&M basis. And yes, if you are getting paid to do the estimate, then there is a certain expectation that you know what you're doing.
What I disagree with is the idea that, if I work T&M for a client, they are entitled to the reward (potentially lower costs) AS WELL AS some relief from the risk.
In my view, if you, as the client want no risk, then work fixed price. If you want to take a risk, and enjoy the possible (but not guaranteed) reward of lower cost, then work T&M.
To use your example; if you boofed an estimate, or the weather played hell with getting any production going, you wouldn't be going to the HO for more money. You'd eat the loss, right? Likewise, if you happen to nail the estimate, and the sun shines (more rare, I know), you'd happily take the extra profit.
I'd be surprised if you and I did things very differently, as far as pricing goes. I've been at it for a long time too, I've documented my screwups, and my estimates are usually within 15% as well. Philosophically though, I just feel that, if the HO wants a potential reward, then they should be on the hook for the risk....all of it. That doesn't absolve me of the obligation to work efficiently and intelligently, but I like to think I do that anyway.
Like Blue, I think maybe you're rationalizing a bit.
"I mean, it sucks that termites ate half the front wall of their house, or whatever, but it sucks for THEM, not me. I just own the company they hire to make it right again. It's not my hobby, it's how I make my living, and I try to make that living as good as I can. I'm not cheating anyone, but I'm not Mother Theresa either!"Clap! Clap, Clap! Priceless!! Gotta remember those lines. I do use "I don't have xray vision" which does help a lot.
I charge by the hour and I bill weekly. If I'm there for many weeks I bill every other week. I have my own bills to payroger
Edited 9/24/2009 3:07 pm ET by roger g
I get what you're saying, but here's a hypothetical: What if you're doing your T&M job, a few mis-cut pieces here and there, ok the HO eats that, then you back over a rose bush leaving the site. Do you pay out of pocket for a new rose? Or is that just part of the T&M?Not trying to pick a fight, just asking. I couldn't define or justify what I consider a billable mistake on a T&M job to save my life. A lot of it depends on how I feel, and how I feel about the client.Just curious to hear your take on the rose bush scenario.k
rose bush scenario.
That's an insurance issue. The question is: do you turn it in or pay it out of pocket?copper p0rn
Insurance issue because of vehicle or because of property damage? What if you fell on it?Probably doesn't matter, I was just trying to see where Mike draws the line on "mistakes". Maybe he really is as constant as he says. Me, I'm all over the place. I might rebate time one day for the same "mistake" I billed for on another. It's a kind of seat of the pants thing with me.And what about billing for the time I'm trying to chase down the portugese water dogs who got out... LOL.k
Insurance issue because of vehicle or because of property damage? What if you fell on it?
Insurance because something was damaged outside of the scope of work. Doesn't matter HOW it was damaged. copper p0rn
Hmm. I'll try to come up with a better example.
k
Who would pay for a new mahogony door if the laborer cut it 68" instead of 6-8". Don't tell me that you a laborer never cuts a door. We all had to start someplace.
Personally I would eat the door.That scenario about 68" and 6'-8 rings too close to home. I've made that type of mistake so many times I bought a metric tape measure.
In general I have a hit and miss approach to mistakes. Some I eat other I don't. It all depends how I think of it at that time.
When I worked for someone else as an employee they paid for ALL my mistakes. Whether it was passed onto the customer I doubt because I never talked about the mistakes I made to the boss.
If it was a contract price then the boss paid for it but if it was a T&M then the customer did in fact pay for it.
Whether to eat it or not to eat it only applies to small owner/hands on jobs otherwise who would know about mistakes being made in the first place.roger
I have a book on running a plumbing business where the plumber sites an example of making money on a mistake.
He breaks a custom granite counter top while installing a sink, turns it into the insurance company who in turn pays for the granite to be removed and reinstalled, and for the plumber to make a second trip out there to install the sink! (plumber still charges for the unsuccessful first attempt)
The thing is insurance is a cost of doing business, and that cost needs to be figured as if the insurance policy will actually be used and what it will cost if it is used. Then when a mistake happens you can afford to fix it, and while still working at your same average rate but with more hours worked = more money!
This has been a highly engaging thread. Thanks to all who contributed. Dinosaur, it would be worth the price for a fifth of Glenlevit to pick your brain and hear your stories!
Mikes got it exactly right.I've told this story before but I'll tell it again...in shortened form.A referal called me and wanted me to set an interior french door. He had already purchased it at a home center. It wasn't particularly expensive but it was still about 400 back in the day. He wanted to hire me by the hour and I told him my rate. I think I estimated about 4 hours at maybe $25 per hour. Before the conversation ended, I reminded him that he was responsible for the door if I should perhaps screw it up and it needed to be replaced. He was aghast. I explained that I wasn't making enough money to risk working on his door. After much bantering over three days and three conversations, he agreed to pay me an additional sum (probably $100) for me to assume the risk. The moral? Risk has a cost.
Charge him as if he were a first time client, otherwise he may be your last client.
Also if you go too low, this person will lose respect for you. Once that happens its all over anyway.
Family.....They're always there when they need you.
thanks for all your answers it gave me new confidence to charge what i should on all my jobs without feeling guilty about it......................thanks
nicko
The only thing you should feel guilty about is shortchanging your family by not charging enough.
Oh great. Lay the guilt trip on him now. "Put your creed in your deed." Emerson
"When asked if you can do something, tell'em "Why certainly I can", then get busy and find a way to do it." T. Roosevelt
nicko,
Your customer is having you back for some of many reasons,
One is you must do quality work for them but I bet they really like your prices. I bet they tell others, great work & he works cheap
I would rather have a customer when talking about me to other say things like
"He's not the cheapest guy out there but his work is 1st. class, he's prompt & on time, honest & trustworthy, neat & efficient worker, ect ect.
Sell yourself, be the guy they wish their would have married and then charge for it.
If you sell it right & preform for them they will feel good about the higher price.
No one should regard themselve as "God's gift to man." But rather a mere man whos gifts are from God.
I have found that many people are happy to pay premium prices for premium product, which in this case means first-class service, total reliability, great care of their premises and contents, a high level of technical expertise, and the ability to make the project better than they thought it would be. When I can get those things I always buy from the person selling them.
Some great stuff in this thread. Why I love BT! Carry on.View Image bakersfieldremodel.com
many people are happy to pay premium prices for premium product
Like buying quality tools and Chevy trucks."Put your creed in your deed." Emerson
"When asked if you can do something, tell'em "Why certainly I can", then get busy and find a way to do it." T. Roosevelt
Like buying quality tools and Chevy trucks.
Let's edit to
Like buying quality tools
My Chevy Truck is a POS-Everything is starting to fail after the warrantee is up. I was holding the exterior handle of my driver side door last Thursday morning when I was trying to leave the house.
Bruce
I had to look,
You're half way between Harrisburg and Pittsburgh?
$2000 works out to $250 a day. What is your REAL cost of doing business per day? What does that leave you?
I'm on the eastern side of the state. I was just this evening sitting down with a friend and going over a plan he's bidding. A second set of eyes kinda thing. He's a one man operation as well.
When we were done making a list of issues/areas of concern to address before finalizing his bid? We talked about his TRUE cost to be in business. He's a one man band also. After some math, and knowing full well I missed a few things, his TRUE cost to be in business as a legitimate contrator was pretty close to $70 a day.
That $70 a day (That's $70 per WORKING day. I use 20 days per month as the baseline.) was a shock to him.
He's shooting for $350, settling for $325 a day.
Edited 9/20/2009 10:06 pm ET by robert
wish we had talked more at blodgetts....never enough time
some jobs don't fit any model.... we're finishing one now that has 10 change orders AND 3 different contracts
if i had done Cost plus Fixed Fee someone would be crying
one i'm bidding now i had to change my bid method from the model that jim uses to the one that Jerrrald uses..... too many expensive materials and too many expensive subcontracts...... i can't explain what their choices are doing to their budget if i use my old tried and true.. and we are not doing the design so it's harder (much harder ) to control costsMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
>>too many expensive materials and too many expensive subcontracts...
That's most of my jobs...
robert thanks for taking the time to post your findings. i bet if i took the time i would be right at about what your talking about. it is bare bones buisness 101 but i just never took the time. thanks for sheding some light on it for me
nicko
Dude,I feel your pain.I just want to make what others in my area make that have my experience and tools.I hate the part where you turn in the bill and feel bad for the customer.I had a boss one time that said if the customer didn't complain about the price you weren't charging enough-provided they still pay it.It always worked for him,but I feel guilty charging enough to make people squel but I'm tired of working myself to death and barely getting by.
."I hate the part where you turn in the bill and feel bad for the customer"Maybe you should start turning in the bill and then feel bad for your retirement fund....which you aren't funding. You are cheating your heirs!
Cheating his heirs?? He's also cheating the rest of us future old guys, who will be slinging extra-hard to help pay for the masses with no retirement savings.
If you get every job you bid, you're doing something wrong. It sounds like you are pretty good so you should be at the upper edge of that envelope, pushing it. If these are repeat customers, give them a bid that is prifitable to you, if they think it's too high, encourage them to get others. Explain to them that they need to compare apples to apples, and win or lose, after their decision, you would like to see the other bids out of courtesy of good honest work in the past. Explain to them that this info helps you to stay competitive.
The bottom line is you have to pay insurance, fuel, buy tools, pay for the occasional damage, pay labor(?), maintain tools and vehicles and alot of other things you should have in overhead that many of us don't. In my case, that's about $50,000 a year, Roughly 25 an hour. I figure 11 months of work a yearbreaking it down to about 250 a day, and in all honesty it's probably more than that. Your 35 an hor would leave me about 20,000 a year.
That said, I just finished a TI job that paid pretty well, but having nothing right now. I'll go do some framing for less than I do generally (framing prices have dumped in Seattle area) After my over head, I'll pay my self a wage less than my second, but better than sitting on my a$$ and my overhead gets covered during that time frame.
But this is just a stop gap exersise between jobs that pay. If it was always that way I'd hang it up and start flipping burgers...knock on wood, might be wearing an apron sooner than I think!
If you want, you can come down here to Austin and get some framing jobs for 1.75 per foot. Oh wait...they won't hire you if you are not hispanic because they know you won't make it. They won't waste their time with you.
Dude.
he's right. I went to texas after hurricane ike and was told " we don't hire white boys to roof"
I'm not making this up. My MI framing partner walked into the construction trailer in the sub I lived. The superintendent looked up and before anyone said anything he said "You won't make it. I've had many who have tried and the prices are so low, you'll never do a second one."It's just the way it is here. After 2 1/2" years, I finally saw the first white construction worker in the sub: he was carrying a mop and broom to do the final construction cleaning LOL! The Hispanics won't stoop that low and wash the floors LOL. Don't get me wrong, I don't have anything against the Hispanics. They are hard workers and for the most part do decent work. Some of the trades are worse than others and they all could use some additional technical training but that could be said for all of us. I LOVE my Hispanic roofing crew. I can honestly say that they are the best crew that I have worked with in my entire career. They do good work, fast, are dependable, friendly, clean, conscientious and happy.
I've been to texass, I already knew.
"If you get every job you bid, you're doing something wrong. It sounds like you are pretty good so you should be at the upper edge of that envelope, pushing it. If these are repeat customers, give them a bid that is prifitable to you, if they think it's too high, encourage them to get others. Explain to them that they need to compare apples to apples, and win or lose, after their decision, you would like to see the other bids out of courtesy of good honest work in the past. Explain to them that this info helps you to stay competitive."That's good advice right there...I have been pushing the envelope for a while, sometimes shocking folks with my prices...Most of it is the limitations we have set for ourselves-as in argue for your limitations and they're yours...as in-I'm not worth that muchor as a sub who works for me says-I wouldn't pay that much for that job...I've given this lots of thought and I think homeowners have been misled with the advice to always get 3 bids...We know there is no apples to apples in 3 different contracts and
the low bidder will probably make it up with change orders...So now I try to sell my strengths...I'm not bidding against anyone but myself...Why work with me? I'm easy to get along with, personable, knowedgeable...as you can see from our interactions...What's your budget...I can work within your budget...What I try to do now is find the right match for myself and customerThen-it's not about price-it's about trust
it's about a working relationshipit's about delivering an excellent product it's about creating customers who will rave about you to their friends and family... and mostly it's working...I needed a filler job and customer called and asked if I could fix a
cabinet abortion...no prob...he wanted to go hourly...what to charge? needed the job...needed MIP-money in pocket- at the end of the week.So I emailed him and proposed 60./hr. for me 30./hr. for my helper and explained that 50/25 + 20% a very modest markup to cover my overhead...usually in a contract I markup 40-50%...and he bought it.Not perfect but at the end of the day-MIP-money in pocket-I try to "max out every match" so I'm leaving as little on their table as possible...silver
It sounds like you are refining your selling process. You are headed in the right direction. All too often, small time contractors think they should substitute price for presentation. I can't imagine doing a small remodeling presentation in less than 30 minutes. Only then would I show the price! Both decision makers MUST be there. A major remodel would take considerably longer. During that time, rapport and trust are being created. Bridges are being built. Detailed questions are asked and answered. The job is sold before money is talked about. When the money is too much for them to buy, they must agonize and tell you no. At that time, it's still possible to renegotiate EVERYTHING, including scope, price, overhead and profit.
"The job is sold before money is talked about. When the money is too much for them to buy, they must agonize and tell you no. At that time, it's still possible to renegotiate EVERYTHING, including scope, price, overhead and profit."Note to self: in your next lifetime, learn this earlier in your career.I still get folks saying-you're way too high...I recently shocked an Italian couple with a price for a rail install. Bob thanked me and said they had found someone a lot less...I heard through the grapevine that it ended costing what I had quoted...can't win them all...
I never liked the concept of selling but I have finally grasped the concept of selling the value of my custom services and I finally see that my job is to sell them on me first and the project second. I often go through a series of proposals until scope meets budget...
I know I have the job as long as we can negotiate a reasonable sum...
it works very well with referrals from customers who are raving about you. Sometimes I have to transfer a large chunk of work from me 75/hr.
to my helper 37.50/hr. and it will make a huge difference with no loss in quality.We recently changed out 9 large thermopane windows on an older character home...we took care with the older trim and put everything back together better than new. He hired my finisher by the hour-45/hr to polyurethane all the trim in the downstairs.When he was writing my final check, I asked if he was happy?Yes he nodded as he wrote.Then I asked: Would you refer me to your friends and family?He said yes and we had a laugh when I told him it was something I had just learned...but it's also selling on the back end...of a well executed project....I like selling like that.silver
Good post. Thanks for contributing to this thread.
Thanks Jim...it's not often that I pipe up but occasionally I try to give back and step up to the plate.95% of what I've learned in the last couple of years has been as a result of things I've gleaned from Breaktime...silver
It's so rare to see a thread like this one on the WWW, but I find them commonplace here. Ideas and theories and truths and non-truths are flying around like a tornado, and as a result, a truly spectacular thread full of wisdom, insight, experience and a bit of humour.
Cheers, gentlemen.
I am, and forever will be indebted to this forum.
well said and I concur...I was thinking about this last night=what to charge=what is my break even point= read Ellen Rohr's books what is my overhead= ditto wage + overhead + profit = value of your servicenow what to charge becomes=how to sell this number=what am I worth to the customer?=how do I sell myself to the customer for this amount=marketingour time is a non renewable resource... what to charge is really how do I sell/market myself/company to recoup
the highest return on my non-renewable resource-my time and my unique knowledgeanyway-I have to fly this am-a few random thoughts while I play hooky for a few minutescheers,silver
When I do a bid I include everything that will get the job finished.
I know many contractors who bid low, win the job, then jack up the price after the fact because they know the homeowner will pay it because the work has already started.
So I do get quite a bit of "oh that's more than I expected!" when they see the price. It drives me nuts because my bids aren't even high - at all - but yet somehow the customer makes up some figure in their head what the job should cost, despite having literally zero knowledge to base their made-up figure on.
Even my own mother does it to me. Out of curiosity she asks "How much to do so-and-so...?" So I think for a minute, then give her a ballpark dollar figure. 99% of the time she gasps and says she can't believe it. Hah.
I've also lost bids where the lowest bidder bid LESS than the cost of just the materials for the project. So obviously something is horribly wrong there, but by the time the homeowner knows that, it's too late, and the checkbook has to be pulled out for 'extras'.
I know a framer who never includes decks in his house-frame prices, but also never mentions it. So when the decks aren't done and he's packing up to leave the job, the homeowner either has to pay more, or hire someone else to do the decks. It's a scumbag way to operate IMO.
I framed for three decades and I never included an exterior deck. That is/was the trimmers work. I guess it all depends on your locale.http://thewoodshedtavern.com. = no peer mods!
Oh I see.
Well yes it must be different here because as the framers we've always done the decks no matter who I was working for.
One of my old bosses hated tyvek and refused to do it, but he'd put that note in his bid. The sidewallers would end up doing it which made more sense because they were already up there on the staging anyway.
I discovered a nice sales toolI mentioned to a new customer that I think they have been given some bad advice to get 3 bids to do a job.Then I said-My advice would be to find someone you trust, that you can work with and set a budget and see what you can do with that budget...In her case, she and her husband are taking my advice...kind of a complicated reno but when I left we both felt we could work together...In this case, we'll see what unfolds-but no bidding oranges against apples...silver
When i am involved in building a house you get whats on the blue print , no more no less
if there are other bidders they bid the prints also
If you throw in a deck how do you know the size
I finally finished a deck for a customer this summer that has been ongoing for 3 years
Material & labour $26,000 on a 950 sq ft house , glad i dident bid it only estimated !
Oh yeah I bid the same way - just going by the prints I've been given.
We framed a rather large house for a homeowner who was playing GC and every time they'd change something or add something in, I'd tell them "that's an extra just so you know."
At one point the wife threw her hands up and said "I don't get it! What's extra and what's not?"
So I had to explain to her I can only bid on the prints you gave me. She obviously couldn't read the prints so it led to her frustration when she wanted her attic converted into actual living space with a dormer, when none of it was on the prints.
They ended up paying us $5,000 more over my original bid but were happy in the end.
"At one point the wife threw her hands up and said "I don't get it! What's extra and what's not?"So I had to explain to her I can only bid on the prints you gave me. She obviously couldn't read the prints so it led to her frustration when she wanted her attic converted into actual living space with a dormer, when none of it was on the prints.They ended up paying us $5,000 more over my original bid but were happy in the end."That is a very good point. If she hadn't thrown up her arms in desperation and said what she said you wouldn't have know. What was so obvious to you, about not being on the plans, was not to her.
The phrase "not able to read plans" might mean all sorts of things to different people. You would think that when people read dimensions of a living room and then change those dimensions a cascade of other changes take place. But then again you can't get into people mind to find out what they know or don't know.................or admit to not knowing.
The same applies to trades people also.roger