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New to this. Negotiating cost.

4K views 24 replies 21 participants last post by  Jaws 
#1 ·
Hello. I am new to this. I started out in my business by calculating the cost of the job. I factor in how many hours it will take me, what tools I may need to rent if it is a large job, and the amount of work it will take to get it done. I try to charge less than more established companies because I am new and I understand that people are more comfortable with more established companies and I am just starting out.

Recently, I estimated a job to be about 1300$. It would involve the painting of several rooms, installing a toilet and tiling the floor. I would need to rent a tile saw. Based on my researched estimates, 1300$ seemed like a fair price, and on the low end to boot.

The guy, who used to be a handy man himself and ran his own business, consistently insists that he wants to pay me per hour. He says he has most all of the materials all ready to go, (I wasn't factoring the materials into the amount I was charging for labor), and he wanted to pay me 25$ per hour and have this all done in a weekend. There is no way I would make what I calculated, in one weekend at 25$.

I am new so I am interested to hear the advice and experiences of handy men who have been in the business a long time and have experienced this kind of customer.
 
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#3 ·
This is probably good advice.
And you better be charging at least $50 per hour for your time & tools or it's not even worth showing up.

Nothing wrong with working by the hour, but when you get into one of those deals where the client wants to buy all the materials or hire subs so you don't get any mark-up or profit on them, you have to jack up your labor rates accordingly. In the end, you need to be making as much as if you were running all the materials and subs thru your books too.
 
#7 ·
He's looking to take advantage... Look at him square in the eye and tell him "that having been in business for yourself, you know dang well $25 and hour is not actually $25/hour and closer to minimum wage after expenses"...

Never mind the weekend and rush differential... :rolleyes:

And then simply finish with "Look, I buy stuff too, and try to get a fair price, but if you're looking to pay Craigslist wages and risk the results, that's probably your best route... so do you really want this job professionally done for a fair price in a realistic time-frame or should I assume we don't have a match and move on? Because if YOU really thought that was fair, you'd pay yourself that and do the work"... if he chooses not to... "you have my number... just remember to fix it will cost you more"...

Sometimes in those scenarios how you handle it goes a long way in generating trust that you're a pro and the willingness to loosen the wallet follows once that wall is broken down...
 
#9 ·
Sounds like that guy wants a Craigslist kind of “contractor”. Probably a waste of breath talking to him. If you have the experience and ability to explain this, you may be able to eek out a few extra bucks out of that guy but dint hold your breath. He sounds like the same kind of guy who will mix 4 partial cans of paint together to paint a room.


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#10 ·
From what I've seen Craigslist people pay $10/hr. And I agree, $25/hr you might as well stay home.
 
#12 ·
You have to decide who's going to run your business. You or everybody else. Everybody else has nothing to loose and will run your business into the ground pretty quick. The prospective customer wants to treat you like an employee but he isn't picking up the taxes, licenses or operating expenses. Working by the hour isn't bad but you have to add on trip charges and any additional fees like rentals, like you would in a bid. $25 is an employee wage. Good luck with that.
 
#13 ·
I've walked away from people like that. My price is my price. When I was starting out I did it a few times and I ALWAYS regretted it, because I know what it takes.

I'm uncomfortable with jacking the price up by 10% so I can take it off during negotiations. I give my honest price up front and 1st. If it's too much, I understand. Not everybody can afford what they want.
 
#18 ·
I would agree with what the others have said, you have to know when you walk away from a job, and when to run. Depending on this guy's age, and how long he's been out of the trades, $25/hour might sound reasonable to him, because he hasn't kept touch with the times.

If it was a $1,300 job when you bid, it's a $1,300 job now. I'd encourage the guy to shop it around, and call you back if your bid looks reasonable. But don't differentiate yourself from the competition based on price. That's bad for your would-be clients, and worse for you.
 
#20 ·
he's going to be over your shoulder the entire time. You usually don't regret the jobs you don't take. Also, be careful, at least here in NJ setting a toilet is a job for a licensed plumber. Sounds silly but I sleep better now that I am able to sub out all my plumbing. A little less profit but no worries about insurance or problems if something springs a leak.

Also, when I started, if I needed a tool I thought I'd use more than a couple of times, I'd buy it rather than rent it. Tax write off for something you may have for years, can use over and over again, or sell it when you no longer need it.
 
#21 ·
I learned this from a larger remodeler I do sub work for:

Repeat after me, "MY FIRST OFFER IS MY BEST OFFER"

This guy is trying to screw you over. By your own words, you offered a fair price (fair to you and fair to him) stick to your guns. Don't screw yourself.

NOTE: Never ever ever allow a client to "buy the paint" they will get the cheapest crap they can find, "'cause paint is paint, right?" It will take you twice as long to do the job. [been there learned that]
 
#23 ·
i try to avoid jobs where client mentions " I will be furnishing x,x,x,and x. just need your labor." it usually turns out you are seeing the tip of the iceberg.

they think they can cut down on our RIDICULOUS profits as contractors, and typically you are in for a project you cant wait to get done with, or dont finish because of some payment issue.

if you do choose to take these jobs, I would still add a markup on the materials as if you had purchased them,

the problem with client furnishing these things, is that you will be expected to warranty them. Toilet breaks? Yep, youre on the hook, although you didnt make a dollar on it. ( you can avoid this with a disclosure in your agreement- i.e. contractor does not warrant items client supplies or some thing to that extent)
 
#24 ·
i try to avoid jobs where client mentions " I will be furnishing x,x,x,and x. just need your labor." it usually turns out you are seeing the tip of the iceberg.

they think they can cut down on our RIDICULOUS profits as contractors, and typically you are in for a project you cant wait to get done with, or dont finish because of some payment issue.

if you do choose to take these jobs, I would still add a markup on the materials as if you had purchased them,

the problem with client furnishing these things, is that you will be expected to warranty them. Toilet breaks? Yep, youre on the hook, although you didnt make a dollar on it. ( you can avoid this with a disclosure in your agreement- i.e. contractor does not warrant items client supplies or some thing to that extent)
yep, thats a real butt-burner for me and a heads up that they are gonna be rough to work for. I let them know right from the start that I bring in the materials. I'll get specific stuff that they want but I'm in charge of the entire show. And I charge a fee to get and haul the materials to the jobsite. Or I have the stuff delivered.... and up here a typical delivery is 350-400 bucks from HD or Lowes.
 
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