We bid per job as most do. My builder works very efficiently. He's been building for 20 years and doesn't mess around. His work is excellent, his customer service is excellent, his job sites meticulous.
We recently had a client who needed repair done after a kitchen remodel relocated the vent hood. There was water damage extending up the roof to the chimney.
He replaced siding, sheathing, all flashing with copper, ice guard to all joints between the roof and the wall, added Tyvek to all the areas that were exposed, and trim boards were PVC board. He charged $4200 for the job. It took 2-8 hour days to complete.
The client agreed to the proposal and signed the contract. They had the 3 days for cancellation and the project started on the 4th day.
They were very happy with his work and wanted him to propose a roof job for them using composite slate tiles. We found a distributor, registered for an installation course and obtained marketing material. He went over yesterday to drop off the tile samples and asked "do you have any questions about the work I did? Is everything to your satisfaction?" The client replied that she was very pleased with the work and that she would discuss the roof with her husband and get back to us.
Last night we got a call at 9p from the husband. He was screaming. syaing we over charged him, he was reporting us to Consumer Protection, BBB and taking us to small claims court. He continued to yell saying that two different builders told him we had charged him 3-4 times as much as the job was worth. He had already sent the $1200 balance and we told him we would send it back. He asked for itemized bills and commented that my builder was only there 2 days. He refused to meet today face to face to discuss this and requested the information be sent in the mail. Then he hung up on us.:furious:
After gathering ourselves from the shock we reworked the numbers in CostEstimator. It was hard to come up with an hourly rate but we estimated $100/hour for 16 hours, $825 for materials and marked up 67%. Our estimated cost was off by about $150. Technically, this is what we *owe* him for a refund. He wants HALF! :blink: At this point, I don't think we are going to settle for anything less than the contract amount. Let him take us to court. Our mark-up is based on our State's Contractor Guidelines first of all and secondly, they signed the contract. If it was for $8000, they signed it and were happy with the work when it was completed, they owe. Period.
Now in a LETTER we have to justify the $100/hour rate which I'm sure is going to seem astronomical to this guy. We are a sole proprietorship, there aren't 19 guys working for us making $30/hour plus bennies. All this stuff comes directly out of our pockets. I broke everything down specifically and came up with a rate analysis.
Figuring in expenses like SS, WC, holiday/vacation pay, medical and truck costs in order to make $75/hour "pay", we need to charge the client $111.58. So our guess wasn't too far off.
How do I phrase all of this so the client understands how this works? I want to make it clear that paying "per job" rather than hourly is in HIS best interest since a slacker builder could drag a 16 hour job into 40.
This is the second time that a client has allowed us to complete a project only to decide the work wasn't "worth" what they paid for it. The first time we were stiffed $6000, now this one is $1200. Do people really think they don't have to honor contracts??:blink:
We recently had a client who needed repair done after a kitchen remodel relocated the vent hood. There was water damage extending up the roof to the chimney.
He replaced siding, sheathing, all flashing with copper, ice guard to all joints between the roof and the wall, added Tyvek to all the areas that were exposed, and trim boards were PVC board. He charged $4200 for the job. It took 2-8 hour days to complete.
The client agreed to the proposal and signed the contract. They had the 3 days for cancellation and the project started on the 4th day.
They were very happy with his work and wanted him to propose a roof job for them using composite slate tiles. We found a distributor, registered for an installation course and obtained marketing material. He went over yesterday to drop off the tile samples and asked "do you have any questions about the work I did? Is everything to your satisfaction?" The client replied that she was very pleased with the work and that she would discuss the roof with her husband and get back to us.
Last night we got a call at 9p from the husband. He was screaming. syaing we over charged him, he was reporting us to Consumer Protection, BBB and taking us to small claims court. He continued to yell saying that two different builders told him we had charged him 3-4 times as much as the job was worth. He had already sent the $1200 balance and we told him we would send it back. He asked for itemized bills and commented that my builder was only there 2 days. He refused to meet today face to face to discuss this and requested the information be sent in the mail. Then he hung up on us.:furious:
After gathering ourselves from the shock we reworked the numbers in CostEstimator. It was hard to come up with an hourly rate but we estimated $100/hour for 16 hours, $825 for materials and marked up 67%. Our estimated cost was off by about $150. Technically, this is what we *owe* him for a refund. He wants HALF! :blink: At this point, I don't think we are going to settle for anything less than the contract amount. Let him take us to court. Our mark-up is based on our State's Contractor Guidelines first of all and secondly, they signed the contract. If it was for $8000, they signed it and were happy with the work when it was completed, they owe. Period.
Now in a LETTER we have to justify the $100/hour rate which I'm sure is going to seem astronomical to this guy. We are a sole proprietorship, there aren't 19 guys working for us making $30/hour plus bennies. All this stuff comes directly out of our pockets. I broke everything down specifically and came up with a rate analysis.
Figuring in expenses like SS, WC, holiday/vacation pay, medical and truck costs in order to make $75/hour "pay", we need to charge the client $111.58. So our guess wasn't too far off.
How do I phrase all of this so the client understands how this works? I want to make it clear that paying "per job" rather than hourly is in HIS best interest since a slacker builder could drag a 16 hour job into 40.
This is the second time that a client has allowed us to complete a project only to decide the work wasn't "worth" what they paid for it. The first time we were stiffed $6000, now this one is $1200. Do people really think they don't have to honor contracts??:blink: