What Do You Show The Client In Proposal

d-rez

I am a G.C. that is currently doing projects around the $100,000 range. When I submit my estimate/proposal I also include the spreadsheet showing line items, the last line is my company's fee. I add this so we may adjust the bid according to thier budget,explaining that I put down x amount for whatever, but it could be changed. Do you guys show this or do you spread the soft costs into the other line items? Or do you not show the client a spread at all? I am asking because it seems some clients see that charge of, say, $20,000 and think I personally am walking away with that. I wish!!!! They do not understand overhead, my project leads salary, ect. I think I just lost a job based on this situation( they commented on it...) Thanks, Chris

POOLMANinCT

hell no!!!!!

they get my price. your
"fee" should be no more negotiable than the 30k windows, "they just have to get"

the only "wiggle room" should be in their products options... the window vendor won't devalue their product, why devalue yours...
your efforts are a commodity & are worth ***X$.

__________________
......Less with the jaw & More with the paw.....

MKamis

My overhead and fees are always factored into the cost of each line item in the project. This help a lot when, for instance, certain parts of the job are removed or changed. If you have all of your overhead costs in one column, the potential customer might remove a $3,000 item in the proposal and you're on the spot to figure out how much overhead is attached to that item without compromising your actual costs.

For whatever reason, a lot of customers don't want to see how much money we will net from the job, and when they do, they don't understand that it's not just going into the pocket of the owner!

TNGHomes

I include my markup for overhead into my bid in each line item. Not only do I break down the phases into line items I include the literature and options on all materials to be used ( heating/cooling equip, tubs, cabinets, ect. ect.) with in that Price. The customers get to see everything there going to get before they decide on a contractor, thats why I love going against guys who give a straight up price.

dirt diggler

it's worked for me and it has caused problems for me

im back to lump sum 100% all the time


it's nobody's business anyways what you make... and nobody but yourself should know

i'll repeat that ... for slowpokes

"nobody but yourself should know ..."

again

"nobody but yourself should know ..."

RobertCDF

In my limited experience... The people I market to just want to know if I can build what they want and how much will it cost. Very rarely do I get people questioning my 1 line price. The ones that do are usually the ones that found me on the web or from other random sources.

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Robert Shaw
Colorado Springs Custom Decks
Colorado Custom Decks
Custom Composite Decks

Richard

Try handing them your testimonials and references from past satisfied customers. That's how you earn trust. Who cares what they think, you know the cost of doing business. In turn, they should not be so ignorant to what big projects cost. After all, a smart customer is one who has gotten at least 2 other estimates-Not choosing on price alone, but the full package/warranty being offered.

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Rich

Chris Johnson

I usually show the scope in detail, the bottom line, and then a schedule of allowances for options/upgrades. Being in a different line of this business then the finish/renovation guys I don't deal with too much options, concrete is concrete. But your profit/mark ups/salary or whatever you want to call your money is just that, it's your money and I guarantee if the client sees what you are making on the job they will always think it is too much and try to beat it down to nothing, no matter how low you price the job the more numbers you give them the more numbers they are going to question and check behind your back as to what they can buy them from a supplier directly and perhaps try to renogitate your labour since they think they are doing all the hard work of 'organizing' the project.

I have done a few projects where the people have negotiated a deal with the concrete company for all the concrete on their house, at this point I don't have an issue with that other than have them sign an acknowledgement that the quantities if I give them are soley my estimate and if there is a shortage or overage I am not responsible and no backcharge will be accepted. Generally the 'special' price the Ready Mix supply gives them is still 10-15% higher than my price, I match this 'special' price and just close the contract that way.

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Chris

rino1494

I agree.

__________________
Life is hard. It is harder when you are stupid

Uncle Sam wants YOU....to speak ENGLISH

ruskent

I break the estimate down to the different parts: Pool, retaining walls, pool deck, plantings, mulch, seeding, etc etc etc.

First off, if i am giving people this detailed of a proposal i already got atleast a $1500 dollar retaininer from them. 2nd off, i can not ask someone to give me a six figure amount without them seeing what $ was going where.

KillerToiletSpider

We show them the total dollar amount, without any breakdowns, the last job we bid was 1.4 million in plumbing, we were $30,000.00 dollars high, but the job was ours. We ended up turning the job down because we couldn't man it.

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A flush is better than a full house.

RobertCDF

That is fine to break it down like that in LARGE portions. This way they can decide what they want to do first or what they can cut to make it work. I would be ok with breaking it down like that. But each thing would still be materials, labor, markup, and profit grouped together.

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Robert Shaw
Colorado Springs Custom Decks
Colorado Custom Decks
Custom Composite Decks

Driftwood

If the customer want's to know what I pay for nuts and bolts , Wrong house !

THIS NUT BOLTS! I,m with Dirt Digler

Second Look

We're in a service business. Lumber, nails, gasoline, electricity... those are commodities. There's little difference from one brand of gasoline to another, so they tend to be priced similarly and offer similar benefits.

A custom job is just that. It's not something you can buy off the shelf. The more we can "de-commoditize" what we do, the better.

__________________
Second Look home improvement www.SecondLookHome.com
Handyman and Home Repair Specialist in Rhode Island
RI Licensed Lead Safe Remodeler/Renovator, RI Registered & Insured Contractor

skyhook

If that's soft money, it will get left on the table. Most of my people want a fixed number. How I get there is irrelivent to them.

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wackman

I never show my fees. Not my profit, overhead, labor, nothin.. If they showed you how little it cost them to actually build that truck you'd balk at the sales price too, it's human nature.

As for the picks I just give them an allowance in the range of what I "expect" they will cost and then if they exceed that amount it comes out of pocket and if they don't pick as spendy of items as I thought then I'll credit them.

I send them to my showrooms that have my margins built into the price and if they want some special fixture that isn't from my vendors then I tack on more to the labor price to account for the missing material mark up. Plus those items usually are a PITA to deal with and take longer to install. I won't warrent a item that I didn't purchase, only the install. If I purchased it then I'll warrent the item and the labor.

On bigger jobs that need to be broken down my profits, fees and OH are broken down and incorporated into the line item. OH is calculated by the day.

tmccafferty

For a lump sum project we generally give a line item document showing our standard 10 on 10 mark-up structure. !0% overhead and 10%profit. Once the contract is signed and this is disclosed to the client then this number cannot go down. It can go up if the client should add work but if something is removed from the scope you overhead and profit are not reduced.
As long as all this is put on the table then there is no need for arguement over costs at the end of the project. It is all simple and laid out for everyone involved.
I find that, if you have done your homework, then people generally appreciate the openness of it all. If not then they can go with the low bidder and most likely end up paying more.

Cdat

Seperate it and still show it. Otherwise, HO's will look at other bids and you'll lose if you have the overhead factored in/per part of the job. At least where I'm at, it's a HO'ers market right now and they can pick and choose.

Just be prepared to explain to them in detail (true or not, that's up to you), what those costs are for. You just say, "Overhead". They'll look elsewhere. Been there, done that. If however, I explain in detail what those costs represent, it wins me trust and if you put it in terms they understand, they'll be more receptive to your offer. I've actually used a PR man to 'sell' me. A good people person who 'sold' my product better then I ever could.

Big Bob

de-rez,

This is a salesmanship question. You need to help the buyer by selling them the way they want to be sold. Test for hot buttons and be flexible in your sales presentation.

It's all about comfort zone... not price..

good luck