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olmsted carpenters / cc – 07:54pm Oct 20, 1999 EST
Guest User
I have hit many repair jobs in the suburbs of Cleveland (urban sprawl)on houses that are 2 to 5 years old. Very poor workmanship, lots of leaks and poor installations. I want to diplomatically start charging T&M Plus.I think I would be able to weed out a lot of people on the phone and would not have to drive all over to look at small 3 to 4 hour jobs. I would like to find a way to do this, maybe send them some references along with my company brochure when they call and then if they are interested then maybe they will call back? I think many people have the notion that they will get ripped off? Anyone had any success with this method?
Thanks cc
Replies
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I'm not sure what T&M plus is. I do alot of small repair jobs T&M. (I've heard of cost plus)
On the phone, I simply explain that on small repair jobs my labor rate is X$ per hour plus materials and that I do not mark up materials. I also say that payment is expected at the completion of the work.
Say it like it's just a fact and has been a fact and no one will question it.
If you don't get work by being so up front, you probably won't get the work after going out to bid the job.
If someone wants a firm price, tell them that after insurance, and overhead, there is such a small profit in the small projects that you simply couldn't remain competetive if you had to visit every site and write a proposal for each.
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matinance work is almost always done around here with a fixed rate. You have to arrive at a bill out rate that will include your labor overhead labor burden and profit. Around here it is going from 35 to 45 per hour. Plus materials (usually marked up 10%). Carpenters that do a good job on general matainance are making 15 to 20 per hour. Do not under price yourself. Your bill out rate should be at least double your labor rate. If someone wants a price charge 25$ for the estimate. To be taken off the bill if the work is done. Dont forget to add 25$ to the estimate.
Rick Tuk
*I'm glad to see others are having the same problems with homeowners, etc. expecting "free" estimates from small builders/repair contractors. Why is it that they will pay a doctor, attorney, dentist, etc. a consult fee, but when it comes to us, they don't want to pay. If they called an electrician or plumber out to give them an estimate, they don't hestitate when told that it will cost $xxx.xx for them to come out and give an estimate. There are a couple of ways to do it.1. Tell them over the phone that you charge $xx.xx per hour for 1 person, $xx.xx for 2 people, etc. plus materials (don't forget pickup/delivery charges).2. Tell them that you would be happy to come over and give them an estimate, but that you would have to charge them for the time to come out (again, don't forget travel time).3. If you do go out to bid a job, be prepared. i.e.* Make sure that if they are getting other bids, that everyone is talking apples. If the homeowner has not written down what they need done and you put in a bid, you may be including things that another contractor is leaving out and not including in his/her bid.* Have a standard form ready to fill out and sign just in case the homeowner likes your bid. There is nothing worse that a homeowner telling you that he likes what you are saying and the price and he wants to use you only to go back to the office to draw up the papers and getting a phone call that they decided to go with someone else. Get a signature and a non-refundable deposit (I normally charge $100.00). Remember, when you go to their home and get a signature, by law, they have 3 business days to cancel, so never start the work before the start of the 4th business day after the signing.As for sending them references and your company brochure, this is just another expense incurred that may or may not result in you getting the job. I recommend that you have a standard "Thank you for calling" form letter stating your company policy, rates, membership affiliations (BBB, Chamber of Commerce, NAHB) and references and proof of insurance upon request. Many homowners are afraid of being "ripped off", but most are just shopping to get the lowest price.*** To all..... How do we as Builders/Remodelers/Small Construction businessmen get all these magazines (Fine Homebuilding, Family Handyman, This Old House, etc) aimed at the homeowner to get the point across that OUR time is not free?????Vince ([email protected])
*Vince,Around here everyone expects a free estimate that is why I charge a fee with the proviso that it will be taken off the bill. Then I add the fee back into the estimate. Makes them think they are getting something for nothing.Rick Tuk
*Rik,I would much rather you state you're going to charge me $25 for the estimate rather than backhandedly slide it back into the bid/estimate afterwards. That's not professional at all. I don't disagree that we all have to make money and that our time is valuable. If you expect people to respect you and your work, then don't do hypocritical stuff like that.Matt
*I remember reading a thing not long ago about estimates. The jist of it was - the first meeting and estimate process are usually you first business interactions with a customer. If you do it free, you are telling them what you consider your time to be worth - nothing. I still go at least look at the job once without charging. It is expected around here. I'd sure like to find a fair way to charge for the estimate though. - jb
*RickI agree with Matthew. When I do the estimate, at the bottom where I give the total, then I subtract the amount they paid for the estimate. If you figure your overhead, labor, labor burden, & profit right, that small fee you charge for an estimate is already covered if you get the job. You can usually tell from the phone conversation if it is going to be a big or small job. You don't have to charge everytime, but let them know that you normally do. i.e. "Mr Smith, Normally I charge for my travel time and estimates, but since I'll be in your area on Thursday, I'll be happy to stop by and see you. How about 3pm?" When you get there, have them expain exactly what they want or need, take notes, ask question, and then you will be able to tell if is a simply job or a more complex job. Simple jobs, you can take some measurements quickly and give them an estimate on the spot (don't be too quick to give them the estimate - get out your calculator, notepad, etc. and do some figuring, even though you already have a figure in mind). If it looks like a more complex job than what they told you on the phone, before you spend anymore time there, explain to them that it will take some time to do the estimate and that you will have to charge for the estimate.In either case, be prepared (See my comments above). A couple of things I left out are use old fashion carbon paper if you draw up a bid on the spot, carry a receipt book for any monies received, note on the receipt or bid that the estimate/deposit is NON REFUNDABLE, and depending on the type job, put in the "caviat" --Foundation estimate -- a rock clause -- XYZ Construction cannot bid what we cannot see, therefore should we hit rock that cannot easily be remove, additional charges will occur.Re-Roofing estimate -- a sheathing clause -- XYZ Construction cannot bid what we cannot see, therefore should we encounter damaged or rotten sheathing, we will replace up to XXX sf of sheathing at no extra charge. The charge for replacing sheathing over XXX sf will be charged at $xxx.xx per sfYou get the idea. Just make sure that you put everything you are going to do in the estimate and make sure the customer understands that anything over that will be extra.Also, like I said above, if you are not the only one giving them an estimate, make sure that everyone is talking apples.I posted some time back, the best book I've found for the small builder/remodeler is one put out by the company that sponsors this web site "The Builder's Guide to Running a Successful Construction Company" by David Gertsel. I highly recommend it.
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olmsted carpenters / cc - 07:54pm Oct 20, 1999 EST
Guest User
I have hit many repair jobs in the suburbs of Cleveland (urban sprawl)on houses that are 2 to 5 years old. Very poor workmanship, lots of leaks and poor installations. I want to diplomatically start charging T&M Plus.I think I would be able to weed out a lot of people on the phone and would not have to drive all over to look at small 3 to 4 hour jobs. I would like to find a way to do this, maybe send them some references along with my company brochure when they call and then if they are interested then maybe they will call back? I think many people have the notion that they will get ripped off? Anyone had any success with this method?
Thanks cc