Competing Against Bigger Builders

orson

How do you other small remodeling companies fare against larger builders who are diversified, do much larger volumes of business and have much lower markups.

I run into this where I'm competing for a remodeling job against home builders who do 10 to 100 times my sales volume, have half my markup(my markup is @ the low end for a small remodeler being a new company) and lower costs because they don't always sub the mechanicals (legal here in PA) and use some of their dirt cheap subs from new construction to keep their costs low.

To make things even more fun a lot of the local mechanicals companies are starting to advertise GCing bathroom remodeling too.

I'm not complaining, I realize competition is the nature of the marketplace, just wondering how you do against larger home builders w/ good reputations quoting jobs @ half your price?

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dayspring

I'm a small operation. I don't mind competing with larger contractors. I have the right people lined up, such as a mason, electrician, plumber, etc, if need be. I sell my experience. If someone has experience, it means alot. How does the H/O know you have the experience?

Several ways.

#1 You show up on time. If your not on time for your initial meeting then you've already shown you are a tardy, undependaple person.

#2 You must also prove you are not only good with your hands, but that you have a business mind. You must make them understand that they are not just dealing with Joe the carpenter or plumber, but they are dealing with a legit business owner.

#3 Give them references, nothing beats your previuos clients opinion.

#4 Make them aware that by being a small operation, you will be onsight, the job will be done to your specs with your total supervision.

The list goes on.

Bottom line in most cases, you can provide a better job, for a lil less money, due to overhead cost, Most times it may not happen in as short a time, 'cause you are in control, being picky, and doing more of the work yourself.

If you are dealing with bathrooms, how many people can work in the average bath at one time?

Us small timers take care of our clients, they are our next job sometimes.

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woodmagman

David and Goliath, not everyone could take on Goliath, It is apples and oranges when you are talking 10 and 100 time the size. You are not going to compete and nor do you want to. You differently will be able to take consumers from them but competing....you are different businesses. Price is not the issue if someone is looking to hire a company 100 times larger. It is about reputation, ability, management structure and the list goes on...your not going to get a 100 million dollar bridge project and they do not what a 1 million dollar restaurant renovation.

dayspring

I totally agree

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woodmagman

Not all the guys that are out there do a million dollars in sales a year. I would bet and would accept being proven wrong…the average one man operation plus a couple helpers or subs only does 100-300 K..in sales. It is all about the profit and not about the volume.

CrpntrFrk

Quality before quantity! ALWAYS! No one ever says " Come see my new bathroom. It looks like s**t but man it only took them 5 hours!"

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orson

I'm a new company and a 1 man show. A good sales volume for me at this point would be 300 to 350k.

I am competing against home builders that also do remodeling and do 3 to 30million a year in sales, it's a fact. (As well as mechanicals companies who do bathroom remodeling and others including small companies)

Your figures don't make sense. Where are you getting 100 million dollar bridge projects out of what I'm saying?

Why do you guys assume that just because a company does that kind of business they are some sort of jerk offs who don't show up for appointments on time and don't have good references? Honestly, the odds of getting that large and being completely incompetent or pretty low.

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nlgutters

Don't get that myself. the big guys around here run a real tight ship. I think it will get harder for the little guys now. With people scared about business going under they generally feel more comfortable with the big guys.Also when you hire the big gys the job dosent shut down becuse the owner has a doctors appointment.

woodmagman

what?

woodmagman

what?

Am I reading the same thread as you and orson are...? smiles like wolf crap to me.

orson

I see your what? and I raise you a wth?

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RizzoMaryland

I call..with a shooby doowop

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will575

In my experience, the big boys have more overhead that makes them less competitive on smaller jobs, As long as the small guy (like me) doesn't try to make an absolute killing on the small job. Just what my experience has been, may not be true where you are.

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wellbuilthome

In a bad economy the big guys cant keep up . The amount of money it takes to run a large remodeling company is mind boggling . I work with over 30 guys at one time . We had 11 people in the office and 5 sales men . Our direct mailing cost 35000 a month alone . Now My calls are free i build 6 to 10 additions a year . Ive been working with 3 or 4 guys + subs . I sell my own work ,I design my own jobs, and build the complete job . I own all the equipment to do it out rite . I tell my customer I'm available to them 24/7 They are my neighbors if they don't know me they know some one that dose they see my work every day, they see me or my guys driving around they mite call a large company or get a guy Thur a lead service but Ive only had 1 job that i designed get built with out me . The guy used my plans ? I think he was working by the hour . My neighbor and friend of 30 years is a very large remodeling contractor and he has salesmen that have not sold a job this year. I can make money when he cant break even . We are not working cheep , i can just work for less . I stay within three miles of my house . Every thing i own has my name and # on it. every one knows me , I have a good rep . I truly care about my customers . I'm thinking about free snow plowing for life for all my customers. I haven't plowed since i was a kid but what better way to get in some ones face and have them talking .

Jordy3738

I got tired of working so many late nights to keep up with running a larger company. Having a few employees can really dig into the bank account when things are as slow as many re experiencing this year.

When your small the cost of closing a business is minimal. you just decide to sell it all and there;s a good chance you'll break even.

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KHouse75

A lot of the big companies around here are going under. They have too much overhead and too much inventory. I've bought many prime lots at very nice prices from larger companies just trying to survive.

Being a small company, having very little overhead and owning all my equipment, I've found it very easy to complete.

I was talking with my custom cabinet rep yesterday about several large builders that have gone under owing his company hundreds of thousands of dollars. Same with my staircase supplier and window supplier.

One thing that's been getting us, however, is we've run into trouble getting our entire orders for windows and doors delivered at one time due to the credit crunch. It's not a big deal as we just get them a cashiers check after the first delivery and they get the rest out the next day.

mtm

I just ran into this myself. I had five days to remodel a bathroom to make it handicap accesible for my son. (Who is finally coming home after 8 months in the hospital ) I called four contractors told them what I needed, how fast, and a general idea how much I had to spend. Two backed out, two said no problem.

The "big builder" came out gave me his estimate and wrote a proposal that stated bathroom remodel with the price. It was cheap..

The small time contractor called the night before to confirm our appointment. Showed up on time, introduced himself and looked at the bathroom. He measured, talked and listened to me and my girlfriend. Made suggestions and wrote a proposal that was unbelievably detailed. He pointed out potential problems that may happen once he opens the walls and how they would be corrected. He then put them in a manilla envelope with copies of his insurance and license. He also included a name & address of a job he was currently doing, and five past jobs he had done. His estimate was around 900 higher than the other guy. I hired him.

Its all about presentation and appearance. You need to convey to the customer that you are the owner, the worker and if something gos wrong the person that will answer the telephone if something is wrong.

kidcontractor

i am a very small contractor with only one full time and one part time employee. i found what everyone said about customer service is true. I give my customers great service, competitve prices and quality work. They keep calling me back with more work and then there friends call with more work. I find if you treat you customers like they were part of your family and show them that you have there best intrests in mind that they feel like they can trust you and then they dont mind paying a little extra for piece of mind. I've only been in business for myself for three years and i haven't gone a week without work and im in a very competive area, so it goes to show being nice to people does count. I even got six or seven cristmas cards from some of this years customers.

bwalley

When I am going up against the larger contractors, I show them my state Certified licenses that have my name on them and explain to them that most of the larger contractors the license holder will usually not ever see the job until after there is a problem and maybe not even then.

I explain that since I am a hands on contractor with multiple licenses, I am far more knowledgable and experienced than the big contractors guys are, because if his guys were as good as I am, they would be in business for themselves, instead of working for soemone else.

I ask them if they want some guy who may have been flipping burgers last week or just got out of prison a week ago working on their most expensive investment and around their kids, or do they want me working for them.

If the big guys bids are 1/2 the price of yours, you are either bidding too high, or they are losing money on their jobs.

I bid against a big contractor in the area, the client liked us, but she said that our price was quite a bit higher than the other contractor, I re did the numbers and his bid was doing it at my cost, I told the client he was a respected large contractor and that they were going to lose money on the job and may come back trying to get more, but advised her to hire him.

Later I spoke to her about another job she wanted done, she told me I was right they underbid the job, the guy who sold the job was fired, they took longer to finish than she thought they should have, but they did the job right from what I could tell and came back to do some warranty work for her, she said she heard some of the workers and subs talking to each other on the job about how they were getting hammered to get the job done as quickly as possible and as cheap as possible because the contractor was losing his ass on this job.

I told her that a job taking longer to complete than she thought and having other minor issues would have most likely happened if I did the job.

She ended up being a whacko and had a handyman who kept coming up with these wild ideas on how to do things, didn't want to do the proper (per FBC)railing and fencing around her pool, etc. in retrospect I should send Paul (the contractor who underbid me) a bottle of Scotch and a thank you note.

wyoming 1

I get most of my jobs from situations like mtm describe they are not only buying the job but me as well I have always kept my company small (not always by choice) and most of my clients want to feel secure that I personally will be there to oversee the job and do the work and feel secure to leave there house and know that my guys or some subs guys are going to be going through there underwear drawer or jewelry box. The down side is it is tuff for me to step out of the picture. Since you are at the begining stages if i was going up against a large firm I would sell myself, that I will be here I will make sure everything is done right. With big companies some people feel like they are just another number I try to make people feel like there home is mine and that there job is the most important job to me. This is what works for me and has worked well i do not like working for customers who only want the low bidder