The Customer Wants A Breakdown

sparehair

I guess I'm in the minority here. I ALWAYS break it down. Every tube of caulk. Everything. I mark up materials sometimes 100% Whatever I think looks reasonable. Several clients have said they liked it because they knew what they were getting and perceived it as being honest.

silvertree

As I said, I started the breakdown of everything about 10 years ago. I had just bought the Hometech computer estimating program and gave out 20 page contracts. Most HO's didn't read everything even though I sat with them and made them read it. Into the job I'd get things like "Oh, is that what I picked"?
I gave it up a few years ago, but I went to seminars that said it was a good thing to do. I found it to be problematic.

Things are changing, some for the worst. We'll have this thread come up again I'm sure.

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Brock

I don't break them down, but I am always impressed with the insurance breakdowns. It would be nice to have an extra billion dollars to buy that program and check yourself from time to time.

Actually now that I think of it, I could use that program to my advantage. I would have that thing broke down to every screw and tube of caulk. I may be on to something here. No wait I don't have the Billion for the software...damn it man.

rbsremodeling

Its really not to bad I think you can rent it for monthly fees. Its been awhile since I looked into it but it was not to bad when I check. They have a remodeler version of it now too

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Sportioli

Sounds like the client is a micro manager, one poster suggested recommending a competitor to him.. Which when you think about it does make good sense.

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duckdown

I don't think it is a matter of consumers have a perspective that markup is bad. What I think the problem is that no one applies a consistent markup which varies amongst contractors. If there were an industry standard markup expressed as a percentage, then consumers would probably just accept it.

If I markup 0%, you 10% and another 20% then this can only stimulate bad perceptions amongst customers since they know they are getting the SAME material and can only think of it as gouging...

DavidC

Possibly I'm an anomoly, but as a consumer I understand that markup is HOW a business makes a profit. How much time does anyone spend thinking about a retailers markup while shopping? If they all use a standard markup how is it we can get the same item for less at a different store? What makes the contracting business so different that we have to expose ourselves to make a sale? No other business' seem to feel the need.

Most clients we deal with know very little about what and how we do what we do. They ask about the cost because they don't know what else to ask about. Educate them a little and you notice that they are less concerned with how much we are making, more concerned with what they are getting.

One contractor works alone with a pick up and box of tools, liability ins. and his license. Another has the same plus 1 employee which now requires WC, Disb. Ins., UI and payroll taxes. A third operates with 3 crews and multiple trucks and a sales staff. How can you possibly apply a standard markup? They could all be competing for the same garage to build. The consumer will choose what they perceive as the best value.

We don't sell materials. We sell a finished product. It is up to us to present our product as the best choice based on the value we build in our presentation. Charging enough to cover your costs and make a profit over and above your wage is not gouging as long as the level of value you are providing is consistant with your price in the customers eyes.

Good Luck
Dave

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tcleve4911

If you mark up 0%, you are making MINUS -40% profit!!!!

Markup is the number you use to create profit.
After all your expenses are paid - gas, rent, insurance etc, You are left with your "profit".
Profit is used to stay in business and grow.
We mark up labor, materials & subs 100% to meet our goal of 40% profit.

Sometimes we hit it, sometimes we don't.....Jobs go good & jobs go bad

Read your Business 101 and markup the amount needed to stay in business or get out of the way.

Don't mean to sound harsh but I've heard this too much

In answer to the thread topic. Breakdown should be by tasks, not items.

i.e. Door installation would read "Install door in existing frame. Allowance for door @ $1000.00, Trim to match existing." Total cost = $2,100.00

Not shims @ $1.09 per pack, Ice & water @ $.80/LF. Casing @ $2.74/LF

EXAGGERATED BUT MAKING MY POINT. IT'S A PACKAGE DEAL

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Mellison

Whenevr I have been asked for a breakdown (not often) I simply FUDGE it.
The HO never knows what thet are looking at and I think it makes them feel as though they know what they are paying for.

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Tom M

Funny how a ballpark cost just got specific. I tell myself either they have some SQFT number in there head because before they called you they spoke to a few people or they honestly are curious as to where the money goes and if they can save something somewhere. I would say "your putting at least this much ***x in the ground, framing around ***xx then roofing & siding is going to come in at around ***x". By now you have justified where money can add up. Wait you then say "you didnt even add a garage door or electric or even the debris removal". Any more specific you need plans. What you want to do is show them where money can add up and let them get used to the idea on spending that kind of money to build it.

Vince_B

After being exposed to the bidding process, I'm not really comfortable to being grinded on price by giving a breakdown.

This is the customary dialog that follows these requests:


Customer: Can you break down your price?

Me: What are your concerns?

Customer: I just want a breakdown.

Me: I don't give breakdowns.

Customer: Why not?

Me: I just don't.

(long awkward silence)

Me: OK, good luck with your project.

Mike Finley

Well, you almost stumbled into some clarity for just about a nano second.

So how does your theory apply to Blue Jeans?

Walmart sells wranglers for $19.00, target sells the same ones for $29.00, Macy's sells them for $35.00

Are customers protesting Macy's for price gouging?

Another version:

A pair of Levis has 2 lbs of denim material in each pair, a pair of Guess jeans has 2 lbs of denim material in each pair. Each one has 2 legs, a zipper, 4 pockets and a belt loop going around it.


Some consumers buy the Levis for $35.00 a pair and some others buy the Guess jeans for $125.00 a pair.

Are customers protesting Guess for price gouging?

Are you scratching your head yet?

Brock

WTF are you talking about. They each have 5 pockets. You are forgeting about the midget pocket all of us hook our tape measure on to.

Bodger

Well...unfortunately...some of us have more time on our hands than we would like..

I have been asked for "breakdowns", and I keep them very general.
If the client wants a real breakdown, tell him to hire a jackleg or do the job himself. He'll get a breeakdown all right.

Mike Finley

I forgot about that pocket, haven't used it since my mom used to stick a dime in there so I could always call home.

Actually my designer guess work jeans only have pockets on the front, none on the back so my ass looks smooooooooooooooooooooooth.

MALCO.New.York

And how are we, as men and seasoned Professionals, expected to deal with posts such as this?????

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Bodger

Hey, if Finley's azz gets you worked up, that's YOUR problem!

skymaster

No Way, I have seen this more than once. You break down a job, and next thing ya git is: Well I can get this guy cheaper to do the sheetrock, and this painter is 10 dollars cheaper etc etc, You got only what you show to be cheapest and have to deal with contractors that are NOT yours and YOU are responsible for the whole damn job
NFW

Tscarborough

Break OUT options, but if they want a serious breakdown of the estimate charge them 10% of the bid upfront to see it.

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Mellison

Great analogies.
Too bad all customers don't see along these lines.

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