Firstly, I agree with Michael Stone and the rest of the “gurus” that one must never discount your work – in principle. I know what I need to cover overheads etc.
But here, I am a one-person operation who’se business starts flying in March/April, and virtually dies in mid-October. I can’t really make enough during the summer/fall to make it during the slow months. So, I have started a concentrated promotional program.
One of the things I have considered is a “summer” rate, and a lower, “winter” rate. It seems to me that bringing in less money per hour and keeping busy is more attractive than sitting at home.
It could be that the “down” time is for visiting places like sound equipment sellers to line up home theatres and the like.
How do you girls & boys handle the slower times? What do you think of the two-rate idea?
Quality repairs for your home.
AaronR Construction
Vancouver, Canada
Replies
Aaron,
for me----and I think for you also----- the 2 rate plan( winter/summer) is a bad idea.
I am in the roofing business primarily
I typically work from St. Patricks day( march 17) to Thanksgiving ( november 23).
I am also--technically a "one man band"
so our businesses share some similarities.
now---- I am fanatically devoted to remaining a "one man band" because-
#1 it's MUCH ,more profitable( suprisingly)
#2 much more piece of mind.
to make the system work to your advantage you need to do work with your own hands------and also leverage the work of subcontractors to your and your customers advantage.
2 rates based on the time of year will work AGAINST what you are trying to do( remain solvent) ---by encouraging customers to delay work untill the " cheaper" time of year.
what you really need---is MORE money for the same amount of work--or even more money for a lower volume of work. your 2 price system will work against that.
now---that said---at age 44 I am positioning myself to step out of roofing over the next several years and go into semi-retirement doing oddball carpentry projects-----------------in FACT---- to aid that goal i actually HAVE 2 price levels------- but they have NOTHING to do with the time of year
I have a VERY high rate for roofing, and a much lower rate for carpentry. I work about 1000 hours a year as of nov. 11-------- 533.25 hours roofing, 120.75 hours carpentry, 268.75 hours overhead.
about 90 of the hours attributed to roofing were supervising a sub on a LARGE roof------ and along with several other projects I could reasonably re-allot some hours and my roofing carpentry split would be about 3/1----and about half my total hours worked would be overhead( supervision, billing, purchasing, taxes etc.)
you CAN make the system work----but I don't see how cutting your price is going to assist in that.
I would be happy to go into considerable detail about this if you would like----but let's do it off line if we are gonna talk much more detailed numbers.
Very best wishes to you---and EVERY possible encouragement,
Stephen
He didn't say CUTTING his rate in the winter, he said "lower" rate in the winter.What about raising the summer rate and keeping the winter rate where it is?
I'm with Stephen that the 2-rate plan won't benefit you. Is the problem really rate-related, or are people just not doing work during the winter because of all of the holiday running-around, the cold, etc? I know here in NJ, it's not that people are looking to spend less on work in the winter, it's just that they've got so much other stuff going on that it's not the first thing on their minds. Even if the price was substantially lower, most still wouldn't bother until spring, and if it was low enough to entice them, it'd probably be too low to make it worth your while. I know you're going to say "I'd rather be working for 1/2 rate than not working at all", but that's not a business plan that's very sustainable in the long run.
Bob
Aaron:
I'm pretty much in agreement with everyone here.
I'm a one-man show and I do solid surface countertop fabrication, installation and repair. I was busy all last winter and early summer it slowed to nothing by the fall. This month has picked up very nicely, especially the repairs.
These client's tops and sinks were just as broken in the summer as they are now. I could have done the repairs for free and they still wouldn't have called. There's just too much competition from summer activities, not other remodelers.
Kowboy
You don't say what business you're in, but I assume it's pretty seasonal. If you're really dead in the water after October, I would consider either raising your prices during the summer, or do something else for the rest of the year. What kind of work would sell in your area, and could (would) you be able to do it?
I'll take a stab at this Aaron and as usual, I'm on the other side of the coin from the first few responders.
Everyone's making good points about why it's bad to cut and why you should charge more, but they aren't helping you solve your problem: you don't have enough work during the winter months.
Stephen's premise that your summer customers might put off their work till this time of the year provides us with a window of opportunity to fill your winter schedule. He presented it as a negative but actually, there's a positive side to this idea. Unfortunately for you, it won't help you this year, but if you embrace this idea, you'll be much busier next season.
Don't you wish you'd have asked this question last year?
Anyways, the solution is to actively try to persuade your summer customers into booking a fall and winter project at reduced rates. It's a very simple solution that will probably work if you are dealing with clients that like to save a buck.
The negative side to this idea is that you might end up with holes in your summer schedule. That's a possibility, but if you are marketing heavily and doing good work, you probably can't handle all your summer work.
blue
, the solution is to actively try to persuade your summer customers into booking a fall and winter project at reduced rates.
Or perhaps "book now at current rates before the Spring rate increase."
Bowz
Dang, I wish I could send you all a message without having to type for each contributor.
Last night, before I started the thread, I bulk mailed an electronic greeting card, essentially telling each named recipient that I was thinking of them, and that if there is anything I could do to help get the house ready for the season, I would like to talk with them.
One of my customers replied she has a new son and a job for me, replacing doors for her little girl's bedroom closets. I'll call her tomorrow.
Hey, this promoting thing could be fun.
I hate to cut my rates - but Blue, perhaps you are right.... maybe a card just before Easter (Passover) with a pre-booking special to grandfather last year's rates before May 15 IS a good plan.
Thanks.Quality repairs for your home.
AaronR ConstructionVancouver, Canada
blue,
i am not sure I quite follow your line of reasoning.
If we assume Aaron has more work than he can handle in the summer--- financially it makes more sense( in my opinion) to RAISE his rates over all. He will work less---( surely)---but almost as certainley make MORE per year.
of course we all offer advice from our own perspective
but the way I see it--- there are only so many days per year suitable for me to come and tear-off your roof-------reasonably i can only do X number of jobs.
rather than trying to INCREASE the number of jobs---- I would prefer to increase the sales price of each job actually done
Years ago I went to a seminar put on by Certainteed ---complete with hand-outs !
I wish I had saved those handouts---'cause they would be handy for this discussion !
Basically we explored what would happen if( as roofing contractors) we Reduced our price by 10% in order to increase total sales.
If I remember correctly------what happens is that you have to do 30% MORE jobs just to break EVEN with your original profits ----plus you increase your liability(30% more roofs to warranty)---and you increase your wear and tear on equipment etc.
remember---decreasing your price by 10%----comes straight out of profit-------but increasing your price goes straight IN TO profit
I can't remember the exact figures( wish i had those handouts)--but INCREASING your prices 10% dramatically reduced the amount of jobs you had to do----and you actually made more money!
what I can tell you Blue------is that more money and more free time---is to me-- the preferred way of operating---as a bonus----- the increased free time-let's you devote more time and energy into selling at ever higher rates-----and ALSO increasing the quality of your product as well.
As a practical matter-----it is EASY to reach the limit of how LOW you can set your price------ but I have yet to find the limit of how HIGH I can move a price.
Please keep in mind,BTW---that I am selling something that many--on the face of it consider to be a commodidty( roofing)-------the difference is that I am putting a lot of thought into how to sell it as anything EXCEPT a commodity.
If I can do this as a roofer----there is no limit to what YOU guys can do as CARPENTERS !----- most of you have more talent in your little finger than I have in my whole body.
I seem to remember Aaron works as something of a generalist---general handyman type work?--- He might be better served by concentrating on one or two things he does really well---like hanging doors or plaster restoration and devote himself to selling those services at TOP rates.-- that's actually how i came to find the roofing niche--- 18-20 years ago I used to do a variety of projects-------- but I discovered in time that I could make much more per hour worked roofing than I could doing anything else---so I concentrated on selling more and more roofing( and concentrated on getting better and better.)------Ironically, roofing is now subsidizing my efforts to step into semi retirement doing a variety of weird carpentry projects.
Best wishes Blue,
stephen
Stephen, the problem with Aaron's situation is that he seems to be dead in the water and needs to work. If he was turning people down in the busy time of the summer, he might have been able to persuade some of the lost sales to schedule at a reduced rate in his "slowtime". In the end, he'd have more gross sales but admittedly a lower profit margin.
Profit margins only occur when some work is performed. My suggestion was a method in which he could increase his gross by filling more hours in the offseason.
It was always my experience when things were good in the new work that I'd turn down at leat one house for everyone I framed during the good times. There wasn't any way to push those lost sales into the offseason because the builders wanted their stuff now! Homeowners are different. Some of them would be glad to take a discount to do a job in the winter.
step into semi retirement doing a variety of weird carpentry
You have a warped sense of "retirement" LOL!
Best wishes to you too.
blue
blue, people often find different solutions to the same problem.
In General I am dead in the water from late November untill late march each and every year.
my solution has been to learn to charge more for the same volume( or even reduced volume) of work april through november.
I am certainley not going to reward procrastinators by climbing up on their snow and ice covered roofs in January------and discounting my rate besides!!!!!! No way.
what makes that system work for me is risk and stress april through november. once i have written my last tuition check approx. 4 years from now--- I will go into semi retirement.( I hope to work maybe 2 days a week waaaaay into my 70's. I have the family genetic history to support that idea--as long as I don't have a stroke--we are pretty long-lived)
I have also found over the last few years that leveraging the work of subcontractors reduces my personal physical risk and stress levels---and provides most $$$$ / hour actually worked---- so I am concentrating more on that as well.
If I can do it, Aaron can do it----- but you are right----doesn't help him out this winter.
HEY--- good luck with your school reno.
that's been done down here--- turned into senior citezens apartments---with I think federal money for low income apartment construction.
Stephen
blue... lowering your rates works against you in a slow-down
let's assume that if you halve your rates, you will double your jobs
that means you have to work twice as hard to make the same amount to apply to O&P
what you should really do is double your marketing efforts
risk = reward... if you halve the reward you double the risk...
and we've all been there... you reduce the price to get the job, you get the job and it doesn't work out the way you want... so instead of getting half the profit you had figured you get none..
or even worse...... some of your capital ends up as a gift to the customer
look .. if it gets that bad... you are really better off staying home or take a part-time job at HD ... but don't lower your rates... it is so hard to get them back up again
instead.. sell... sell ...sell
Mike Smith Rhode Island : Design / Build / Repair / Restore
Mike Smith
You sound like you are in a differant catagory from others.. Well estabilished with a good reputation and a long customer base. What about the newbie who has few seasons under his belt and needs to make enough so the kids can eat (let alone make payments)
Despiration causes mistakes but wouldn't it be a bigger mistake to let his kids go hungary? Early this spring with the slow down I noticed a number of builders hold out for the price they'd been getting earlier. They have since turned in equipment and gone out of business.
Those who scrambled and took commerical jobs that paid much less have been busy all summer and now with the steady increase of late fall as the spec houses were sold off have gone back to doing what was profitable.
I see both kinds of customers. long established firms and Newbies and this spring even some long established firms were getting despirate..
frenchy.. <<< Those who scrambled and took commerical jobs that paid much less have been busy all summer and now with the steady increase of late fall as the spec houses were sold off have gone back to doing what was profitable. >>>
great point... they scrambled & took commercial work.. they didn't screw up their normal customer base
they last time it got real bad here... i laid off my two guys .. then found work for me & the best one doing demo work for a wrecking company at prevailing wage... worked my skinny little butt off and lost that little pot belly
but we were both getting $35/hr. working in the city.. a hell of lot better than trying to compete in town against a bunch of desparate guys willing to do anything for nothing
i like the sub idea.. i like the commercial work idea.... i don't like trying to do competitive bids when you know it's just a downward spiral
when people call me and say they are getting bids on a job... i just say we'd love to bid their work... depending on the scope, our fee for a Proposal is $100 to $5000 .... most look elsewhere..
but some are willing to make the investment... those are my customersMike Smith Rhode Island : Design / Build / Repair / Restore
Mike Smith,
I guess we are saying the same thing only with a slightly differant twist. I'm speaking about the newbie with no customer base to affect and you are speaking about going out of town to keep your rates intact. Both are legitimate stratagies.
In my case I have many customers who cut and run and are selling their equipment for below market value rather than lose it to the banks. My market is totally over saturated but I simply cannot sell my equipment for less. My costs are already established, to eat I need to make a profit. I cannot sell for below my costs and still make a profit.
I need to count on offering services to customers that private sellers cannot offer.. Commericial remains viable so I have a small market to sell into. However much of the commercial market is masons.. Masons tend to quickly use up the good in a forklift and long before it would norrmally need major work masons forklifts are in the shop. To avoid that market we lose 50% of the forklift market.. However that makes the remainder of our fleet more valuable.
frenchy,
this is all a matter of perspective--'cause there are at least 3 different situations being discussed.
1) the OP, I believe--was asking how best to handle the ORDINARY and easily forseeable winter slowdown that comes every year. I believe my method is best for a solo operation---- however someone with a crew might find it makes $$$$ sense to work at a near break even rate for a while in the winter--to keep a crew together and save the hassle and expense of training and recruiting a crew in the spring------- that's definitely not the case for a solo operation.
2) mike is talking about when depression hits and there are NO projects to be had--all bets are off.
3) I can't help but think that you often view contractors as people who work in order to make heavy equipment payments. LOL
however------ to me cutting your rate just to make equipment payments looks like the next bad step in some demonstrably bad decision making by some of your customers.
you also mentioned that laid off employees become our" competitors".
Actually, it's just about impossible for that to happen if we have thought things through, positioned our selves properly and have targeted the right market. If we are chasing the low service, lowest price, " git 'er dun" market-- well sure a laid off employee might compete--------- but I SERIOUSLY doubt that Mike is in that market-----and I KNOW that I am not in that market.
more later--gotta run,
Stephen
Ah the different experiences piled in one thread together.
There was a time when my situation was closest to yours but not a match. Still its a good memory.
After my Father trained me to do some of every thing as a contractor that built 20 homes a year, I actually chose painting alone. There was a quite a bit more money in it than any other trade for me . Doing it I made three times or more what an established carp made with his own tools. So lets keep that fact in mind. In fact in three Summer months it was possible to make what a journeyman carp made all year working for my Father. With that said ;
I did what the department stores do basically. In peak times I worked up to 12hr/7 days per week. That was a yearly income to a carpenter working for a contractor. However it wasnt contractor or sub scale. In the fall and spring I worked about 40 hrs per week more or less. In the winter I was off . I planned three months every year of hunting and trapping.
Thinking I needed a change , I picked up drywall to my painting business to shorten my hours in the summer and work all winter. That move was actually a mistake . It didnt pay anything close for years what my painting did . I found my self doing drywall when I should have been painting . I worked all year for less money.
Finally when I had had enough of that I moved into commercial drywall and that paved the way to replace and improve my old painting income. Id say that helped me more than I helped it to finally add two trades I could make good money .
I saved enough money to become a general conractor and did that for less money.
I started flipping houses with the money I had been able to save from the earliar trades and then came the rentals . That put me into semi retirement where I am today.
Ive always worked when others were watching ball games and taking vacations. Some one was always having a cook out or get together while I was pounding away. I have worked on holidays all my working life. Ive had longer vacations than any one I know that work full time. I seldon took a day off once I was under a contractor on his job and they always rewarded me with another job for that I think.
I dont know if I was right or wrong. I can only say what I did was work all I could handle in peak times . If I were to give any advice and anyone were listening , I would only say forget what the public thinks is right . 40 hrs a week is bull crap. 5 days a week if horse play. Holidays are way over rated. But thats just me.
One more thing . Like the farmer says , find a way to make a living while you are sleeping . Find a way to make money when you are not working . There will become a day you wont want to.
Tim
tim,
I have always been astonished by the incredible talent level here on Breaktime. most of these carpenters have skills and abilities I don't even rationally aspire to
but, I am equally astonished that sometimes there seems to be a difficulty in making that incredible talent generate the $$$ it so obviously deserves.
I have a sub right now( he reminds me a bit in some ways of a younger, more successfull me)-- I am really happy with him--but I notice he has told me several times over the last few years---" I am going to have my trucks and equipment paid off in X number of years and then I will really be making some money"
i have tried again and again to show him that his equipment is NEVER going to be paid off the way he is operating-- that he doesn't need 3 trucks plus a dump truck plus 2 dump trailers, plus his nice house,plus his pole barn at another location.
He does quite respectable work---and I am sure his yearly GROSS completely dwarfs mine--- but I wouldn't trade NET with him.
I went out and hung 2 doors today and I am sure my net for the day will be more than his---working with 3 trucks,plus the dump truck,plus the 2 trailers plus the 3 employees--- he is working like a dog just to pay equipment and crew wages.
today I had a ball hanging a couple of doors( I bet I spent as much time talking to the customer as I spent hanging the doors)---- just me and my one truck and my tools
monday we will do a roof--we will arive with 5 men,4 late model pickups,a dump truck and all will be sporting my signage. job will probably be done in one day-----and Tuesday i will be back to me and my one truck---and the other 4 trucks will be somebody elses expense--------- that's what I mean by leverging the work of sub's.
Reaaly gotta run now, LOL
If I were to give any advice and anyone were listening , I would only say forget what the public thinks is right . 40 hrs a week is bull crap. 5 days a week if horse play. Holidays are way over rated. But thats just me.
Had a conversation over a few beers with a successful contractor a few years ago. His tongue in cheek comment was, "It is my goal to work 5 hrs a year at $50,000 per hour. until I can do that I am always looking to see where I can do better."
Bowz
Bowz,
40 hours is about right, IF! you are an employee with no stake in the profits of the company. Hard to remain dedicated if all you are making is wages..
I think you mis-read my post. The red part was what Tim had written.
The point the contractor was making to me, was not to just try to bang out more work. Use your head as well as your body to make your living. And to transition to using my head more as I get older. This was a remodeler who was in the process of retiring and selling his company while in his early-50's.
Sort-of like Tim. Except this guy didn't work all the time and miss holidays.
So in a roundabout way it goes back to the original poster. Should he lower his rates? I think his answer depends on whether he has done all he can to generate profitable work. (using his head).
Bowz
Bowz,
You are correct in that first you try to maximize your sales potential, then you adjust adapt and make do.. Too many are afraid of the skill and work required to maximse sales especially if they haven't done that sort of thing before. It's a world differant from just submitting a bid and waiting for the start date. Selling, which is really what we are speaking about is a skill few people master.
In my trade less than 1 person out of a hundred who start a career in sales remains in sales for more than 5 years. In the competitive sections of sales whereby your sales skills are up against others the numbers get even more dramatic!
I spoke with a Car dealership owner who once told me that he needed to hire an average of 8 new salesmen a month. This is for a relatively stable dealership that sought out long term relationships with customers rather than turn 'em and Burn 'em appraoch common at many volume dealerships.
I only use these numbers to point out just how difficult it is to generate sales when few are building..
Minnesota which is one of the more stable states when it comes to the economy this year alone has had a over 37% decrease in new home sales.. over 8000 who used to be employed in contruction (and an estimated 3000 who were employed but paid cash off the books) no longer work in contruction.
That does not count lead carpenters who now work laying asphalt or have moved into other trades simply as a means to make payments..
If a few brave individuals are willing to try to hold the line with regard to pricing, most will take the only path they really know which is cut prices..
hazlett,
You've summed it up well thank you. I might add a few notes to your comments more to clarify than to contradict. You remark about working to make payments could seem like the case, but a framer with a trailer full of tools that he is making payments on to remain viable also meets the work just to make payments stratagy. Same with truck payments. Heavy equipment like I sell is down on the list but required to be competitive in todays framing market..
I'll greatly over simplify to make my point..
Assume I am paid $20,000 to frame up a house.. using pure labor to meet a required deadline it would cost approximately $15,000. leaving $5000 for equipment payments, truck payments, overhead, and profit for the contractor..
If however he were to frame up the same house using a telehandler the numbers would amount to the following..
Labor $10,000 (use of two less grunts) and a 20% shorter build time requirement.
Telehandler payments $750
Profit for truck payments, equipment payments, would remain the same* actully slightly less since the proper use of telehandlers saves 20% of the time required and thus allows a contractor to build 20% more per year which further reduces costs.
The 20% time frame is the average that my customers report to me after the intital learning curve. Some customers report much much greater gains than that!
Complete home builders, that is those who do everything from foundation to trim work clearly save much less and often need to purchase lower priced equipment in order to still show a profit on their purchase. Nobody ever buys one of these to show it off, it makes them money pure and simple or they wouldn't spend what they cost.
Complete home buyers are lucky because the gentle way that framers use a telehandler means that it has a 20+ year life cycle. I say gentle because if someone starts to hotrod one they quickly spill the cargo or tip over.. Besides nobody will allow a fool to operate a piece of equipment when their neck is 40+ feet in the air.
frenchy,
I am just home for a quick lunch( lot of irons in the fire today)
so I might be off on my math here OR on my logic
but it looks like, off the top of my head, your contractors------- in theory===" make" about $4250 more per house using your equipment at your figures---------and in 2 houses make enough additional to make the payments for a full year.
so-I am wondering---what's the problem--why are they turning in their equipment?
I must have missed something---because it looks like your figures indicate that after---oh a half year or so operating with your equipment your contractors should be sitting on a butload of cash and easily able to ride out a few months slow down---
but apparently that ain't the case---or they ain't giving you all the figures----or they are making some other poor decisions
gotta run.
stephen
Hazlett,
When this spring rolled around and all of the overbuilding of spec homes finally hit home there was virtually no new construction at all. I used to only go and visit job sites where there were many new homes under construction in order to maximise my contact with builders. Starting this spring I would visit any job site that pulled a permit. New home, remodel, or whatever.. many days I was home either before noon or there just weren't any new permits pulled that day.. (I get a state wide listing of all building permits)
I even started to drive around looking for building where there wasn't a permit pulled. (Imagine the chance of that in a state as large as Minnesota, that should give you some idea of just how desperate things were.
Fully a third of my customers called me up and asked me to either skip a few payments or lower the payments dramatically so they could squeeze by..
We were happy to do it in all cases. This is a business that depends on refferals and if you help out a contractor who is squeezed, that word gets around quickly. I should have a lot of good will built up as construction starts back in..
I've already noticed a brief flurry in late October as the still low interest rates attract smart builders who know that the oversupply of homes is just about sold up.
I think you may have made a miscalculation. When I said that a framer was paid $20,000 for the job, I'd expect that the job would take about two weeks thus the payments on a loaded new forklift will be about $1500 per month. $750 is just 1/2 of that amount.
I do know a few framers who could knock out a framing job like that in as little as ten days while others might take a month to do the job. It really depends on how organized you are and how skilled you are at framing.. There are some jobs that can be done only with the aid of a forklift that cut many many hours off build time.. One of the biggest time savers is flooring or decking..
Now to answer your question, yes some made foolish decisions.. One novice builder who had over two years of equity in his forklift simply called us up and turned it in rather than make payments. In real terms he lost well over $15,000 worth of equity that he could have easily used to reduce his payments. He wasn't willing to listen to anything we offered him, he had his mind made up!
By late this summer trying to frame by himself he was taken off the job by the builder because he was weeks behind schedule. This in spite of working 14 hour days 7 days a week.. That was the straw that broke his back. Last I saw him he was working at Sears selling vacumm cleaners..
Frenchy,
when YOU said
Telehandler payment $750
I assumed that was/month as that's how most credit deals seem to work
If it's 1500----- then things are even tighter--making the initial purchase of the telehandler less feasible----and more dependent on an endless stream of $20,000 framing gigs.
simple mis-comunication.
As you may have figured out--- I would probably be looking for a way to enjoy the benefit of a telehandler----without having to actually own,pay for,insure,store,operate and maintain one.
Best wishes, Stephen
Hazlett,
You don't need to spend what a new one costs, just buy a good used one.. Framers seldom put more than 200 hours a year on theirs, while masons often put 2500 hours a year on theirs. Don't buy a ex mason forklift! careful about reading the hour meter, they only cost about $45.00 to replace and there is no legal restriction regarding their use or replacement (it's not an odometer)
Right now is the absolute best time to buy since I started selling them over 15 years ago!
By carefull buying! You can easily spend only $500 a month or less. Few grunts will work for $500 a month and a forklift will replace two grunts. Plus I promise you one thing, once you own one for a month you will tell me you're sorry you waited so long to buy one. In 15 years I have not ever heard otherwise.
If you'd like advice as to which ones to avoid and which ones are good deals I'll be glad to advise..
Frenchy--- there isn't the SLIGHTEST chance i am EVER going to buy one.
my whole system revolves around doing a volume of work making equipment like that absolutely irrelevant ----and in locations inaccessible to that equipment.
thanks anyhow
however-- I agree--- if i had a use for it--and a demonstrable need---THIS is possibly the classic "BUY LOW" moment.
Best wishes, hope things turn for the better for ya,
stephen
As I have often noticed here, Mike has hit the nail right on the head.......lowering your rates doesn't get you anywhere.......spend a little more on marketing, advertize more...... there is no reason to work longer or harder for less or equal pay . I learned long ago that I'd rather not work, than work for nothing. Dan
it always seems hokey,but there is a reason the big boys do coupons,people buy things because of them.so do one like 100.off ,free item,etc.send them out in sept with a 90 day expire date. i hate to admit it ,but if lowes sends me a 10% off,i go there and pick up stuff that i wouln't buy that day.larry
hand me the chainsaw, i need to trim the casing just a hair.
i hate to admit it ,but if lowes sends me a 10% off,i go there and pick up stuff that i wouln't buy that day
I'm an even cheaper date... they just have to send me a $10 off card.
jt8
"Even if I knew that tomorrow the world would go to pieces, I would still plant my apple tree." -- Dr. Martin Luther King, Jr.
I think you should have a standard rate and a higher prime time rate.
My wife does tax work. She charges a 25% premium for all work that gets to her within 2 weeks of a tax deadline.
Aaron,
I used to keep two price sheets in my truck when I first started. The " If I get this job I'll make my salary and a profit" price list. And my " The kids need food and the mortgage needs paid" price list.
I hit one job witht he " Gotta Eat" list and got it. Did a good job and even got a refferal out of it. Problem was? The refferal came from my quality work AND my price. So now I had work.................at the price that just paid my wages. And it steamrolled from there. Pretty soon I was busy every day.....................making wages.
There is an HVAC guy around me who does the "Two Rate" thing. And to be honest, I'm helping a friend break out of a rut and one thing we've talked about is advertising in the dead of winter with an " early Booking Price" for spring decks.
But it just doesn't sit right with me.
If you're gonna drop your price to keep busy, you might look at soemthing that you can sub from someone else. That way, you stay busy, someone else does the leg work, and the fact that you have reduced your price to stay busy doesn't become public knowledge.
'round here, I can alwasy pick up some sub work doing interior or exterior trim or putting in a stair rail.
If I were evr to go back to work for myself, I would hold the line on price.
we have a very big road contractor in town, when business get slow, he takes jobs at cost plus one dollar just to keep from laying anybody off. Hes a highway paving and then he be seen doing hotel parking lot and service station, small junk.
Edited 11/23/2006 11:01 pm by brownbagg
I've followed in the footsteps of a mentor and try to schedule projects as far out as possible. Right now the shedule looks full until June, but next week I'll be meeting two potential clients for a one week project and a two month job.
Many clients don't realize how many carpenters are sitting around during the winter months and would work for lower pay. If you book them when times are good there is less competition and prices are high.
Having said that, there will surely be the cancelation or other unforsean event that makes finding work in Jan. a necessity. In the past I would simply call around to the other contractors and see is anyone needs extra help. Even in a town of 30k people, there always seems to be at least one contractor who is scrambling to finish up a winter project.
:-)
Beer was created so carpenters wouldn't rule the world.
A good example of keeping busy in the off season popped up today. I stopped by a remodel where a painter friend is working to look at a minor modification to an existing cabinet he's refinishing. The contractor that was there was friendly enough and seemed to do nice work. We got to talking and exchanged cards. He's relatively new to the area so his client base isn't well developed yet.
I simply asked how busy his schedule is the next few months in case we get in a time crunch and need another hand on a T&M basis. He fessed up that he only has a few weeks of work lined up and will probably have an open schedule after that. He was excited to hear of something to add to the end of Dec. or early Jan. and without me even asking he dropped his normal winter price 25% in 2 minutes.
He would have been someone we'd hire at the normal price. His winter rate was quite reasonable and 25% off of that was a steal. For an insured contractor with his own tools, who is clean and presentable, he's only asking for as much as we'd pay a good laborer.
If he does good work we'll probably hire him as a sub to work on the jobs we're currently turning down.
There is also another contractor looking for a carp to take up some of his slack, and yet another homeowner doing his own remodel that would hire him for a few months. While on the surface it looks like this is the off season, it's really quite busy if someone were to network a little.
Don,I don't know if you're in support of dropping one's rates or not, but it seems like it was a mistake for the contractor to drop his since you would have used him anyways.*edit: I hit the post button to earlyJon Blakemore RappahannockINC.com Fredericksburg, VA
Edited 11/27/2006 9:22 pm ET by JonBlakemore
I don't know if you're in support of dropping one's rates or not, but it seems like it was a mistake for the contractor to drop his since you would have used him anyways.
I don't think dropping rates brings in that many new jobs unless the rates are unusually high to begin with, or the clients are tire kickers looking for the low bidder (often a mis-bid).
"He fessed up that he only has a few weeks of work lined up and will probably have an open schedule after that. He was excited to hear of something to add to the end of Dec. or early Jan. and without me even asking he dropped his normal winter price 25% in 2 minutes."
I ran into this with a new electrician in town last winter. So I signed him up for a few smaller projects. The trouble was as soon as his phone rang for "full pay jobs" he would disappear and my work became the filler. Took months to get 3 weeks of work completed. Never again. I pay subs their full rate but in return I expect to get full time attention.
-Norm
I usually let subs under bid or under charge if they want to. Regardless, if they can't do top knotch work we show them the door.
Having said that, if I like them, and they are about to do something stupid I don't mind pointing out things that make it win-win for everyone.
As far as the other contractor goes, we are always busy so it's in his best interest to keep us happy so we can be a reliable source of filler work when he has slow weeks or months. It was just a total lack of experience negotiating on his part.
:-)
Beer was created so carpenters wouldn't rule the world.
AaronRosenthal,
Never discount?
Not always good advice.. I see many more contractors in a month than you will see in years.. Some should never discount it's true. they have great reputations and a long list of customers.
However more than a few have been forced out of business recently because they couldn't make their payments on the equipment they need. In turn they lay off workers who add to the pressure by going out and seeking work on their own.. Your workers don't just disappear when you lay them off, they become your competiton.
If they'd been willing to lower their profit margins they could have remained in business long enough to weather the currant crises.. I see now a steady increase in work as the existing inventory of spec homes is being absorbed. Basically if they'd survived from May 'till October they could most likely will survive thru the winter..