Leaving Money On The Table

Aggie67

We have several firms in our field that we cooperate with and have come to know very well.

The most intriguing discovery is everyone's position when it comes to adjusting markups and haggling over price.

Some firms adjust markup depending on how much they want the work. Some firms go in at cost or for wages just to keep men employed and their name on the street. Some firms will let the customer haggle, by building in a cushion because they know the guy is going to come back at them saying "My friend, do it for this price and the job is yours." Others stick to their guns no matter what, and get turned off by that type of client.

I will live and die by the philosophy that says if you're swamped with work and in demand - especially if clients are repeats - you stick to your guns on price and engage the client in scope reductions. If you're slow with your repeats, you adjust markup to compete on the bids. Our ultimate goals are to keep a break-even number of guys employed or more, and to always have one more project lined up than you can get to so crews can swing right to a new job.

It truly is a fine line, but does anyone else here think differently? How much haggling do you put up with? Is pushing volume more important to you, or does your work level porpoise between nothing, a lot, nothing, a lot?

genecarp

I operate very much like you have described, on another note, your thread title LEAVING MONEY ON THE TABLE, i believe it is good to leave A LITTLE $ on the table on every job. you then leave the customer feeling good, and often if they have a little $ left, they will start another little job that they where not planning on, then add to it to complete...

__________________

Aggie67

That's not a bad idea. In our line of work, that would work for the no-bid repeats. For the bids, it's tough to go back after the number is in. I suppose during estimating we could look into some value engineering points, and include them in the bid. Something along the lines of "you drew and specified this, and here's the number, but if you did it our way, you'd save this."