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Square Foot Pricing.

 
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Old 01-16-2015, 04:46 PM   #1
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Square Foot Pricing.


Alright guy's. I don't like to discuss prices but I'm looking for a little advice. I normally bid my additions from $75 to $150 square foot. That has been a good formula for me. I'm in Washington state, where everything is more expensive. I have a handful of guy's that depend on me to put food on their families tables, and I accept that responsibility with pleasure. That being said...I bid a job low to begin with to keep the cash flow streaming. The customer is beating the hell out of me on price. I can do it for what he's willing to pay, but the profit is minimal. I would never take a job that loses money on purpose, we all want to make a profit. I know how to run job's and I know how to bring them in on time and on budget. I'll have to micro manage the hell out of this job just to make a little money. Of course I'm struggling with that aspect to say the least. But, it brings in a nice chunk of change through the business and some needed capitol. Just looking for some input from some of the really good contractors here.
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Old 01-16-2015, 04:51 PM   #2
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Re: Square Foot Pricing.


Lemme get this straight.

You priced the job, and the guy accepted it. Now he's wanting you to lower the price even more? To the point you're losing money?



Me.... I'd walk away from the job.

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Old 01-16-2015, 04:56 PM   #3
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Re: Square Foot Pricing.


Just my .02....

Depends on if you have something else to do or not. When I have guys depending on me for their living, and feeding their families I HAVE to deliver. If I have a job where the company only makes $100 profit (after all expenses, including my own payroll) and the only other option at that time is to do nothing for a few days or so... I take the $100 profit job in a heartbeat. My loyalty is to my guys and my customers.. not to how large the company bank account can get.
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Old 01-16-2015, 05:00 PM   #4
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Re: Square Foot Pricing.


No deal is better than a bad deal, every time
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Old 01-16-2015, 05:20 PM   #5
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Re: Square Foot Pricing.


The most retarded thing I have ever heard in my entire life is "I'm not making any money, it's just to keep the guys busy"

I shake my head in disbelief, because honestly I don't know how anybody can jump through all the hoops of a project and not come out ahead with profit.

I'm not in business to give people jobs, I'm in business to make myself the largest coin I can. If I don't have profitable work I'm doing something wrong and better find another profession.
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Old 01-16-2015, 05:48 PM   #6
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Re: Square Foot Pricing.


Sometimes you have to take less than desirable projects to keep your crew. You better have a top notch crew if you take these jobs and they should be few and far between... Now is the time for you to sell! Have a rock solid contract with payment schedule and a pile of change order forms on site!
I have run a few of these types of jobs. Before work starts I have a meeting with my crew and subs explaining that there is little meat on the bones and timelines will be meet, no exceptions. Then crack the whip and be in constant contact with the HO. Good luck!!!!
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Old 01-16-2015, 06:57 PM   #7
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Re: Square Foot Pricing.


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Sometimes you have to take less than desirable projects to keep your crew. ..........

True. But you take those types of jobs to keep your crew, not have something for them to do.

You should have the cash on hand to buy the job, not use the non-profitable job to keep a good crew.
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Old 01-16-2015, 07:01 PM   #8
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Re: Square Foot Pricing.


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Before work starts I have a meeting with my crew and subs explaining that there is little meat on the bones and timelines will be meet, no exceptions. Then crack the whip and be in constant contact with the HO. Good luck!!!!

I was going to say the same thing. If you're comfortable enough with your crew, and you've been good to them in past, tell them what's up. Let them know you NEED them to be extra on-point for this one. Be honest. Tell them it's tight all around. Maybe they'll look at it as a challenge and show that they can deliver.

And if they do deliver, show your appreciation some way. Dinner, beers, a little extra in the paycheck after the next profitable one.
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Old 01-16-2015, 07:08 PM   #9
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Re: Square Foot Pricing.


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...I bid a job low to begin with to keep the cash flow streaming. The customer is beating the hell out of me on price......
There are some customers that will keep pounding on you until you are paying them for the privilege of working on their home...You have to stop them at the beginning...
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Old 01-16-2015, 07:18 PM   #10
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Re: Square Foot Pricing.


I've done jobs for cost when starving to keep the trucks moving, it sucks, but sometimes you gotta do what you gotta do.
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Old 01-16-2015, 07:24 PM   #11
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Re: Square Foot Pricing.


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True. But you take those types of jobs to keep your crew, not have something for them to do.

You should have the cash on hand to buy the job, not use the non-profitable job to keep a good crew.
A good crew will want to work and you have to keep them working. If not they will find a company that will keep them busy or strike out on their own. Not having something for them to do usually means they wont get a check that week. Its give and take with some jobs being better than others for the principal. You might only make 2k with job A but you retain your crew to profit 75K on job B.
You are 100% correct, one should have the cash reserves to keep good jobs rolling in, in a perfect world. Sometimes you have to make due with what you have at that particular moment in time.
If the principal is constantly taking jobs with minimal profit margins then thats not cool and he or she needs to take a different approach. But sometimes you just have to take crap jobs.
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Old 01-16-2015, 09:25 PM   #12
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Re: Square Foot Pricing.


Quote:
Originally Posted by Mr Knucklehead View Post
The most retarded thing I have ever heard in my entire life is "I'm not making any money, it's just to keep the guys busy"

I shake my head in disbelief, because honestly I don't know how anybody can jump through all the hoops of a project and not come out ahead with profit.

I'm not in business to give people jobs, I'm in business to make myself the largest coin I can. If I don't have profitable work I'm doing something wrong and better find another profession.
Never said I wasn't retarded. Lol. And I will make money on the job, I'm not stupid. But thanks.
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Old 01-16-2015, 09:29 PM   #13
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Re: Square Foot Pricing.


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Originally Posted by JAH View Post
Sometimes you have to take less than desirable projects to keep your crew. You better have a top notch crew if you take these jobs and they should be few and far between... Now is the time for you to sell! Have a rock solid contract with payment schedule and a pile of change order forms on site!
I have run a few of these types of jobs. Before work starts I have a meeting with my crew and subs explaining that there is little meat on the bones and timelines will be meet, no exceptions. Then crack the whip and be in constant contact with the HO. Good luck!!!!
I do have an awesome crew and they know what I'm about. They know me, and they know I pay it forward.
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Old 01-16-2015, 09:35 PM   #14
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Re: Square Foot Pricing.


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Lemme get this straight.

You priced the job, and the guy accepted it. Now he's wanting you to lower the price even more? To the point you're losing money?



Me.... I'd walk away from the job.
I never got anything more than a text telling me he wanted me to do the job. I knew there was going to be some back and forth, I'm used to that.
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Old 01-16-2015, 09:37 PM   #15
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Re: Square Foot Pricing.


Thanks all. I usually just go with my first instinct, no matter what. But then I remembered all the friendly contractors here with PHD's and thought to myself...let it fly.
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Old 01-16-2015, 09:47 PM   #16
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Re: Square Foot Pricing.


Pretty common for a GC, with a good crew, to do a job with little or no profit to keep guys busy during slow times.
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Old 01-16-2015, 09:48 PM   #17
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Re: Square Foot Pricing.


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Thanks all. I usually just go with my first instinct, no matter what. But then I remembered all the friendly contractors here with PHD's and thought to myself...let it fly.
I suspect that if you focus more on your sales and closing strategies it will all fall into line. Numbers are often relative. Just a hunch.
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Old 01-16-2015, 09:53 PM   #18
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Re: Square Foot Pricing.


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Never said I wasn't retarded. Lol. And I will make money on the job, I'm not stupid. But thanks.

Never intended it towards you, just in general. Of course you're the OP so it flowed in your direction.


(In general) Contractors are their worst enemy. Too many quality oriented guys take on work for little money giving the public quality work for a cheap price. That's not the way it should work.

Doing so will condition the public into expecting the same type of work in the future at that same cut rate price. They have been conditioned.

I work much too hard, I'm very conscientious, morally straight, will not cut corners, very fair to my clients and ensuring everybody in their home working on their project can be trusted. You're not getting that at a cut rate price. Not from me anyway.

Go ahead, keep your guys busy and barely pay your bills and payroll. Eventually it will catch up to you, because you can't make that up unless you charge the next client what you lost on your last client.

If you don't have the money to float your business 6 months with payroll you're already in trouble and don't even know it.
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Old 01-16-2015, 10:00 PM   #19
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Re: Square Foot Pricing.


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Originally Posted by Mr Knucklehead View Post
Never intended it towards you, just in general. Of course you're the OP so it flowed in your direction.


(In general) Contractors are their worst enemy. Too many quality oriented guys take on work for little money giving the public quality work for a cheap price. That's not the way it should work.

Doing so will condition the public into expecting the same type of work in the future at that same cut rate price. They have been conditioned.

I work much too hard, I'm very conscientious, morally straight, will not cut corners, very fair to my clients and ensuring everybody in their home working on their project can be trusted. You're not getting that at a cut rate price. Not from me anyway......
I'm going through my year-end review and reflections and needed to hear that. Thanks much.
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Old 01-16-2015, 10:48 PM   #20
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Re: Square Foot Pricing.


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I'm going through my year-end review and reflections and needed to hear that. Thanks much.


Mark, I love what I do, building beautiful "one off" projects for some of the nicest clients one could wish for, really great people, but my ultimate goal is to stay way ahead of my costs and there's no other way to do that but to charge for success.

What really pisses me off and is probably one of the reasons that makes me stand hard on my numbers when pricing out jobs are the designers. They f#$king make my head spin. I deal with some upscale clients and they all have these phony accent very well dressed fancy car driving designers that are billing out for probably more money then I'm billing out for plus getting their cut on what they supply, window treatments, fancy chairs etc.. and they do absolutely nothing but drive around to showrooms and act like they know what they are talking about. The ultimate bullsh#ter in the industry. All they are are companions for the clients. I'm convinced of it.

I have a funny story of an incident I just hand with one a few weeks back, but I'll not say it here in the public forum.


P.S. Just saw you are from Arlington VA. I'll be in your backyard next weekend for an event over at the Newseum.

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