Reduction In Labor Rate!

mnjconstruction

I think all of us have had a hard year. Up here in northern maine is no different.

I know I have heard from alot of contractors that they refuse to reduce there rates. Well I apparently am not one of them.

I ran an add in the newspaper and local swap and sell book that from oct to the end of feb, I am offering a "winter labor rate" of only 20 per hour. Now I know in other areas there is no way you could go this low. But up here its only 6 dollars less than my normal hourly rate. We make alot less than most other areas!

I am now booked till around x-mas. All by the hour at the "winter rate"

Dont know if this method would work for other areas but I just thought I would share.

CookeCarpentry

So a $48.00/day reduction in labor costs has you booked until xmas?

What if you never reduced your labor rate, but still billed it as a winter special?

Vision Custom

Wow, what do you pay your guys? Where is your W/C, overhead, taxes, etc. coming from?

That would put me in the red BEFORE I paid for the ad for it.

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Don
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http://rioranchosremodeler.com/

CookeCarpentry

Even if he is a 1-man operation, seems a bit low even at his original $26.00.

Vision Custom

I do like the idea of a Winter Special on rates, though.

__________________
Don
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http://rioranchosremodeler.com/

CookeCarpentry

Perhaps just advertising it as a "Winter Special" and keeping everything the same will get people calling...

Vision Custom

I would tend to agree, and I think I would offer a series of coupons based on sales ammounts per customer, so the margins are more manageable.

$100 - $500 = $ 75.00 off
$ 501 - $ 1000 = $150 off etc.

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Don
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http://rioranchosremodeler.com/

mnjconstruction

i know it seems low to just about everyone on here but up here its not low at all. My rate is average for these parts. contractors charge 24-28 few at 30. we are all insured, workmans comp. etc. not hacks working for cash. been in buisness for 15 years

KentWhitten

Being from Maine and originally from "the county" I understand the price. It is the truth. A few years back I remember seeing in the newspaper an ad for a 6 bedroom home for sale with acreage for $34,000. Problem was that it was in Millinocket which has a problem keeping the mill open. The further north you go, the tougher it is and I think I've talked with the OP before and he's way....way....way...up there.

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If you correct your mind, the rest of your life will fall into place ~Lao Tzu

Custom Cabinetry - Portland, Cape Elizabeth, Scarborough, Kennebunkport, Yarmouth, Falmouth, Cumberland, Ogunquit, Maine

Salmon Falls Cabinetry

CookeCarpentry

So am I to assume the further north the lower the wages? And associated living costs?

What is unemployment like up there?

J F

How many guys at this rate? You? or 10, 20, 100?

J F

J F

I might reduce my rate for my parents, but I make sure to whack 'em on change orders.

rselectric1

Oh Jimmy, you don't swing that way...do you?

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220...221...whatever it takes!

CookeCarpentry

I treat working for my parents like any PITA customer...mark everything up an extra 20%

And whack 'em with change orders...

J F

Patrick

Its a whole nother world up there. I actually like it if I had a big pot of money Id go live up there, but I see no way for a working man to live off whats available up there. Even the kids gotta move out, the parents manage to save enough to send them to college, and when they come back its like "where the hell am i gonna get a job here?"

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Originally Posted by Celtic
Like I said...I'm sure you are very good at what you do ~ whatever that is and where ever it happens.

CookeCarpentry

wow....

DaVinciRemodel

I don't think your original post was to discuss the pay scale in Maine but to discuss the concept of a lower rate offer. Many moons ago we were near death and made a similar decission. We made a 10% off offer - project must be completed by XX-XX-XX (time limit). (note: you cut yours by 23% - That's big). The big difference is that we only made the offer to past customers (and we played it up - "due to your loyalty" type thing) - the phone started ringing the next day! The big difference is that we turned it into a marketing opportunity - you just gave away the money.

Find a way to now turn this into something that will pay benefits in the future. Make sure these people understand that they got a GREAT deal. Use 23% off rather than $6 off.

Good luck and hang in there!

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CookeCarpentry

Seems that Mr. Wonton didn't think that either....