Can You Give A Better Deal For Cash?

kanadaeh

I hear this one alot when I'm estimating residential repaints. Heck, I even had a builder asking me to paint his new homes for cash. Guess who never got the job, surprise. This city seems to be very cash minded. I don't know how many jobs I have lost because of this but I'm sure it's quite a few. Anyways, now that I'm working on my strategies for the new year I thought of a new way to handle this. When I'm estimating I usually add about 10% on the top to allow for the unexpected and room to play. So when I hand in my written estimate and the customer asks for a better deal for cash I will knock a small % off and say sure. At the end of the job I will enter the cash on my books and pay taxes like a regular job and the customer is happy because he thinks he paid cash and got a better deal. It's a win-win for all parties involved. What do you think?

PressurePros

Either way you are lowering your price to get the job. If you are okay with that, then it sounds like a winner. Personally, I don't like the insinuations of getting cash. If I lower the proposal its like I am engaging the customer in a dishonest conspiracy. "Yeah you pay me cash, Mr Homeowner and I will not report the earnings. It'll be our secret" ::wink::

I used to get this with restaurant owners. "You give discount, I pay cash?" Sure, are you gonna give me the same discount when I pay cash for my Shrimp in Lobster Sauce? Another example, selling cars while in college.. An ego would walk in with a briefcase filled with cash expecting you to drop your pants on price for him. Umm, hello, there is profit in financing and the dealership gets paid immediately when the car leaves the lot either way.

I doubt you are losing paint jobs based on a few percentage points difference in an estimate.

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Ken Fenner
Pressure Washing PA
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dougchips

I can not think of a way to hide an under the table job. We use a job name when we order product and a job name when we pay our subs. Besides being wrong and illegal, it would take more time to hide the money then to record it properly. Sort of an insult for the client to ask you to risk your company over a few hundred dollars in taxes. We have accepted cash in the past from people that did not have credit cards or a checking account, always wonder if they were drug dealers.

Some people just want to make sure that they are getting the lowest price possible.

kanadaeh

Ya, your right. I probably couldn't compete with the low ballers who work for cash and it's probably not a market I would want anyways. It just gets frustrating sometimes when I put so much time and energy into an estimate, the customer mentions cash and I tell him I don't play like that. They say they found someone to do it for half the price and I know it's probably under the table.

POOLMANinCT

i always find it amusing when i am asked to bid against myself

Boogga

Usually when a prposed client offers you cash instead of a legit cheque then of course he/she wants it cheaper. if you end up going this option then it becomes dicy because they probably want nothing written down (ie no Contracts - because you need a Contract for anything over 200 bucks) and would make you think whether you get paid for the work you do at the end. So it would become purely trust. These days forget it.

Also I don't know how these people who do alot of cash get away with it. I mean if they supply and fix for a job, they have to purchase materials from different suppliers. So they don't usually buy materials with cash so how can they hide it? These Cowboys that underprice everyone else by doing cash deals under the carpet will oneday soon get busted by the Tax office. Karma.

Thanks,

Boogga

Stone Mountain

Been doing that for 25 years.

As an aside, nearly all my customers ask "if I can do better"
Several times, I experimented:
a] in this scenario, I artificially boosted the price way higher than I really wanted. When they wanted to bargain with me, I dropped 5 or maybe 10%, and easily got the job. Funny, this, because I got more than I wanted.

b] In this plan, I gave my absolute dead cost as the price. Even though this was a hellova good deal, the customers STILL wanted to bargain. Believer me, I only tried this a few times, and no, I didn't drop any further.

People just need to feel like they're getting a bargain. Doesn't matter how much, they just want a little "give". It's a game!

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copusbuilder

Not to mention the fact that if anything ever goes wrong and they turn on you....guess who they are going to call and report you to.

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joasis

And there are some customers I have dealt with that pay cash...because they do not trust the banks, they don't trust uncle sam, they don't trush their neighbors.....whatever...funny thing about them, they never ask for a better price, or let you know it is coming in cash....one guy a built a steel building for...the kit was $11,000...and here he came, 110 $100 dollar bills....so I trip to my steel upplier...lay the cash on him...he doesn't blink an eye, gives me a receipt marked paid, and away I go...then a few weeks later, I give him the bill for the labor...out comes the cash, and I give him the receipt...and I head to the bank...split the deposit in 2 parts, everyone is happy. This has happened more then once, and while deposits of more then 10k have to be reported, so what? If you keep accurate books, what do you have to worry about...it isn't against the law to hold cash yet.

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mdshunk

If I'm asked during a sales call if I give a discount for cash, my usual response is, "If you get a cash discount, will you be signing the contract tonight?" If I get an answer in the affirmative, then a discount it is. Whatever it takes to close the deal. If you don't need work, then you obviously don't need to give the discount when asked. I think that most people think you'll give them a lot off, hoping that you'll keep it "off the books". You're nuts if you do that. A couple percent is my normal discount, if they even ask for it. Even the supply houses give you a couple percent off if you pay right away (cash or otherwise).

Mike Finley

thom

Things work a little different here in NM. We don't pay sales tax on materials we buy (assuming we are properly licensed and have the appropriate non-tax certificate for the supplier) but we charge on the full job, her in Albuquerque just a hair under 8%.

What people are looking for is to keep that off the books so they don't have to pay the 8% tax. I always said hell no, but a lot of guys say yes.

It seems no matter what price you quote it's to high to many people. If it's a $30,000. job an you quote at $30,000 that's way to high. Bid that same job at $15,000 and it's still way to high. If you bid it at $40,000 then drop to $33,000 they think they got a real deal, even though the "regular" price would have been $30,000.

john elliott

I know people like that too. It's great if you can spot them right away, before any numbers are on the table, then the sale is virtually certain if you add x% on and then deduct x/2%

John

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EZ Rider

[quote=joasis;171717]And there are some customers I have dealt with that pay cash...because they do not trust the banks, they don't trust uncle sam, they don't trush their neighbors.....whatever...funny thing about them, they never ask for a better price, or let you know it is coming in cash.....

Exactly. One of our clients, painter by trade, ALWAYS pays in cash and NEVER asks for a price break. He often pays more than we ask for (I guess we are pricing to low).

Another downside to dealing in cash on a regular basis is, unless you can find a way to 'launder' the money and invest a portion of it, you are shooting yourself in the foot because it lowers your reported income and likewise the amount taxed for Social Security which in turn lowers what you will be able to receive when you retire. Hopefully that will still be around when we get there???

Dave

Chris G

That's the trick isn't it. I have a friend who owns an architectural salvage shop. Antique hardware and things. He doesn't mark anything in the store with a price tag. He's is so good at sizing up customers that he can just tell when he needs to add 20% to his price, so he can then give a 20% discount.

Remember that merchants pay for visa, (3-5%?), so you can usually save a few percentage points on materials if you offer cash.

PressurePros

My price is my price. No bartering. No negotiation. I don't markup so I can mark down. I don't penalize a customer for using a CC nor do I reward those that pay cash. I offer plenty of perks (no material deposits, for instance to book the job) In my opinion all of that is shady and comes back to bite you in the azz. If you are going to discount a couple hundred bucks or so, then mdshunk's close would work well.

If I go into a retailer and no prices are posted (my jeweler does that) I always leave the place wondering if I paid FMV or if I got ripped off. I don't want my customers to feel the same way.

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Ken Fenner
Pressure Washing PA
Roof Cleaning Services PA

Teetorbilt

I live in an area where cash is highly suspect and there are a myriad of ways of tracking it. EVERYTHING goes through the books and banks.

My current idea of retirement is not a 10 X 12 apt. with a roommate named Bubba BTW, Tax evasion is a FEDERAL crime. You will not be at your local work release camp.

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POOLMANinCT

all cash is good for is dinners & clothes,

wisdom bestowed on me by a bookie i did work for in college

mdshunk

So, you eat out a lot, and you have a nice wardrobe?

POOLMANinCT

nah im too cheap

i rarely will pay for coffee on the road 2$ wtf.. i make it for a week for less than that