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Years ago when still in Michigan I created 17 of what I called CSCS, Conformance Specification Control Sheets, one for each of the trades we were involved with. They were give to subs and used by ourselves as standards for which to meet, and as training aids for new employees.
Either here or on the RO site we discussed the absence of really good standards existing in our industry. We all know the booklet NAHB created a few years ago is a joke. Anyway, while at the Remodelers Show in Detroit and NAHB’s Bookstore, I happened to glance at a book entitled “The Scopes of Work Program” which also included a CD. It supposedly was similar to what I described above. Tonight I went out for coffee and took it to read. It’s another joke, allowing for example a 1/4″ allowance out of level in countertops from front to rear, concrete that contain up to 1/4″ cracks are acceptable as is trim with a 1/8″ gap.
But, it can still be used for it’s set up and terminology and modified for one’s own standard “specs”. I’ve decided to experiment. I’ll modify those trade pages that we normally perform and use them while on initial sales calls as part of a marketing plan. In addition, to really test their hard copy use as marketing and PR items, I’ll increase each sales price by exactly 10% and see if they, in the clients “perspective”, prove to be of value justifying my increased prices. I think this is one of the areas many clients are anxious about – what to expect.
Hey, we gotta keep trying different “tools” that will allow us to increase our prices a little at a time right? Later I’ll post the results of my experiment.
Replies
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Sonny,
You lost me when you said you would charge an extra 10%. What is this for? What is this to prove? Please clarify. Thanks,
Barry
*Barry, it's like the expensive car manufacturers ads and marketing. They show what their products have over and above their less expensive competitors. Obvious is the difference in a restaurant between a hamburger and steak. We know the difference between an Olds. and a Cadillac. The differences is "tangible" and widely known. Something everyone can actually see. What we do is "promise" to ............................ , since "service is really only a promise. But workmanship, or rather "perceptions" of workmanship is not a tangible aspect. The public has a pretty good idea of what they percieve to be good workmanship and when they see it they generally know if it's good or not. Those differences include the important aspects of content protection, clean up and its frequency, etc. But, they're generally apprehensive about "if" they will get what they "want". I want to remove the "promise" from being an in-tangible to a tangible.Hard copy, like price books, is a tangible real life item they can touch, feel and read, and as such, gives "crdebility" and "validity" to their assumption of what they are paying for and will receive.So, based upon proved marketing "techniques" is why I call this an experiment. To see if these (CSCS) will result in the same "responses" in our selling system, as they do in other industry "marketing "systems." In the end, it's a psychological experiment of transferring another industry market system to our own. I think it will work because the public is tired of contractors flapping their mouths (even the word 'quality' is overused), and the CSCS will, as I stated, provide descriptions on paper for comparison. If why compare my CSCS to my competitors, what will they be comparing them to: "Verbal" CSCS by competitors, since no one else uses them. How would you compare a "document" in you hand to a verbal statement, even if the verbal statement comes form a contractor who was referred to the client. Courts, psychologists and marketers all know what can be documented carries much more "validity" than mere verbal statements. I contend that we should all be increasing our net profits to well over 15% or 20% - we've discussed this before. If this experiment proves to be as I think, it will become standard fare for my own sales and marketing "system."In effect when we're higher than other contractors, in effect, what clients say to us is:"Sonny, justify your price." Use of CSCS may just do it, and even eliminate their question from being verbalized. "Honey, I now Sonny's price is higher than Joe's, but look what Sonny will do as far as quality of workmanship preparation, clean up, etc. I think he's worth the difference."The key: "I think he's worth the difference."Isn't that what we all want when making a purchase? Just to have the difference justified "in our own minds." We each have a box of "tools" we use when justifying our prices. Probably allof us have been awarded jobs even though we were higher than a competitor. The CSCS is just another "tool" to add to our box. In close cases, it just maybe the one tool to tip the scale to our advantage. The nice thing about them is that once a database of them is on the computer, all we have to do is print out each appropriate CSCS to bring with to the 1st or 2nd meeting, or to include with the SCA. WOW! Now that would be impressive.
*Specs with tolerances...And warranties with proceedures to follow...Definitely are worth while in a production enviroment. Not as needed in the one on one handshake world of many here...I am in between..near the stream,ajI would like to buy that CD...Where and how much?
*Sonny, your experiment may have merit in justifing the value of some of the work you can perform. Your client may however, dismiss the value you assign to your services or hold even higher standards than your own. Products of all different degrees of quality are sold every day and rationalized by the commitments the consumer is willing to make by the sacrifes to their budget or other more emotional factors. If nothing else, the written standards should promote a basis of understanding that should reduce any conflicts. As to whether the mere writing down of the standards makes Sonny Lykos worth more than his unwritten values, remains to be seen. You could just as easily raise your prices 10% without the written standards. Is it the standards themselves or your commitment to them that is really of value here?
*Peter, everything you say is correct. I'm expensive already. But, as I stated originally and in my last post, I just want to see the responses to this experiment. If I think I'm a good sales person and the CSCS ends up allowing me to get a fe bucks more, so be it. But, to those who are not naturally sales people, the if the experiment proves valuable, then others have the option to use them as a sales tool.We all know the what ifs, the I should haves and could haves. Just just takes one of those to the reality stage and our of the philosophical or discussion scenario. Absolutely nothing lost but a heck of a lot learned.About your last question, the comittment only has meaning if the standards of which I'm to commit to can be "visualized" by the client. Reread my post. CSCS make those "visualizations" a "tangible" reality. As I mentioned months ago, the CSCS was something I had hoped would be created, used and marketed by TAC memebers - a major point as a committment to new high standards. I'm just going it alone.AJ, I don't know which CD you asked about.
*You said the spec book came with a CD...Near the stream hoping to save typing time,aj
*Aj, go to http://www.bookstore.com, NAHB's book store, and order it from them. Retail is $75, and members of NAHB get it for $60.Craftsman Books, ISBN#0-86718-514-7, Linda Hass Davenport is the author.There is also another book.from McGraw-Hill intitled "Construction Specifications Portable Handbook" I have, by Fred A. Stitt, ISBN#0-07-134103-X. Retail is $50 and available from http://www.books.mcgraw-hill.com. this book is muc more difinitive, EG. specifying types of drywall fasteners and lengths andd much more.They use the CSI format of which I'm a member. Reading the back of this book that state the sources of their info, eg., listed under the heading "03000 Concrete and Portland Cement" is ACI, APA, CRSI, NPCA, PCA (Tilt-Up Concrete Association) The book I have is about 5x7x an inch think, and in paperback.I don't know if this will show up as a link - what a link. If not, at the site type in the title in their seach section. Took me awhile to find it.http://shop.mcgraw-hill.com/scripts/McGraw.dll/?1/NodED7jlLBb9Vv3tmLjOfGF1008y4xF8Q2jJovS3Lg000I210000W-----3m50oGeJ6EU4WZz0BztHI6Ev3O1oYBF28M800mY208h80f6p_9JqDKjC53S06vS5BagPhlDjKm34Qt_1YOm104B60Wln00ITUhWJ39Nv41cAfxmZriKW3pHaeRdQ9M40Z03CC8l0n_EClW20072CWG00349hG00m240dQdwri8sfXHcC30000Ghl00aEPtt90Ai3dFWbFCp70y1ShloZXZ9WOG3Z8Y540GO90CBjXfagSfGaJsDL0RUp0HX33M002W15Q40000
*Sonny you know I share some of your TAC vision. If your current experiment is designed to get some insight towards that end, I applaud your efforts. As you work through this process, I would suggest you look for some things. You will, of course, need to define what Sonny Lykos' standards are, first. As you develop these, ask yourself how they will be embraced by two groups: your clients and other contractors. I think that your clients might have an easier time of it since their standards are so nebulus to begin with. The fact that you have a written standard might go a long way in reinforcing your presentation to them. The contractor group might be another story. Most of this group already has standards, if only in their minds. Your standards therefore, can be viewed in three manners: as more than, less than, or equal to their own. If it is viewed as "more than" it might come across as unattainable or exclusionary, if "less than" it might be viewed with contempt. As a proponent of TAC, I'm not so interested if a standard of 1/8" is set for a crack in concrete or 3/16". I'm more concerned that each individual member develop their "personal" standards and are commited to upholding those standards. Each member might need to go through exactly what you are doing; finding and creating standards that are aligned with their personal beliefs and commitments. This is the baseline that each of us individually tries to better ourselves from. If you try to create a universal document that can be applied to all contractors, it could be viewed in the same manner as NAHB's Performance Guidelines. A political document that serves the needs of a select percentage of it's intended audience.Give the TAC members a process instead. A process by which they can reflect upon and create their own personal standards. Give them a standard "structure" only. Let them fill in the blanks as to what parameters defines those standards. They are more likely to be committed to something of their own choosing and activily involved in the constant refinement of those standards. And as competitors in the same market, the standards will adjust themselves to the value assigned them by our clients. We don't all have a universal client. Is a universal standard appropriate then?
*I try to read all these threads, but I know I've missed some.Who verifies these standards as being met? And if not, they must be fixed?
*Peter, my standards will be just that - my standards. To answer bobl's question, the final verification will be done by the client, who's satisfaction for which they are made to begin with. As to TAC, if it becomes a reality, any standards must be created as a minimum level - a high miminum level. Therefore, if for example, Jerry Hayes opts to use bisquits at all trim joints, is his option. Like a paint job, or the pressing of a pair of pants, - "acceptable" is in the eye of the beholder, but I think it's prudent to set high standards that are a minimum as opposed to high standards being an option. If someone opts to modify his/her own standards as much higher for several of the many, many applications done in a typical project, so be it.My concern is that current minimum standards as evidenced by the NAHB booklet are exceptionally too low. Furthermore, as we all know, the buying public has no "knowledgeable" source" for even those standards.They need to be created, agreed to, adherred to, and marketed. Doing so will bring some sense of "comparability" and realistic standardization to our industry. Our industry needs to change and any changes should be steps forward, not backward. I just got back from a sales call. Added that extra 10%, used an appropirate CSCS for the job, and still got the job. Also called a client with a price whereas I included another change, marking up the material 50% instead of my standard 25%. Remember I use the Proof system where all overhead goes onto my labor charge. Got that job also. I did it because over this week end I got to thinking about the prices being charged and net profits being made in other industries - especilly the 400% markup on "parts" used by dealerships.No more thinking in a tradesman mentality - working for wages and an insulting percentage of net profit for the liabilities we assume and experience and expertise we utilize. Look, everything we do is custom, even general repairs. We all know what it costs to have a car made "custom"; what it costs to have a dress or suit made "custom." Meanwhile, each of us does "custom" work but at mass production prices. No more for meYou know, look at our industry as a "market" or kids. Notice they're no longer getting into the trades any where near the large quantities as 10 or 20 years ago. Guess why? The "return" on their side of the "balance" equation is not there - no money. What I do find curious is the resistance from others to be paid properly for what they are really worth. For too many of us, and for too long, and compared to other industries, we have been diminishing our tremendous value to the buying public. It's not Xmas time, but I say: "Bah. Humbugh!"
*A couple of points.I believe the client will be expecting you to insure the standards are met, otherwise you could expect that the client will be on-site doing inspections as you work, or hiring somwone else to check. Perhaps getting in the way. Most people wouldn't know how to look anyway. And do they understand they are responsuble for you meeting your standards??But if they're your standards then YOU are building to them even if the work is done by a sub. The clents contract is with you, not your subs. You're also leaving youself open to claims against you for misrepresentation if something is found later-on that say are "in-code" but not up to your "standards", especially the "hidden ones".I agree with your statemnts about getting paid what your worth, professionalism, etc. How you present price data to clients can have an effect on them. If all they see is a fixed price bottem line, then they don't know how you are pricing. If they see individual breakouts, then it could cause some concern. If the customer sees a window at HD for $100 and you're charging $150 w/o installation? A lot of this depends on how you keep your books, which only you know. And how you keep your books(what's in overhead, direct charge, etc) depends on how you price things. If the customer only sees the bottem number and is satisfied, then they are satisfied, and how you arrived there is your business process.The more knowledgable the customer becomes (or thinks they are) the more "explaning" will be needed. Generally today the customer either will go to someone via a reference, and feel comforatable with the price, or go the "three bid" route and only have those three bids to get a feel for what a price will be, which only gives you a comparison of those particular three, and not what another three might price.
*Bobl, I only do fixed price contracts.My CSCS are not only for myself and my employee, but also what is expected from my subs. Months ago during a discussion I mentioned an incident wit my son. He had fired 3 different tile subs form a large high end profect. I asked him what he told the subs he expected as far as the workmanship. He replied "Perfect". I went on to say, that word , as is many others, is ambigous. Ten people will interpret "perfect" or "flawless" in 10 different ways. I then created a CSCS for ceramic installations. As Gerber states in The E-Myth, the purpose of written instructions, which CSCS are, is to eliminate Discretion" from the the parties involved. He says if it isn't written down, it doesn't exist. I agree. CSCS provide hard copy of specifics, (why they're called "specifications") so no, or at the least, absolutely minimum, abiguity exists. Isn't individual "discretion" or "intrepetration" what causes 99% of al law suits and project problems? Don't model numbers do the same by referring to the particular set of specs of a product?Anyway, I'm not trying to "sell" my idea to anyone. I used it very successfully in Michigan and intend to begin using them here as well. I simply wanted to offer this idea to others to consider. I'm sure there are those who may feel that CSCS and their use is a terrible idea. It's an individual decision whether or not to investigate this concept. Again, I'm an innovator. Ideas flow from me automatically. Any value they have or don't is up to the reader.
*Sonny, I've seen you post a lot of good stuff on business ideas etc Like most things, not knowing exactly what someone does in their work process, assumptions are made etc, which leads to some of the things that are said. I sometimes get confused as to what I saw here or over at the other site. Good LuckBobL
*Sonny, in Walt Stoeppelwerth's 1981 book Professional Cost Estimating he reccomends a mark-up for handyman businesses (small jobs between $3,000 - $4,000) of a minimum 100% for a gross profit of 50%. He also reccomends a mark-up closer to 250% - 300% is more realistic because these small jobs are more overhead intensive. If I remember correctly the nature of the work you currently perform falls in this realm. Since you operate under the proof system the mark-ups might be calculated differently in your case. Still, even at your current 50% mark-up you may not be realizing your true value. Stoeppelwerth also reccomends flat fees for items of work performed so that the customer can't gripe about hourly costs and service people get paid on a piece work basis.
*Peter, your right. Walts current web site says that "handyman" work should be charged at a minimum rate of $65 per hour, and for the hours you mentioned, but he then goes on to suggest that the handymen should be subs and paid on a commission basis. They make the sales calls, obtain the materials and collect the monies when done - no receivables, except for credit card purchases.http://www.hometechonline.com/handyman/My current rates are between $72 and $125 depending on the "expertise" needed to accomplish the job. And my rates are not published. They are what I use as a basis for quoting total installed prices. The variable rate is because they are determined upon the "expertise" needed to perform the repair, which is what I've been trying to get across for post after post - that's where the value is - expertise - and only seconded by the time involved.If you remember, when we discussed this issue back on the RO site I was even subtlely accused of being a capitalist, as though profit was a dirty word. If the desire to cease being a schmuck means I'm a capitalist, guess I'm a capitalist, but a capitalist who's going to get full value for his time and expertise.
*Peter et all, I think the excerpt below from "The Strategic and Tactics of Marketing" book is self explanatory, especially the second paragraph."Marketing consists of four coequal elements - (1) the product, (2) its promotion, (3) it's distribution, and (4) its pricing. The first three elements - product, promotion, and distribution - are the firm's attempt to "create" value in the marketplace. The last element - pricing - differs essentially from the other three: It is the firm's attempt to "capture" some of that value in the profits it earns. If effective product development, promotion and distribution sow the seeds of business success, effective pricing is the harvest. Although effective pricing can never compensate for poor execution of the first three elements, ineffective pricing can surely prevent those efforts from resulting in financial success. Regrettably, that is a common occurrence.The difference between successful and unsuccessful pricers lies in how they approach the process. To achieve superior, sustainable profitability, pricing must become an integral part of strategy, not merely an after thought. Strategic pricers do not ask, "What pricing do we need to cover our costs and earn a profit?" Rather, they ask, "What costs can we afford to incur, given the prices achievable in the market, and still earn a profit?" Strategic pricers do not ask, "What price is this customer willing to pay?", but "What is our product worth to this customer and how can we better communicate that value, thus justifying the price?" And strategic pricers never ask, "What prices do we need to meet our sales and market share objectives?" Instead, they ask, "What level of sales or market share can we most profitably achieve?"So what I do is to determine the profit I desire, then determine if, where and how I can communicate the "value" of my products (services), at the desired prices, to a predetermined, yet changeable market, in order to achieve my goal - my desired profits. It is exactly why more and more companies are "firing" their "under producing customers", "producing" being defined as profits. Seems a no brainer to me. When I started my business after selling to my sons, I fired the condo associations who only bought via price. With the boys, we serviced 121 associations. I started with about 90, the "producing" clients. Since then I've acquired an additonal two property management companies as clients and their own associations, so I'm slowing approaching about 115 associatons now - all "producing". I mentioned the word "changeable" market, because change it does. One must continually be aware of what the priorities are of one's clients. Priorities change for many people as their situations change.
*Sonny, the point I was trying to make is that varying business structures have fundamental differences. Home builders typically mark-up 15-20%, remodelers 50-67%, and handymen 250-300%. Even though a business owner might perform the same types of work in all three businesses, and even though he might achieve the same sales volume, the operating costs associated with the sister structures are vastly different. Unless one understood the full implications of the work he performed, he might believe he was doing well. Comments such as $125 per hour or 300% mark-up are meaningless unless your audience understands the costs as well. Something that they may very well not understand if they are only familar with their particular business structure.Bottom line is that you charge more because it costs more. As all of us realize exactly what it "is" costing us in physical and metaphysical terms, he adjusts his prices accordingly.
*Peter, you stated: "Comments such as $125 per hour or 300% mark-up are meaningless unless your audienceunderstands the costs as well. Something that they may very well not understand if they are onlyfamiliar with their particular business structure. Bottom line is that you charge more because it costs more. As all of us realize exactly what it "is"costing us in physical and metaphysical terms, he adjusts his prices accordingly." The costs are not important in the context of this discussion. My point was to get paid, no, "highly"paid, for one's time and expertise, regardless of construction type. The major constant of alltypes is time and expertise. There in lies the value, well, some PR too. One does not adjustprices "only" because of costs. Some (as myself) adjust prices because of the realization of havingmaintained (for years) the bad judgment of virtually "giving" my "wares" away. There is however,one huge stumbling block. To get more, one must "sell" more - actually, sell "better." Most smallcontractors are tradesmen, not businessmen, and most of them admit they hate to sell. It's ironicthat "selling", what they hate, or at least dislike, is the key to their success and sanity. I'm lucky, in that I love to sell. I dislike learning technical stuff (typical old guy), like reworking digitizedphotos. However being an advocate of a quote that I've posted before: "Successful people formthe habit of doing the things failures don't like to do.", I forced myself to do something new today -another experiment. From talking to our subs I've found that one of their frustrations is when giving bids to GCs, notknowing if or when they'll know if they got the job, and if they get it, they know the next questionfrom the GC is what's your lead time. Last week I set up an appt. for yesterday morning from a repeat client who wanted to remodel her5 x 9 condo master bath. Brought some CSCS I already made up. Cultured marble slabs on theshower walls (converted from a tub/shower), new vanity, toilet, etc. I had an idea, so I called myplumber, electrician and marble subs and asked if they were Internet connected. Two were, attheir offices, and one, only at home. I then asked if I emailed them digitized photos (touchedthem up before emailing), a drawing of the bath with locations of recepts. switches and otherpertinent info, when they could get back to me with a price. I went on to say, I was going to returnto her condo tomorrow (meaning today), and wanted to finalize the sale. They all said tomorrowmorning via email. I called the client and set up a return visit for 3 PM today. Yesterday when I took my laptop, logged on the Internet and had her pick out a faucet & toiletfrom a factory's web site, a vanity cabinet, shower doors, and some accessories. Sketched thebathroom on the laptop and emailed all the info to the guys. Today, I took the floor tile sampleswith me since I knew generally what she wanted. At about 3:15 PM I logged on, got my emailand all three prices were waiting for me. About a half hour later, I walked out with a deposit. Onthe way home I called the 3 subs and told them to put her name down on their schedule. I couldhave waited and emailed them, but I was excited about "our" success as a "team" and wantedthem to know the result of our collaboration. All 3 said that they would like to do this more - quotesmade in 2 hours and a few hours later another job nailed down, and scheduled. From theirperspective, the several days of if and when was eliminated. I don't know if it was my salesmanship, the CSCS or what, but I got that extra 10% and the sale. "Boy!" she said. "I didn't think this would take such little time." I said: "When the client has a prettygood idea of what they want, and the contractor has a lot of expertise (see the plug), just addtechnology and Bingo. As a team, I'd say we work great together. Now let's celebrate withanother cup of coffee?" So you see, my price was only indirectly related to my costs since the excess percent was way over those costs. I could have charged her about 15% less and still make a respectful net profit, but respectful by who's perspective? Ahhhh. The million dollar question, eh? Who wants more (go out and "sell" it), and who will take less (as in what ever they will "give" you)?
*So what you're saying is that your 10% extra has nothing to do with the laptop comptuer you bought, the digital camera, printer and assorted pheripherals, the CAD software, or Adobe Photoshop. There was no learning curve investment, to learn the new programs (read hours or days of time). No monies budgeted for equipment upgrades and repairs. I don't argue that you deserve to get extra monies for the work you perform, but it's because of all the additional "stuff" you bring to the table. That "stuff" has value (read costs) associated with it that needs to be compensated for. Now if it were a question such as the post of "Another 12% just for the heck of it" where no changes occurred to warrant the increase, then I would concede that your time may have been under valued to begin with. As we improve ourselves and the "process", you're damn right we should be charging more.
*Peter, as you know I've suggested in past forums that each of us should include overhead line items for "Future Capital Expenditures" (FCE), as do Fortune 500 companies. Ours are no different, just a miniscule dollar amount - but the expenses still exist. The laptop and camera purchases came from my FCE reserve.Software is also a line item.Left, is the time to learn the software use. This time - read money - is budgeted under the line item that states: "Educational expenses", no different from if I hired a consultant or signed up for an evening course - all legitimate educational and/or training expenses. I ask, who else is doing this? This is what I mean by our peers reallly knowing their "numbers" - the realities of the costs of running any business.Perhaps increasing a price 12% just for the heck of it in itself, was an experiment to test the market?I agree with your last sentence since it goes along with my contention that the "stuff" we bring to the table has a tremendous value to the consumer. Our porblem is that too few of us realize that, and if they do, don't have the cajoles to demand true value ($$$) for services rendered. Hell, look at how many yeers it took this dummy to learn that and develop the guts to finally say to myself: Enough! A couple of days ago I w requested to solve a problem of 36 condo stairways with very slippery treads They agreed to pay me for a "consulting fee" since they preferred not to use paint or stain with granules. After kicking around different solutions (scarifying, sanded vinyl strips and acid etching were also out), I decided to suggest Abatron 8006-3 clear epoxy with Shark's Skin granules. A 3-4 " wide strip applied via brush thru an aluminum template after cleaning the surfaces with TSP and a mile acid wash. The association paid for that "stuff" I brought to the table. Two years ago, I would have spent at least 4 hours doing the same for zip. "Stuff" has value! That "stuff" was acquired from trade shows, reading trade magazines, researching the Internet, and other sources - all time, and time that subsequently is transferred into "stuff." Concerning the definition of the word "cost", perhaps a separate discusson should be considered to determine the true definition of what is contained in "cost". Experience and the subsequent knowledge (expertise) as a result of our experience(s) costs a tremendous amount of money. We've all screwed up in various aspects of business operations. What did those errors cost us? Do they ever stop being played out? So learning is a continual process. Place a dollar figure on this "type" of "cost" of learning. Those costs are not indicative to contractors only. They are an inherent cost to architects, designers, virtually anyone who provides a service or produces anything, and at any location of that chain.On the JLC forum a person recently posted his current price of $25 per hour for doing small jobs and inquired if that was approporiate in his location of Southern New Jersey. Knowing me, you know it took a lot of self constraint on my part to ask him if he has become insane. Think he knows his "numbers?"As you stated: You're damn right we should be getting more!
*Reality CheckThis is not ment to disagree with all the various things that have been said. But basicly a request to make sure you know your numbers and how those play in the market place.Worth is not always what you perceive it to be, but can be what the market will bear (or over bear). for example, what happen to the cost of construction and materials around Holmstead Fl a few years ago after the hurricane? If memory serves, fly-by-nites and accusations of gouging. When recession hits what you can get for for expertise goes down, as a lot of you know.I do believe that everyone does not know what their real costs are, and they should determine what they are. One of the "processes" being used in some big companies is called "Value Chain" Essentially it is a look at those costs you can control and then control/reduce them where you can. (read overhead).b BUT YOU HAVE TO KNOW WHAT THEY ARE. There are a number of professions where you are expected to stay on top of the information on your own time. Where you are considered FLSA Exempt, allowed to volenteer as much time as you want. How many hours week/month/year do you PAY your employees to attend shows/read etc?Repeat- This was only ment for thought and a reality check. Not as a disagreement.
*Bob, we are not in disgreement - we are in 100% agreement. Furthermore, your points are very important.1. Only the market determine the value of anything, regardles of the seller's value intrepretation.2. Every company must know it's total and correct numbers regardless if they are direct or indirect.I might add one thing you may or may not agree. It is the responsibility of the company, be it Joe's Handyman Service or Sony Corp., to create a marketing system to disseminate to the public what they (the company) perceives their values to be. By doing that they attempt to "influrence" their target's market "perception" of the value of their services/products. In reality, it's really done by utilizing the company's marketing, advertising and PR "systems", and usually is also influenced (I refuse to use "impact") by how the company handles consumer complaints, delivery (the process), ease of purchase, availablitiy and other less important aspects of the services/products, e.g., packaging. BTY, each of the above should become separate discussions since they have a large affect on any perveived value. Remember, what we're trying to do here is to maximize to it's fullest potential, virtually every aspect that contributes to, or detracts from, the purchase of our clients as they "perceive" it to have extra value over our industry "norm" - read $$$$$.Hey, we should have entitled this thread "Marketing", which is really what we're talking about, and it being affected by costs, and affecting costs. Let me take this opportunity to appologize to the readers here who consider my extra long, and frequent posts, booring. I realize that not everyone has the same interests and/or passions.
*Bobl, along the same lines of our current discussion about "value" - "our" value of ourselves. About a week ago, I acted as a sub for a plumbing contractor. He recently took over his Dad's business which has two showrooms in Naples. He has a service dept., acts as a sub for other contractors, sells bath remodels, and sells retail. Anyway, during our meeting at the clients condo, I told him about some of the issues discussed here, and I explained to him about "The Process" and my conception of SCAs. I faxed him a copy of The Process. I just got back from a meeting tonight of our recently created Remodelers Council - he was my guest - and told me that a couple of days ago he got paid for his first SCA fee. Imagine that. After only a very few days of learning about SCAs and The Process.Value? Whose, where, when and why? Like mama use to say: "Where there's a will, where's a way!"Salesmanship! The primary talent for success, and in many industries including ours, the only talent needed. The business of selling is a business of itself. Everyone needs to accept that and act upon that fact.
*Sonny,Keep on posting. If your "soap box" is taken, I'll get you a new one. Hang in their my friend.Jim Scales
*Sonny, We are in agreement.BobL
*Sonny, we all have made the same mistakes and come to the same realizations, don't be so hard on yourself.I don't know if I'd call it strictly a matter of salesmanship, however. You had been a retail salesman (for Polk Bros.) and have been selling remodeling for years on top of that, yet you still seem to discover additional services you could be charging for. Salesmanship is the art of asking for a decision, but you still need to know the questions you should be asking. Like your plumber friend who had learned about SCA's. He was doing fine until he realized he could be charging for this service. Now he has discovered the value of his estimating expertise and can communicate that to his clients.There is no one source, that I know of, that can walk a contractor (old or newbie) through the "process" of construction and show him the services he typically performs, the value of those services, and how to ask for their compensation. We all learn them in dribbles and drabs...trial and error. Sounds like one hell of an opportunity for a TAC organization?
*Thanks, Jim and Bob.Peter, I'm not hard on myself, just acknowledging a major past wrong judgement that "diminished" my business and life for over 25 years. In fact, the last several months I've gained additional respect for myself and have been having a ball.Yesterday I guy called me to install a replacement door he got from Home Depot. His was a Stanley as is his new one, which was special ordered. The old one rusted. He paid $112 and was told by HD that it was galvanized. I notified him that HD installs doors, and he replied "Well, I figured a handyman would be cheaper." Imagine that - he wanted to pay less than $45 per hour. I replied, my rates were about double what HD charged. Than I dropped the bomb that his new door was "not" galvanized, and furthermore, was only about 22 or 24 gauge non-galvanized metal, and with about the cheapest primer used - just good enough t allow Stanley to advertise "Pre-primed." I than asked how he intended to treat the edge skins where they wrap into the wood edges, treat the top and bottom edges and address our area's problem of interior door cavity condensation.. His reply was "What the.... Ugh.......But........, What do you do and what stuff do you use." The magic word "stuff" we talked about. I said, he really didn't want to know since he ony wanted to "pay" for a "handyman", and gave him the name and # of one I knew.He started again with "But.......", when I cut him off, and suggested he could hire me as a consultant and I'd provide him with detailed materials to use, supplier and proper applications. "Well. Thanks for the that guys #". In other words. Hire me at my prices or hire me to glean my expertise. My cards do not contain a 1-800 # for free expertise of Home Improvement How Tos. Arrogance, or self confidence instead? Again, only the market will determine. However, I'll never go back.As for TAC, I talked to a mutual friend on the phone a few days ago. Apparently he has an opportunity that's developed where as TAC might become reality, or at least get a lot of concept exposure. I told him I'd create a 2-3 page letter explaining it's concept, sort of in The Process format maybe, but geared to contractors and others in our industry. What ever happens, happens. It's no longer high on my priority list.
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Years ago when still in Michigan I created 17 of what I called CSCS, Conformance Specification Control Sheets, one for each of the trades we were involved with. They were give to subs and used by ourselves as standards for which to meet, and as training aids for new employees.
Either here or on the RO site we discussed the absence of really good standards existing in our industry. We all know the booklet NAHB created a few years ago is a joke. Anyway, while at the Remodelers Show in Detroit and NAHB's Bookstore, I happened to glance at a book entitled "The Scopes of Work Program" which also included a CD. It supposedly was similar to what I described above. Tonight I went out for coffee and took it to read. It's another joke, allowing for example a 1/4" allowance out of level in countertops from front to rear, concrete that contain up to 1/4" cracks are acceptable as is trim with a 1/8" gap.
But, it can still be used for it's set up and terminology and modified for one's own standard "specs". I've decided to experiment. I'll modify those trade pages that we normally perform and use them while on initial sales calls as part of a marketing plan. In addition, to really test their hard copy use as marketing and PR items, I'll increase each sales price by exactly 10% and see if they, in the clients "perspective", prove to be of value justifying my increased prices. I think this is one of the areas many clients are anxious about - what to expect.
Hey, we gotta keep trying different "tools" that will allow us to increase our prices a little at a time right? Later I'll post the results of my experiment.