Not being very profitable
I been 3yrs full time in the business. I’m still struggling with finding out how to be profitable. I keep having jobs where after I determine my net profit it seems like I’m working for $2.50/hr to $10/hr. I occasionally get the job where I get what I WANT to get which is $60/hr. I”m just getting so frustrated because I’m still searching for the right formula, method, whatever, to ensure I’m charging the right amount of money.
Here is how I do my proposals. Customer A calls me up, wants 5 outlets installed in their garage and a 21 x 14 bonus room drywalled and finished. I go look at the job, spend about an hour. I then figure out my materials cost. Say $500 to keep it simple. Next I determine how long it’ll take to do the outlets. Say 3hrs. Then to do the drywall hang and finish, say 25hrs. Total job time I estimate is 28 hrs at $60/hr. That comes to $1680 plus the $500 in matls making the job cost $2180. At this point I’ll be honest, I have a hard time adding anything else to the cost. Why? Because A) I need the work and am afraid if I’m too much higher I wont’ get the job, B) because I don’t know what is a good reasonble amount to charge I’m already at this point concerned I’m too high as it is and C)I don’t know how much more to add on even if I were to do so.
Let me elaborate each point:
On point A, this is all I do, it’s now my life, and I love doing what I do. So please don’t go out telling me to find another line of work, that I shouldn’t be doing this business if I don’t know how to make it profitable and all that other stuff. I have to make this business work. It is the only income I have and I must support myself and two boys on it. Therefore, I need work, and with the economy and fuel costs being as they are I’m even more worried about pricing myself too high.
On Point B, I”m concerned if I’m too high I’ll price myself out of the market. I usually go to Lowes and find out their costs and under charge them maybe $10 or $15 so that I get the work and not Lowes. Also with Lowes posting their prices if I charge $300 to install a vanity because I need to make that much but Lowes charges $200 then someone will say “that’s way to much, Lowes only charges $200, I’m not going to pay $300” and then I loose the job and wind up regretting the loss because I would’ve gladly worked for the $200 if I didn’t think I’d get it for what I wanted.
On point C, take drywall for example. I hear people around my area charge $10 a board to hang and $10 to finish. That’s $20/bd. Above 8′ it doubles to $40/bd. But when I look at how much time it takes me to do hand taping/finishing it seems like I make more like $.50/hr if that when you figure one trip to hang, one to tape and top coat, a second then a third coat and light sanding, 5 trips in all. With the price of fuel I feel like I’m earning virutally nothing and can’t figure out anyone is making money on it. Then I hear others charge by the hour to do DW hang/finish and others price it by the job as in “oh uh….gimme $600 for the job and I’ll do it” type of job pricing.
Continuing on Point C. I had a guy track me down at HD. Gave me blueprints, he owns a construction company and wanted me to bid plumbing the house. I bid it at $5500 for labor only using PEX This figure of $5500 I came to was an attempt to add on some decent profit and included an estimated $175 in fuel I’d use to get to/fro his job site. He went “whoa” on the phone when I told him. He said none of his guys charge him that much (this guy also thinks PEX is some “crazy” weird pipe that seems to only be used in PA and now where else. Sheesh). Said I was way high. I said that that’s what I wanted for the job. He said send it to him, he was getting others. I then did something stupid. I know, very stupid, but understand, I”m trying to keep food on the table and bills paid. I wrote the proposal for less than the $5500 hoping to have a real and reasonable chance of getting his work. I’m waiting to find out now. I also derived the $5500 by using Lowes prices. That is they want $200 to install a toilet. I used their price in figuring $400 to install two toilets per the plan. I figured why not use their price, theirs has overhead/profit in it already for them.
I realize I am still making mistakes. I’m just being transparent here and trying to learn and STOP making mistakes. I’m just trying to find the right way to make money. My businiess/truck insurance runs me $900/yr for $2M liability. I need to make about $2100/mo to pay bills and keep food on table. But I never have anything left. Fuel costs for 2006 were $4800, 2007 it was $5300 and I”m projecting $7400 for 2008 based on prior history. I pay for all of that out of my net profit.
The work I do is outstanding, better than most others I see out there. I take a lot of pride in what I do, I don’t advertise, it’s all word of mouth. Sometimes I wonder if word of mouth is more for my being cheap and getting a very well done job. This is my 3rd yr full time. The longer I go the more I realize I’ve got plenty more learning to do to become more profitable. I’m determined, I just need more advice.
You are self talking your price down. DON'T DO THAT!
It's bad enough when your contractor in the HD lot talks you down. Don't do it yourself.
First, you have to have confidence in your price. Give it like you are the baddest (in a good way) mutha on the block. If they don't use you they are missing out. Why is the HD contractor shopping? I'm not there but I'll give you three reasons...........one is not price. It's service. He says price. It's not. Service can be anything from showing up on time, getting out on time, having respect for other trades to having a nice clean truck in front of his job.
You have to figure that out yourself. And work it into your pitch. What do you do that other folks don't do?
Now onto Lowes pricing. One hint that you are in the wrong segment for customer base is they bring up the BB. If they bring up BB on your meeting............RUN! They are shoppers. I know it's hard. But if you get into the price shopper segment it is very hard to get out. The shoppers will share your number with each other. And beat on you. It's a sport.
You can do the same thing with the retail custumer as the contractor. And it is actually a bit easier. What do HO hear about contractors? Sell that you don't do that.
gotta run.be back later
Scrapr,That makes sense. I'm feeling more encouraged now, really. I've long wanted to ask about this BB pricing stuff. Glad I'm airing it out now and finding out that everyone else thinks it's a joke.If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
Bidding is selling yourself and not a product. The HO wants someone who they can trust to do a good job in a timely manner. Price generally comes after that. I don't get every job I bid, if I did I would have to re-think my pricing. Also I'm generally the most expensive bid they got on the jobs I do get. What they are willing to pay for is quality service. You are working on the most expensive thing they own, you should be getting more than the guy who works on their car.
Remember when you bid you also need to account for truck, tools, company profit, Ins & bond, vacation, retirement, etc.
That is they want $200 to install a toilet. I used their price in figuring $400 to install two toilets per the plan. I figured why not use their price, theirs has overhead/profit in it already for them
I can install a toilet in about 1/2 hour. Assuming it is on site wich it should be delivered with the finish plumbing package from the wholesaler. Im not sure why you would price it out like you were driving across town to install 1 toilet at a time? Your on site doing plumbing "finish" i think your pricing structure should be different. My plumber would probably charge me around 7-800$ a day to do finish on a simple 2 bath home w/ drop in sinks. 400$ for the install of 2 toilets is probably high.
Now from what i read in your post on everything else you CAN'T be afraid to add overhead and proffit to your bids. I never believed that i could do it, thought nobody would pay it. Thought everything i read on hear and in the books was for high end craftsmen doing 1 off imported wood stairs or something like that, they were the only ones who could get away with adding "proffit". Thank god i finally got over my fear of making money.
Im sure somebody else will chime in and give you articulate advice, just dont assume nobody will pay for it! And quit using lowes as your competion, find the things your good at and stick to them, learn your prices
Edited 5/12/2008 8:13 pm ET by PASSIN
Hmmmm, a lot to discuss there.
First let's talk about different types of work. New construction pays less. More guys doing it and it is quicker to get in and out of as you don't have furniture, dogs, cats and owners to worry about. So don't try to maximize profit on a new build. Bid it like you just want to make a living with a little profit.
Retail work (homeowners) are better money but with more BS to deal with. All the things above and the owner knows a lot less than you think they do. Most don't know what Lowes is charging. Some might but they don't think anymore of Lowe's installers than we do. So being the same or slightly higher is rarely an issue.
To raise your prices you need more demand. More demand takes some marketing. Signage on your truck, business cards, bandit sign in the yard, ad in a local paper etc. When you have enough demand (booked a month or two out) you can then bid a couple at a better rate and take a shot at making more money. When demand is down we all bid less to keep the doors open, when demand is up the smart ones look to make more money. Not gouging mind you, just more.
To make money in any business you have to make money on anything you touch. Material, sub labor, tool investment, etc. If you are not making money at doing this and only feeding yourself you don't own a business, you simply own your job. Nothing wrong with either but there is a difference. Even if all you do is mark up material 5% you still need that revenue.
If the client wants to provide the material I explain that while they think they are saving money the recieve no warranty for that, if there is a problem with the material (hole in the bath tub for instance) I go on the T&M clock while they track down the fix for it, or they pay me to handle it. Most relent.
I don't care what you think people will say to you if they are not really saying it then don't believe it. Give them a price you feel good about.
Last but not least, look at your level of competency. If you are going out to a site 5 times to finish a room you are not doing it as good as you could. We use hot mud on the first two coats. We can usually get 2 coats on in a day this way, next day finish with bucket mud and sand on day 3 (or 4 if you include hanging). Hope some of this helps. We do the same type of work in a small blue collar town and so far are doing ok. DanT
Well, actualy on jobs that are fairly far away I do use hot mud for the tape/hide coat then bucket mud for the remainder. I guess I could always do that. I do very limited advertising. I just put a flyer in a local shopper paper, 2000 copies. One call is all I got and I targeted it to older style developments with money and all I got was one call. Bummer. If I get that job it'll more than pay for the $150 it cost to print/deliver the flyers, though. So i'm hoping.If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
Willie, this is a good site, but I might suggest you go to JLC.com.
The guys over there are all pros and will be glad to help you.
the guys over there are all pros? not so! besides there are many pros here maybe we just choose not to market ourselves as such.
Mike all a person in this situation has to do is read all of Sonny Lykos posts over there and he will have a different outlook.
frammer.... jlc is not that helpfulMike Smith Rhode Island : Design / Build / Repair / Restore
Mike I have found some of the posters know what they are talking about, Sonny Lykos comes to mind as one!
sonny spent a couple years here before he moved to jlc... sonny.... ripMike Smith Rhode Island : Design / Build / Repair / Restore
Did not know that. Seemed like a nice guy, always willing to help!RIP!
Willies question and dilema will not be greated with the same kind of help over at JLC it has been here.
He'd probably be called some less than pleasant names and told to sell his tools and get a job at Lowes.
Sonny was the exception, not the rule.
That is my exact opinion of JLC. Always wondered what the reason to act so high and mighty around there was. Im deffinatly a "professional" but it dosent give me the right to feel better than others about my knowledge, sometimes makes me feel ashamed to read the responses they give Ive stopped going there.
I like it here and have learned so much I am proud to say. I never want to have to prove my worthiness to someones else's version of what I should be, just to share information.
I ran a business well enough to have fed my family and kept a roof over my head.
If my life changed tomorrow I still have satisifed customers that would feed me work next week.
But go ahead and ask a question over there that they see as beneath them.
I've seen some very good advice there, from guys like Sonny!
I've also seen some advice, legal and tax wise that I know has bad consquences because I got some of the same from my own accountant and paid dearly for taking it.
It's a shame too, cause without the attitude? There are some pretty smart guys there who could really offer alot.
Just persist and they calm down. Once they realize you are not going away, it's not so bad.
They do seem to feal that they know it all!
I advertise in the local papers. oddly enough I get more calls from previous customers who were reminded of me when they saw my ad than I do new customers. either way, having your name constantly show up every time someone opens the paper is key. you may not get calls right away or even for a long time, but when a person is looking for someone they see your ad and say "oh I've seen that guy in here for years. he must be good to still be advertising.Just a thought,Jason"it aint the work I mind,
It's the feeling of falling further behind."Bozini Latinihttp://www.ingrainedwoodworking.com
good post , dan...<<<<
To make money in any business you have to make money on anything you touch. Material, sub labor, tool investment, etc. If you are not making money at doing this and only feeding yourself you don't own a business, you simply own your job. Nothing wrong with either but there is a difference. Even if all you do is mark up material 5% you still need that revenue. >>>>>>>
everything gets marked up... everything
start with your rate... what do you pay yourself... how much does it cost to pay that employee ( you, in this case )
figure it out.... if the guy shows up , he comes with attached costs ... gas... ss... ins.... holidays... tools... anything directly related to the employee being available for work... this is labor burden
next you have business overhead.. both what you already have .... AND what you should have for your business to open the door... truck... office... computer.... paper...books... accountant... tax preparer... look at your schedule C for starters
walt stoeppleworth says the minimum is about 30% and as a business , it should make a profit... profit is what there is AFTER you pay all the employees ( including YOU ) and pay all the bills for direct costs....
and pay all the bills for overhead ...indirect costs
guess what... this is a lot of money... if your pricing doesn't cover ALL of this for your business, then just admit to yourself that you don't have a business.... you have an expensive hobby
if you are ready to price your work accordingly then you have to stop trying to be "competitive"... you are not competing against Lowes... or HD... or the guy down the street.... you are not competing with anyone
your business is selling your work at a profit..... and your costs are not the costs of Lowes... or HD... or the guy down the street
they are YOUR costs.... you have to know what they are... and you have to pricew for a profit....
your customers will only know a couple things.....they want the work done that YOU describe....... they want you to do it......... and they generally have no idea what anyone else would charge
if you run into a customer that insists on getting "competitive " bids... 1st.. be certain of this... there is NO SUCH THING
no one else is going to do the job the same way as you.... and your price has to be high enough so you can do the job to the quality and service level your reputation says you deliver
no one else... no one
so .. to reiterate... you have to know your rate... your costs... your profit level... then you have to sell the job for that price
if you are not ready to sell at that price.... make sure your wife gets a good job... cause she is going to be paying the bills... not youMike Smith Rhode Island : Design / Build / Repair / Restore
Boy you are all over the board tonight.
I haven't read your post, I will after my shower.
I would read this thread. I started it, but the good input came from others.
What was the outcome of the first example? How many hours did you work on installing the outlets? How much time in the drywall? Why did you have more hours than you projected? Why did you have less? Now you are doing a job cost analysis.
Figure your next estimate with the info gained from the previous ones. Experience.
No matter what happens you will have jobs where you miss something or something takes much longer than anticipated, all you can do is suck it up and complete the job with a positive attitude. Theres some more experience.
If you would have gladly(profitably) set the vanity for $200 why say $300. Like the above poster said have confidence in your price.
As far as your hourly rate, how did you determine that $60 was the rate you would charge?
I use a sheet to track hours and refer back to it to do similar jobs when estimating. I arrived at $60/hr because it was more than the hourly people here charge which is between $30 and $40/hr. I needed more so I went with $60/hr.If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
I'm going through the same school of hard knocks as you. I've been in business for a year now, the work is coming in, and I'm charging more then I did May of 2007. Here is how I, and probably many others look at it. Figure out what you need in your pocket an hour to live your life, pay your bills, feed the family, etc.. Then figure out what you need to pay overhead (bills for the business, ALL of them), your taxes, etc.. Then mark it all up, say 30 to 40%. That's your hourly you should charge. Mark up material, your doing the leg work to get it. Cushion jobs that your not sure how long it will take. We are all in this to make money and enjoy the freedom (what little we get) of being in business for ourselves , not sh*ts and giggles.
And if a customer or any one asks where you get your prices from asks them this,"Do you ask your mechanic or doctor to explain where every cent they charge goes to?"
Here is a couple of screen shots of National Estimator.
It will work out. You will find your way and you will learn to be profitable.
I'm not a contractor so i can't comment on your prices but as a homeowner who might be looking for a contractor, I rely A LOT on the internet to get information about a contractor. So i can't really give you much information on how to become more profitable but might be able to give you information on how to get more business, if that's lacking too.
Do you have a web site and email address ? Are you a member of the Better Business Bureau ?
A web site where i can get some information about the work that you do, some pictures of past jobs, contact information, a blurb about you and your staff, these are all things that will help me narrow my search to 2 or 3 contractors. People like to "get to know" the people they are hiring, and a web site is a great way to do this without taking up your time.
I also attach a lot of value to ratings on the BBB. I try to limit my choices to BBB members or at least to those who do not have a bad rating. I won't even consider a contractor with too many unresolved complaints. As was recently covered in another post, it's to your best interest to make sure the client doesn't have to contact the BBB. It can really make or break a business as far as I'm concerned.
As far as prcing goes... I had to redo my roof a few years ago (final cost around $5k). I initially received 3 estimates but because the highest bid was twice the lowest bid, i got one more. All of them were in good standing with the BBB but only one of them required a small deposit, accepted credit card payment (good for air miles), AND didn't require payment in full until a few weeks AFTER the job was done. They were the second higest bidder but the fact that they did not need to get paid until after the job was done indicated to me that they were financially secure and that they were confident enough of doing a good job and would eventually get paid. I was happy to pay them more on that basis. I realise that not every contractor can do this, especially for large jobs (easy to do for a roofer though), but a contractor that requires too much cash from the start would raise some red flags.
I appreciate your point as the consumer, and giving the flexibility to pay with a CC is a benny for you. Some contractors offer this option, although it will cost a 1-3% service charge for the merchant.
But from the other side, I don't want to finance your job. That is what banks are for. And I certainly don't want to have to wait for several weeks after my work is done to receive payment.
Two sides to the coin.
Well of course i would not expect "financing" from a contractor. The roofer was probably able to do this because he has known material costs and it's a 1-2 day job. I would not expect this from any other contractor.
The point i wanted to make is that I would pay higher for a contractor that wants regular payments throughout the duration of the job and then the majority of it at the end. The contractor that wants 50% at the start would probably not get my business even if his/her bid was lower. I'd be concerned about losing that 50% if the contractor turns out to be a hack and i have to boot him out.
I've had people ask if I take CC. I'd like to but at the same time it's tough waiting. One of my biggest problems is my proposals say I need paid on the spot when done. I give the invoice and I get "can I pay you next week." and it hurts. Like now. I'm down to $200 in the bank and that's not a ##%#%* joke. I'm waiting on one guy to pay me from 4/13, another guy to pay me that I sued and suing again (long story) and I fell into the trap of doing work for close friends who assumed they could not pay me right away, and I have one job where I got into it at a cost they could afford and ran into big problems resulting in an additional $400 work but they didn't have the add'l $400. What to do? I cant' stop the job, I have to finish it and collect it next week when they got it, meanwhile, with the price of fuel, I"m trying to make my $200 stretch and god help me if they don't come thru. I rarely get paid at the time of completeion.If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
I feel for you man.
I have been there and done that. I started out with 3 days of work and not enough skills or enough tools. But I needed to feed my family. Not knowing how to price a job does not disqualify you to be a contractor. It just makes you fit in with the rest of us.
You mentioned Lowes and their pricing several times. Or you mentioned you have heard that drywall can be hung for such and such. Quit it. Now.
You are already tracking your time, your are ahead of the pack and it has taken me many years to learn to do that. Still trying to do that.
You are doing the job, you have to price it for what you can hang 10 pieces of drywall. That SF # is for clean, new construction and crews that do only that, and they don't make much money doing it. You on the other hand are hanging drywall in existing contruction and up and down stairways and you don't have wide open spaces. (In new construction the closet takes as long to hang as the whole bedroom.)
Figure out what you think it will take you to do the job x $60/hr.
Figure your materials. add 5% for contingency and markup materials 20%.
Add 10% to your labor if you feel uncomfortable with your labor #.
Don't worry about what the rest of us think or what we charge. You have to do the work, you have to pay the bills and you have to feed the kids.
I do estimates like the above. I also check my estimates with National Estimator. You can download 11 cost books for $69. I am not saying it's the best, but sure is affordable.
The program allows you to set the labor wage and it allows you to set materials markup, labor markup and contingency.
I usually go 10%, 10% and 5%.
If you, who do this for a living don't know how much a job should cost, why do you think the HO knows the cost of hanging 10 sheets of drywall. Heck i have been doing this for 25 years and I still don't know off the top of my head what a job should cost.
I will post some National Estimator stuff for you.
If you are a Christian, you should pray about your business and remember that the HOs are not your source of income. God is. He is bigger than your situation, he can teach you and give you favor in the workplace. He has cattle on a thousand hills. Bible talk for endless resources.
Actually I am a Christian, and as a matter of fact I wanted this business for years. I used to be a software engineer who decided I'd rather be a contractor because I liked it so much more. I love going into someones home and making it better than I found it. I prayed a lot and didn't have the courage to jump ship. Going from a $65K job to a "how small an income?" job is scary. So far I'm making arouind $40K/yr. It can and should be better. Two weeks ago work was drying up totally. I've not had a time when a month out I had nothing, except 2 wks ago. I began to loose faith but I started praying and asking God for the work and then bam my sub that I work with all the time got a job for himself and we always work together when he's got a job and it's about a 6 week project. So now I"m booked til end of June. Your post was encouraging. I doin't know all there is to know. I do know this. I want to be fair, not a shyster, do quality work, have excellent customer skills, and a passion to do the job right the first time. I'd say my only issues are figuring costs so that my success will soar, and not be stagnant. Somewhere in here God wants me to learn, and I know He uses others often to help teach the lessons, thus that's why I"m on here.If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
Rich...this National Estimator you're referring me to. To be sure I understand say for example I have a DW job where I must DW a 30 x 18 room. I can d/l this estimator (the DW portion) and it'll run on my PC like a program and I plug in what I"m doing? Or is it just an online book that I reference?If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
I'm at H.D. cashier the other day, reading a guy's logo on the back of his T shirt and the inscription "Proverbs 16:3", couldn't help to ask as he was finished paying and ready to go, 'so what does 'Proverbs 16:3' say? "Commit your work to the Lord and he will prosper you"...hmm
Food for thought for my day.
I don't consider myself a Cxtian anymore, not walking the walk, but good advice you're giving here.
I've been doing this for ten years now and still strugle to find the sweet spot, the right estimate, I never want to give prices off-the bat even when pressed, I need my time. That others may find themselves in the same boat, saves me from feeling a like a dimwit.
Thanks for the compliment. That's just advice from a guy that has been doing it wrong for too long.
I've been doing this for ten years now and still strugle to find the sweet spot, the right estimate,
I've been doing it for 25 years and I want that sweet spot to be more on my side of the ledger. Yes I want to be fair to the HO. But I more committed than ever to making my business profitable.
By that I mean profit above and beyond my wage. Having decent tools and vechiles. Making regular payments into my IRA. Saving money for the slow winter. Saving money period. I'm 52 and I am looking at a daughter who wants to go to college, possible wedding costs, a puny IRA by comparison to if I worked 25 years for a company. Both my boys are working with me in the trade so I didn't have to put them thru school.
10 years ago I figured out I wasn't bullet proof, now my body is telling me that there are limits to how long I will be able to work like this. (I can still work just as hard as the 20 somethings but I have aches and pains.)
So it's very important that I get a handle on making money in the office. The accountant, the salesman and the lumberyard estimator all make money doing the non paying parts of this trade. So I need to be paid for this office time, estimating time and going to the HO house and diagnosing a problem time. (It's raining today so that's probalby what I will do all day.)
I spent probably 15 years of my as an atheist. Even though I did not believe in God I trusted he would provide for me. (Strange logic)
Deut. 8:17-18 If you start thinking to yourselves, "I did all this. And all by myself. I'm rich. It's all mine!"â€”well, think again. Remember that God, your God, gave you the strength to produce all this wealth so as to confirm the covenant that he promised to your ancestorsâ€”as it is today. (message bible)
Today I remember my Creator and my Savior and give him thanks, and I try to live by his standards. Mine weren't working so well.
Here are a couple of National Estimator examples.
1st one is a an estimate that I copied into a Word doc.
The second one is pages from a cost book that I copied on to a Word doc.
Rich.....that Steeler Estimate you attached. I'm confused. Is that an actual estimate that you wrote, or is it an invoice? Is that what one would actually give to the HO? I have a mega DW job coming up where those numbers look like they may fit with some tweaking into this job I want to do. I like seeing the profit percentage, markup and contingency amouints. But you wouldn't show your customer contingency percentages, though, would you? I guess I wasn't clear what that page was.If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
This was an estimate i did for Steeler here on BT.
Nat. Est. downloads and you can run it on your PC.
You can print Estimates or invoices, you can show mark up or you can have markup built into each item and not as a total at the bottom.
Or you can just show the total.
I usually take there numbers and write my own word document. I redid the steeler estimate, with the labor at $60/hr, and I took out the 2x4 wall framing.
I can only show you a screen shot of the invoice.
The estimate is what you work with at home. The screen shot can be changed to an estimate or an invoice. And like I said you can just show the totals if that is what you want. Sorry the screen shots are reversed.
Rich,Do you have the estimator software you're referring to for electrical? I checked out the link yoiu sent and I want to get it. They're saying it costs $64. I don't have that right now to get it and download it but might next week. I have to replace a service entrance 200amp cable, it's all frayed and getting wet inside the jacket. It runs 50ft. It's $3.99/ft. Here is how I estimate it.
50ft x $3.99 + $11.97 tax = $211.47
3 hrs labor @ $60/hr = $180
Total job is $387.47. That's how I've BEEN doing things. But I'm wondering what the estimator software tells me the job should cost. See to me $180 is too little for what ultimately is a half day, til I get on the truck, go get the wire, show up at 8am for the electric co disconnect, trash the old wire, run the new, I got my half day gone there. All for $180???? See that's why I keep questioning myself. Electrical work is a skilled trade, and it seems like it should be more money. Yet at the same time, as one poster said, I talk my price down in that I think to myself "ok $180 seems like decent money for such a simple job." I get into those wars in my head often and then the other side says "no, $180 is too cheap for your time when you need to eat and pay bills."
If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
Here is how I would estimate the job.
PS go back and readd your numbers.
50ft x $3.99 + $11.97 tax = $211.473 hrs labor @ $60/hr = $180Total job is $387.47.
I'll try to do Nat. Estimator later
Rich...Thanks for running those numbers. I got two things of interest to say to that. First, while I was waiting for you to respond to my inquiry about Nat.Estimator I decided to try and work the numbers using the example you gave me last night with 20% overhead, 10% conting and 20% profit. The total I came out with to replace the cable ONLY was $581.70. I next priced it replacing also the meter socket and addit'l parts to do so and came up with $770. I just got off the phone (before I saw you got a chance to reply) and told the customer what it'll be and he accepted the $770 price and gave me the job. Now THAT feels much better for a change. Instead of 3hrs labor, though I'll do 4 and not complain about it because I'm earning something far decent that way. The second thing I wanted to say to the figure you came to is that ordinarily, apart from this thread I started last night, I'd see that figure you came to of $668 and say that's way way too much money. Why would I say that? I'll tell you why. I've changed out, or converted over to, about 30 200 amp services over the last 9 years. I've been charging on average $1200 to $1500. why? Because for some reason in my area most of the electrical contractors are charging about that much. The way I been finding that out is that they people tell me they got other bids, some even higher. Replacing a cable drop to the meter only at a cost of $668 is almost half of the job cost for far less time. To actually convert/swap the panel takes far more time. That is I've done some that took as long as 12 hrs nonstop. So ordinarily I might think $668 is too much to just replace a cable. But, after this discussion and intaking all this advice, plus this HO giving me this job now, I'm thinking I've been nothing but helped IMMENSELY by you guys over the last few hours. THANK YOU!!!!!If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
Feels good don't it. Way to go.
You are now the baddest (in a good way) contractor on the block.
you can spit if ya want
LOL man you're funny. What was that movie, Walking Tall, the man with the big stick? Nah, I don't want to ever get too proud, just earn a great living and be honest and fair to every one in my path and enjoy the feel good moments when they come.If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
The secret to walking tall is being proud of your work. Once you are proud of what you do and know that no one else can touch what you do it's easy to get your price.
Somehow contractors and HO can smell desperate. And they generally run away from it. If they don't they will pay less for it. At a minimum. What could be worse than a low price? How bout a low price and a nit picking HO? That is a nightmare.
But once you believe in your price they pick up on it. And then they believe it.
You just found out that everyone does NOT shop on price. Now, the hard part.
Find more of those people
One of the tapes I have listened to on selling, guy talks about restaraunts. Everyone goes in saying we're going to serve good portions, good food, and rely on word of mouth. Then they promptly go broke. Because in the rest industry that is the Quality, Service, Price triangle. You only get to pick 2. If you pick 3 you will go under
I'm happy for ya. You just learned a lesson that will feed your family for a long time
It's really nice to actually hear someone believing in me. I remember about 3 yrs ago I was having some trouble and the responses I got were go find another business or line of work. I was offended, and a bit intimidated, but as you can see I didn't let it stop me. As such this time I've found most of you to be more than helpful and I hope you can appreciate how much I appreciate that. I really love doing this stuff, I love geting up each day and not going to the same old boring office cube. I just got home earlier from grouting the tile floor I laid yesterday. I know what that room looked like when I started. Now it's a shining piece of gold. It's sharp. Moments like those, making it better than I found it, knowing I added to the value of ones home and delivered a product that someone hired me to do, brings about satisfaction I never had at my old job and in a way does make me feel a bit "tall" so to speak. But...I'm still only 5'8". Always 6" too short.If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
That was a great reply. A reply like that makes it all worth it.
I just reread the whole thread tonight. I decided to saving the link in a word document that I keep of Beaktime favorites. Go to the numbers in the RH corner and right click, click on save shortcut and paste it on a word document.
No matter where we are in our business life we need to take a hard look at our business practices and our profitablity.
There is always another level of excellence and another level of profitablity. We all need to be saving for short term needs and retirement needs. I am afraid that too many of us in construction are not saving a dime.
Anyway, how is it going with the estimating and your business profitably? Last we heard you were down to $200 in the bank.
Let us know what is going on. We are here to back you up.
Hey there. I did another estimate using the 20, 10, 20% model and it appears the owner may accept it. I"m sure they're thinking, "that's way higher than the last time he ran a circuit for us" but when I gave my cost they didnt' flutter or jump, they just said ok and they're waiting for the landscaper to get back to them for their portion of their bid. I finished the tile floor job and boosted my cost on the extra work involved and got paid for that. I finished a re-roofing job today and netted $583. I got about a grand in the bank now and paying my midmonth bills at the moment. By the way....this is an aside story and a long one. I sued a guy who owed me $3200. I sued for $4K due to late fees, interest, etc, for a job I completed back in Feb 07. I lost at the DJ, judge threw his hands up. So I appealed, suing for $7K to collect atty fees and add'l late fees, etc. I just got my papers last Friday. The jerk is counterclaiming me back for $22,599.33. Long story, but the a-hole doesn't want to pay and he found a bottom feeder atty to try and scare me. I"m a perfectionist and my work is great, I stand behind it. The jerk says I did shoddy work and violated the PA Unfair Trade Practices law. Scumbag. I did not thing of the sort, the HO didn't want to work out issues with me, just bicker and complain. I had a thread on this saga many months ago on BT, just to talk and rant a bit.If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
Good to hear you are turning it around.
Keep it up. Stay in touch.
Watch your attitude. God has given you a chance to show forgiveness. Forgiving someone frees you from the carrying it around and getting bitter about the situation. It will eat you alive.
I am not saying to forgive the debt or go to him and seek his forgiveness. But I am saying that you may want to do a heart check. Is your attitude towards this man pleasing to God? Have you prayed for your "enemy"?
Maybe getting your heart right is the key to solving the problem. Even if it doesn't solve the problem, if you can reach forgiveness then you can live at peace, and let God solve the problem.
Jesus Teaches about Loving Enemies
43 "You have heard that the law of Moses says, â€˜Love your neighborâ€™ and hate your enemy. 44 But I say, love your enemies! Pray for those who persecute you! Matt 5:43-44
Oh oh...your going to get this thread tossed into the Tavern! Bob's next test date: 12/10/07
So be it.
My philosophy is to bill weekly. When a problem develops stop the work.
Settle for what you can get and move on.
If you can't learn to forgive, then this business will eat you alive.
I believe my heart is right concerning this situation. I don't hate him, and I may feel like going over there and ripping everything out of his house that I did, but I"m obviously not doing that. I"m just letting the process follow legally and let that work it out. It's obviously out of my hands from the beginning, now it's even more out with a counterclaim of $22K. My atty is going to ask the judge to make the thief open his home for a visual inspection by an arbitrator. When that occurs I am sure I'll be vindicated, except for the fact that it's been over a year and who knows what the thief has done to my work since.If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
During the Civil War, Robert E Lee never refered to the North as the enemy. He usually refered to them as "Those people over there".
They were killing each other. He was having friends die around him. And yet he kept his heart right, and our nation can be thankful that the Civil War didn't turn into a civilian bloodbath.
When you can work together with this man (on a volunteer project for instance), then your heart will be right. I would not work with him again.
I would say " I think for the sake of our friendship that you should find someone else to do your work."
but the a-hole, bottom feeder atty, The jerk says, Scumbag.
When you can talk about the situation without using those words then you heart will be right. I am not saying it is an overnight process. But don't feed the bad dog within you. Nurture the positive thoughts.
Sorry if this sounds harsh, I am not preaching to you. I'm just a brother in the trade who cares just a little bit about you. Also I am reminding myself of what forgiveness looks like.
If the standard seems high, that's because it is. You don't want to swim with the attorney.
all my contracts have a mandatory arbitration clause...... mandatory... they can't sue... neither can I.... any irrreconcilabel dispute will go to arbitrationMike Smith Rhode Island : Design / Build / Repair / Restore
Mike,this arbitration thing is something I've become more interested in but dont' know much about it. How does it work, who picks the arbitrator, where do yuo find an arbitrator and how does the process work when there is a significant grievance on either party?If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
I use the American Arbitration Association... i'll copy the clause when I get to the officeMike Smith Rhode Island : Design / Build / Repair / Restore
I'm not an electrician. Yes I have the electrical cost book, but I didn't find anything that would match your situation.
There is the caution of cost books. They are not a substitute for your brain and your common sense. Plus you have to spend some time figuing out how they are organized and how the label things.
I can estimate fine without them, but sometimes I have no idea how much time a certain job should take. Or I just want backup. Then I see if the cost books can give me some help.
I mostly use the Improvements and Insurance cost books.
I did copy and paste of a couple of pages for you and you will see what I mean.
I also am going to post a summary of the thread "How do you speed up estimating". It's full of good links to posts that are very helpful to getting your mind in the right place to do business.
Everyone can talk all day long about confidence, but it is like character. You build it one brick at a time. The Bible teaches us that trials build character.
Character and confidence are great things to have. But sometimes it's no fun building them. There are no short cuts. You have to go out there and take your lumps and get back up. But if you learn from your mistakes the lumps get fewer and fewer.
If you decide to get the costbooks and get stuck just drop me a line and I will help.
You'll do alright. Take care of those boys.
I"ve had a few hard knocks I've been learning from. Long story, but in summary I had to sue a guy for what is now $4700. He burned me back in March 07. Made all kinds of complaints about my work and stuff. never heard a word about issues til it came for final pay day when he tells me he isn't paying me due to this, that, everything else. I just filed the appeal (I lost, judge tossed it up) early March. That guy stole frm my family. He paid for the project, but nt the extra work. Like I said, long story. My atty is on his butt now and feels confident I'm going to collect. It's just a hassle at 14 months and not being paid. If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
On T&M and extras. Bill the HO every week. Then they and you know how much the job is costing.
Don't just inform them of the progress of the bill.
Get the money. For labor and materials. Money out of pocket slows the extra train.
It's a lesson we have all learned.
Even on Bid jobs, get a payment schedule that is similar to paid once a week.
That way a shyster doesn't get too deep into you.
If you do this you are being fair to the HO and yourself. They don't always realize how much the job is getting out of hand.
Rich,Hey, it's Rich again. I'm sorta reviving this thread a tad because I'm still trying to find my way into this estimating model you informed me about 2 mos ago. I have another job where Im to price doing electrical work. I have to hang 4 ceiling fans in 4 bedrooms. There is nothing in the ceilings of these rooms at this time, nor are there any switches. I must install the fan box in the ceiling, a switch and switch box on the wall, and run a new circuit to power everything. The owner is supplying the fans. My materials come to around $120. Using the model 20% overhead, 10% conting and 20% profit, and an estimate of 16hrs labor at $40/hr I arrive at a price of $1210. That sounds like I may be high. However I have an advantage here. The advantage being that this is in a development where the houses were cookie cutters and I did this same job for someone 2yrs back and while I wasn't in the habit of logging hours per job back then I do remember it took quite a while. I'll be working by myself and it's a lot of crawling around in the attic. So in that light,$1210 seems reasonable. Yet I'm a home improvement contractor, not an electrical contractor. I"ll be doing the work but I wonder if it's possible that I'm high at $1210?My figures go like this:
Job cost: $759
20% OH: $152
10% contig: $91
20% Profit: $200
Tax on matls: $8
Job cost: $1210Yoiur thoughts?If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
Good to hear from you again.
Yes I think it sounds high.
I always do about my estimates. I reason to myself that with a couple Saturdays and evenings I can do this work and I wouldn't hire someone to do simple task like this.
But I am looking at the job from the eyes of a capable contractor and not a HO who is scared of electricity and who doesn't want to crawl around in attics.
We take our skills for granted. I have watched the average guy try to drive a screw with a cordless (skill level 101) and it can give some guys a hard time. So hanging fans (instructions) and new circuits can seem daunting.
I thought you wanted to make $60/hour.
I attached an estimate from Nat. Estimator below that seems to indicate you are not too high.
I also attached my bill summary worksheet I do in Excel. I figure all my bills in Excel, that way I remember to bill for Estimating and Billing time and I keep a record of every job and the T&M it takes. You can copy and paste it for your own use.
Yeah I wanted to make $60/hr but at that rate when I calculated it I thought for sure I was WAY way high and I"m pretty experienced. I estimated 16hrs on the job because of all the attic crawling and having to move lots of Insulation, plus crawl on joists, etc. so in this case it appears I'm on target. I forgot to mention, I owe this owner a 10% discount. He was responding to my flyer I sent out when work was really realy low for me andI was trying to drum biz. He called me mid June after I had gotten swamped. I told him I'd honor the discount since he was responding to it and feel that I may have a good customer in the end for other things. If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
Someone here on BT once told me "Don't be afraid of the money".That advice has helped me considerably.
We should all help stamp out, eliminate abolish, and otherwise avoid redundancy.
"Someone here on BT once told me "Don't be afraid of the money"."That is excellent advice Boss. I'd add a little more to it by saying; "Don't be afraid of the money, and if you are, get someone else to do your sales."We all have our talents. Willie is running a one man show and his talent range may not be comprehensive enough to wear the sales AND bean counter hat. Willie, you need to invest your time in sales lessons or get someone else to do your sales. Go to Jeffrey Gitomers website and sign up for his weekly newsletter. Go to the library and take out a sales book every week and read it. You also need to figure out how to believe in yourself more. That's tough to do when the cash flow stops but absolutely necessary.You need sensible, standard answers to every objection regarding your sales style. You need the right answers when someone asks you what your margin or markup or profit is. Bob's next test date: 12/10/07
I'm going through the same thing myself. One thing that has helped me is this: If the customer thinks that the price is too high, maybe they need to cut back on what they are trying to do. I'm not there to make my bid fit what they think it should cost. I'm not there to finance their project with my labor (although that is what I still seem to do sometimes). Aw well, I'm still learning too...it is good to hear what others have to say about this though. Any comments on profit, overhead, ect...do you put it out there for the customer to see? How about a project management fee for larger remodels?
I wouldn't discuss profit or overhead numbers with a client. The subject is much too involved and open to interpretation. If asked, I'd simply respond that it's imperative that I cover my overhead and stay profitable in order to stay in business to service the warranties of their installation. A good question to follow that statement would be "Did you ever try to get a hold of a contractor that went out of business to perform some warranty work. Could you imagine how tough that would be?" The question is designed to make them think...I am budgeting 5% for project managment duties. It comes out of the gross profit markup and is reflected as some of the overhead. I want every phase of the operation to have a line item attached to it. I want the amount to be large enough so that I can hire that out to someone else. If I can afford to pay a guy to shop vac the job, I can afford to pay a manager to oversee it. Bob's next test date: 12/10/07
You also need to figure out how to believe in yourself more.
Jim, I think this is the single most important thing when it comes to sales/selling. I don't know a good/successful salesperson that does not posses that quality.
We all when starting out lack the confidence to price the job the way it needs to be prices, fear of getting rejected, not getting the job.......
Willie, you need the confidence to know that what your charging is what you need and what you're worth, the confidence to stand by those numbers, You need to sell yourself and your company to those customers!
As in my case, sometimes it just takes someone to point it out.--------------------------------------------------------
Cheap Tools at MyToolbox.netSee some of my work at AWorkOfWood.com
There isn't much I can add that hasn't already been said. I don't have a wife and kids, so I'm lucky in that respect (well, financially anyway). But like all of us, I need to pay my bills and keep a roof over my head. I'm in pretty much the same boat as you, sort of living paycheck by paycheck. I'm getting better at business, but it's taking a long time. I've been fixin' sfuff for about 20 years, but only really started getting serious about doing business a couple of years ago, when I started to think what kind of situation I'll be in if I don't get it together while I'm still physically able to do the work, and my future was starting to look pretty bleak to say the least.
One real wake-up call for me was when I was talking with a good friend and he commented "Ted, you lack self confidence". I didn't respond but that really hit me. He was right. I know I do far better work than most, and it's not just me saying it but I'm told this all the time. But for whatever reason I didn't feel I was worthy of making top dollar in my field. To be honest, I still don't feel I'm worth it. Maybe it's because I was such a juvinile delequent, maybe it's because I dropped out of high school, maybe it's because my dad was a raging drunk.. whatever the case, I didn't and to and extent still don't feel worthy. None of this should have anything to do with the quality of work I deliver but, in my mind, it has a lot to do with it.
One thing I try to keep in mind is that most of the work we do is a luxery item. Most of the bathrooms I remodel don't actually NEED it. The shower, sink and toilet work perfectly well. Most of the time we are hired because people WANT it. It's not like we are holding out for a higher price on prescription drugs or low income housing. When we are hired to paint a room it is usually because the customer simply wants a different color. When we are hired to lay a paved patio, it's because they want to entertain friends or bath in the sun. These are not necessities, they are luxuries. In short, we're making already nice homes even nicer for people who usually have more money than we do.
I'm not sure where I'm going with this, except to say that if your work is better than average, then you should charge accordingly. One of my favorite theories on pricing is if I get every job, I'm way too low. If the potential customer has to think about it for a while, then maybe I'm in the right ballpark.
In closing I'll share what someone once said to me. A reporter friend of his told him "Don't have to get it right, just get it written". I don't totally agree with that. We should get it as right as we can. But more importantly, we have to get the job done. On every job, keep your eye on the finish line. When you catch yourself tinkering with little odds and ends, that finish line just gets farther and farther away. Get the job done and get on with the next one. --------------------------------------------------------
Cheap Tools at MyToolbox.netSee some of my work at AWorkOfWood.com
I do share a little of the same thought processes as you. I never saw myself as ever being a contractor. Never seemed like I'd fit the mold. I went for years never dreaming I'd ever wind up as a contractor. Furthest thing from my mind. Plus, no interest. But, I got married and started watching Hometime and sorta got the itch to make things a little nicer arouind the home. I'd watch other home improvement kinds of shows, cant' even remember their names now, This Old House was one as well. It spurred me, it just somehow started churning inside the "hey I can do that" mentality. But I had no confidence. Oh man, I was a basket case in confidence. I didn't even know what R value meant, not even a 2x4, no idea what a 4 in 12 roof was, never heard the term Gable before. No concept of a black wire vs. white....So I built on the TV shows. Then started reading books. The more I read the more I wanted to get into something and tear at it. I had no idea how messy horsehair plaster/lath is. I bought a house, great aspirations to renovate it. As soon as I swung the hammer the first time into a lath/plaster wall I knew I was in trouble. I started chickening out, but now I had this hole in the wall. I hit some more, now the room is getting all smoggy. I can't breath. Today, 12 yrs later I got all that down and more. I can do anything. Yet...I still sometimes say to myself, "you're not a contractor, you're not the rough'em up spitting chew hairy bearded tough guy contractor who loves to show his pectorals in the sunshine" type of guy (and trust me, you don't want to see my pecs even today). Yet...I still forge on. Somehow I am a contractor. I make mistakes still, I never was formally trained, I taught myself a lot plus plenty of OJT. I bought an old house, tore they bejeebers out of it, got stuck, bawled a little, gave up, tried again, gave up.....So my encouragement to you is I know how you feel man. yet somehow we're still doing it, right? You're cool, I"m cool, we get paid, and, hopefully, loving our work as if it was still the first time.If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
I've had people ask if I take CC. I'd like to but at the same time it's tough waiting.
If you take a credit card, the money is in your account within a day or two, if not sooner. The fee is just a few %.
For smaller jobs remember that for most homeowners, you showing up on time and doing the job is far more important than the price. I'd rather pay you $1000 and have it done than use the guy with the $500 price who never shows up, or who shows up but never finishes.
willie.... a payment schedule should be in your favor... say 10% as a sigining deposit
and less than 10% for the final payment.... never let the final payment be an amount that can break you....
your responsibility is to stay in business and take care of your family , your employees, and your customers...
set up schedules that are fair but firm.. and leave no room for quibblingMike Smith Rhode Island : Design / Build / Repair / Restore
If you're referring to the guy who I sued and who countersued, I did have a payment schedule with him. However, the HO decided to modify it and discussed doing so with me. Unfortunately by this time I had believed I had a very good enough relationship with the HO that I didn't need to write it up as a change. And, got burned.If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
chucky... you'd miss a lot of good contractors with your filter system
bbb is nothing more than a scam to get money out of business
Mike Smith Rhode Island : Design / Build / Repair / Restore
even if a contractor is not a member of the BBB, complaints against them are still recorded. I realise it's not the best system but it's better than nothing. I also realise that you can get a bad rating from customers who are unreasonable so while i might discount one or two complaints, a contractor with too many would not get my business.
So the question you should ask yourself is how does a consumer go about hiring a contractor ? Checking the BBB is obviously one way. A referral from someone you know is another. You could also ask the contractor for references but he/she will probably give you only the ones he knows will give you a good one.
Although I'm not in the business, i often thought of what i would do so that a customer like me would feel comfortable with the references provided. I thought that i would supply the customer with a list of the last ten clients I had, good or bad. An then go on explaining why some are bad. I think i'd be sufficiently confident in my workmanship to go about explaining things. Not sure if that makes good business sense but I always feel that telling it like it is usually makes sense in the long run.
Finally, regardless of the BBB, referrals, or recommendations, nothing beats the gut feeling you get when you talk to the contractor face to face. You just need some mechanism to narrow down your choices....for me it's the BBB, web sites, and possibly referrals.
chucky... i provide references if requested... and i would never knowingly put someone on the list who would give me a bad review
still... you never know what people will say about you.. or how it will be interpreted
since about 90% of our business is referral or repeat .. we always try to leave the customer happy.. most of the time we succeed
here in ri, customes can check bbb, or Contractors Registration Board... a lack of complaints is not much of a recommendation though
i'm a pretty good salesman.. and a pretty good judge of charactar... still... i do know some patholgical liers who can look you right in the eye, pizz on your leg and convince you that it's raining... so much for my faith in hombre-a-hombre
i guess my favorite hiring is experience, referrals, and reputation.. but i'm a small-town guyMike Smith Rhode Island : Design / Build / Repair / Restore
..and while I'm at it, I also look for a contractor that doesn't work under the table, that gets all the required permits, that keeps the job site clean and takes the necessary safety precautions, respects me and my neighbours, doesn't bad mouth the competition, doesn't bull5h1t, etc., etc.
..all of these traits cost more!
Edited 5/12/2008 9:52 pm ET by Chucky
I used to think like you. I am changing now. The pain made me quit. It's a cycle.
No money at the end of the month leads you to under-price.
Which leads to:
No money at the end of the month.
Eventually the pain train makes a stop with a big medical bill, an unexpected repair, the realization you can't put your kid through college and that retirement isn't possible before seventy if you want.
Lowes has nothing to do with what you do. A drywall sub that knocks out large square footages in a short time is in a different game. The $10 a bd. guys can't do 20 bd. jobs.
It sounds like you can do carpentry, plumbing and wiring. One stop shopping is a premium product for a homeowner.
You care about quality. I am amazed at some of the sorry work I have seen. Some guys who are in a hurry to bust the job out do work which the customer really just accepts without really liking it. They leave the place a mess which is what the customer sees instead of the job.
Some guys don't conduct their business in a professional manner.
You can rightfully ask for more.
I used to look at my bids and think they are too high and then reduce them. Not anymore.
Its an amazing experience when you figure out what you need to charge, agonize over it, and then decide to stick to your guns. Then the customer never blinks!
Some guys will always hammer on price. It's good to get rid of them. If you were making three bucks an hour, they'd say you were worth a buck and a half. There are better customers out there.
You aren't abusing anybody by doing a good job in a professional manner and making enough to keep doing it.
Glad you put in your bit of wisdom.
You and i could save the kid about 15 years of doing it the wrong way. LOL
LOL, well, I'll be 40 on May 23, hardly a kid, but at least in heart.If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
I'm a long way from being an expert. I'm in the process of graduating from hopelessly broke to broke but hopeful. I've got a long ways to go. I still need to make many changes in the way I do things.Here's the thing--As I learn to take care of money and business, the work has become fun again.I am starting to remember what attracted me to this insanity.
YEah, you're right...underbidding leaves no money at the end of the month. I have learned in at least one area. Sewer hookups. I used to charge a certain price in a range that was always below $2k. There was a project in a town near me that converted to public sewer. I got about 18 jobs out of 170 potential customers. After about the 14th job I started realizing after talking to others that I was way undercharging. I had an excavator friend I met tell me my jobs were too cheap. I then went thru a moment of no money. I got a call to bid a sewer. I bid it at double what I would've normally bid it. They accepted (so did the bank who used my bid to grant a housing loan for the project and had to inspect my work before checks would be cut). I walked away with a wonderful sum in the bank. I repeated that a few times. Did well. So, I can learn, experience helps a lot, but....you're right, it's not easy getting to those points.If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
"I walked away with a wonderful sum in the bank. "It's a good feeling when you learn how bid to do that.It's a process.
Craig,BTW, yes I'm a one stop shop. I agree, most of my customers are glad they can call me for everything. This one house I'm doing now, I gave them new electric service, new front door, new interior door plus a tile floor now that they love....here's the shameful part. They got a lot of new stuff to value their home by for a price that I'm sure wasn't on part with what I should've charged because I'm still figuring this estimating out. Oh well....I can't complain, they've kept food on the table many a time.If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
This is something that I too have been working through, but I think that I may have some insight.
I've found that general "handyman" work isn't as profitable as going after a focused area of business. I was running around doing random, odd jobs from installing a new garbage disposal to tiling a kitchen backsplash. It was too much work for small payoffs. However, if you can land fewer, big jobs (e.g. bathroom remodel, basement finish, kitchen remodel, etc), you will fare much better.
Focus your business. Become the company that does quality kitchens and baths or custom closet systems or something else specific. Any smaller jobs are just gravy, if you feel you have the time to do them.
Best of luck.
It took me 5 to 10 years to build a good customer base and to rely on referrals, The shoppers were almost always one time shots, If i found a good customer i went all out to please as they have good friends too. You might try one or 2 things to specialize in, ie fencing, decks, windows.Although i was a trim carpenter i went into roofing, I would have starved as a trim carpenter. Doing roofs i got all the carpenter work while i was there.
Good to hear you are still in the ring swinging. I was wondering after losing e-mail contact with you after getting real busy with a couple of things. Good to hear your prices are better. Bad to hear your back is still against the wall.
2007 it was $5300 and I"m projecting $7400 for 2008 based on prior history. I pay for all of that out of my net profit.
Incorrect: You pay them out of your gross profit. If you don't charge enough gross profit you have no net profit. (or worse)
Keep on swinging, as you can see you are not alone!
Bowz.....yeah I'm still swinging. I lost your emails, man, I had a frigging virus and needed to clean up my machine and all mail went with it. Figures. I KNOW I'm gonna get this. I'm getting far better advice this time around than I did the last time from some of these guys, I'm feeling much more encouraged than ever.If at first you don't succeed, try using a hammer next time...everything needs some extra persuasion from time to time. -ME
You're in a tough market brother. I live just west of Allentown, wasn't much different. round my way you can get someone to come do small jobs for $30 hour all day long.
From reading some of your responses, I'll admit! i miss working for myself. I don't miss the uncertainty. todays the 13th. Uncle sam just made another deposit in my account this morning.
I struggled when I tried to service individual customers as opposed to subbing from a shop or yard or builder.
You suffer from the same problem I did. You can't sell yourself on the price so you can't sell it to the customer.
Gotta figure out how much you want/need to make, divide it by 1500-1750 billable hours per year AND THEN add your overhead. Overhead is all of it. truck, fuel, tool replacement, insurance etc.......
then ya gotta go SELL your SERVICE, not the price.
The world is full of guys with no sales skills who will install for HD or Lowes for $220 a day all year long. That's ok if you can live on that. Doesn't sound like you can. I couldn't.
You have a small but growing upscale market by you. Those people will call you cause they don't want to spend two hours standing around a lowes waiting for some 19y/o kid to schedule a measure and install.
SO? You need to charge accordingly for the SERVICE YOU ARE PROVIDING THEM!!
A side note, Don't know how your carpentry skills are but there is a place in Pine Grove called StairPAK that sells and installs lots of stairs and rails. One big product is a knockdown Spiral stair. They usually need an installer. you'll make more than $300 a day and Rich Sr. and Rich Sr. are stand up guys. Might be worth a call if you're slow.
"On point C, take drywall for example. I hear people around my area charge $10 a board to hang and $10 to finish. That's $20/bd. Above 8' it doubles to $40/bd. But when I look at how much time it takes me to do hand taping/finishing it seems like I make more like $.50/hr if that when you figure one trip to hang, one to tape and top coat, a second then a third coat and light sanding, 5 trips in all. With the price of fuel I feel like I'm earning virutally nothing and can't figure out anyone is making money on it. Then I hear others charge by the hour to do DW hang/finish and others price it by the job as in "oh uh....gimme $600 for the job and I'll do it" type of job pricing. "
Ill take this one . I did it for a living .
You gave it away when you said you hand tape and you dont hang board for a living . You cant compete against drywall hangers and tapers with automatic tools. That is their prices , not yours . They also hang 4,000 ft of board up which is enough for a crew for a little while . It would take longer to clean my bazooka than tape a garage . I dont want a garage . You do . Youre not competing with tapers and hangers . If you are youre getting beat badly. Those guys have to burn and turn to make a living and you aint gonna catch them working in a garage.
Willie has been operating under some false assumptions.
1. I have to be competively priced.
2. The HO is getting several Bids.
3. The HO knows what a product or service should cost. (As if there is a Master Cost Book out there that everyone has access to.)
4. Other contractors know what a product or service should cost.
5. Other contractors are making money with these low priced services. (The truth here is that without their wife's income and benefits many contractors wouldn't make it.)
But he is turning it around. It's all in your head.
Price the job to make money for what you and your company can do and forget what the rest of the world says. Charge enough to live to the level you want to live, and put some in savings.
Now I am not saying that I am completely beyond believing those 5 assumptions. But I am actively trying to get them out of my head.
Well, thats true up to a point .
Point is if hes really slow becasue he hasnt been taught speed in areas like hanging and taping drywall , then there are bids out there thats cheaper. Might be a problem.
I answered a question on here several years ago about taping a garage in freezing weather with no heat . The magazine printed it . I finished a garage in one day in the post in freezing weather .
I had the tools, special materials, knowledge , and the ability to to it . Carpenters dont have it unless they have a drywall professional background. In my mind remodelers need to be jack of all trades if they do it all. They are only as strong as their background or experience. Ive read too many posts and answered too many throughout the years on here that I know this to be a fact . They excell in areas where they have the most experience. However they suck in areas their dabbling in. Still they provide a service and a price that will sell . Its ok to suck speed wise in a few areas if you can do most things well.
Jeff Buck comes to mind as a remodler that does tile well. He knows what hes doing . Ive read too much of his posts. Hes a true carp with finish experience . Id say thats his background. Hes a finish carpenter that does tile well. He doesnt go on about his painting . Drywall either . But he reads everything .
Calvin is kinda similar although he does quite a bit of drywall. Ive seen him write in posts to know that he learned what hes doing in drywall. I dont know how he did it or when . I just know by his replies he impressed me with his answers. Hes a true remodeling carpenter with drywall experience .
The hardest thing I had to learn is remodeling plumbing . I dobbed in it for several years and sucked. I still had to do it with my rentals but I would have been a poor feller if I had made a living in it at that time . Theres simply too much to learn to be good at it in a short time with out professional training like working on the job with a good plumber. I worked as an apprentice plumber for two years on new construction but it taught me hardly anything about remodeling plumbing . I dabble in tile too although I visit a tile site. I suck at it .
Somtimes its smarter to hire a sub but you have to know when to do it or do it your self . Lot of guys on here finish bathrooms and do it all. Its fine to dabble drywall if you can at least get good results in a small area. A garage is really boderline . Hand taping off a step ladder will turn up a high bill of labor. Your pretty well in the stilts, banjo segma which is the old style of professional taping. Better known as the old hand finishers. Before that was strickly hand work off benches. Get up on a bench and do 8 ft and get down and move. Before knifes it was hand trowels and hawks.
To take on a garage today you really need to be in the stilts/banjo mode. If the garage is all youve got to do , you need to be using hot mud and easy sand. If youre not up to it then its cheaper labor wise to sub it to someone that can do that . Then work on somthing you excell at. Practice on somthing smaller.
But a guy that is young in the trade (OP is in his 3rd year), will go nuts trying to figure out how to price jobs, learn the trade and be competive.
You have to price out taping the garage with the tools and knowledge that you have.
I have learned most of my skills because we needed to eat and the HO said can you tape the garage. So I said yes we can. Once they are gone I said," How am I going to do that?"
It doesn't matter if you can do it for $500, I can do it for $1,000 and the Willie can do it for $1,500. The HO doesn't know any of this. He trusts Willie and Willie is here and ready to do it.
I might know that Tim can do it for $500, but it may take 3 months to get him here because he is busy doing new home construction.
So for Willie or for me, charge what you need and do the job. If it is too much for the HO they can search the want ads for Tim and his $500 job.
Maybe he will find him and maybe he will get Tom the Hack. Better to stick with Willie because we already know his skills.
Unless of course Willie doesn't charge enough, then in 2 years he is out of business. Harry HO has another garage to tape and Willie the trusted one is gone and Harry has to go out try to find Tim the Pro or Tom and the Hack.
Willie's cheap price didn't end up helping Harry all that much.
Pretty good senario.
The problem is hes doing it for 10 dollars a board and competing with new construction prices.
The customer has always been the recieving end of what ever luck they draw. Thats not what I meant .
What I meant is for Willie to make those decisions . If he can get 1500 fine. If he can hire me for 500 hes making money hes not making . I just went into explanation of what I was talking about . I didnt expect him to compete with a drywall pro. He stated somthing like he was starving doing it at that price. He can turn it around by finding someone that can sub it from him where he can make money. I dont fix my lawnmower or do my taxes . And no the same guy doesnt do both for me . <G>
Ive lost contractors over this very same subject. They hired me to do houses at a set price per foot and we were all having fun. Then I get a call one night to do a garage their building and say get it done because they know me . Well they get a bill of like .50 cent per foot instead of .25 and they have all shown different attitudes but none of them were positive. A couple never used me again but never addressed it to me . They thought I crooked them I guess . One contractor said after he recieved his bill , well how much per foot is that ? I finally learned to explain up front the pricing was higher on a small job. Ive done jobs like bathrooms theres no sg footage to talk about . I would normally price out a garage by flat rate bid . SQ footage doesnt apply becasue Im tired of trying to explain it.
I would never ever pizz of a contractor over anything that was using me on purpose. In the early years they were the life blood of my business . Normally I did more for them than anyone else . I tried my best to take care of their needs so they would continue using me . The call I got on the quick hang and finish was a small contractor who had been using me on every job. They guy who works from the back of his truck with one guy helping him. I brought my tools and all three of us hung it . He didnt have any work and it was bitterly cold so we draped the door opening with heavy plastic . I did the job the next day. I gave him a bill showing him what I had in it and he was fine . It had to be over twice what he had been paying on houses because of the hot mud , heat , and time element . I know for a fact he got charged exactly what I had in it with no profit . It was still over double .
We didnt hang as fast as I did with my help but they got to work.
I would have been burning and turning with a bazooka on one of his houses , but I couldnt run hot mud through automatic equipment . He understood and I never lost his work.
People like Willie make good customers to sub for if they understand how it works . Its my job to explain it not his . Thats what I tried to do. You call a pro for help. Willie could have called me before he bid the job, etc. I might have told him to try doing the job or I felt he needed me . Id be getting enough work from him throughout the year to take the phone calls that didnt support me .
I knew a guy that worked alone and made 100k every year on stilts with a hawk and trowel. I watched the guy work and he could cover a wall as fast as he could walk. Bob's next test date: 12/10/07
great rich... those are the 5 great myths of contractingMike Smith Rhode Island : Design / Build / Repair / Restore
I learned it from you.
Truly, the posts thru this last winter has helped to change my mindset.
Now I'll see if I walk what I talk and think.
It's been a good year so far.
I feel your mind set is working against you. You price your work as though you are having to pay for your services yourself. Have faith in your own skills and price them accordingly. Your skills are far more valuable than you give yourself credit for. Never under value your skills. You will price yourself out of business.
I feel that 45 to 65 dollars an hour for my services 10 years ago was not over priced. So 65 dollars plus now would not be too much. Your costs of doing business is more than you realize.
I'm very glad you started this thread since it helped me make a decision this week that put money in my pocket.
A couple I was working for asked about tiling their backsplash. I referred them to a tilesetter with 30 yr.s experience. I don't do much tile. The tile guy was a better value because he could do a perfect job in half the time, but doesn't charge twice the rate.
The customers wanted the job done now and I was already there. They are at the end of their kitchen remodel and at a stage where the fun is beginning to fade rapidly. They didn't want the additional stress of dealing with one more person. They asked me to do it.
In past yrs, I would been in denial about how long it would take or I would cut my price. How can I charge more for a job than someone with more experience?
I didn't have any real numbers from tracking previous jobs, so I divided it up into days and took into account it usually takes me a day longer to set tile than I think it should.
They accepted my price, I did the job in the time I thought it would, it looks great and they are very happy. I tracked my time and have numbers I can put in an Excel bid sheet. I enjoyed doing the job because of less time pressure and that mood rubbed off on the customer.
All from using the info on BT to change my mindset.
Life is good. I feel bad about being a slow tilesetter, but the dead presidents in my wallet are counseling me through it.
No customers were harmed in the making of this episode. In fact, they are tickled.
No customers were harmed in the making of this episode. In fact, they are tickled.
That was great.
I tracked my time and have numbers I can put in an Excel bid sheet.
I would love to see how you track jobs on Excel.
I have a worksheet started. Tracked jobs this winter when thing were slow. But now I probably have 2 months worth of jobs I could enter into the sheet.
And I am not really sure i like the format I created.
Here is one sheet on exterior doors. I have about 15-17 categories in the worksheet right now.
I have sheets for ea. category of work--framing, windows, tile etc.I have man hours per sq. ft, ln ft. etc. on ea. sheet which I revise after I do jobs. Some no.s are from cost books because I haven't tracked time on that item. I revise it after I do the job. (If I get around it)It's all kind of cobbled together now.I like how you keep notes on jobs. You'll remember 10 yrs from now about some problem when you bid.
I just don't feel like I can look at my job summary sheets and find a price without some deciphering. Even though I designed it.
I just don't like it yet. I want it simple.
I also keep all my Excel sheets from old jobs.
For example, the Gunther door, which was the last on the list.
I have the estimate worksheet and the after job bill summary. Which I will post.
I find these to be more helpful the the spreadsheet I developed to track my costs.
Without the computer I would never be able to keep all this information organized and stored.
When a job is no longer current then I clean out my computer and put the worksheets in a file I call Storage.
"Without the computer I would never be able to keep all this information organized and stored."I'd have stacks of unreadable scrawls on giveaway pads."When a job is no longer current then I clean out my computer and put the worksheets in a file I call Storage."One of the things I need to do is overhaul my filing system. I think there was a thread on this not too long ago.
When a job is no longer current then I clean out my computer and put the worksheets in a file I call Storage."
What I mean by that is I just create a folder within my construction folder.
When a file is old I just click and drag it into the storage folder.
That way when i open my construction folder it is not 200 files long.
The files are still there, I just need to open a another folder in order to see them.
"I just don't like it yet. I want it simple."I know what you mean. It's hard to get detail without getting too complicated.
I tried to post #97 to you and ended up posting to myself. Sorry
That's ok. I tried to reply, hit some stray key which sent it who knows where. Someone in Ecuador is going to wonder just who in the heck CraigF is.
Just curious Craig. How many square feet and how long did it take to do it. I`ve done a few backsplashes but I charge by the hour and don`t worry about the time. I just boogey along until it`s done. I find cutting around receptacle a pain plus extending the box out when I`m finished seems to take quite awhile. Also leaning over a counter under uppers is really a pain in the back.roger
26 ln. ft of counter. U-shaped kitchen. Breaks at pantry, window, door, corners and fridge. With a couple of extra courses over the stove-41 sq. ft.6 in. tile. 3/16 grout line. Running bond. Had to cut around approx. 10 boxes,ends and top course.Set with thinset and tile spacers. Layout,setting, grouting, caulking--32 hr.s The electrician will do the extensions. Some of the boxes had outlets I had to take loose.I know what you mean about the cuts. I bet I walked 5 mi. back and forth to the saw :) They were considering a diamond pattern. I'm glad they reconsidered. I'd layed out with a narrow trim tile at top, A diamond course and then a diamond course with the tip of the full diamond cut off. A lot of cuts for a little MK diamond 370 saw.Corner cabinets are hard for a fat guy like me to work under.:)
I haven't read any of the replies so I may be redundant but.......
I had many of the same problems when I started out in 71 or so.......and throughout my career this was a problem.
Where is the magical line? I wanted to make the most profit while at the same time not having an unhappy customer.
First thing I did was to work on doing really good work. Being self taught this took a while....money was a second issue. First of all I needed to learn....and as any self employed carpenter knows you gotta learn a lot of various and sundry applications.
As to money I'd find the going rate amongst my competitors which was usually a sq. foot or lineal foot price........I'd go with it and although I never lost money I came close a few times.
Once I gained experience in (whatever) the pay day was better cause I could do it faster.
Thing is there are no pat answers and all the formulas are pretty much bullshidde. You gotta find and know what the market in your area will bear.......charge 60.00 an hour for your labor around here and I guarantee you a long sit on your front porch.
I've also worked by the hour.....guy buys materials, I supply labor........
Be friendly......can the big shot routine. Talk and ask the wife questions, leave her into the loop cause she is more than likely the power broker in the house....regardless of what hubby says.
It is easy to get into this business, but the learning curve never ends.
"It is easy to get into this business, but the learning curve never ends."
Thats a great line JJ. As long as we're still willing to learn we will be ok.
"It is easy to get into this business, but the learning curve never ends."
I tell all the guys I hire "the day you stop learning will be your last day here". In my opinion that is the neat part of this business. DanT