if I want to compete on the job I MUST lower my costs
Do you NEED to lower your costs or do you just NEED to lower your price?
I charge about $5.5 per foot for aluminum gutter, but on new construction, there are guys doing it for $3.5 all day every day. Why would I want to do it for $3.5 when I know I can do it for $5.5?
Maybe the question "Why do they want to do it for $3.50 when others are getting $5.50?" merits some examination as well. I think to presume that it's because they don't have some essential grasp of economics is the height of self-deceit. Your factory needs $5.50 / LF to produce your product, theirs needs $3.50 to produce theirs. It might be that simple.
They do it for $3.50 and you do it for $5.50 because your businesses are different. They're not in the guttering business, they're in the delivery business - the delivery of that commercial or residential property to the end user, be it a commercial leasor or a homebuyer. Everything about new work is about DELIVERY. Deliver the lot to a builder, deliver a structure to an owner. You on the other hand are in the business of protecting property assets. Your 'factory' for putting a roof on John Smith's home is different, by neccesity, than someone else's 'factory' for putting rooves on 300 townhouses for Centex Homes. For that matter it's different from the guy who's putting the new roof on the office building up the road. The guy that makes money doing 'new work' now at $3.50 / LF now would probably LOSE money for a while (until he retooled) doing your work at $5.50 / LF. It's different work.
Over the last several days I've had to repeatedly read an expression that I just can't stand - 'apples to apples' (it really is like nails on a blackboard to me). You just can't compare the pricing structures of businesses that are inherently different at the core (no pun intended) despite similar outward appearances.