I am writing up a contract to build partition walls and cabinetry in a restaurant and the owner of the property wants me to include a breakdown of my labor and material costs. This is not a cost plus deal. It’s, I will do XYZ work for X amount of dollars.
I have itemized the costs in an estimate; walls, cabinetry, doors, trim, finishes, etc., but now he wants more info.
I have never been asked this before and I think it is: 1. odd, 2.none of his business, 3. really none of his business.
He’s a billionaire (really) and does he think just a little different from the rest of us, or is this a negotiating tactic us thousandaires aren’t used to.
Totally perplexed and just wondering.
Constructing in metric…
every inch of the way.
Replies
it sounds fishy. I think it is really none of his business. Hope you can find another client.
good luck
john
people in the restaurant trade tend to be stingy with the money. want everything for nothing and everything is negotiable. be careful
Sometimes you just have to say no.
I'd say he's getting a feel for costs to determine making a similar investment on a greater scale.
Ask him why he needs to know. If he is a man of character, he'll tell you.
Edited 4/5/2006 11:24 pm ET by peteshlagor
My Clients aren't my partners so they are not privy to proprietary information and don't get to tell me how to run my business. I am sure he would not allow another to determine how he runs his restaurant.
Prospective Clients can and will determine who they hire. If they don't want to hire me on MY terms, then I do not want to work with/ for them.
If I change my business methods to suit their requests I will be telling them that MY business methods are negotiable and therefore so is EVERYTHING else.
It doesn't matter WHY he wants to know this information. Spending effort thinking about that is a waste of energy. Conclusions will only be speculations - not truths.
These are my thoughts. Be confindent in your own.
Frankie
There he goes—one of God's own prototypes—a high powered mutant of some kind never even considered for mass production. Too weird to live and too rare to die.
—Hunter S. Thompson
from Fear And Loathing In Las Vegas
It's not uncommon to have full disclosure in commercial contracts.
What difference does it make if he knows how much you are making? Figure out what you need to make, and present him with the numbers. Don't move on your price, if he accepts it, good. If not, what did you lose?
Speak the truth, or make your peace some other way.
Depends. If he's getting competitive bids, then I'd say further breakdowns shouldn't be necessary. If he's just handing you the job, he may be interested in seeing exactly where the money is going and what areas are capable of scope reduction; which areas are labor intensive vs. material intensive. It wouldn't be an unreasonable request in that case.
If you are being given the job, protesting too much may make him think you actually have something to hide.
I'm fond of the question, "Suppose I provide you with that information, how will you use it?" Pose the question and don't say a word until they answer it.
OTH, we often break out debris removal/dumpster because in NYC these can be significant costs that clients are unaware of.
The awful thing is that beauty is mysterious as well as terrible. God and the devil are fighting there, and the battlefield is the heart of man.
- Fyodor Dostoyevski
I see you're from NY. This yrs Fest is on Long Island. Check it out in the Fest Folder.A great place for Information, Comraderie, and a sucker punch.
Remodeling Contractor just outside the Glass City.
Quittin' Time
Holy,
I've found over the years that customers who want to know the break down of every part of a job, tend to try to save money by eliminating parts that they think they can do themselves or have there own employees do.
Taken as a whole a job has ups and downs.Some parts go faster then expected some slower. If some of the faster parts are taken away there is no cushion for the slower parts.
What I'm trying to say is, I don't break down my pricing any more.
Vince Carbone
He's looking to start negotiating on price. Don't give him any information that will allow him to do that!
Okay, I was in a lame mood last entry, I would like to say this. I think that disclosing your breakdown on how you arrived at your final price is up to you but it can work to your advantage. The only way for a person to compare apples to apples is to have the specifics. It should be clear that the price is non-negotiable. I don't think you would sit down in his restaurant and after enjoying the meal decided the check was too high and offer him say 2/3 rds of the amount. business is business. Our wonderful world of capitalism affords him the opportunity to get many prices and spend what he wants.
I gave the client the contract yesterday and did not disclose my materials and labor costs. I told him that amount was between me and the IRS. That seemed to suit him.
I would explain my costs to him but some parts I don't think he would get. I get it because I have been doing this a long time and have learned to charge for intangibles.
I put a lot of PITA factor in the job. It was downtown with huge parking hassles, we could only work four hours a day due to their hours, all of the major pieces had to be pre-built off site and assembled in one twelve hour stretch, we HAVE to keep the dust down, etc...
My cost to the client in no way reflected the fact that he is a billionaire. The cost of the job is the cost of the job.
I think the client must be used to the soak the rich surcharge. That is probably the reason for his requset. I can't overcharge him just because he has a few billion dollars in the bank. I want more work out of him in the future. He is a very highly regarded man in our community literally giving away millions to help people in need.Constructing in metric...
every inch of the way.
Ask the client "If I come in your restraunt and order a steak, will you give me a break down of what the costs & labor to prepare that meal is?" I don't think so. But I am quite sure that after you get done eating that steak dinner the both of you will be satified with the deal, the same when as you working for him.
You both are businessman and both of your businesses are basised on satified customers. I am not in the construction trades, I am a portrait photog., 31 years in business. What I pay for a 8x10 @ the color lab is none of there business. It's what I do with that 8x10 before it goes to the lab that deturmins my selling price.
Sorry for rambling, just had a customer tell me I charge to much, "I know what you pay at the lab for that print!!!"
I'd simply tell him no
Journal of Light Construction (jlconline.com) has a 2nd party vendor sell their publications - I bought (loaned out & can't find) a contracts guidance book. It provided pretty good direction on what to include in a written contract.
I would go down to a builder form store, if you have such an animal in your town, and get a Standard AIA Construction Contract and General Conditions. Or use an ACG form. These are very contractor friendly, the latter being more contractor friendly.
Bottom Line, He supplies the design; He warrants the plans; You build per plans and specs. He pays you your price.
I think he wants more detail to use the bid to shop the price around. This guy didn't become rich by paying what everyone says is the price the first time around. It is none of his business how you came up with the price.
I had the same issue the other day having a computer system built, and I wanted to see what the parts were, what labor was, and what the "profit" was. I didn't really come out and ask those questions, but thats what I wanted.
And my computer guy passed on giving me that detail--and I didn't care.
Regards,
Scooter
"I may be drunk, but you're crazy, and I'll be sober tomorrow." WC Fields, "Its a Gift" 1934